High court: Certain firms can deny contraception coverage

Anthony Hahn, CEO of Conestoga Wood Specialties. The ruling means he can refuse to pay for employees' birth control on religious grounds. AP
Anthony Hahn, CEO of Conestoga Wood Specialties. The ruling means he can refuse to pay for employees' birth control on religious grounds. AP
Posted: July 02, 2014

The U.S. Supreme Court dealt a blow to the Obama administration's signature health care law Monday, ruling that employers with religious objections can refuse to pay for their employees' contraception in twin cases brought by a Lancaster County cabinet manufacturer and one of the nation's largest craft supply chains.

In their 5-4 decision, the justices recognized for the first time that for-profit business - such as Conestoga Wood Specialties, owned by a Mennonite family in East Earl, and Oklahoma-based Hobby Lobby - can exercise religious views derived from their owners.

Justice Samuel A. Alito Jr., writing for the court's five conservative justices, said that a federal religious-freedom law applies to corporations controlled by religious families. A provision in the Affordable Care Act requiring them to provide cost-free birth control imposes a substantial burden on those companies' religious liberties, he said.

"A corporation is simply a form of organization used by human beings to achieve desired ends," he wrote. "When rights, whether constitutional or statutory, are extended to corporations, the purpose is to protect the rights of these people."

Anthony Hahn, Conestoga president and son of company founder Norman Hahn, hailed the decision as a victory for his 950-employee firm and the religious beliefs upon which it was founded 50 years ago. Had they defied the contraception requirement, they would have faced penalties as high as $90,000 a day under the law.

"As I said at the beginning of this lawsuit, this effort wasn't just for Conestoga. We took this stand for others as well," he said. "The administration has gone too far in disrespecting the freedom of Americans to live out their convictions."

White House spokesman Josh Earnest criticized the ruling, saying it would "jeopardize the health of women" employed at companies like Conestoga.

"We will work with Congress to make sure that any women affected by this decision will still have the same coverage of vital health services as everyone else," he said.

It remains unclear how many women will be affected by the decision.

A federal judge had previously estimated that nearly one-third of American workers may not be affected at all. Religious employers such as churches are exempt from the contraception requirement, some insurance plans that had not previously offered coverage have been grandfathered in, and small employers are not required to provide health care coverage.

A survey by the Kaiser Family Foundation found 85 percent of large American employers already offered contraception coverage before the health care law required it.

Still, Monday's decision is likely to ripple through dozens of suits similar to those brought by Conestoga and Hobby Lobby. Nearly 90 cases have been filed across the country challenging the contraception mandate as an infringement on religious liberties, according to the ACLU, and courts have varied widely in their opinions.

Of those cases, 42 involve religious nonprofits, including several tied to the Archdiocese of Philadelphia, while 48 have been brought by religiously oriented for-profit companies, whose leaders say the beliefs of the owners form the bedrock of their business practices.

"For those of us who draw every breath from our faith, our vocation cannot be divided or compartmentalized into a small bin which runs at odds with our beliefs," said Jim Kahn, president of Philadelphia-based Kahn & Co., a fourth-generation commercial real estate brokerage. "Work is a vital organism which allows us the opportunity to share the gifts and blessings we have been granted by our heavenly father."

Though Monday's decision focused on a small portion of the Affordable Care Act, the provision at its core has been just as hotly contested as the challenge two years ago that took on the law's central mandate, which compels individuals to obtain health insurance or face fines.

Chief Justice John G. Roberts Jr. cast the pivotal vote in that case in 2012, upholding the law in the midst of Obama's campaign for reelection.

Monday's case split along traditionally partisan lines, with the four more liberal justices dissenting. Writing for the court's minority, Justice Ruth Bader Ginsburg maintained that the contraception requirement was essential to ensuring health and reproductive freedom for women and worried that the court's ever-growing list of the rights of corporations could have unintended ramifications in the future.

"The court's expansive notion of corporate personhood," she wrote, "invites for-profit entities to seek religion-based exemptions from regulations they deem offensive to their faiths."

Alito cautioned the ruling should be read narrowly, with regard to the contraception issue.

Both the Hobby Lobby and Conestoga cases relied heavily on the Religious Freedom Restoration Act, a 1993 law that bars the federal government from taking any action that substantially impinges upon the exercise of religion unless it can show its action is the least restrictive means of achieving a compelling government interest.

Obama administration lawyers argued in the Conestoga and Hobby Lobby cases that providing no-cost access to birth control was a compelling interest.

Conestoga's attorneys maintained, however, that the health care act's contraception mandate effectively required the Hahn family to violate its moral convictions surrounding human life.

The Hahns had no qualms about covering most forms of birth control under the act. But they objected to four specific contraceptive methods, including the Plan B morning-after pill, saying they were tantamount to abortion because they can prevent fertilized embryos from implanting in a womb.

Last year, Philadelphia-based U.S. District Judge Mitchell S. Goldberg rejected that argument. His decision was upheld by the U.S. Court of Appeals for the Third Circuit, which differentiated between the company and its owners, and said for-profit corporations are inherently secular and "cannot engage in religious exercise."

The 10th Circuit appellate court split with that stance and sided with Hobby Lobby.

The high court's decision Monday followed the 10th Circuit's logic, arguing the mandate was not the least restrictive way that the government could ensure female employees had cost-free access to contraception.

Alito pointed to one less burdensome model devised by the Department of Health and Human Services to accommodate religiously affiliated nonprofit groups. Organizations can opt out of paying for contraception themselves by noting their objection with the third-party administrators of their employee health care plans. The insurer then picks up the tab for birth control and can apply to the federal government for reimbursement of the added cost.

But that arrangement is not fully supported by those organizations it was meant to appease.

More than 40 nonprofits, including several tied to the Archdiocese of Philadelphia, have filed lawsuits arguing that the compromise still requires them to tacitly support providing contraception to employees, even if they are no longer paying for it.

Federal courts in Pennsylvania have split on that question, and the Third Circuit has yet to weigh in. On Saturday, its justices granted the archdiocese a temporary exemption, saying they would wait to see what impact the Supreme Court's ruling might have on its case.

But Alito cautioned Monday that the court's decision in the Conestoga and Hobby Lobby cases should not be read as a backdoor ruling on those other legal challenges.

Still, Philadelphia Archbishop Charles J. Chaput found the court's basic holding heartening.

"No person and no organization grounded in religious conviction," he said, "should be forced to choose between complying with the law and violating their religious beliefs."


jroebuck@phillynews.com

215-925-2649

@jeremyrroebuck

Inquirer staff writer Diane Mastrull contributed to this article.

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