Since last October, legal experts and business leaders have been watching and waiting for the U.S. Supreme Court to hand down their decision probably 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 supply contraception coverage to the employees as mandated through the federal regulations when the 2010 Affordable Care Act. By way of a razor-thin, 5-4, majority vote, the Supreme Court answered that it could.
The four dissenting justices disagreed, strenuously, on both the end result and also the rationale. However, the general public and media attention which has been provided to this significant Supreme Court opinion has almost overshadowed the reality that – for most small, and mid-sized businesses – it will do not have impact whatsoever.
The Choice in a Nutshell – Two families, the Hahns and the Greens, own a total of three companies. The Hahns and their children own and control Conestoga Wood Specialties (cabinets), as the Greens as well as their children own and control each of the Hobby Lobby christmas hours. Among the Greens’ sons also owns an affiliated Christian bookstore chain.
Though these for-profit businesses meet the meaning of “closely held” corporations that is, (five or fewer shareholders) these are hardly what most people would consider to be small businesses. The Hobby Lobby chain operates some 500 locations nationwide with almost 13,000 employees. The bookstore firm, Mardel, has about 35 stores and a few 400 employees. Conestoga has about 950 employees.
The families argued that the Health & Human Services Department regulations mandating birth control coverage violated their rights beneath the federal Religious Freedom Restoration Act and also the First Amendment. One of the many, complex issues decided was whether a for-profit company could “participate in religious exercise.”
Five of the justices (Kennedy, Roberts, Scalia, Thomas, and Alito) ruled that these particular families’ rights are violated through the contraception mandate, that it “substantially burdened their exercise of religion,” and that HHS “had not demonstrated a compelling fascination with enforcing the mandate against them,” or proved the mandate was the “least restrictive means” of furthering a compelling governmental interest.
Justice Samuel Alito, writing for your majority, revealed that this ruling “… put on closely held corporations” and, in a concurring opinion, Justice Anthony Kennedy noted that it must be supposed to have been a narrow in scope.
Why Many Businesses Is Going To Be Unaffected By This Ruling. Legally, this decision will not affect nearly all American businesses and, particularly, on family-owned firms. First, there is not any “employer mandate” in any way beneath the Affordable Care Act for just about any business with less than 50 employees. These firms are already exempt and possess no requirement to offer workers with any medical insurance coverage whatsoever. Furthermore, as the great majority of small businesses in america (about 78%) are family owned, no more than 2 percent of small companies have 50 or maybe more employees.
So, for many closely held corporations, this Supreme Court case, however newsworthy, is not really relevant. Second, even before the passage and implementation from the Affordable Care Act, the majority of businesses, including small and midsized firms, already offered the mandated contraceptive coverage. Over 70% of U.S. employers not connected to religious institutions included birth control within their company health plans. Even for businesses with fewer than 200 employees, that figure was over 60%.
Third, the Affordable Care Act already exempts religious for-profit corporations as well as nonprofit corporations out of this coverage mandate.
For Affected Companies, You can find Broad Implications – This ruling will affect a fairly small number of closely held corporations whose private owners elect to assert they hold “sincerely held religious beliefs” against contraception. However, wjdqpc Court’s majority opinion is not exactly clear how these religious convictions have to be measured or proved.
In her own blistering dissent, Justice Ruth Bader Ginsburg predicted that the opinion could eventually allow “businesses to opt out of any law (saving only tax laws) they judge incompatible making use of their sincerely held religious beliefs.”
Other critics, including many legal experts, are concerned about its broader implications, and the things they describe as a “slippery slope” of possible religious challenges to a variety of government regulations.