Business Protected On Religious Grounds Against Obamacare Free Birth Control Rule!

Yes!  Freedom of religion is not a limited “freedom of worship.”  It also applies to how one acts and lives out their faith in the world.

A self insuring private business, the owners of which object on religious grounds to contraception, have been awarded an injunction against Obamacare’s “Free Birth Control Rule.” First, the court notes that the company in question does not qualify for the limited exemption provided in the regulation.  From the ruling in Newland v. Sebelius:

Hercules’ health insurance plan is not “grandfathered” under the ACA. Furthermore, notwithstanding the Newlands’ religious beliefs, as a secular, for-profit corporation, Hercules does not qualify as a “religious employer” within the meaning of the preventive care regulations. Nor may it seek refuge in the enforcement “safe harbor.” Accordingly, Hercules will be required to either include no-cost coverage for contraception in its group health plan or face monetary penalties. Faced with a choice between complying with the ACA or complying with their religious beliefs, Plaintiffs filed the instant suit challenging the women’s preventive care coverage mandate as violative of RFRA, the First Amendment, the Fifth Amendment, and the Administrative Procedure Act.

The court ruled that the plaintiffs have shown “irreparable harm” would occur if the injunction were not issued. Here’s a real money quote about the importance of the free exercise of religion:

Defendants argue that entry of the requested injunction is contrary to the public interest, because it would “undermine [their] ability to effectuate Congress’s goals of improving the health of women and children and equalizing the coverage of preventive services for women and men so that women who choose to do so can be part of the workforce on an equal playing field with men.” This asserted interest is, however, undermined by the creation of exemptions for certain religious organizations and employers with grandfathered health insurance plans and a temporary enforcement safe harbor for non-profit organizations. These interests are countered, and indeed outweighed, by the public interest in the free exercise of religion.

I predicted in an earlier blog post, the Free Birth Control Rule is doomed as applied against religious objectors because they are protected by a federal statute known as the Religious Freedom Restoration Act,” meaning the Constitution need not be applied.  And sure enough, the judge avoided the constitutional issue, stating that the law RFRA requires a compelling state interest “in all cases where free exercise of religion is substantially burdened.”

The judge ruled that the state had not met its burden, and in a rich irony, based his decision in part upon the many exemptions already provided for various entities under Obamacare!

To make such a showing, however, the government must “offer evidence that granting the requested religious accommodations would seriously compromise its ability to administer this program.”... Any such argument is undermined by the existence of numerous exemptions to the preventive care coverage mandate. In promulgating the preventive care coverage mandate, Congress created significant exemptions for small employers and grandfathered health plans... Even Defendants created a regulatory exemption to the contraception mandate...(exempting certain religious employers from the contraception requirement of the preventive care coverage mandate).

It is worth nothing that the decision does not end the case, only prevents the law from being enforced against the plaintiffs in the lawsuit pending its final outcome.  The ruling does not apply to any other business or persons.

Also, the judge raised an interesting question: Can a corporation be said to have religious liberties?  As an issue of first impression, he properly did not try to provide the answer at this stage of the proceedings. But it is an interesting matter to ponder.  Here’s my preliminary stab.  It depends on the facts of the individual case.  If it is a widely held corporation like GM or Google, in which the stock ownership is so diverse and institutionally held that it can’t be said to have a single religious perspective, I think not. But a closely held corporation in which the owners clearly have a common view, I think so, since in such cases, the corporate structure itself would have no relevance as to the beliefs of the business’s owners.

If I am wrong about that, religiously oriented business owners might have to eschew economic benefit derived from incorporating and turn instead to other approaches, such as the limited liability partnership, if they want to protect their free exercise rights.

In any event, this is good news. Particularly given the statutory protection, I think the Free Birth Control Rule will not be applied to individual businesses owned by religious objectors and to objecting religious institutions going forward. As I said before, because these cases can be based on the federal law, I don’t think they will reach the Supreme Court.

Update: I also don’t think a business need necessarily sue, but could use the statute as a defense if they refuse to comply and face enforcement action. But, of course, any business so thinking should obtain legal advice before making any decision in that regard.