Never underestimate the tenacity of libertarianism in contemporary American politics. From the outset of his first term, President Barack Obama dared to take on this strain of American culture by pressing for passage of the Affordable Care Act, which extends health insurance to millions of uninsured Americans—and therefore represents to its critics all the worst that big government has to offer. His opponents fought the bill aggressively in Congress, where they lost.
They then turned to the courts, arguing that Congress lacked the power to require people to either purchase health insurance or pay a tax. In essence, they claimed that the federal government could not ask Americans to pitch in for the common good. Again, they lost. And for good reason. In virtually every other developed nation, the idea that universal heath care is part of the social contract has long been established. In the United States, it has for decades been a feature of social life for the elderly and those poor enough to qualify for Medicaid. But it remains anathema to the libertarians, and they have not let up.
The latest round of challenges takes the “death by a thousand cuts” approach. In two consolidated cases now pending before the Supreme Court, three for-profit corporations owned by Christians opposed to abortion—Hobby Lobby arts and crafts stores, Mardel bookstores, and kitchen cabinet wholesaler Conestoga Wood Specialties—assert that because they object on religious grounds to providing insurance coverage for certain types of contraception, they must be exempted from the ACA’s requirements that employer-provided insurance plans pay for such services. They object not to all birth control, but to those methods, such as the IUD and the morning-after pill, that they believe end life after conception.
If the challengers prevail, as they may, we can expect a long line of businesses objecting to covering other medical services, and seeking similar exemptions. At bottom, the cases, argued in March and likely to be decided by June, ask whether individuals and businesses have a religious right to opt out of sharing responsibility for assuring that everyone has adequate and affordable health care.
Ironically, the religious objectors would have no claim if Congress had enacted a single-payer system for health insurance, as many on the left preferred. Under a single-payer plan, the government itself would always provide the insurance, as it does for many under Medicare and Medicaid, and there would be no legal basis for religious objections. If people chose not to use birth control, that would be that. The religious objection to the ACA stems from the requirement that the employer pay for the insurance; these employers object to being complicit in the provision of forms of contraception that they view as akin to abortion.
But the fact that the ACA rests largely on employer-provided insurance, of course, is itself a compromise demanded by the conservatives—the very conservatives who are now complaining that employers should not have to provide insurance for services they find objectionable. (Last year’s constitutional challenge to the ACA’s “individual mandate” similarly would have been a nonstarter under a single-payer plan, because no one disputes that Congress has the power to tax and spend for the general welfare by providing health insurance directly.)
The current challenges are based on the Religious Freedom Restoration Act (RFRA). Congress enacted RFRA in 1993, in response to a 1990 Supreme Court decision, Employment Division v. Smith, holding that neutral laws of general applicability do not violate the First Amendment’s clause protecting the “free exercise” of religion, even if they have the incidental effect of imposing a burden on a particular religious practice. In an opinion written by Justice Antonin Scalia, the Court upheld a criminal ban on peyote applied to a Native American’s sacramental use of the drug. It reasoned that the Free Exercise Clause is implicated only when government singles out religion for disfavored treatment, and not when it imposes obligations equally on all, religious and nonreligious alike.
As Scalia noted, to allow a religious objector to opt out of general social obligations would permit him “to become a law unto himself,” a position that “contradicts both constitutional tradition and common sense.” Thus, the Court sustained the law against using peyote because it did not single out religion. But in another case it struck down a law selectively banning certain types of religious slaughter of animals.
Liberals and conservatives alike were unhappy with the Smith decision, which they felt showed insufficient sensitivity to religious concerns. Accordingly, in RFRA, Congress sought to restore the pre-Smith approach as a statutory matter. RFRA establishes that whenever a federal law of general applicability imposes a “substantial burden” on a “person’s exercise of religion,” the government can sustain the law’s application only by demonstrating both that denying a religious exemption serves a compelling interest and that there are no less restrictive ways to further that interest. In effect, RFRA compels the federal government to accommodate religion whenever it can do so without compromising a very important government interest.
Hobby Lobby, Mardel, and Conestoga Wood argue that requiring them to pay for their employees’ insurance coverage for forms of contraception that they deem objectionable violates RFRA unless the government can demonstrate that doing so is the least restrictive means to further a compelling interest. If they prevail, it would mark the first time the Court has ever ruled that a for-profit enterprise must be exempted on religious grounds from a generally applicable regulation of its commercial activities. And as the government warns, such a ruling may well invite a parade of copycat challenges by religious objectors to all sorts of generally applicable social obligations, including vaccination requirements, minimum wage laws, and antidiscrimination statutes.
