What the Burwell v. Hobby Lobby decision really means for women’s health care

Whenever a landmark Supreme Court decision comes out, I try to find the decision itself and read it because I want to understand not only what the justices decided but how they decided it and exactly what it means. If you can get past the legalese, it’s often fascinating reading material no matter how you feel about the decision.

On June 30, 2014, the U.S. Supreme Court issued a decision in the case of Burwell, Secretary of Health and Human Services et al. v. Hobby Lobby Stores, Inc.. The court ruled 5-4 in favor of Hobby Lobby. I’d encourage you to read the decision of the court’s majority, written by Justice Samuel Alito and the concurrence from Justice Anthony Kennedy as well as the minority dissent written by Justice Ruth Bader Ginsburg. Please make up your own mind — don’t take my word for what any of it means.

Background: How we got here

In case you’ve been living under a rock for the past week, I’ll provide a bit of basic background on the case, which can also be found in the court opinion. I apologize if this falls into the category of TL:DR (too long, didn’t read), but the details are important.

A refresher from high school civics class

In case your memory from high school civics class is a little foggy, I’ll review an important concept. The U.S. Constitution is a framework that allows for four different types of laws, and judges might have to take all of them into account when reviewing a case. Deciding the rule of law correctly is a very difficult thing for any judge to do, and this is where good lawyers earn their high hourly rates.

  1. Statutory law. Statutes are the types of laws we normally think of that are passed by both houses of Congress and signed by the president. The framework for this is described in Article I.
  2. Administrative law. Under Article II, the executive branch is given the authority to carry out laws passed by Congress, and that often means writing administrative law. We often describe administrative laws as regulations. Whenever a president issues an executive order, he (or perhaps she in the future) is acting under the authority granted by Article II.
  3. Treaties. Article II also allows the president to make treaties with other nations…with the Senate’s consent. This isn’t really relevant to this case, but it is another type of law.
  4. Case law. Article III created the judicial branch, and when the judicial branch — especially the Supreme Court — makes a ruling, that ruling becomes part of the body of case law that can be cited as precedent in future cases. There is a principle in case law that you might have heard about before called stare decisis, which is Latin for “to stand by things decided.” To illustrate the importance of case law and stare decisis, Planned Parenthood of Southeastern Pennsylvania v. Casey was decided based on the previous precedent of Roe v. Wade in spite of statutes written by the Pennsylvania legislature.

In 1990, the Supreme Court ruled in another landmark case called Employment Division, Department of Human Resources of Oregon v. Smith. In this case, a man named Alfred Smith was fired from his job for ingesting peyote, which was both a religious sacrament in the Native American Church where he had membership — and an illegal drug in the state of Oregon. After being fired, Smith sought unemployment insurance benefits but was denied because Oregon law disqualified applicants who had lost their jobs due to “misconduct.” The court found in favor of the state government in Oregon (thus against Smith). An excerpt from that decision:

Although a State would be “prohibiting the free exercise [of religion]” in violation of the Clause if it sought to ban the performance of (or abstention from) physical acts solely because of their religious motivation, the [Free Exercise Clause of the First Amendment to the U.S. Constitution] does not relieve an individual of the obligation to comply with a law that incidentally forbids (or requires) the performance of an act that his religious belief requires (or forbids) if the law is not specifically directed to religious practice and is otherwise constitutional as applied to those who engage in the specified act for nonreligious reasons. Opinion of the Court in Employment Division, Department of Human Resources of Oregon v. Smith

This case prompted Congress to react, passing a statute called the Religious Freedom Restoration Act (RFRA) of 1993. It was signed into law by President Bill Clinton. This is the key excerpt from the statute:

SEC. 3. FREE EXERCISE OF RELIGION PROTECTED.
(a) IN GENERAL.—Government shall not substantially burden a person’s exercise of religion even if the burden results from a rule of general applicability, except as provided in subsection (b).
(b) EXCEPTION.—Government may substantially burden a person’s exercise of religion only if it demonstrates that application of the burden to the person (1) is in furtherance of a compelling governmental interest; and (2) is the least restrictive means of furthering that compelling governmental interest.

In plain English, RFRA was written for the express purpose of overturning the precedent set by Employment Division, Department of Human Resources of Oregon v. Smith, even going so far as to mention the case in the background of the statute. Remember this little nugget…we’ll come back to it.

Fast forward to 2012. After Congress passed the Patient Protection and Affordable Care Act of 2010 (aka Obamacare), the work of the executive branch — specifically the Secretary of Health and Human Services — to write regulations to implement the statute began. One of those regulations was called the Women’s Health and Preventive Services Guidelines, which took effect on August 1, 2012.

