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Protestors gather outside the US Supreme Court on Monday Photograph: Jim Lo Scalzo/EPA Photograph: JIM LO SCALZO/EPA
Protestors gather outside the US Supreme Court on Monday Photograph: Jim Lo Scalzo/EPA Photograph: JIM LO SCALZO/EPA

Hobby Lobby ruling: firms can refuse to provide contraception coverage

This article is more than 9 years old

Justices side with Hobby Lobby and rule companies can claim religious exemption from Obamacare birth control mandate

Read the supreme court's opinion

Conservatives celebrated a victory over Obamacare on Monday after the supreme court ruled that some companies should be allowed a religious exemption from rules requiring them to include all forms of contraception in employee health policies.

In a judgment with significant implications for the legal rights of corporations, a narrow majority of five justices argued that “closely held” businesses such as the family-run Hobby Lobby chain of stores, which brought the test case, enjoyed the same religious protections under law as individuals.

Hobby Lobby's Christian owners and others like them will now be free to remove four controversial contraception methods from insurance plans provided to their 13,000 staff, claiming they amount to a form of abortion because they take effect after the point of fertilisation.

The wider implications for Barack Obama's Affordable Care Act (ACA) were less immediately clear, with critics arguing the ruling could open the floodgates to companies seeking other religious exemptions for treatments such as blood transfusions and vaccines, but conservative justices insisting their “very specific” ruling should not set a precedent.

Either way, the judgement in favour of Hobby Lobby – an Oklahoma-based arts-and-crafts chain of about 600 stores founded by David and Barbara Green – is the most significant legal setback for Obama's politically contested health reforms since the supreme court first upheld its right to force individuals to find insurance cover in 2012.

Lower courts were previously split over the contraception mandate, with the 10th circuit court of appeals voting in favor of Hobby Lobby in an earlier decision, and the third circuit court of appeals ruling against Conestoga Wood.

The second case was brought by Conestoga Wood, a cabinet-making business run by a Mennonite family in Pennsylvania. They, too, believe certain contraceptives are abortifacients, even though scientists have repeatedly disputed these claims.

“We in the Hahn family want to thank everyone who supported us during this lawsuit. We wholeheartedly affirm what the supreme court made clear today – that Americans don’t have to surrender their freedom when they open a family business,” said Conestoga Wood president and CEO Anthony Hahn in a statement.

The ruling now forces Obama’s department of health and human services (HHS) to decide whether to pay for contraception in such cases out of the public purse instead, risking a fresh confrontation with Republican critics of the law in Congress.

Nevertheless, the five normally conservative judges on the bench, led by justice Samuel Alito, argued they were simply upholding the 1993 Religious Freedom Restoration Act (RFRA) by backing Hobby Lobby, and rejected administration arguments that the firm could have chosen to pay a smaller fine by opting out of health insurance instead.

“We doubt that the Congress that enacted RFRA – or, for that matter, ACA – would have believed it a tolerable result to put family-run businesses to the choice of violating their sincerely held religious beliefs or making all of their employees lose their existing healthcare plans,” argued Alito in the majority opinion.

He also argued it should not be for the government to judge whether the connection between paying for certain contraceptives – such as Plan-B “morning-after pill” or IUD “coil” – amounted to a significant infringement of their religious rights.

“The [owners] believe that providing the coverage demanded by the HHS regulations is connected to the destruction of an embryo in a way that is sufficient to make it immoral for them to provide the coverage,” added Alito.

“This belief implicates a difficult and important question of religion and moral philosophy, namely, the circumstances under which it is wrong for a person to perform an act that is innocent in itself but that has the effect of enabling or facilitating the commission of an immoral act by another.”

However, the four liberal justices who dissented from the majority opinion said it trampled on the rights of women employees, who had been specifically protected under the ACA to include preventative care such as contraception and reduce cost imbalances with men.

“In a decision of startling breadth, the court holds that commercial enterprises, including corporations, along with partnerships and sole proprietorships, can opt out of any law (saving only tax laws) they judge incompatible with their sincerely held religious beliefs,” wrote justice Ruth Bader Ginsburg in the minority dissent.

She argued that the majority were effectively suggesting “the general public can pick up the tab” instead, and warned of dire consequences: “Where is the stopping point to the ‘let the government pay’ alternative? Suppose an employer’s sincerely held religious belief is offended by health coverage of vaccines, or paying the minimum wage.”

The White House sharply criticised the ruling but played down its wider impact on Obamacare and said it was up to Congress to act to close the loophole.

“Some bosses can now withhold contraceptive care from their health coverage based on their own religious views,” said spokesman Josh Earnest. "Today's decision jeopardises the health of women who are employed by these companies.”

He added: “We will work with Congress to make sure that any women affected by this decision will still have the same coverage of vital health services as everyone else," he added.

The court’s underlying dispute over the legal status of companies may prove almost as long-lasting as rows over Obamacare, with liberals pointing to a slew of recent cases involving campaign finance as evidence that the bench is routinely favouring wealthy corporate interests over the rights of individuals.

It also the latest in a series of legal setbacks for the Obama administration, which was also rebuffed by the supreme court in recent days in its attempt to make administration appointments without the approval of Congress.

But Alito and the other four justices, including chief justice John Roberts, were adamant that the Hobby Lobby case represented a narrow reading of corporate rights, that were effectively extensions of the rights of their owners.

“A corporation is simply a form of organization used by human beings to achieve desired ends,” wrote Alito. “When rights, whether constitutional or statutory, are extended to corporations, the purpose is to protect the rights of these people.”

He rejected the argument made by Ginsberg that the ruling was a slippery slope, and suggested it would only apply to companies with a small, clearly-defined group of owners rather than large, publicly-owned companies with many shareholders.

“Our decision should not be understood to hold that an insurance- coverage mandate must necessarily fall if it conflicts with an employer’s religious beliefs,” added Alito. “Other coverage requirements, such as immunizations, may be supported by different interests (for example, the need to combat the spread of infectious diseases) and may involve different arguments about the least restrictive means of providing them.”

More on this story

More on this story

  • US supreme court Hobby Lobby ruling: supporters and detractors react

  • The Hobby Lobby ruling proves men of the law still can't get over 'immoral' women having sex

  • Reactions to the supreme court's ruling on corporation's religious rights

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