Guest Post: Hobby Lobby and the Prophet Motive

Guest Post by Brian White:

Contrary to the conservative meme that everything in the Patient Protection and Affordable Care Act (ACA) is an unprecedented overreach of federal power, the ACA contraceptives mandate was patterned on longstanding state “insurance-equity” laws. Such laws promote the health of women, children and families by assuring access to prescription contraceptives. Though not superseded by the decision handed down by the Supreme Court in the Hobby Lobby case, these state laws never actually pertained to Hobby Lobby or any other large employer with pockets deep enough to avoid state-regulated insurance products altogether by self insuring.

Without this self-insurance loophole, Hobby Lobby would have been obliged years ago to offer all contraceptives approved by the Food and Drug Association (FDA) to its employees in a majority of the states where it does business, including Mitt Romney’s Massachusetts. Loss of this loophole under the ACA is the reason Hobby Lobby sued for federal religious protection. Companies lacking the wherewithal to self-insure are still on the hook in those laboratories of democracy that have embraced insurance equity.

According to the National Conference of State Legislatures, at least 28 states have laws requiring health insurers that provide prescription drug coverage to cover all FDA-approved contraceptives. The reasoning behind this public policy was expressed nicely by the Georgia State Legislature in 1999:

The General Assembly finds and declares that:

(1) Maternal and infant health are greatly improved when women have access to contraceptive supplies to prevent unintended pregnancies;

(2) Because many Americans hope to complete their families with two or three children, many women spend the majority of their reproductive lives trying to prevent pregnancy;

(3) Research has shown that 49 percent of all large group insurance plans do not routinely provide coverage for contraceptive drugs and devices. While virtually all health care plans cover prescription drugs generally, the absence of prescription contraceptive coverage is largely responsible for the fact that women spend 68 percent more in out-of-pocket expenses for health care than men; and

(4) Requiring insurance coverage for prescription drugs and devices for contraception is in the public interest in improving the health of mothers, children, and families and in providing for health insurance coverage which is fairer and more equitable.

Having so found, the Georgina State Legislature ordered that:

Every health benefit policy that is delivered, issued, executed, or renewed in this state or approved for issuance or renewal in this state by the Commissioner on or after July 1, 1999, which provides coverage for prescription drugs on an outpatient basis shall provide coverage for any prescribed drug or device approved by the United States Food and Drug Administration for use as a contraceptive. This Code section shall not apply to limited benefit policies described in paragraph (4) of subsection (e) of Code Section 33-30-12. Likewise, nothing contained in this Code section shall be construed to require any insurance company to provide coverage for abortion.

Though there may be room for Georgians of good will to disagree, legislate and even litigate over the FDA distinction between contraceptives and abortifacients, what there is no room for in Georgia is a religious exemption from the larger state contraceptive mandate. Georgia is one of eight states making no exception for religious employers who purchase insurance within the state.

Ironically, had the ACA followed the strict, no-exception approach to contraceptive coverage of this conservative southern state, and not provided a mechanism for some employers to avoid paying for contraceptives they find objectionable on religious grounds, the federal mandate might have passed Supreme Court scrutiny.

Just like it’s contraceptives requirement, the ACA definition of a religious employer was based on state precedent. The ACA exemption language is identical to court-tested exemption language in California and New York:

a "religious employer" is an entity for which each of the following is true:

(A) The inculcation of religious values is the purpose of the entity.

(B) The entity primarily employs persons who share the religious tenets of the entity.

(C) The entity serves primarily persons who share the religious tenets of the entity.

(D) The entity is a nonprofit organization as described in Section 6033(a)(2)(A)i or iii, of the Internal Revenue Code of 1986, as amended.

It is worth noting that during his Massachusetts gubernatorial campaign of 2002, Mitt Romney did not oppose an insurance equity bill that went on to pass the state Senate by unanimous vote and the state House by a vote of 240 to 16. Massachusetts exempted only churches or church-controlled organizations as “defined in 26 U.S.C. section 3121(w)(3)(A) and (B).” Profit-making corporations would seem to have no religious rights worth protecting in the Bay State:

(A) For purposes of this subsection, the term “church” means a church, a convention or association of churches, or an elementary or secondary school which is controlled, operated, or principally supported by a church or by a convention or association of churches.

(B) For purposes of this subsection, the term “qualified church-controlled organization” means any church-controlled tax-exempt organization described in section 501(c)(3), other than an organization which—

(i) offers goods, services, or facilities for sale, other than on an incidental basis, to the general public, other than goods, services, or facilities which are sold at a nominal charge which is substantially less than the cost of providing such goods, services, or facilities; and

(ii) normally receives more than 25 percent of its support from either

(I) governmental sources, or

(II) receipts from admissions, sales of merchandise, performance of services, or furnishing of facilities, in activities which are not unrelated trades or businesses, or both.

Court watchers will debate whether the renunciation of established state and federal health policies and workplace definitions in favor of the “sincerely-held beliefs” closely-held “corporations” have about the religious morality of the FDA formulary was an example of unprecedented judicial overreach, but the question remains, what is left in it’s wake? Certainly not the kind of objective definition of religious conviction needed for the impartial administration of justice. In the Hobby Lobby case, for instance, “sincerely held” does not mean “consistently held” as the company used to cover two of the four kinds of contraceptives it ultimately objected to.

It is doubtful it even means “absolutely held” as the Archdiocese of New York currently preaches against the same contraceptives it voluntarily covers in collective bargaining agreements with unionized employees. Nor is there any relief from the confusion regarding corporate personhood stirred up by the Citizens United case. If the rights of corporations and the individuals who control them are the same, why should a corporate veil separate the liabilities of the two? Or as Justice Ginsburg put it in her Hobby Lobby dissent, “One might ask why the separation should hold only when it serves the interest of those who control the corporation.” There goes 100 years of corporate law out the window. No wonder the United States Chamber of Commerce is getting nervous. One thing seems certain, it is going to take quite some time to sort what is Caesar’s from what is God’s.