Cornerstone - A Conversation on Religious Freedom and Its Social Implications

RFRA Worked in Hobby Lobby; What’s Next?

Responding to Hobby Lobby: The Ruling and Its Implications for Religious Freedom

In ruling that Hobby Lobby Stores do not have to cover contraception in employees’ health insurance, the Supreme Court resolved some big questions—correctly—and ultimately reached a narrow result that exemplifies how the Religious Freedom Restoration Act is supposed to work in balancing religious freedom against governmental interests. Justice Alito’s majority opinion rules that for-profit “closely-held” corporations can raise religious freedom claims, and it makes a number of other points in support of broad religious freedom. Justice Kennedy, the crucial fifth vote, joined the majority opinion but also wrote a concurring opinion emphasizing the decision’s limits. (See my previous Cornerstone post “Kennedy, the Perennial Swing Vote, and the Likelihood of a Narrow Ruling,” in which I correctly predicted what the Court and Kennedy were likely to do.)


The key point, for Kennedy in particular, was that the government already had a mechanism for accommodating objections to contraception by nonprofit religious organizations. The organization tells its insurer—or a third-party administrator (TPA) if the organization self-insures—that it objects to covering contraception, and the insurer or TPA provides that coverage directly to employees in a separate contract, with no financial or administrative involvement by the employer. The insurer can do this because contraception coverage, by the government’s own calculations, saves net costs by avoiding costs from pregnancy. Given this, the Court sensibly held that the government could extend the accommodation to for-profit objectors. Presumably, it’s cost-neutral for their insurers, too.

The case shows RFRA working as Congress intended. The statute says that it is meant to “strik[e] sensible balances between religious liberty and competing [g]overnmental interests.” There may well be a strong interest in ensuring contraception coverage, but the fundamental question was who would pay for it. If insurers are willing and able, why coerce the employer who has religious scruples? The Court pointed to the solution that could protect both sides.

Hobby Lobby’s aftermath involves three big questions. First, will the decision start a cascade of exemptions from coverage mandates and other commercial regulation? I seriously doubt it. For-profit businesses should be able to make RFRA claims, but most judges recognize that the commercial context involves distinctive government interests: ensuring that everyone can participate in economic life and preventing businesses from seeking unfair commercial advantages. In Hobby Lobby, the cost-neutral nature of contraception not only meant that insurers could pay, but also that businesses had little financial incentive to make false religious claims. The Court also made clear that a business’s religiously based claim to discriminate against employees or customers presents a different situation—although the only laws it specifically endorsed were race discrimination laws. A small photography or florist business might still win a religious freedom right not to provide services at a same-sex wedding when many alternative providers are at hand. But I doubt that commercial discrimination claims will get further than that.

Second, the “insurer pays” accommodation itself is being challenged by some nonprofits who claim that still it makes them impermissibly complicit in providing contraception or abortifacients. They object that the opt-out process requires them to “designate” their insurer as the provider of contraception, and more broadly, that it still means their insurance contract triggers contraception coverage (albeit by someone else). Passages in Hobby Lobby provide some ammunition for these arguments: the majority held that if a claimant honestly believes a certain degree of involvement is impermissible, courts should not reject that connection as too attenuated. On the other hand, if the nonprofits’ claim is that no form of the insurer-paid accommodation can ever be permissible, I have doubts that will prevail. Justice Kennedy, the crucial fifth vote, seemed particularly focused on this accommodation, in some form, as the solution. The government should come to the table by adopting a more basic opt-out process that does not involve the employer “designating” or communicating with the insurer.

Finally, what will happen to RFRA and parallel religious freedom laws in 15 states? Already one hears calls for amending the federal statute—although a White House source has disclaimed any interest in doing so, and the gridlocked Congress seems unlikely to act. Opponents may try to amend other federal laws to exclude RFRA from applying to them and to amend or even repeal RFRAs in blue states. Those attempts should be resisted. In an increasingly divided society, RFRAs provides a means for protecting dissenters from serious burdens while still allowing government to accomplish its important goals. The Hobby Lobby decision is controversial, but no less so than the decision to mandate contraceptive coverage in the first place. RFRA actually guided the Court toward a decision that can protect the interests of both sides. Let’s remember that in the coming months.
Other Responses

Perry Dane

The Battlefields of Hobby Lobby
Perry Dane
September 12, 2014

Alan Brownstein

Hobby Lobby: An Unnecessarily Broad Opinion
Alan Brownstein
September 11, 2014

Micah J. Schwartzman

What Did RFRA Restore?
Micah J. Schwartzman
September 11, 2014

Jennifer Marshall

Can We All Just Get Along? Yes.
Jennifer Marshall
July 2, 2014

Kyle Duncan

Hobby Lobby Spells Doom for Mandate 2.0
Kyle Duncan
July 2, 2014

Stanley Carlson-Thies

Hobby Lobby, Benefit Corporations, and Religious Nonprofits
Stanley Carlson-Thies
July 2, 2014

Robert Tuttle

Hobby Lobby in the Long Run
Robert TuttleIra Lupu
July 1, 2014

Steven D. Smith

Hobby Lobby: A Modest Comment on a (Prudently) Modest Decision
Steven D. Smith
June 30, 2014

Thomas Farr

The Hobby Lobby Decision: A Victory for Religious Freedom and for American Women
Thomas Farr
June 30, 2014

 
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