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Supreme Court Rules for Employers on Contraceptive Mandate

Yesterday, the U.S. Supreme Court issued a decision that could help ease the burdens placed on many employers by the Affordable Care Act (“ACA”). In Burwell v. Hobby Lobby Stores , the Court ruled that the federal government cannot force owners of closely-held, for-profit corporations to provide insurance coverage for certain types of contraception that violate their religious beliefs.

Following the passage of the ACA in 2010, the U.S. Department of Health and Human Services issued regulations requiring companies with fifty or more employees to provide their female employees with insurance coverage for all contraceptive methods approved by the U.S. Food and Drug Administration. The owners of three closely-held, for-profit corporations objected to providing coverage for certain types of contraception under the mandate, as doing so would violate their religious belief that life begins at conception. The Supreme Court agreed, holding that the contraceptive mandate substantially burdened the business owners’ exercise of religion and was not the least restrictive means of furthering the federal government’s interest in guaranteeing free access to the contraceptive methods at issue.

As a result of the Court’s ruling, owners of closely-held, for-profit corporations can now opt out of covering types of contraception that conflict with their religious beliefs. Even though the Court emphasized that its ruling only applied to the ACA’s contraceptive mandate and closely-held, for-profit corporations, today’s decision could have a large impact going forward. Closely-held corporations make up 90% of U.S. companies and employ 52% of the U.S. labor force. In what may be a sign of things to come, several closely-held corporations throughout the country have already announced that they plan to halt contraceptive coverage pursuant to the decision.

If you have any questions about this post or any other Labor & Employment related topic, please contact me at jbuckley@nmmlaw.com.