The cases pose multiple questions of statutory interpretation and application. Can for-profit corporations “exercise religion” under the terms of RFRA, or does that statute protect only individuals and nonprofit religious institutions? Does the requirement of Obamacare to cover contraception impose a “substantial burden” on religion, even though the law permits businesses to opt out of providing any insurance at all, and instead pay a tax? Does the government have a compelling interest in ensuring that employees get coverage for contraception? And could that interest be pursued in ways that are less restrictive of the plaintiffs’ religious exercise rights?
The challengers have plausible statutory arguments on most of these questions. But the government is surely right that the last thing Congress thought it was doing when it enacted RFRA was giving for-profit corporations a way to use religious objections to avoid the generally applicable obligations of running a business. The Supreme Court has never recognized anything close to such a right under the Free Exercise Clause itself, and Congress expressly stated that it intended RFRA only to restore the pre-Smith approach as a statutory matter. Hobby Lobby, Mardel, and Conestoga Wood in effect maintain that Congress unwittingly went further than the Free Exercise Clause had ever been understood to go. The oral arguments suggested that a majority of the Court may agree with them. And the problem is that, given Congress’s current state of dysfunction, correcting that error through legislation would be a tall order.
The issue that has received the most attention in the press is whether a for-profit corporation can claim that it has a right of religious freedom. The idea of Exxon Mobil claiming a religious exemption seems ludicrous, and the solicitor general argues that for-profit corporations ought not to be protected by RFRA. But that argument runs into several problems. RFRA expressly protects “persons,” a term defined elsewhere in the US Code to include corporations. Churches themselves are some of the oldest forms of corporations, and the government concedes that churches and nonprofit religious institutions are “persons” for purposes of RFRA. But nothing in RFRA draws a line between for-profit and nonprofit institutions. And if a kosher butcher can file a challenge under RFRA, why shouldn’t five kosher butchers who incorporate be able to file the same challenge? So while there is much intuitive appeal to the idea that a for-profit corporation cannot exercise religion and should not be covered by RFRA, the argument does not withstand scrutiny.
The next question, and possibly the most important one in the case, is whether the ACA’s obligation to cover contraception imposes a “substantial burden” on the plaintiffs’ exercise of religion. Here, the strongest argument against the challengers is that they are not in fact obligated to provide any health insurance coverage at all. Under the ACA, they can choose not to provide health insurance, in which case they need only pay a $2,000-per-employee tax that helps defray subsidies the government provides to individuals who purchase their insurance independently on state or federal insurance “exchanges.” Since the average cost of health insurance to an employer is about $4,000 for single employees, and $12,000 for employees with families, it’s not at all clear that paying the $2,000 tax makes an employer worse off than if it bought the insurance.
The employer would presumably have to increase wages for at least some employees to make up for not providing health insurance, but if most of its employees can get government-subsidized insurance on the exchanges, it might well be a win-win outcome for employer and employee alike. Alternatively, as Justice Anthony Kennedy posited at the oral argument in March, it might turn out to be “a wash.” Whether not providing employees with insurance is in fact a win-win, a wash, or a “substantial burden” depends on a host of facts specific to each employer, none of which has been explored on the record in the cases as they now stand. Since it is the challenger’s obligation to demonstrate a “substantial burden,” the simplest way to resolve the cases would be to remand them to the district court for factual development on the ground that the challengers have not yet shown that they would be burdened at all.
Mysteriously, the government has not even made that argument. It was advanced, however, by at least one amicus curiae brief, written by lawyers at Americans United for Separation of Church and State, and has been elaborated in an extensive series of important posts on the blog Balkinization by my Georgetown Law colleague Marty Lederman. At oral argument, three justices—Anthony Kennedy, Elena Kagan, and Sonia Sotomayor—specifically asked about the issue.
Assuming the Court finds that for-profit corporations can sue and that they have demonstrated a substantial burden, the government would then have to show that requiring the businesses to cover contraception without religious exemptions serves a compelling interest in the least restrictive way. The need to provide comprehensive preventive coverage, including contraception, certainly seems compelling, as does the need to ensure that female employees are not denied the coverage they would get under any other ACA insurance plan. Why should Hobby Lobby’s female employees, who do not necessarily share their employer’s faith, have to pay for the religious exercise rights of Hobby Lobby’s owners? The Court has in the past declined to recognize the religious rights of one person where it would mean imposing a significant burden on others.