Supreme Court to review ACA’s contraception mandate

(Bloomberg) -- The U.S. Supreme Court will take up a challenge to part of President Barack Obama’s health care law by companies claiming a religious exemption to the requirement that they provide birth-control coverage for employees.

The justices on Tuesday agreed to hear two cases involving family-run businesses that say they regard some forms of contraception as immoral. The companies include the craft-store chain Hobby Lobby Stores Inc., whose owners, led by David Green, say they run the business in accordance with the Bible.

The dispute threatens to carve a hole in the 2010 health care law, already beset by problems on multiple fronts as its major provisions take effect. The clash will be the court’s first look at Obama’s biggest legislative accomplishment, the Patient Protection and Affordable Care Act, since a majority upheld the core of the law in 2012. The court will rule by July.

“Few issues are more important than the extent to which the government must recognize and accommodate the religious exercise of those it regulates,” Hobby Lobby argues. The second case involves Conestoga Wood Specialties Corp., a woodworking business owned by a Mennonite family.

Both sides urged the justices to resolve the religious-rights question. The issue has divided lower courts and sparked dozens of lawsuits by for-profit companies.

“We believe this requirement is lawful and essential to women’s health, and we are confident the Supreme Court will agree,” says Jay Carney, a White House spokesman.

The court will consider whether the Constitution and a 1993 federal law give companies the same religious-freedom rights as people.

A variation of that question drove an ideological wedge through the court three years ago in the Citizens United case, which centered on corporate speech. The court cleared the way for corporations and unions to spend unlimited sums on political campaigns.

The birth-control rule stems from the health care law’s requirement that employers provide insurance coverage meeting minimum standards. Hobby Lobby says it could be fined as much as $475 million a year for noncompliance. Conestoga, which has fewer employees, says it faces annual fines of $35 million.

“The administration’s mandate is an attack on religious freedom,” says U.S. House Speaker John Boehner, a Republican from Ohio.

‘Substantially burden’

The 1993 Religious Freedom Restoration Act says the U.S. government may “substantially burden a person’s exercise of religion” only in rare cases. Congress enacted the law to nullify the Supreme Court’s 1990 decision in Employment Division v. Smith, which cut back constitutional protection for religious practices.

The Obama administration says that before 1990, the high court treated the Constitution’s free-exercise clause as covering only individuals and non-profit religious groups.

“No pre-Smith case held -- or even suggested -- that a for-profit corporation could obtain exemptions from corporate regulation on the basis of religion,” U.S. Solicitor General Donald Verrilli argued in court papers.

Hobby Lobby countered by citing “over a century of jurisprudence recognizing that corporations exercise a broad range of constitutional rights.” Those include guarantees of free speech and equal protection and protections against unreasonable searches and double jeopardy, the company says.

Founded in Oklahoma City in 1970 by Green, Hobby Lobby now has 573 stores and 13,000 employees. On its website, a mission statement commits to “honoring the Lord in all we do by operating the company in a manner consistent with Biblical principles.” The company closes on Sundays and buys hundreds of full-page newspaper ads each year inviting people to “know Jesus as Lord and Savior.”

Green’s son, Mart, founded a Christian bookstore chain, Mardel Inc., which is also involved in the case.

The Greens say they view several forms of birth control, including Teva Pharmaceutical Industries Ltd.’s Plan B One-Step and Actavis Plc’s Ella, as abortion. They say the drugs prevent a fertilized egg from being implanted in the uterus.

The manufacturers and the Food and Drug Administration say the drugs work primarily by preventing the release of an egg from the ovary. The American Medical Association considers pregnancy to begin when a fertilized egg is implanted in the uterus.

Company employees

The administration says that, even if the 1993 law protects companies, the Greens’ religious objections don’t “trump the rights of the corporation’s 13,000 full-time employees and their family members to receive the health care to which they are entitled by federal law.”

“Bosses have no business imposing their own politics on their employee’s health and decisions,” says Ilyse Hogue, president of Naral Pro-Choice America, which advocates for women’s reproductive rights.

Anti-abortion groups are backing the companies. “Punishing Americans for their moral objection to life-ending drugs and devices is abhorrently un-American,” says Charmaine Yoest, president of Americans United for Life.

A federal appeals court ruled in favor of the Greens, temporarily shielding them from having to comply with the contraception requirement.

Conestoga is controlled by five family members -- Norman and Elizabeth Hahn and their three sons. The company, based in Lancaster, Penn., makes doors and other wood parts for kitchen cabinets and has more than 950 employees.

Its board of directors has adopted a “statement on the sanctity of human life,” stating the family’s belief that life begins at conception.

“The administration has no business forcing citizens to choose between making a living and living free,” says the Hahns’ lawyer, David Cortman of the Alliance Defending Freedom.

A federal appeals court ruled against Conestoga, saying that “for-profit secular corporations cannot engage in religious exercise.”

The two families contend that the contraception requirement violates their rights as individual owners, as well as the rights of the corporation.

The Conestoga appeal also challenges the contraceptive requirement as an unconstitutional infringement of religious rights. The Supreme Court agreed to consider that issue, even though no federal appeals court has sided with a company on those grounds.

The health care law has had a rough last few months. Website flaws have hindered enrollment, and Obama had to apologize to people who received notices that their insurance plans were being canceled. The president had promised that people could keep their policies.

The cases are Sebelius v. Hobby Lobby Stores, 13-354, and Conestoga Wood Specialties v. Sebelius, 13-356.