What the Supreme Court Decisions Mean For the Future of Employer-Based Insurance


Paul KeckleyMonday, in its 5:4 ruling in Burwell v. Hobby Lobby, the Supreme Court affirmed that for-profit employers may opt out of certain methods of contraception it finds objectionable on religious grounds. In effect, the ruling gave standing to a company’s ability to use the 1993 Religious Freedom and Restoration Act, previously applied to individuals. Thursday, the Justices voted 6:3 that Wheaton College, is not required to transfer contraception coverage to a private insurer via submission of ESBA Form 770 deeming it an impermissible burden on its religious exercise. Instead, Wheaton will simply be required to notify HHS of its objection.

Pundits have framed these two decisions as a pivot point for the future of the Affordable Care Act. I think that’s overstated, though it assures the ACA will stay in the news and be prominent in Campaign 2014. I read the rulings and dissenting opinions: the points of view frame complicated questions, like ‘is a company entitled to the same religious freedoms granted individuals’ and ‘what are the limits of a company’s decision-making about matters of health’ and so on.

In practical terms, the immediate implications of the decisions are two:

The White House will have to develop an alternative path to contraceptive coverage.Prominent news organizations have speculated about two possibilities that would secure contraception coverage for women  who work for employers who refuse coverage on religious grounds: 1-the federal government could  create a new federal program or  2-it could require private  insurers provide coverage directly. Each would be challenged by opposition: If the former, the White House would face pushback from critics who would call it “a new entitlement”. If the latter, insurers would need to raise premiums or secure federal funding if expected to add the costs of contraception coverage for this specific circumstance.  Either way, it’s a sticky situation.

The rulings mean scores of companies and not-for-profits will file challenges to the ACA invoking religious freedom through the court system: an employer might take the position that vaccinations are a religious objection, or transfusion of non-autologous blood, or others. Already, more than 50 cases are working their way through circuit courts: more are expected.

But beyond these, the impact is likely to extend to a broader discussion about employer-sponsored coverage: Hobby Lobby, Conestoga, Wheaton and others pursued their grievances as employers through the court system. Trade associations representing manufacturers, small businesses and many industries are seeking waivers/relief from what they consider onerous provisions in the ACA relative to the health benefits they provide their employees (the ACA’s references as Employer Shared Responsibility provisions and others).

Employers need certainty in running their businesses. A number of changes to the law impacting employer-sponsored health insurance lend to uncertainty. For example, the employer mandate for companies above 50 full time employees was delayed until January, 2016 by an Executive Order last year. The viability of health exchanges is an unknown, and rules that determine how a company’s health plan is calculable as “affordable” based on the employee’s household income is problematic. Add challenges to contraception on religious grounds as another element of uncertainty.

The decisions in Burwell v. Hobby Lobby and Wheaton College v. Burwell were narrowly focused on religious freedom, but the bigger story might be employer sponsored health insurance: How employers navigate their benefits planning, how they extract more value for the dollars they spend in healthcare, and whether in the long-term they find it more reasonable to drop coverage altogether, paying the penalty and losing their tax exemption.

The rulings last week assure healthcare reform will remain a prominent topic in the arena of public debate. And they carry far greater weight in the broader context of how employers will navigate.

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6 replies »

  1. Now that corporations are people and money is speech, may as well let them have religion. Don’t worry about that pesky constitution. It was getting old anyway.

  2. As a woman, I find it offensive to imply that I cannot PAY for my own birth control. (read: a victim of my genitaila) I don’t need my insurance company, employeer or (least of all) the government to provide free birth control. Period.

    Why aren’t more women outraged that we are seen as helpless to take care of ourselves and determine the direction of our lives – independantly.

    I want you all ‘out of my bedroom’ – it’s none of your business, don’t need your assistance – I am woman, hear me ROAR!

    • Beagle Mom, thanks for your comment. You are right on target. All these people whining about this decision don’t recognize that they are doing the woman’s movement a disservice by focusing on a non issue for political reasons while many woman are suffering due to abuse and the fact that they are the one’s generally left with the children after the break up.

      I think like the left treats certain other groups the left treat women as second class citizens that can’t do anything right without their help. Maybe for some it makes them feel good.

      The left uses the argument equal protection only when it suits them politically and in this case like in many others this use of the equal protection clause is very dubious.

  3. Several things:

    1. This ruling denies the Equal Protection clause of the 14th Amendment to a class of actual persons based solely on their female gender, insofar as the tx’s in question are otherwise lawful. (The same would be true of any “Personhood at Conception” statute or Amendment.)

    2. It is a de facto “Establishment of Fundie Christian Religion” notwithstanding the Constitution’s ostensible proscription of such. No Islamic church could EVER expect such equivalent dispensation.

    3. Commercial corporations now apparently get a post facto “Line Item Veto” of enacted (and otherwise SCOTUS-validated) legislation.

    It is no answer to point out that women can still purchase contraceptive goods and services with their own money, btw. People of means can, of course, avail themselves of all manner of good and services in commerce (“positive liberty”) that those of lesser means cannot. That’s a different issue, as are the relative merits of legislating this or that required coverage elements.

    One solution would be to get employers out of the healthcare intermediation business entirely. Single-payer or realistic vouchers (though the Fundies would surely attack such provisions there as well, a la Hyde Amendment type efforts).

    Real can of worms, this thing.

    But, at least my Constitutional protection To Be Ready When The Moment Is Right remains intact. That’s all that counts, right ladies? /s

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