ACA Update - Supreme Court Decision in Hobby Lobby Case

Document created by 1050210 on Nov 13, 2014
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Published Date: 07/14/2014


Pat; Rountree

By Pat Rountree


The Supreme Court recently ruled 5-4 in favor of Hobby Lobby and the other closely-held companies who sued the Department of Health and Human Services over a requirement in the Affordable Care Act (ACA) that companies pay the cost of contraceptive coverage for their female employees. The companies’ suit did not cover all contraceptives; only the four contraceptives that were used to abort fetuses, which they said violated their religious beliefs and rights under The Religious Freedom Restoration Act of 1993 (RFRA).


For clarification of terminology: closely-held company is generally defined as a small, privately-held corporation with only a few shareholders, usually family members or other close associates.


The RFRA prohibits the government from substantially burdening a person’s exercise of religion even if the burden results from a rule of general applicability unless it (1) is in furtherance of a compelling governmental interest; and (2) is the least restrictive means of furthering that compelling governmental interest.


The decision delivered by Justice Samuel A. Alito, Jr. stated the government had not met their burden of proof under RFRA. The ACA requirement created a burden on the companies by violating their religious beliefs and creating a significant cost to the company if they violated the ACA by failing to pay for the contraceptives, resulting in fines estimated as high as $1.3 million per day for one of the companies. On the second prong of the RFRA, the Court ruled that the government had not proven that requiring the companies to pay was the least restrictive means of complying with the law.


Justice Kennedy who supported the decision noted the ACA had exempted churches and religious organizations from this requirement in the law and that the government had not met their burden to show that closely-held for-profit companies were significantly different.


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