WASHINGTON -- The U.S. Supreme Court dealt a blow to President Barack Obama's health care law on Monday, ruling that closely held companies can refuse on religious grounds to offer birth-control coverage to their workers.
Voting 5-4, the court ruled that family-run businesses, including the craft store chain Hobby Lobby Stores Inc., can claim a religious exemption from the requirement that they include contraceptives in their health care plans. The companies say they regard some forms of contraception as immoral.
The ruling carves a hole in Obama's biggest legislative initiative, the 2010 health care law that the Supreme Court upheld two years ago.
Contraception is among a range of preventive services that must be provided at no extra charge under the Patient Protection and Affordable Care Act. Nearly 30 million women receive birth control as a result of the health law, the government has said.
More broadly, Monday's decision marks an expansion of corporate rights, allowing for-profit companies, like people, to claim religious freedoms under federal law.
Safeguarding the religious rights of corporations "protects the religious liberty of the humans who own and control those companies," Justice Samuel Alito wrote for the court. He said the administration had options for ensuring contraceptive coverage without infringing those rights.
The case divided the court along ideological lines. Alito's majority opinion was joined by Chief Justice John Roberts and Justices Antonin Scalia, Clarence Thomas and Anthony Kennedy. Justices Ruth Bader Ginsburg, Stephen Breyer, Sonia Sotomayor and Elena Kagan dissented.
Ginsburg wrote that the court had for the first time extended religious freedom protections to "the commercial, profit-making world."
"The court's expansive notion of corporate personhood," Ginsburg wrote, "invites for-profit entities to seek religion-based exemptions from regulations they deem offensive to their faiths."
Ginsburg said the ruling may foster employer objections to other types of health care coverage, including blood transfusions and vaccines or let companies try to opt out of gender-discrimination laws on religious grounds.
"The court, I fear, has ventured into a minefield," she wrote.
But Alito said "it seems unlikely" that publicly held "corporate giants" would make religious liberty claims. He added that he did not expect to see "a flood of religious objections regarding a wide variety of medical procedures and drugs, such as vaccinations and blood transfusions."
Race discrimination, he said, could not "be cloaked as religious practice to escape legal sanction."
The decision was the last of the court's nine-month term, coming as sign-carrying advocates on both sides of the issue demonstrated outside.
The birth-control rule stems from the health care law's requirement that any insurance coverage offered by employers meet minimum standards.
White House spokesman Josh Earnest said the decision "jeopardizes the health of women."
"We will work with Congress to make sure that any women affected by this decision will still have coverage," he said.
Corporations or people
The case centered on the 1993 Religious Freedom Restoration Act, which says the U.S. government may "substantially burden a person's exercise of religion" only when it meets a demanding test.
The law was a response to a 1990 Supreme Court decision that declined to recognize religious exceptions under the First Amendment's free exercise clause to generally applicable laws. Congress effectively reversed that decision.
Alito said Congress included for-profit corporations -- at least closely held ones -- within the definition of "persons." He said a corporation "is simply a form of organization used by human beings to achieve desired ends."
"The court confirmed that Americans don't give up their religious freedom when they open a family business," Mark Rienzi, a lawyer for the Becket Fund for Religious Liberty, which represents Hobby Lobby, said in a conference call with reporters. "If the government thinks everyone has got to have a certain drug, the government has got to be prepared to step up and pay for it."
The Obama administration argued that even if the law covers corporations, the government's interests outweighed any religious rights the companies possess.
The administration said contraceptive coverage is crucial to women's health and economic well-being, arguing that almost half of all pregnancies are unintended. Women of childbearing age spend 68 percent more than men in out-of-pocket health care costs, the government argued.
Hobby Lobby has 600 craft stores across the country and at least 15,000 full-time employees. The Oklahoma City-based company's five owners, led by founder David Green, have all signed statements declaring their religious faith and committing to run the business accordingly.
The company closes all its stores on Sundays to ensure that employees can spend time at church and with their families. On its website, a mission statement commits to "honoring the Lord in all we do by operating the company in a manner consistent with Biblical principles."
The Supreme Court also ruled in favor of Conestoga Wood Specialties Corp., a Pennsylvania woodworking business owned by a Mennonite family. Conestoga, which has more than 950 employees, is controlled by five family members -- Norman and Elizabeth Hahn and their three sons.
The two companies' lawsuits are among at least 50 filed by for-profit businesses opposed to the contraception requirement, according to the Becket Fund.
Alito said the Obama administration has other options for ensuring contraceptive coverage. He said the U.S. could "assume the cost of providing the four contraceptives at issue to any women who are unable to obtain them under their health-insurance policies due to their employers' religious objections."
Alito also said the government could extend an "accommodation" that already lets nonprofit religious employers avoid providing coverage directly, instead shifting the duty to the insurer.
