The Supreme Court heard oral arguments on March 25th, 2014, on the Tenth Circuit Case Hobby Lobby Stores, Inc. v. Sebelius and the Third Circuit Case Conestoga Wood Specialties v. Sebelius; a ruling is expected in late June.[i] Hobby Lobby and Conestoga are two prominent examples from over 71 cases involving for-profit businesses challenging the contraceptive mandate in the Patient Protection Affordable Care Act (ACA) on the grounds that this provision violates their religious beliefs under the First Amendment Free Exercise Clause, Establishment Clause, and the Religious Freedom Restoration Act (RFRA).[ii] Specifically, the contraceptive mandate requires that “all health insurers and non-grandfathered group health plans that offer group or individual coverage for certain preventative cost services for women without cost-sharing.”[iii] A verdict for the government has large implications for for-profit businesses such as Hobby Lobby opposing the mandate. To explain, “The companies could face steep $100-a-day penalties for each employee if they violate the regulations. That works out to nearly $475 million a year for Hobby Lobby, which covers more than 13,000 workers.”[iv] As Justice Kagan points out during oral arguments, a business could avoid such penalties by dropping health coverage altogether which would be less expensive, since the cost is only a $2,000 fine per employee.[v] However, for-profit employers dropping health insurance coverage to avoid penalty under the contraceptive mandate is not a solution to the problem because it undermines the goal of the ACA to increase access to health care. [vi]
Chief Justice Roberts’ vote will likely be determinative in this case, as his vote was the swing vote in National Federation of Independent Business v. Sebelius, the decision upholding the individual mandate provision of the ACA.[vii] While the other Justices are projected to vote consistently with their views in National Federation, along liberal-conservative lines, Roberts may switch positions and reject the contraceptive mandate, thereby influencing Justice Kennedy who is projected to be the swing vote here.[viii] To explain, in National Federation, Roberts voted to uphold the “individual mandate,” requiring all Americans to obtain insurance coverage or pay a penalty, because it could be characterized as a constitutional “tax.”[ix] Accordingly, Roberts did not have to decide whether the individual mandate was constitutional under the Commerce Clause, even though he expressed in dicta that he believed it would be unconstitutional because Congress has the power to “regulate commerce not to compel it.”[x] This reasoning is particularly applicable to the contraceptive mandate because the mandate not only requires employers to provide insurance coverage, but also stipulates what should be covered under the insurance policy.[xi] Therefore, the contraceptive mandate decision could provide Roberts with another opportunity to reject an ACA mandate provision on Commerce Clause grounds.
Recommendation for Revision to the Contraceptive Mandate
The contraceptive mandate includes exemptions for employers with fewer than 50 employees,
“Grandfathered Plans” or plans that were in place in their current form before March 23, 2010, and
Churches.[xii] Also, an amendment was subsequently passed providing a workaround for self-identified, non-profit “religious organizations,” “which allows the required contraceptive services to be provided to employees without any financial or administrative involvement on the part of the employer.”[xiii] Cases such as Hobby Lobby underscore the need for additional reform to the contraceptive mandate for for-profit businesses. To explain, the impact of “a pro-Hobby Lobby verdict would most immediately affect the at least 22,000 people employed by the companies who brought these lawsuits.”[xiv] However, a ruling in support of the mandate would discourage morally opposed businesses from providing health care coverage altogether, undermining the goal of the ACA to expand access to health care coverage and to reduce the cost of health insurance, a likely consequence of contraceptive coverage. [xv]
Regardless of how the Supreme Court ultimately rules in this case, a suggestion for a legislative solution that would appease both plaintiffs such as Hobby Lobby and the Government would be to provide for-profit employers with the option of having a third party pay for the birth control methods a business finds objectionable.[xvi] This is consistent with what was done by the amendment creating a workaround for non-profit religious organizations. The new amendment to the mandate for for-profit employers could include an option for employers to sponsor a plan that excludes the birth control methods they object to for a fee, less than the $2,000 fee for opting out of providing coverage. As an adjunct to this solution, the government would provide employees with the option to purchase supplemental plan coverage for all contraceptives not included in their employer’s plan through the health insurance marketplace in the employer’s state. Relying on the marketplace infrastructure already created by the ACA would help to reduce the cost of the supplemental insurance policy. This type of creative solution would be beneficial by bringing in more people to the state health insurance marketplaces already created as part of the ACA, while also providing for-profit businesses with the flexibility not to directly administer or sponsor the contraceptives they are morally opposed to supplying.
[i] Ben Goad, High Court Split on Birth Control Mandate, The Hill, Mar. 25, 2014, http://thehill.com/blogs/regwatch/healthcare/201651-court-fractured-on-o-cares-birth-control
[ii] Hobby Lobby Stores, Inc. v. Sebelius, 723 F.3d 1114, 1125 (10th Cir. 2013) cert. granted, 134 S. Ct. 678, 187 L. Ed. 2d 544 (U.S. 2013).
[iii]Jaeah Lee, Its not just about hobby lobby: These 71Companies Don’t Want To Cover Your Birth Control Either, Mother Jones, Apr. 2, 2014,http://www.motherjones.com/politics/2014/04/hobby-lobby-sebelius-contraceptive-for-profit-lawsuits
[iv]Supra, note i.
[v] Supreme Court Seeks Compromise in Contraception Case, USA Today, Mar. 25, 2014,http://www.usatoday.com/story/news/politics/2014/03/25/supreme-court-religion-contraception-hobby-lobby/6860479/
[vi]Zoe Robinson, The Contraception Mandate and the Forgotten Constitutional Question, DePaul L. Rev. 10 (2014). pdf
[vii] Amy Davidson, Roberts the Swing Vote: Court Upholds Most of Health Care, The New Yorker, June 28, 2012, http://www.newyorker.com/online/blogs/closeread/2012/06/roberts-the-swing-vote-court-upholds-most-of-health-care.html
[viii]Supreme Court Appears Ready to Reject Obamacare Birth Control Mandate, Chicago Tribune, Mar. 25, 2014, http://articles.chicagotribune.com/2014-03-25/health/chi-supreme-court-obamacare-contraception-mandate-20140325_1_justices-corporate-rights-citizens-united
[xi] Supra, note vi.
[xiv] Supra, note ii.
[xvi] Lauren Markoe, Supreme Court Takes Up Hobby Lobby’s Challenge to the Contraception Mandate, Mar. 25, 2014, http://www.religionnews.com/2014/03/25/hobby-lobby-feds-face-supreme-court/