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Closely-Held Companies Permitted to Decline to Provide Birth Control Coverage

by Horizon Payroll Solutions on June 30, 2014
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In a 5-4 decision, the Supreme Court ruled today that the government cannot force a closely-held for-profit corporation to cover the cost of birth control for its employees, if doing so would conflict with a sincere religious belief of the owners. Under the Affordable Care Act (ACA), employers who provide health insurance to their employees must pay for a plan that covers contraception. Two family run businesses (Hobby Lobby and Conestoga Wood Specialties) challenged that requirement, claiming that it infringed on the religious liberty of the corporations. A majority of the Supreme Court agreed with the two corporations.

The Court found that requiring corporations to provide contraception coverage against their will places a substantial burden on the practice of their religious beliefs. In addition, according to the Court, mandating coverage that conflicts with a corporation’s religious belief is not the least restrictive way for the government to achieve the stated objective of guaranteeing access to birth control. The Court placed several limits on its ruling, however. First, the decision is limited to corporations run by families or other closely allied people. Further, this ruling only deals with the question of contraception. Similar claims of religious objections to other insurance requirements, such as blood transfusions and vaccinations, will not necessarily succeed. Finally, the Court cautioned against cloaking illegal discrimination as religious practice.

While lower courts are already beginning to halt enforcement of the contraception mandate against corporations with pending legal cases, it is not clear what process will be required for closely-held corporations to apply for a religious exemption from the ACA’s contraception requirement.

Topics: Laws & Protections