The Hobby Lobby Ruling on the Affordable Care Act

Recently, the Supreme Court of the United States (“SCOTUS”) issued a landmark decision in Burwell v. Hobby Lobby Stores, Inc. on June 30, 2014. The Court ruled that closely-held for-profit companies can deny coverage of contraceptives under their group health plan based on religious grounds. Below are some frequently asked questions for businesses about the ruling:

What Law Was Challenged?

A provision of the Affordable Care Act (“ACA”) that required some employers to provide female workers with health insurance that included coverage for various methods of contraceptives.

What is the Ruling?

Per scotusblog.com, the ruling is “as applied to closely held corporations, the regulations promulgated by the Department of Human Services requiring employers to provide their female employees with no-cost access to contraception violate the Religious Freedom Restoration Act.”

What was the vote?


Does the Ruling Apply to All For-Profit Corporations?

No. The ruling was specifically drafted to narrowly apply only to closely held for-profit corporations.

Does the Ruling Effect the Less than 50 Employee Exception Already Articulated in the ACA?

No. If a company has less than 50 employees, it is still exempt from providing group health insurance.

What are Closely Held Corporations?

Generally, a closely held corporation whose shares are held by a relatively small number of shareholders. The Minnesota Business Corporation Act defines a closely held corporation as one which does not have more than 35 shareholders.

Does this Decision Apply to Other Mandates under the ACA?

No. The ruling only specifically applies to birth control and does not necessarily mean that companies would succeed with religious objections to vaccinations and blood transfusions.

Does the Ruling Effect a Religious Non-Profit’s Ability to Still “Opt-Out” of Providing Contraceptive Coverage under the ACA?

No. “eligible organizations,” which means a nonprofit organization that “holds itself out as a religious organization” and “opposes providing coverage for some or all of any contraceptive services required to be covered…on account of religious objections” are still exempt from the contraceptive mandate.

How about Churches and Other Religious Employers? Does this Ruling Effect their Exemption under the ACA?

No. Religious employers which encompass churches, their integrated auxiliaries, and conventions or associations of churches are still exempt under the ACA’s contraceptive mandate.

How Many Women Employees will this Ruling Effect?

It is still unclear considering that the contraceptive mandate presently does not apply to tens of millions of people.