Essentially, these guidelines required all health insurance plans (except for those that were grandfathered in before the statute was signed by President Obama on March 23, 2010) to cover 20 FDA-approved contraceptives without any copays, deductibles or coinsurance. Under the Patient Protection and Affordable Care Act, organizations with 100 or more full-time employees are required to provide health insurance to them or pay a penalty of $2,000 per employee. So the financial stakes can be high.

After creating a firestorm with these guidelines, the Department of Health and Human Services walked back and exempted “religious employers” from being bound by the Women’s Health and Preventive Services Guidelines. The guidelines were very specific about what constituted a “religious employer,” (essentially a church or house of worship), and a for-profit corporation like Hobby Lobby definitely did not fit the description.

HHS had to strike a delicate balance of making contraceptives available to the women who worked for these “religious employers” while not forcing those religious employers to be the ones to pay for it. So they created a program that allowed the religious employers to notify HHS of their objections and then require the health insurance company to finance the benefit directly…which health insurers are quite willing to do since covering pregnancies is a lot more expensive. (Apparently even that didn’t satisfy some Catholic employers who object even to filling out the exemption form.)

Closely held corporations vs. publicly traded corporations

It’s crucially important, especially in this case, to distinguish a closely held corporation like Hobby Lobby Stores, Inc. from a publicly traded corporation like Walmart Stores, Inc. You can’t call up your broker and buy Hobby Lobby stock on the exchange…it simply isn’t for sale. Even though the Walton family retains majority ownership in Walmart, the remaining common stock is still publicly traded. One of the first steps that many entrepreneurs make when forming a business is to incorporate it — this protects the entrepreneurs from being held personally liable for debts incurred by the business. So when we talk about Hobby Lobby as a corporation, all we really mean is that the business was incorporated like most small businesses are. It just happens to be bigger.

Four of the contraceptives: Plan B (levonorgestrel), Ella (ulipristal acetate) and two types of intrauterine devices (IUDs) are controversial because the Food and Drug Administration wrote that they sometimes prevent the fertilized egg from implanting in the uterus as a failsafe if they can’t prevent ovulation or prevent the sperm from reaching the egg.

Because the Green family, who hold 100% ownership in the incorporated Hobby Lobby chain, believed that being required to pay for these four contraceptive methods violated their religious belief that “human life begins at conception,” Hobby Lobby sued the U.S. Department of Health and Human Services.*

The owners of the businesses have religious objections to
abortion, and according to their religious beliefs the four
contraceptive methods at issue are abortifacients. Opinion of the Court in Burwell v. Hobby Lobby Stores, Inc.

The Hobby Lobby case, which came from the Tenth Circuit Court of Appeals was consolidated with a similar case called Conestoga Wood Specialties Corp. v. Burwell that came to the Supreme Court from the Third Circuit Court of Appeals…essentially, the Supreme Court decided both cases at once since they were so similar.

Hobby Lobby’s legal argument was essentially that the Religious Freedom Restoration Act of 1993 exempted them from having to provide coverage for these contraceptive methods that violated their religious principles, and that since HHS had already set up the exemption program for religious employers, that there was already a less restrictive method in place to meet the governmental interest without burdening their employees. Essentially, Hobby Lobby Stores, Inc. wanted to be treated like a church — something HHS clearly never intended.

The decision

The court ruled in favor of Hobby Lobby — in large part because HHS had already made the exemption for religious employers by setting up an alternative means of financing contraception, and expanding that exemption to a for-profit corporation that objected passed the “least restrictive means” test as described in RFRA. And, considering the penalty for not complying with the large employer health insurance mandate in the Affordable Care Act (which was the only way the Greens of Hobby Lobby and the Hahns of Conestoga Wood Specialties Corp. could not violate their beliefs) created a “substantial burden.”

The effect of the HHS-created accommodation on the women employed by Hobby Lobby and the other companies involved in these cases would be precisely zero. Under that accommodation, these women would still be entitled to all FDA-approved contraceptives without cost sharing. Opinion of the Court, Burwell v. Hobby Lobby Stores, Inc.

The court rejected HHS’s claim that for-profit corporations cannot themselves have religious beliefs and cannot assert RFRA rights, at least as it pertained to the petitioners in this case.

Corporations, “separate and apart from” the human beings who own, run, and are employed by them cannot do anything at all…HHS would draw a sharp line between nonprofit corporations (which HHS concedes are protected by RFRA) and for-profit corporations (which HHS would leave unprotected), but the actual picture is less clear-cut…The companies in the cases before us are closely held corporations, each owned and controlled by members of a single family, and no one has disputed the sincerity of their religious beliefs. Opinion of the Court, Burwell v. Hobby Lobby Stores, Inc.

Justice Anthony Kennedy concurred with the court decision written by Justice Alito. He wanted to emphasize that this decision shouldn’t be interpreted broadly to mean that any for-profit corporation can claim RFRA protection to any law based on religious objections…and that this case was confined to a very specific set of circumstances.

