Free Exercise of Religion by Closely Held
Corporations: Implications of Burwell v.
Hobby Lobby Stores, Inc.
Cynthia Brown
Legislative Attorney
April 6, 2015
Congressional Research Service
7-5700
www.crs.gov
R43654
Implications of Burwell v. Hobby Lobby Stores, Inc.
Summary
A 5-4 decision, issued over a highly critical dissent, Burwell v. Hobby Lobby Stores, Inc. resolved
one of the many challenges raised in response to the contraceptive coverage requirement of the
Affordable Care Act (ACA). Imputing the beliefs of owners of closely held corporations to such
corporations, the U.S. Supreme Court found that closely held corporations that hold religious
objections to certain contraceptive services cannot be required to provide coverage of those
services in employee health plans. The Court’s decision was based on the protections offered
under the federal Religious Freedom Restoration Act (RFRA), a statute prohibiting the
government from imposing a substantial burden on a person’s religious exercise unless it can
show a compelling interest achieved by the least restrictive means. The Court declined to address
the constitutional challenge, holding that the companies were protected under RFRA.
In the absence of a definition under RFRA, the majority interpreted the term “person” to include
closely held corporations, even if they operated for-profit, and determined that the penalties that
such companies would face if they failed to comply with the contraceptive coverage requirement
would impose a substantial burden. Though the Court assumed that the government had a
compelling interest to require contraceptive coverage under ACA, it found that less restrictive
means (e.g., expanding the regulatory accommodation available to nonprofit employers with
similar objections) could achieve that interest without requiring companies with religious
objections to be subject to the requirement.
Although Hobby Lobby resolved the question regarding the applicability of RFRA to closely held
corporations—defined by the Court as “each owned and controlled by members of a single
family”—the decision leaves open a number of questions about the scope of RFRA’s protections
and future enforcement of the contraceptive coverage requirement (including a series of legal
challenges asserted by nonprofit religious organizations). Because the Court’s decision was based
on statutory grounds, Congress remains free to define which entities may be governed by ACA or
other federal laws generally.
This report analyzes the Court’s decision in Hobby Lobby, including arguments made between the
majority and dissent, to clarify the scope of the decision and potential impacts for future
interpretation of RFRA’s applicability. It also examines potential legislative responses, should
Congress consider addressing the current applicability of RFRA. Finally, the report addresses the
decision’s effect on requirements that employers offer contraceptive coverage in group health
plans under federal or state law.
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Implications of Burwell v. Hobby Lobby Stores, Inc.
Contents
Rights of Closely Held Corporations Under the Religious Freedom Restoration Act ..................... 1
Threshold Issues: Defining Person and Exercise of Religion ................................................... 2
Prohibition on Substantial Burden ............................................................................................. 4
Compelling Interest ................................................................................................................... 5
Least Restrictive Means ............................................................................................................ 5
Selected Potential Legislative Responses Following Hobby Lobby ................................................ 6
Amending RFRA to Clarify the Scope of Applicability ............................................................ 7
Preempting RFRA ..................................................................................................................... 7
Effect on Contraceptive Coverage Requirements ............................................................................ 8
Current Status of the Regulatory Accommodation .................................................................... 9
State Coverage Requirements .................................................................................................. 10
Contacts
Author Contact Information........................................................................................................... 12
Congressional Research Service
Implications of Burwell v. Hobby Lobby Stores, Inc.
ne of the ongoing controversies related to the Affordable Care Act (ACA) has been the
scope of exemption from certain health care coverage requirements, including the
Ocontraceptive coverage requirement.1 A series of regulations have been promulgated to
address concerns of certain entities with religious objections to the coverage requirement, but
until 2014, the regulations applied only to churches and nonprofit religious organizations, not to
for-profit corporations.2 Though closely divided, the U.S. Supreme Court’s 5-4 decision in
Burwell v. Hobby Lobby Stores, Inc. has settled the question of whether certain for-profit
corporations must be exempt from the requirement, unless Congress chooses to amend the statute
providing those corporations legal protection.3 Imputing the beliefs of owners of closely held
corporations to the corporations themselves, the Court found that the ACA could not require such
companies to provide contraceptive coverage in group health plans offered to their employees. It
based its decision on the Religious Freedom Restoration Act (RFRA), which provides heightened
protection for burdens on religious exercise.4 Although the case has been analogized to Citizens
United v. Federal Election Commission, a 2010 case holding that corporations have free speech
rights under the First Amendment, the Hobby Lobby decision was not decided on constitutional
grounds.5 Instead, it provides protection on a statutory basis, meaning that Congress has the
ability to respond to the decision if it disagrees with the Court’s ruling.
