What Does The Hobby Lobby Ruling Mean For Consumers?

This morning, the Supreme Court issued its ruling on one of the most-watched cases of the season, Burwell v. Hobby Lobby. The issue was employer-provided healthcare, and what companies are required to provide under the Affordable Care Act. But the broader issues brought up by the ruling have implications beyond one craft store’s benefits package.

The Court ruled 5-4 in favor of craft chain Hobby Lobby and cabinet-maker Conestoga Wood Specialties, finding that certain kinds of companies can claim religious objection to providing employees contraceptive health care as part of their benefits package.

Specifically, the Court ruled that closely-held corporations cannot be required to provide contraceptive coverage to their employees (other treatments that occasionally meet with religious objections, like vaccines and blood transfusions, were specifically left out of the narrow ruling). A closely-held company is, basically, one that is not publicly traded, but instead has the majority of its stock owned by an individual or small group of individuals, like a family.

Closely-held corporations are about 90% of U.S. businesses and account for over half of private-sector employment in the country. Hobby Lobby is a large company, with close to 600 stores and 14,000 employees — but the chain remains privately owned, and not publicly traded.

There are already exemptions in the law — not only the ACA, but also a whole host of other laws — to cover religious organizations. Churches were already exempt from the ACA before today, as The Atlantic explains. What the Supreme Court did today was to allow for-profit, secular corporations owned by religious individuals to claim the same exemptions as churches:

The Court found that private companies have the same rights to religious objections as non-profits. Last fall, the government finalized its process for granting exemptions to the Affordable Care Act’s birth control mandate for non-profit organizations — religious universities, convents, and charities have to sign a form certifying that they object to paying for birth control, and then the government takes care of paying for it from there. It’s likely that the same sort of standard will apply to private companies: If they believe that providing coverage of certain forms of birth control violates their religious beliefs, they may not have to pay for that coverage, but the government still can.

Hobby Lobby and Conestoga weren’t alone; over 70 companies altogether had filed lawsuits over the contraception mandate, and many were still pending before this morning’s ruling. Although the Court only announced its decision a few hours ago, eligible businesses are already putting in motion their plans to cut back on benefits. The Wall Street Journal reports on several that were eagerly waiting for this morning’s ruling before hitting the kill switch on their offerings:

[St. Louis-based O'Brien Industrial Holdings] provided health coverage for its 100-plus employees but didn’t cover birth control and the morning-after pill, thanks to an injunction granted after the company filed suit. Had the court ruled against Hobby Lobby, Mr. O’Brien said he would probably have sold half the company to keep his total head count under 50 employees, which would have exempted him from having to provide health coverage.

Politico also digs into the future implications of the ruling, noting that Hobby Lobby “marks the first time that the Supreme Court has allowed companies the ability to declare a religious belief — a decision that could reverberate far past the Affordable Care Act to other laws and issues.”

Politico notes that Justice Ruth Bader Ginsburg said as much in her dissent, as Consumerist reported earlier, pointing to the “startling breadth” of the ruling and saying that it opened the door to let corporations “opt out of any law (saving only tax laws) they judge incompatible with their sincerely held religious beliefs.” Other organizations, both religious and secular, have previously expressed similar concerns.

Politically speaking, reactions in Washington are playing out exactly as anyone would expect. The Obama administration and Congressional Democrats are upset about the ruling; Republican lawmakers, meanwhile, are hailing it as a win.

And what of the thousands of employees whose health-care benefits packages now have holes in them, thanks to their employers’ religious beliefs? The government should take care of them, argued the Court. As SCOTUSblog explains, the “middle man” — either the insurer or a government subsidy — can step in to take over the cost of contraceptive coverage if an employer files a formal religious exemption.

At least, that’s what’s been worked out so far for religious groups, and experts expect it to apply here, too. Some religious organizations object to filing the exemption paperwork itself, claiming that doing so makes them complicit in employees accessing those services anyway. But that objection, as SCOTUSblog points out, is a legal case for another day.

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  1. TheRealSpottedfeather says:

    There is no reason for a company to provide contraceptives. It just doesn’t make sense. They should, I agree, provide insurance for life saving or health services like medical or dental. But something that isn’t for keeping someone alive, the employee should take care of stuff like that themselves.

    • Xenotaku says:

      You realize that, for some people, contraceptives /are/ helping keep them alive. My roommate /physically/ cannot move during her period without the hormones from birth control that she’s on. I know that her sister, because of her medical condition, also has to be on birth control, because of her medication.

      My FATHER was on contraceptives at one point, even, because of the way the hormones in it interacted with his other medication was beneficial.

      • AlaskanPixie says:

        That no longer counts as birth control then, I think. I take contraceptives for medical reasons, as long as my doctor fills out the proper paperwork I was told I’d still be covered. I need to find out my work’s standing now though.

        I really hope I haven’t been misinformed.

    • SuperSpeedBump says:

      Better yet, let’s just take insurance coverage out of the hands of businesses and keep it independent… that way religious fanatics can’t force their religious beliefs onto their employees.

    • charmander says:

      There is no reason for a company to provide Viagra. It just doesn’t make sense. They should, I agree, provide insurance for life saving or health services like medical or dental. But something that isn’t for keeping someone alive, the employee should take care of stuff like that themselves.

      And yet nearly all companies do cover Viagra. Why is that?

      • KevinBlah says:

        Look at the majority in the SCOTUS decision: all men. There’s your answer.

      • CzarChasm says:

        But do they HAVE TO cover Viagra? If not, your argument is specious. The ruling said nothing about companies not being able to pay for things they want to.

    • Edmunddantes says:

      The biggest misconception is that the company provides or gives you any healthcare. They don’t.

      They act as a negotiator between you and the insurance market. They find the best deal possible, and they then collect premiums from you in the form of your own payroll contributions in addition to money that they are paying you as a form of healthcare compensation in lieu of paying you directly. It’s your money the entire time.

      Look at the history of where the employer healthcare system came from. It makes it abundantly clear that healthcare spending was another way to compensate employees. It came out of the wage freezes of WWII. It got another jolt in the arm during Nixon wage freeze. Employers have even used the fact that healthcare is a form of compensation to the employee as an excuse as to why wages haven’t risen as high. “We’re spending so much on healthcare, we can’t pay our employees more”.

      An employer telling an employer you can’t spend your healthcare dollars on contraception is the same as telling an employee you can’t drink alcohol using money that I pay you since alcohol is against my religion.

    • Raekwon says:

      Wow out of all the stupid arguments I’ve heard today this one is one of the worst. You’ve heard of preventative medicine right? What about chiropractic? What about reconstructive? If I have a cough it’s not life threatening but my insurance covers a doctor’s visit. Men can get penis pumps, viagra, vasectomies, and a multitude of other sexual health products. Insurance covers a ton of non life saving treatments.

      Edit – And the comment system fails at properly putting this under the comment I was replying to.

  2. furiousd says:

    I personally think a federal mandate for employers to have to include insurance as part of an employee’s compensation package is ridiculous. And going back to letting a worker and company negotiate by themselves would avoid all of these silly hoops to jump through after the fact. As part of my compensation, I have 100% of my tuition covered. Should the government force all companies to provide this for their employees? No, but for where I am in life I found a job that would provide that benefit and I trade my time and skills to them for it. Both parties benefit and no one had to use the government to push anyone around.