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Jul 1, 2014

The Supreme Court's Hobby Lobby decision - What it does and does not do

ABSTRACT: Closely-held or family owned companies whose owners have strong religious beliefs may be able to exclude certain contraception-related benefits from their employee health benefit programs. The federal government has available "less restrictive" means of assuring that employees get access to such care at no additional cost, than an outright mandate that all employers provide those benefits.

One thing is undeniable about the 5-4 decision of the U.S. Supreme Court in the case of Burwell v. Hobby Lobby Stores, Inc.: it was handed down on Monday, June 30, 2014. There are one or two other areas of agreement in connection with the significance of the decision as described in the Majority, Concurring and Dissenting opinions, but the vast majority of the 89 pages of opinions is spent by the authors in trying to suggest that the decision is or is not a significant change in the law.

Quick Summary

According to the Majority, the principal points of the decision are that:

1)    Where sincere religious beliefs of the owners of a closely-held or family-owned, for-profit, corporation are

2)    substantially burdened by a provision of the Affordable Care Act;

3)    that provision may be struck down if there is a less-restrictive alternative,

4)    even though there is a compelling government interest in the restriction in its current form.

According to the Dissent, authored by Justice Ginsberg, the decision has “startling breadth” and allows all commercial enterprises including corporations to opt out of any law other than tax laws that “. . . they judge incompatible with their sincerely held religious beliefs.”  The Concurring Opinion of Justice Kennedy and the Majority Opinion of Justice Alito go to great lengths to ascribe a limited scope to the decision and to specifically deny the criticisms of Justice Ginsberg to the decision having any wider significance.

What the decision does not Affect

The decision does not apply to publicly held corporations at all;

The decision only applies to sincere religious beliefs of the owners of closely-held or family owned, for-profit corporations;

The decision assumed without discussion that the contraceptive methods specified by the Department of Health and Human Services furthered a legitimate and compelling governmental interest in the health of female employees;

The decision does not permit employers to specify what methods of contraception their employees may use;

The decision does not impose any greater expense or charge on employees of closely held or family owned, for-profit corporations.


The Affordable Care Act (ACA) requires employers of 50 or more full-time employees to offer group health insurance that provided certain “minimum essential coverage”. As interpreted by the Department of Health and Human Services, employers subject to the ACA were required to purchase insurance coverage which provided, among other things, all FDA-approved contraceptive methods free of charge to employees.

While many of these contraceptive methods would act to prevent fertilization of the egg, four of the twenty methods (two “morning after” pills and two Intrauterine Devices (IUD)) could in some instances have the effect of preventing an already fertilized egg from further developing. Hobby Lobby and an affiliated company which operates 35 Christian bookstores and Conestoga Wood Specialties are exclusively family-owned corporations. Two families own and operate the three businesses and each family strives to operate the businesses in accordance with the family’s devout religious beliefs which include that life begins at conception. Although the families had no objection to 16 of the 20 approved contraceptive procedures they objected to the other 4 as potentially terminating already-existing life.

Analysis of the Supreme Court’s Decision

The Religious Freedom and Restoration Act of 1993 (RFRA) prohibits the Government from imposing a substantial burden on a person’s exercise of religion unless the Government is able to show that the burden (a) is in furtherance of a compelling governmental interest; and (b) is the least restrictive means of furthering that governmental interest. 42 U.S.C. §§2000bb-1(a), (b).

The Majority found that the RFRA included in the term “person” a closely-held, for-profit, corporation in which the owner had sincere, religious beliefs. As a result the Court majority concluded that the family-run corporations did not have to pay for coverage for the 4 out of 20 contraceptive methods which could prevent the development of an already fertilized egg. 

The Court found that for those specific, closely-held corporations there were less religiously restrictive means of providing these four contraceptive methods free of charge to the employees. The Majority noted that the Department of Health and Human Services had already implemented a system which exempted religious non-profit corporations from having to pay for their employees to have free access to contraceptive methods the organizations found to be objectionable on religious grounds. 

The Majority thus concluded that contrary to the claims of the dissent, its ruling did not permit denial by the closely-held, for profit corporations of any method of free contraception to the employees—only that the family owners could not be compelled to pay for the methods of contraception they found to be religiously objectionable. The Majority took pains to reject any suggestion that its decision could be used to provide cover for racial or other kinds of discrimination in the name of religious beliefs.


On its face, the Opinion of the Majority in Burwell v. Hobby Lobby is narrowly drawn to limit its application in the immediate future.to very similar fact situations. As with almost any Supreme Court decision, this does not mean that others will not try to expand its scope over time.