The Supreme Court has issued a 5-4 decision in which it found that closely-held for-profit corporations can avoid the mandate under the Affordable Care Act (ACA) that requires the provision of birth control coverage to their employees. In reaching their decision in Burwell v. Hobby Lobby and Conestoga Wood Specialties v. Burwell, the justices determined that the Religious Freedom Restoration Act (RFRA) applies to closely-held corporations and entitles them to certain religious freedom protections. As a result, closely‑held corporations that operate under a sincere religious belief are permitted to exclude contraceptive coverage from the health insurance offered to their employees. Importantly, this decision was limited only to contraception coverage and does not apply to other medical procedures, including vaccinations and blood transfusions.
In essence, the decision creates a new exemption to the ACA. The Court determined that this decision would be in line with other exemptions already included in the ACA for religious organizations. As a result of this decision, individuals employed by corporations exercising the new exemption would have to obtain certain forms of contraceptives from other sources.
The majority decision noted that at least some employees affected by this ruling could still obtain contraceptive coverage through an accommodation to the mandate that has already been introduced by the Obama administration. The accommodation would apply to religious-affiliated non-profit organizations and would essentially allow health insurance companies to provide contraceptive coverage without the involvement of the employer.
This case is expected to have a considerable effect on similarly‑filed cases around the country. Further, now that the Court has recognized that the RFRA applies to closely‑held corporations, it is expected that corporations may try to challenge other medical provisions under the ACA, arguing that they are also at odds with the corporation’s religious beliefs. The dissent also warned that, although the decision was limited to closely-held corporations, the logic could eventually extend to “corporations of any size, public or private.”