This report analyzes the Court’s opinions in Hobby Lobby, examining the rights of closely held
corporations under the Religious Freedom Restoration Act. It also addresses the implications for
the contraceptive coverage mandate under ACA and discusses potential legislative responses to
the Court’s decision. Finally, it analyzes the impact that Hobby Lobby may have in other contexts
in which employers may claim religious objections.
Rights of Closely Held Corporations Under the
Religious Freedom Restoration Act
The companies challenging the contraceptive coverage requirement alleged violation of their
religious exercise rights under both the First Amendment’s Free Exercise Clause and RFRA. The
Free Exercise Clause prohibits the government from prohibiting the free exercise of religion.6
Traditionally it had been interpreted to require that the government show a compelling interest for
any government action that interfered with a person’s exercise of religious beliefs.7 However, in
1990, the Supreme Court reinterpreted that standard, explaining that the Free Exercise Clause
never “relieve[s] an individual of the obligation to comply with a valid and neutral law of general
1 Patient Protection and Affordable Care Act, P.L. 111-148, § 1001(5), 111th Cong., 2nd Sess. (2010).
2 For a discussion of the various iterations of the regulations providing exemption or accommodation to entities with
religious objections, see CRS Report IF10169, The Affordable Care Act’s Contraceptive Coverage Requirement:
History of Regulations for Religious Objections. New regulations were announced in August 2014 to address the
Supreme Court’s decision in Hobby Lobby and other cases challenging the scope of protection for religious employers,
as discussed later in this report.
3 Burwell v. Hobby Lobby Stores, Inc., Nos. 13-354 and 13-356, 2014 U.S. LEXIS 4505 (U.S. 2014).
4 P.L. 103-141, codified at 42 U.S.C. § 2000bb et seq.
5 128 S.Ct. 1471 (2008). See also CRS Report R41045, The Constitutionality of Regulating Corporate Expenditures: A
Brief Analysis of the Supreme Court Ruling in Citizens United v. FEC.
6 U.S. Const. amend. I.
7 See Sherbert v. Verner, 374 U.S. 398 (1963); Wisconsin v. Yoder, 406 U.S. 205 (1972).
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applicability.”8 The Court’s decision lowered the baseline of protection, but emphasized that
Congress remained free to consider whether additional protection would be appropriate through
the legislative process.9 Congress responded to the Court’s decision by enacting RFRA, which
essentially reinstated the heightened standard of protection.
RFRA states that the “[g]overnment shall not substantially burden a person’s exercise of religion
even if the burden results from a rule of general applicability, except as provided in subsection
(b).”10 Subsection (b) requires that any substantial burden must further a compelling
governmental interest and use the least restrictive means to achieve that interest.11
Threshold Issues: Defining Person and Exercise of Religion
RFRA’s language indicates that in order to raise a claim under the statute, “a person’s exercise of
religion” must be affected. However, when enacting RFRA, Congress never defined the term
person for purposes of the act. Only if a court determines that the party challenging the
government’s action is “a person” under the terms of the statute and that the party exercises
religion, can the court address the merits of the case—whether an improper substantial burden has
been placed on that party.
One of the most significant points of the Hobby Lobby decision was its declaration that closely
held corporations are “persons” eligible for protection under RFRA. The Court noted the absence
of a statutory definition of person under RFRA and consequently relied upon the Dictionary Act
to ascertain the default meaning of the term.12 The Dictionary Act defines person to “include
corporations, companies, associations, firms, partnerships, societies, and joint stock companies,
as well as individuals.”13
Rejecting the assertion that businesses organized as corporations are divested of RFRA’s
protections, the majority wrote that “[t]he plain terms of RFRA make it perfectly clear that
Congress did not discriminate [with regard to the business structure chosen by owners] who wish
to run their businesses as for-profit corporation in the manner required by their religious
beliefs.”14 The Court reasoned that RFRA was enacted to provide broad protection for religious
liberty and, without a specifically applicable definition provided in RFRA, explained that the
definition of person was not limited by for-profit status: “No known understanding of the term
‘person’ includes some but not all corporations. The term ‘person’ sometimes encompasses
artificial persons ..., and it sometimes is limited to natural persons. But no conceivable definition
of the term includes natural persons and nonprofit corporations, but not for-profit corporations.”15
8 Employment Division, Department of Human Resources of Oregon v. Smith, 494 U.S. 872, 879 (1990) (internal
quotes omitted).
9 Id. at 890.
10 42 U.S.C. § 2000bb-1.
11 42 U.S.C. § 2000bb-1(b).
