What Companies Need to Know About Religious Obamacare Exemptions

By William Peacock, Esq. on July 08, 2014 | Last updated on March 21, 2019

Congratulations: Your closely held corporation is a person. And when it comes to religious beliefs, that fictional person, it seems, takes after its figurative parents -- its closely held owners.

What does the Supreme Court's landmark Hobby Lobby ruling mean for your company, your religious beliefs, and your requirement to provide either contraceptive coverage or insurance coverage for other services that run contrary to your beliefs?

Depending on the level of accommodation you're requesting, you may only need to fill out a form or send a letter, though for objections to anything other than contraception, you may be forced to litigate.

Opposed to Providing Contraceptive Coverage? Use Form 700

In the Court's majority opinion, Justice Samuel Alito noted that the decision rested largely on the already available exemption for religious nonprofits. These organizations have to fill out Form 700 [PDF] and deliver it to a third-party administrator, who will then provide contraceptive coverage on the government's dime.

It seems, based on the opinion, that the solution for closely held corporations with religious owners will be the same: Fill out the form and find a third-party administrator.

Opposed to Facilitating Contraceptive Coverage? Write a Letter

While Form 700 might be enough to assuage the consciences of many objectors, others, including Catholic religious organizations, have objected to the exemption procedure and paperwork itself. Relying upon the Catholic Church's earlier writings regarding abortions in Germany (religious officials in the country were providing state-mandated counseling to those seeking abortions), a handful of organizations have argued that facilitating coverage is itself a grave sin.

The Eleventh Circuit recently granted an injunction, requested by a religious television channel, against the contraception exemption form, while the Supreme Court has twice recently granted such an injunction: to the Little Sisters of the Poor and, last week, to Wheaton College.

In both cases, the Supreme Court instructed the parties to send a letter to the Secretary of Health and Human Services notifying the agency that the organization is a religious nonprofit and that it "has religious objections to providing coverage for contraceptive services." The Court has yet to decide these cases on the merits, however, so the procedure for Form 700 objectors could change.

The Court has also not yet extended the letter procedure to for-profit, closely held corporations -- though last week's Hobby Lobby decision at least hints that they should get the same accommodations for beliefs as religious nonprofits.

Opposed to Other Procedures? File a Lawsuit

The real slippery slope of litigation, as pointed out by Justice Ruth Bader Ginsburg, is other religious-based objections that could crop up regarding Obamacare-mandated health insurance. For example, if a corporation's owners are Jehovah's Witnesses, they might object to providing coverage for transfusions.

If your company falls into this group, the Court's opinion is not completely helpful -- it limited its explicit reach to contraceptive coverage, since there was an existing program that could easily be expanded to cover for-profit objectors. Companies with other religious-based objections to providing healthcare coverage may have to litigate the issue.

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