But that accommodation, crafted by the Department of Health and Human Services, is also under legal fire. Religious groups, including the University of Notre Dame and Catholic dioceses across the country, say the arrangements still require them to facilitate coverage. Monday's ruling didn't directly say how the court might rule on that question.
Hobby Lobby argued that the 1993 law requires the government to show that it is pursuing a compelling interest and that its approach is the least restrictive way of accomplishing that goal. Alito said the government failed the second part of that test.
Alito wrote that if the companies fail to comply, "the economic consequences will be severe." He said Hobby Lobby could be fined as much as $475 million a year for noncompliance.
Supporters of the requirement said the law gives employers another choice: not providing health coverage at all. Employers taking that approach must pay a penalty of as much as $3,000 per employee.
Alito said the argument that the companies should take that approach "entirely ignores the fact that the Hahns and Greens and their companies have religious reasons for providing health insurance coverage for their employees." He also said the penalty would be substantial -- about $26 million for Hobby Lobby and $1.8 million for Conestoga.
Cecile Richards, president of Planned Parenthood Action Fund, called it a "stunning ruling" issued by "five male justices."
For women, "decisions about their health care are being made by people who never need to use birth control," Richards told reporters on a conference call.
The administration has said a victory for the companies would prevent women who work for them from making decisions about birth control based on what's best for their health, not whether they can afford it. The government's supporters pointed to research showing that nearly one-third of women would change their contraceptive if cost were not an issue; one effective means of birth control, the intrauterine device, can cost up to $1,000.
The contraceptives at issue before the court were the emergency contraceptives Plan B and ella and two intrauterine devices.
Arkansans' reactions
Members of the predominantly Republican Arkansas congressional delegation issued written statements about the decision. The House and Senate are on recess this week.
U.S. Rep. Tim Griffin said the rulings "uphold our religious freedoms and fundamental rights protected by the Constitution."
"I applaud the Supreme Court for making it clear that the Obama Administration cannot force American family business owners to choose between their religious beliefs and intrusive government mandates. Further, the Supreme Court made clear what I have always believed: that organizations, such as unions, cannot force affiliation and dues on individuals without their consent," he said.
U.S. Rep. Rick Crawford said the ruling "affirmed support for religious freedoms inherent in our Constitution and held that these freedoms do not go away when individuals start their own businesses. No one should be concerned that they have to leave their religious beliefs behind and instead be forced to adhere to a government mandate."
U.S. Rep. Steve Womack called the ruling a victory for religious liberty and business.
"The First Amendment affords Americans the freedom of religion. Obamacare should not infringe on this right, and employers should not be fined for practicing their constitutionally-protected faiths," he said. "I applaud today's Supreme Court decision, which ensures they won't be."
U.S. Sen. John Boozman said the country was founded on the right to freely practice religion.
"Americans shouldn't have to abandon those protections simply because they own a business. And yet, that is exactly what the Obama Administration tried to force on businesses like Hobby Lobby and Conestoga under this mandate," Boozman said. "Thankfully, the Justices thought otherwise and preserved the right for business owners to object to overbearing government mandates that would violate their religious beliefs."
The Senate campaigns of U.S. Sen. Mark Pryor and U.S. Rep. Tom Cotton used the ruling to criticize each other.
Cotton, who opposes the Affordable Care Act, said it forces some people to violate the precepts of their faith.
"We cannot have equality in America if we are not all equally allowed to exercise and act on our religious convictions," he said in a statement. "Sen. Mark Pryor should be ashamed that he voted for Obamacare, which undermines and restricts religious liberty. Sen. Pryor wasn't working for Arkansas when he voted for this unconstitutional law; he was working for President Obama."
Pryor, the delegation's only Democrat, responded that he understands the religious views of the people who brought the suit, but he defended the law.
"I cannot support Congressman Cotton's irresponsible plan to return to the days when women paid more than men for basic health care services and folks were denied coverage due to pre-existing conditions, nor do I agree that we should kick more than 220,000 working Arkansans off of their private insurance plans," Pryor said in a statement. "Unlike Congressman Cotton, I believe that every adult and child should have access to quality, affordable care, and that health care decisions should be made by families and doctors, not insurance industry bureaucrats."
The cases are Burwell v. Hobby Lobby Stores, 13-354, and Conestoga Wood Specialties v. Burwell, 13-356.
Information for this article was contributed by Greg Stohr, Derek Wallbank, Madeline McMahon, Alex Wayne and Angela Greiling Keane of Bloomberg News; by Mark Sherman, Ricardo Alonso-Zaldivar, Jessica Gresko and Jim Kuhnhenn of The Associated Press; by Adam Liptak of The New York Times; and by Sarah D. Wire of the Arkansas Democrat-Gazette.
A Section on 07/01/2014