Hobby Lobby decision creates new questions

The rules have yet to be written and the way forward is unclear, but the June 30 Supreme Court decision in the Hobby Lobby case could create legal ripples for years.

Brian Johnston, a Polsinelli PC shareholder and chairman of the Kansas City-based firm’s employee benefits department, said he has consulted with a few unnamed Springfield-area business owners who have expressed concerns about the contraceptive mandate that was challenged by Oklahoma-based Hobby Lobby Stores Inc. and Pennsylvania-based Conestoga Wood Specialties Corp.  

Before the case went to the Supreme Court, Johnston said he recommended a wait-and-see approach as cases winded through the system.

Now, he expects regulators with the Department of Health and Human Services, the Department of Labor and IRS to sort out the religious-exemption process for private, closely held businesses.

On June 30, the nation’s high court ruled certain corporations could opt out of the Affordable Care Act’s contraception mandate. But Johnston said the judgment wasn’t one that necessarily opened the floodgates to religious exemption to coverage.

“First and foremost, the ruling itself was a very narrow ruling,” Johnston said. “Employers who still have a grandfathered group health plan – meaning they have, in effect, the same health plan that was in effect in March 2010 – are unaffected by this. The contraceptive mandate does not affect grandfathered health plans.”

Further, Johnston said the ruling only pertains to private, closely held corporations. Exemptions already exist for religious employers, such as churches, organizations founded for religious purposes and nonprofits with religious objections. Public companies were specifically identified as ineligible for the contraceptive exemption.

He said while the Supreme Court didn’t offer a definition for “closely held” corporations, family-owned businesses or largely family-owned firms with only a handful of shareholders should meet the court’s criteria.

The decision
The 5-4 decision, in essence, finds that an employer of a closely held company who has sincere religious beliefs – whether they are scientifically provable or not – can trump employees’ rights to legal contraception under ACA because employees can get that coverage apart from their employer.

At issue, Hobby Lobby and Conestoga claim two types of interuterine devices, Ella and the Plan B “morning after pill,” are abortive by nature because they believe pregnancy begins at conception. The ACA had required employer-provided insurance plans provide such coverage at no cost to employees.

Evangel University Business Department Chairman Bernie Dana said the court determined it was not its place to decide whether the people who run closely held corporations had beliefs that were mistaken or unreasonable – which is what Health and Human Services was arguing – but whether their beliefs were honest convictions.  

“I think there is going to have to be some history shown this is a part of their beliefs,” Dana said. “The dissent expressed great concern that everyone is going to want to come in now and want to assert an exemption for something, but I think the burden of proof is going to have to come from the closely held corporations.
“And I’m not sure how that will happen.”

Johnston said he expects by early September the three government agencies involved to set the formal path for business owners seeking a waiver.

Locally, one business already has such an exemption.

Brothers Paul and Chris Griesedieck own Springfield Iron and Metal LLC, a 30-employee scrap metal company, as well as three St. Louis area businesses: American Pulverizer Co., Hustler Conveyor Co. and City Welding. The Griesediecks secured a hard-fought waiver for the ACA’s contraception mandate following their October 2012 challenge against HHS in the U.S. District Court of Western Missouri.

In that case, which has not been settled in the Southern Division court in Springfield, the owners secured a temporary waiver that the Hobby Lobby decision now supports.

“It’s not affecting our business at all. It’s business as usual. We are providing our employees insurance,” Chris Griesedieck said of the roughly 160 workers across their businesses. “We are not against birth control and planning. We are against the ‘morning after pill.’ After conception is what we are protesting.”

Paul Griesedieck said the brothers are waiting to see what happens next as their attorneys try to secure a full waiver based on their Christian faith.

“In the Springfield area, we’ve had some positive feedback. Some employees were very thankful we were willing to take a stand for the unborn,” he said, noting he’s not received negative feedback from employees, two-thirds of whom are male.

The open door
According to the National Women’s Law Center, some 70 for-profit companies have filed suit against the HHS over the contraception mandate, including the Griesediecks from St. Louis. Dana said many of the cases were waiting to be heard by the Supreme Court and would head back to their appropriate lower courts for rulings now that the high court has made its judgment.

The decision raises several questions for business owners going forward, but Johnston said he thinks it answered others by ruling out at least a couple of possible religious exemptions.

“In response to the dissent, the Supreme Court did make note of the fact that this ruling did not open the door to provide the opportunity for employers to choose not to provide coverage for things like transfusions and immunizations,” Johnston said. “But, in my view, the decision doesn’t close the door for other employers of Jehovah’s Witnesses, of Christian Scientists, of Scientologists from making other claims either under the Religious Freedom and Restoration Act or other federal law.
“I think it is too soon to tell what the impact might be.”

While the ruling might have been narrow in the Hobby Lobby case, Johnston said other liability questions could rise to the surface.

“If the Supreme Court is saying that corporations have rights as a person for exercising religious freedom, does that call into question other decisions of corporations and, specifically, their ability to have liability protection that typically shields individuals running corporations from personal liability?”

Dana, who worked 14 years for a Christian-based long-term health care provider in Omaha, Neb., before coming to teach at Evangel in 2011, agreed the decision’s implications are far-reaching and unknown at this point. But he suspects religious business owners might not seek an exemption, even if they could.

“Some people with strong religious convictions are going to say, ‘I’m going to leave that up to the employee to decide. I don’t like abortive contraceptives, but I’m not going to plant my flag there,’” Dana said.

In their efforts, the Griesediecks say they don’t intend to infringe on employees’ rights; they want to protect their own rights as business owners with religious convictions.

“We’re not trying to influence people. We just have our own beliefs and thought we should step up to them,” Chris Griesedieck said.