In March 2012, the U.S. Supreme Court heard arguments in the case “U.S. Dept of Health & Human Services vs. the State of Florida”. It was seen as an organized effort to overturn a portion of the “Affordable Care Act” also known as ObamaCare, in which individuals would be mandated to obtain health insurance that conforms with minimum federal guidelines, or face paying a penalty.
The government tried to use the obscure reconstructionist-era law called the “Anti-Injunction Act” to prevent the case from even being heard. The AIA prohibits any lawsuit against a new tax before that tax is even assessed. Arguments on both sides were presented and, in the end, the court determined that the AIA did not apply to the case.
In opposition to the U.S. Government were not just the state of Florida, but 26 states, the National Federation of Independent Business and several individuals. Without going into detail, the Court ultimately came to a decision. But this opinion only came after a careful interpretation of the act’s language. The majority statement was clear:
The ACA’s key provision amounts to an invitation to buy insurance, rather than an order to do so, with a not-very-big tax penalty for going without. The “minimum coverage” provision (that’s the technical name Congress gave what most people have called a mandate) was never to be enforced on its own — that is, the Affordable Care Act has never told people to buy insurance or you go to jail. It was always going to be enforced only by requiring an individual who refused to get health insurance to pay a tax.
From the court’s perspective, then, the act of a person of purchasing health insurance was a form of “tax incentive”. Purchase health insurance and you don’t have to pay the tax. In a similar way, the government has used the tax code to encourage other types of behavior. Generally, though, when this tax can be demonstrated to cause “undue burden” on the company, it has generally been customary to exempt them from time to time.
Also worth noting is that this interpretation of the “mandate” as a “tax” applies to individual taxpayers but also to corporations over a certain size. When an individual taxpayer holds full time employment at a company of a certain size, it then falls to the company to choose insurance or tax (penalty).
Fast forward to 2014, when the law took effect. The leadership of the Hobby Lobby Company faced a difficult choice: either provide government-approved health insurance, including no-cost reproductive medication/devices which, to them, terminated the life of a living human being – or – pay multi-million tax penalty. From their point of view,
Hobby Lobby faced a choice between a $475 million per year “penalty” if it kept its insurance plan but refused to cover the contraceptives at issue, or a $26 million “tax penalty” if it dropped its insurance coverage altogether.
Complicating matters was that the company’s objections singled out a certain group of employees – women. At the same time, another company, Conestoga Wood Specialties Corp, was having the same debate.
Some say that these two companies are being hypocritical, applying a “Sanctity of Life” argument to some forms of reproductive treatments and not others. Why allow insurance coverage of medications that treat impotency and procedures such as vasectomies then? Why allow birth control pills and infertility treatments? The answer is simple: the religious objection is not over sexual enhancements, treatments, or pregnancy prevention in general. The religious objection is to one very specific outcome – those that interfere with the natural progression of pregnancy AFTER fertilization. There is no hypocrisy. These companies truly believe the fertilized egg and developing embryo is life – and that life is sacred. Though not legally recognized as so, this is the point at which many people of faith would contend that a “medication or device” designed for deliberate prevention of pregnancy from this point on satisfies the definition of abortifacient. A life is terminated, violating one of the most sacred laws: Thou shalt not kill.
The 2014 Case
At one point during arguments, Justice Sotomayor asked a very pertinent question. “How does a corporation exercise religion?” Since the entire argument against the government hinged on the Religious Freedom Restoration Act of 1993 as it applies to companies, this perhaps was the key question. The answer was supplied by Chief Justice Roberts. He suggested that it was part of the “religious commitment” of the families who owned these companies to “provide health care for its employees”. (He was acknowledging that these companies could have simply paid the tax for not providing insurance at all, leaving employees on their own to purchase insurance.) Kennedy was the one swing justice who seemed to be “on the fence” the entire proceeding.
At one point, Justice Kennedy gave both sides a chance to win him over. To Clement (the voice of the two companies) he expressed concern about the effect on employees when a religious employer denied contraceptive coverage. Was it in fact “denying” a segment of the workforce access to care that has been defined as essential to women’s health? To Verrilli (voice of the U.S. government), he put forth “under your view, a profit corporation could be forced … in principle to pay for abortions.”
Verrilli Loses Control
If anyone tries to suggest that the Supreme Court doesn’t control the finer points of discussion or debate when arguments are made – hasn’t listened to a proceeding from start to finish. Verrilli’s strongest argument – that of the NON-mandate – instead became a barrage of questions about expression of religious freedom, and its application to a corporate entity. Verrilli had lost control of the framework of the debate. It had appeared that the majority of the court had accepted, oddly, that in fact it was a government mandate that was being imposed upon these companies to provide specific health care to its employees. (Perhaps because NOT to do so resulted in such a high tax that the company would be left with little choice).
The dissenting side (questions led by Sotomayor and Kagen) was also still focused on the “religious exemption” and were more interested in what would happen if this religious exemption might lead to companies’ refusal to cover blood transfusions, transplants, vaccinations, and other life-saving techniques. Extending it further, what about other laws (such as non-discriminatory labor laws) in which a private, for-profit company might seek exemption for hiring homosexuals, for example? Most (except Justice Ginsburg and a few others) in the room believed that this kind of denial of coverage would be a much harder sell. When “undue burden” of the individual employee is greater than the burden on the employer, it seemed clear that to refuse coverage in this situation would not stand up in court.
