Since last October, legal experts and business leaders have been watching and waiting for the U.S. Supreme Court to hand down their decision one of the most high-profile business law cases in recent years.
Late in June, on the very last day in the current term. the top court published its its ruling in Burwell v. Hobby Lobby. The problem: whether a closely-held, for-profit corporation could refuse based on the private owners’ personal religious convictions against birth control, to provide contraception coverage to the employees as mandated from the federal regulations when the 2010 Affordable Care Act. With a razor-thin, 5-4, majority vote, the Supreme Court answered that could.
The 4 dissenting justices disagreed, strenuously, on the effect and the rationale. However, the general public and media attention which has been given to this significant Supreme Court opinion has almost overshadowed the veracity that – for most small, and mid-sized businesses – it can do not have impact in any way.
The Decision in a Nutshell – Two families, the Hahns and the Greens, own an overall total of three companies. The Hahns along with their children own and control Conestoga Wood Specialties (kitchen cabinets), whilst the Greens and their children own and control all of the Hobby Lobby Sunday hours. One of many Greens’ sons also owns an affiliated Christian bookstore chain.
Though these for-profit businesses fulfill the concept of “closely held” corporations that is, (five or fewer shareholders) they are hardly what a lot of people would consider to get small enterprises. The Hobby Lobby chain operates some 500 locations nationwide with almost 13,000 employees. The bookstore firm, Mardel, has about 35 stores and some 400 employees. Conestoga has about 950 employees.
The families argued the Health & Human Services Department regulations mandating birth control coverage violated their rights under the federal Religious Freedom Restoration Act and the First Amendment. Among the many, complex issues decided was whether a for-profit company could “participate in religious exercise.”
Five from the justices (Kennedy, Roberts, Scalia, Thomas, and Alito) ruled that these families’ rights are violated from the contraception mandate, it “substantially burdened their exercise of religion,” which HHS “had not demonstrated a compelling desire for enforcing the mandate against them,” or proved that this mandate was the “least restrictive means” of furthering a compelling governmental interest.
Justice Samuel Alito, writing for that majority, revealed that this ruling “… applied to closely held corporations” and, in a concurring opinion, Justice Anthony Kennedy noted that it is supposed to have been a narrow in scope.
Why Many Businesses Is Going To Be Unaffected With This Ruling. Legally, this decision does not affect the vast majority of American businesses and, particularly, on family-owned firms. First, there is no “employer mandate” whatsoever beneath the Affordable Care Act for any business with fewer than 50 employees. These firms happen to be exempt and possess no requirement to supply workers with any health insurance coverage at all. Furthermore, whilst the great majority of small enterprises in the United States (about 78%) are family owned, just about 2 percent of small businesses have 50 or even more employees.
So, for many closely held corporations, this Supreme Court case, however newsworthy, is not really relevant. Second, before the passage and implementation in the Affordable Care Act, the majority of businesses, including small, and midsized firms, already offered the mandated contraceptive coverage. Over 70% of all U.S. employers not affiliated with religious institutions included birth control within their company health plans. Even for businesses with less than 200 employees, that figure was over 60%.
Third, the Affordable Care Act already exempts religious for-profit corporations along with nonprofit corporations from this coverage mandate.
For Affected Companies, There are Broad Implications – This ruling will affect a fairly few closely held corporations whose private owners elect to assert that they hold “sincerely held religious beliefs” against contraception. However, wjdqpc Court’s majority opinion is not exactly clear how these religious convictions should be measured or proved.
In their blistering dissent, Justice Ruth Bader Ginsburg predicted that the opinion could eventually allow “businesses to opt from any law (saving only tax laws) they judge incompatible with their sincerely held religious beliefs.”
Other critics, including many legal experts, are worried about its broader implications, and whatever they describe being a “slippery slope” of possible religious challenges to a variety of government regulations.