12 Hobby Lobby, 2014 U.S. LEXIS 4505 at *40-*42.
13 See 1 U.S.C. § 1.
14 Hobby Lobby, 2014 U.S. LEXIS 4505 at *13.
15 Id. at *38-*42.
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The majority acknowledged that the threshold issue arguably is conditioned on the person’s
ability to exercise religion, a point emphasized by the dissent.16 However, the majority cited
previous cases in which the Court had recognized claims involving exercise of religion of
individuals who owned for-profit businesses as sole proprietorships17 and nonprofit
corporations.18 Despite the dissent’s argument that religious corporations could be distinguished
from for-profit corporations because they “foster the interests of persons subscribing to the same
religious faith,” the majority held that the Court’s precedent indicated that neither for-profit status
nor corporate status are prohibitive factors in analysis of an organization’s rights under RFRA.19
Notably, when responding to concerns that applying RFRA to for-profit corporations would raise
challenges of ascertaining “the religious identity of large, publicly traded corporations,” the
majority emphasized that its decision applied only to such companies as the ones challenging the
contraceptive coverage requirement in this case. In effect, the decision therefore is limited to
“closely held corporations, each owned and controlled by members of a single family.”20
Additionally, the majority alluded to the general requirement inherent to religious exercise cases
that the parties must base their challenge on sincerely held religious beliefs, meaning that even if
RFRA would apply to a particular entity, if the entity is asserting a religious belief for the
convenience of avoiding compliance with an unpopular mandate, it could not claim legal
protection.21 The sincerity of the companies’ beliefs in Hobby Lobby was not disputed.
Although the majority noted that it was recognizing RFRA’s applicability to closely held
corporations only, it did not foreclose the possibility that in a future case, a court may extend
RFRA protection to other types of corporations such as those which are publicly traded. Instead it
suggested only that “it seems unlikely” that such “corporate giants” would assert RFRA rights
and that “numerous practical restraints would likely prevent that from occurring.”22 The dissent
was highly critical of this point, characterizing the decision as one of “startling breadth:”23 “The
Court’s determination that RFRA extends to for-profit corporations is bound to have untoward
effects. Although the Court attempts to cabin its language to closely held corporations, its logic
extends to corporations of any size, public or private.”24
Indeed, the dissent’s argument that the decision may provide a basis for expanding the protection
of RFRA further in the future may reasonably give pause. As noted, the majority did not preclude
future application of RFRA to a broader range of corporations, using tentative language and
noting a lack of obvious challenges. Furthermore, the majority’s explanation that the Dictionary
16 Id. at *118 (Ginsburg, J., dissenting) (“Until this litigation, no decision of this Court recognized a for-profit
corporation’s qualification for a religious exemption from a generally applicable law, whether under the Free Exercise
Clause or RFRA. The absence of such precedent is just what one would expect, for the exercise of religion is
characteristic of natural persons, not artificial legal entities.”)
17 See Braunfeld v. Brown, 366 U.S. 599 (1961).
18 See Corp. of Presiding Bishop of Church of Jesus Christ of Latter-Day Saints v. Amos, 483 U.S. 327 (1987); Church
of the Lukumi Babalu Aye, Inc. v. Hialeah, 508 U.S. 520 (1993); Gonzales v. o Centro Espirita Beneficiente Uniao do
Vegetal, 546 U.S. 418 (2006); Hosanna-Tabor Evangelical Lutheran Church and School v. EEOC, 132 S.Ct. 694
(2012).
19 Hobby Lobby, 2014 U.S. LEXIS 4505 at *43-*44.
20 Id. at *58.
21 Id.
22 Id.
23 Id. at *97.
24 Id. at *128.
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Act’s definition of person could not be read to distinguish between types of corporations related
to the company’s profit status suggests that it also may not be read to distinguish between types of
corporations on other grounds (e.g., size or public trading status).
Prohibition on Substantial Burden
After determining that RFRA’s protections would apply, the Court examined the merits of the
RFRA claim, first identifying the burden that compliance with the contraceptive coverage
mandate would impose on the companies challenging the mandate. According to the Court,
requiring the owners of the companies to arrange for “health insurance that covers methods of
birth control that ... may result in the destruction of an embryo” means that the “mandate
demands that they engage in conduct that seriously violates their religious beliefs.”25
If the owners were to refuse to comply with the demand, the companies would face penalties
under the ACA that the Court characterized as “surely substantial.”26 If the companies continued
to provide their preferred health coverage without including the mandated contraceptive
coverage, they would face penalties each day of noncompliance, ranging from $40,000 per day to
$1.3 million per day.27 If the companies stopped providing any insurance coverage to avoid
covering contraceptives and avoid the consequent daily penalties, they would risk paying a
different penalty under ACA, which could range from $800,000 per year to $26 million per
year.28
The majority recognized the substantial burden arising from the owners’ religious objections and
potential financial penalties over strong objection from the dissenting Justices. Justice Ginsburg,
who authored the principal dissent, criticized the majority’s assessment as equating a sincere
religious objection with a substantial burden, instead of distinguishing between the two.29 In other
words, simply because a government mandate conflicts with a person’s religious belief, the
mandate is not necessarily a substantial burden. The dissent explained that the relationship
between the belief and the burden must be linked in order to identify the requisite substantial
burden:
[T]he connection between the families’ religious objections and the contraceptive coverage
requirement is too attenuated to rank as substantial. The requirement carries no command
that Hobby Lobby or Conestoga purchase or provide the contraceptives they find
objectionable. ... Importantly, the decisions whether to claim benefits under the plans are
made not by Hobby Lobby or Conestoga, but by the covered employees and dependents, in
consultation with their health care providers. ... Any decision to use contraceptives made by
a woman covered under Hobby Lobby’s or Conestoga’s plan will not be propelled by the