RFRA requires the Government to use this less restrictive means. As the Court explains, this existing model, designed precisely for this problem, might well suffice to distinguish the instant cases from many others in which it is more difficult and expensive to accommodate a governmental program to countless religious claims based on an alleged statutory right of free exercise. Concurrence opinion by Justice Anthony Kennedy

Analysis

Prior to the HHS regulation being announced, Hobby Lobby Stores, Inc. was already covering all 20 of these contraceptive methods. The Green family said they didn’t realize until recently that their health plan included the four methods they found objectionable.

Given the long history of the Green family’s support of Republican Party causes and their willingness to invest in mutual funds that included the companies that manufactured the very methods of contraception they objected to (even when there are other mutual funds like The Timothy Fund and the Ave Maria Fund that expressly avoid these sorts of ethical dilemmas), it’s easy to suspect that they dropped these methods of contraception just because it would enable them to file a lawsuit to undermine Obamacare for political purposes. If a company owned 100% by people who express such strong religious beliefs did not realize they were violating them for years — in multiple ways — until the issue became a political firestorm, they were at the very least negligent in practicing those beliefs. But it’s not the court’s job to discern a petitioner’s motives, so we have to assume (maybe naively) that everyone involved in this case was sincere.

The court went a long way to explain how their ruling in this case had a very narrow scope, something Justice Ginsburg disputed in her dissent.

The Court’s determination that RFRA extends to for-profit corporations is bound to have untoward effects. Although the Court attempts to cabin its language to closely held corporations, its logic extends to corporations of any size, public or private. Little doubt that RFRA claims will proliferate, for the Court’s expansive notion of personhood–combined with its other errors in construing RFRA–invites for-profit entities to seek religion-based exemptions from regulations they deem offensive to their faith. Dissent opinion by Justice Ruth Bader Ginsburg

It will be interesting to see if Justice Ginsburg’s predictions will come true…my sense is that they will if for no other reason than as an excuse for these corporations to sidestep paying for these products as mandated by the Affordable Care Act. But I can only speculate about what will happen.

The real irony of this case was that HHS dug its own grave by exempting “religious employers” from the mandate and creating a workable program to accommodate them. It’s an important reminder for policymakers that there’s often a price to pay for political expediency in the face of controversy: court challenges.

What the Court seemed to ignore (and perhaps HHS never raised it) was that the exemption for “religious employers” did not include many religious non-profit organizations either…like Catholic hospitals and universities. It was essentially limited to churches and houses of worship…organizations that were not only non-profits but also were organized for the specific purpose of exercising and practicing religion.

I wonder as well why no one raised the stare decisis argument against RFRA. If stare decisis allowed the Court to overturn a statute in Planned Parenthood v. Casey, why shouldn’t the Court have adhered to the precedent in Employment Division, Department of Human Resources of Oregon v. Smith as well?

In any event, the easily forgotten people here are the female employees of Hobby Lobby and Conestoga who were directly impacted by this ruling — sort of. The Court’s opinion reminds us that HHS set up an alternative financing scheme for women employed by organizations that objected to covering contraception to get these drugs with no out-of-pocket cost, and that these women would have that method available to them. A different means to the same end. So it’s important that we don’t overreact to this decision because it does not take away women’s access to emergency contraception — it merely removes their employer from the equation. And it does not require the women to pay for it out of pocket, so cost is still not a barrier.

It’s worth repeating this excerpt from the Court decision:

The owners of the businesses have religious objections to
abortion, and according to their religious beliefs the four
contraceptive methods at issue are abortifacients. OPINION OF THE COURT IN BURWELL V. HOBBY LOBBY STORES, INC.

So, are these four contraceptive methods really abortifacients? As we were reminded in this case, scientific realities don’t seem to matter when it comes to faith…the Greens could have said whatever they wanted, and who could have questioned it as a legitimate religious objection? There’s no sanity check in religion.

There’s a great deal of scientific evidence against this claim of emergency contraceptives acting as abortifacients. There is only one abortifacient drug on the market, and that is RU486. And even if emergency contraceptives do prevent implantation in rare cases, that still does not terminate a pregnancy as it is defined by the American College of Obstetricians and Gynecologists — a group that knows a thing or two about reproduction. (“A pregnancy is considered to be established only after implantation is complete.”) I’ve said it before, and I’ll say it again: Words mean things.

None of these definitions mattered to the Court, which is unfortunate considering the Court’s use of another statute called the Dictionary Act to define corporations as people. I have a feeling we’re all in for a bumpy ride as a result of this ruling.

*At the time the lawsuit was initially filed, Kathleen Sebelius was the Secretary of Health and Human Services. She has since been replaced by Sylvia Burwell. That’s why you might have seen this case previously called Sebelius v. Hobby Lobby Stores, Inc. It’s the same case.

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