Free Exercise of Religion by Closely Held Corporations: Implications of Burwell v. Hobby Lobby Stores, Inc. Cynthia Brougher, Legislative Attorney. July 23, 2014

“One of the ongoing controversies related to the Affordable Care Act (ACA) has been the scope of exemption from certain health care coverage requirements, including the contraceptive coverage requirement. Though closely divided, the U.S. Supreme Court’s 5-4 decision in Burwell v. Hobby Lobby Stores, Inc. has settled the question of whether certain for-profit corporations must be exempt from the requirement, unless Congress chooses to amend the statute providing those corporations legal protection. Imputing the beliefs of owners of closely held corporations to the corporations themselves, the Court found that the ACA could not require such companies to provide contraceptive coverage in group health plans offered to their employees. It based its decision on the Religious Freedom Restoration Act (RFRA) which provides heightened protection for burdens on religious exercise. Although the case has been analogized to Citizens United v. Federal Election Commission, a 2010 case holding that corporations have free speech rights under the First Amendment, the Hobby Lobby decision was not decided on constitutional grounds. Instead, it provides protection on a statutory basis, meaning that Congress has the ability to respond to the decision if it disagrees with the Court’s ruling. This report analyzes the Court’s opinions in Hobby Lobby, examining the rights of closely held corporations under the Religious Freedom Restoration Act. It also addresses the implications for the contraceptive coverage mandate under ACA and discusses potential legislative responses to the Court’s decision. Finally, it analyzes the impact that Hobby Lobby may have in other contexts in which employers may claim religious objections.”