Court: Closely held companies can't be required to cover contraceptives

In a narrowly tailored 5-4 ruling, the Supreme Court June 30 said closely held companies may be exempted from a government requirement to include contraceptives in employee health insurance coverage under the Religious Freedom Restoration Act.

The court said that Hobby Lobby and Conestoga Woods, the two family-run companies that objected to the government mandate that employees be covered for a range of contraceptives, including drugs considered to be abortifacients, are protected from the requirement of the Affordable Care Act. The opinion essentially held that for-profit companies may hold protected religious views.

But the court also said that government requirements do not necessarily lose if they conflict with an employer's religious beliefs.

The ruling is not a slam-dunk for all entities that oppose the contraceptive mandate for religious reasons. The court noted that cases challenging the mandate for nonprofit entities, such as Catholic colleges and faith-based employers are pending and that the June 30 ruling does not consider them. The decision also did not delve into whether the private employers have religiously motivated protection from laws under the First Amendment.

It said the government failed to satisfy the requirement of RFRA, a 1993 law, that the least-restrictive means of accomplishing a government goal be followed to avoid imposing a restriction on religious expression.

The majority opinion said the ruling applies only to the contraceptive mandate and should not be interpreted to hold that all insurance coverage mandates–such as for blood transfusions or vaccinations–necessarily fail if they conflict with an employers' religious beliefs.

Justice Samuel Alito wrote the primary holding, which was joined by Chief Justice John Roberts and Justices Antonin Scalia and Clarence Thomas. Justice Anthony Kennedy wrote a separate concurring opinion, which agreed with the ruling, but made clear that while the opinion applies to the particular companies involved in this case, it is not a sweeping condemnation of the key elements of the contraceptive mandate itself.

"It is important to confirm that a premise of the court's opinion is its assumption that the HHS regulation here furthers a legitimate and compelling interest in the health of female employees," wrote Kennedy in his concurrence. He went on to say that the federal government failed to use the least restrictive means of meeting that interest, pointing out that it has granted exemptions from the mandate for employees of nonprofit religious organizations.

"That accommodation equally furthers the government interest, but does not impinge on the plaintiff's religious beliefs," he wrote.

In her dissent with the main opinion, Justice Ruth Ginsburg called the court's decision one of "startling breadth" allowing commercial enterprises to "opt out of any law" except tax laws that they "judge incompatible with their sincerely held religious beliefs."

Ginsburg, joined on its merits by Justices Elena Kagan, Sonia Sotomayor and Stephen Breyer, said she was "mindful of the havoc" the ruling could produce and noted that the court's emphasis on RFRA failed to take into account the impact the decision would have on "third parties who do not share the corporation owners' religious faith." She said she believed Congress enacted the law "to serve a far less radical purpose."

"Until today," she wrote, religious exemptions have not been extended to the "commercial profit-making world" because these groups do not exist to foster the interests of those of the same faith, as religious organizations do. She also questioned why the court failed to make the distinction between a group's members of diverse beliefs and members who share the same faith.

"The court's determination that RFRA extends to for-profit corporations is bound to have untoward effects," she said, adding that even though the court "attempts to cabin its language to closely held corporations, its logic extends to corporations of any size, public or private."

As a result, she said, "RFRA claims will proliferate."

(Carol Zimmermann contributed to this story.)