It was here that Kennedy seemed satisfied to render a decision on the side of the plaintiffs. When the language of the majority opinion is read carefully, it is clear that in order for religious exemption to apply, this undue burden requirement would be absolutely necessary, and that burden on the employer most often would be greater.
It is possible that Sotomayor and Kagen did not return to the tax as an alternative because it was believed that, in the case of Hobby Lobby, the tax burden (for not covering the 4 contraceptives) was a “substantial burden” that went beyond fairness and equity. I believe, in the privacy of their chambers, these female justices would admit – it would be easier for companies like this to just deny ANY health insurance. But clearly this was not something they wanted to encourage or acknowledge. Getting ALL Americans insured was certainly the goal of the ACA as well as the interest of the U.S. government in keeping citizens healthy.
The final decision involved 3 parts but was summarized as follows:
As applied to closely held corporations, the regulations promulgated by the Department of Health and Human Services requiring employers to provide their female employees with no-cost access to contraception violate the Religious Freedom Restoration Act.
Five justices, all male, signed the majority decision. What is a closely held corporation? The IRS defines it as “having more than half the value of its stock owned by five or fewer individuals. That’s individuals — not just family members.” Legally, it also cannot be public. That is, the stock is not publicly traded on a stock exchange. Closely held companies tend to be small – many are far too tiny to offer any type of insurance to its employees. But there are some which are very large, such as Mars, Inc with more than 70,000 workers and Cargill, Inc with more than 140,000 workers.
The Supreme Court has come down in favor of the notion that a corporation is a “person” in a legal sense. That is, whenever a law applies to a person, that includes corporations, companies, associations, firms, partnerships, societies, and joint stock companies – as well as individuals. This does not seem to be likely to change nor is it anything new.
However this was an historic, landmark result. Never before had exercise of religion been considered to be applicable to a for-profit enterprise. The reason for this had been largely because those who work to sustain the company’s operations do not all subscribe to the same faith. What drove this decision was the size of the tax burden Hobby Lobby and Conestoga would be required to bear. Clearly the justices were moved by the inequity of it. They never would have upheld the constitutionality of the ACA had the tax burden (for not participating) been set high.
Interestingly, there were two dissenting opinions: one written by Justice Ginsburg, the other by Sotomayer and Kagen. In the opinion of Justice Ginsburg, she believes that the proverbial “Pandora’s Box” has now been opened, allowing companies virtual carte blanche to win exemption from all sorts of government regulations based on religious belief. In stating this, some legal experts believe that Ginsburg herself may have opened the door for lower courts to extend exemptions for broader cases than those narrowly defined in the majority opinion.
This was a victory for those who understand the nature of religious expression not being limited to one’s private, personal life – but also can be at the heart of one’s business vision as well as business philosophy. The Court, in its ruling, stated that Hobby Lobby and Conestoga successfully demonstrated compellingly that the Department of Health and Human Services, in its regulations, “substantially burdened the corporations’ exercise of religion”. Clearly there would not be a long list of entities claiming this ruling in order to “get out of” paying for health remedies/preventive care, despite what some claim. I think Justice Ginsburg’s fears may be overly stated.
What about the women whose access to free health care is limited as a result? Here is what the dissenting opinion said. (Direct quote from the dissenting opinion as stated by Sotomayer/Kagen):
“No doubt the Greens and Hahns and all who share their beliefs may decline to acquire for themselves the contraceptives in question. But that choice may not be imposed on employees who hold other beliefs. Working for Hobby Lobby or Conestoga, in other words, should not deprive employees of the preventive care available to workers at the shop next door, 30 at least in the absence of directions from the Legislature or Administration to do so.”
Who is imposing what? I’ve been hearing this a lot lately – that to refuse to pay for something is equivalent to denying access to something. What if the shop next door only has 20 employees? Chances are, my neighbor worker had to get her own insurance. My employer doesn’t pay for corrective eyewear. Does this mean they are denying my access to good vision? Whatever happened to individual responsibility? I can get a voucher toward the purchase of eyeglasses but the bulk of the cost comes out of my pocket. Similarly, if I work for Hobby Lobby and I wish to use a device that could stop a pregnancy by killing an embryo before it implants – then by gosh, I’ll just have to pay for it myself. No one is denying my access or imposing their views on me.
Bottom line to my problem with this argument is this: denial of funds does NOT by definition translate to denial of equal access. So… dear reader…
Who is being burdened by an imposition that significantly hampers their ability to live/conduct business/spend money in a manner their conscience can abide? Is it the woman who has to fork over $50 for an IUD? Or is it the family-owned corporation getting stuck with a $475 million tax bill? Consider the alternative: Hobby Lobby could have simply paid the $26 million to the government, dropped health insurance coverage altogether and told employees to get their own insurance. Despite the politics involved, and the built-in inconsistencies between this ruling and the one in 2012, I think the Constitution and freedom-loving people won this time.