25 Id. at *63.
26 Id. at *64.
27 Id. at *63-*64 (“If the companies continue to offer group health plans that do not cover the contraceptives at issue,
they will be taxed $100 per day for each affected individual.”).
28 Id. at *64. Under ACA, if companies stop providing “insurance coverage altogether and thus forc[e] their employees
to obtain health insurance on one of the exchanges established under ACA” and one or more full-time employees “were
to qualify for a subsidy on one of the government-run exchanges, ... [t]he companies could face penalties of $2,000 per
employee each year.” Id.
29 Id. at *133-*134.
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Government, it will be the woman’s autonomous choice, informed by the physician she
consults.30
The dissent emphasized that the “linkage” between the burden imposed by the government’s
mandate and the religious beliefs offended by the mandate would be “interrupted by independent
decisionmakers (the woman and her health counselor)” in a manner that would undermine
characterization of the burden imposed by the government as “substantial.”31
Compelling Interest
The Court’s analysis of the government’s interest in requiring contraceptive coverage appeared
skeptical, but ultimately it assumed that the interests were sufficiently compelling.32 The majority
noted that the government’s justifications—public health and gender equality—were too broadly
defined, explaining that RFRA requires a “‘more focused’ inquiry.”33 It cited a 2006 case in which
the Court held that, under RFRA, the government must demonstrate a compelling interest for
prohibiting an exemption for a religious purpose while allowing exemptions for other purposes.34
The majority’s discussion suggested that the stated interests were undermined by the extent of
other businesses that were exempt from offering their employees coverage (e.g., grandfathered
plans, employers with fewer than 50 employees).35
Though the Court noted its concern regarding the sufficiency of the government’s asserted
interest, it conceded the compelling interest prong of the RFRA analysis with little discussion.
However, the dissent addressed the compelling interest in greater detail, responding to the
majority’s concern about other exemptions undermining the government’s alleged interest by
citing a number of other federal laws that include exemptions for small employers without
undermining the statutory interests.36
Least Restrictive Means
The Court rejected the argument of the Department of Health and Human Services (HHS) that it
lacked other means to ensure availability of contraceptive coverage without burdening these
companies’ religious exercise, noting a few alternatives it considered “less restrictive.”37 First, the
majority suggested that “[t]he most straightforward way ... would be for the Government to
assume the cost of providing” coverage to women whose employers object to providing
coverage.38 Second, the Court highlighted the availability of the accommodation already
established for nonprofit employers with religious objections, which would “protect the asserted
needs of women as effectively” as the contraceptive coverage requirement without “requiring
30 Id. at *134-*135.
31 Id. at *135.
32 Id. at *76-*77.
33 Id. at *74 (quoting O Centro, 546 U.S. at 430-31).
34 Id. at *74-*75.
35 Id. at *76.
36 Id. at *139-*141.
37 Id. at *77-82.
38 Id. at *77.
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employers to fund contraceptive methods that violate their religious beliefs.”39 Though the Court
cited the accommodation as one potential less restrictive alternative, it explicitly noted that it was
not determining its sufficiency under RFRA for the purpose of any other legal challenge.40
Discussed in further detail later in this report, the accommodation currently is available to certain
nonprofit religious organizations who self-certify their objection to qualify as eligible to have the
insurance issuer provide coverage to the employees outside of the employer’s group health plan.
In response to these alternatives, the dissent questioned the extent to which the majority would
allow employers with religious objections to government mandates to avoid compliance:
And where is the stopping point to the “let the government pay” alternative? Suppose an
employer’s sincerely held religious belief is offended by health coverage of vaccines, or
paying the minimum wage, or according women equal pay for substantially similar work?
Does it rank as a less restrictive alternative to require the government to provide the money
or benefit to which the employer has a religion-based objection?41
According to the majority, the dissent’s concern with the potential assumption of costs by the
government for private objections to various legal requirements was unfounded because its
decision reached only to the contraceptive coverage requirement.42 It explained that its decision
should not be interpreted to mean that insurance coverage mandates generally cannot be upheld if
they conflict with an employer’s religious beliefs.43 The majority stated that “[o]ther coverage
requirements, such as immunizations, may be supported by different interests ... and may involve
different arguments about the least restrictive means of providing them.”44
Selected Potential Legislative Responses Following
Hobby Lobby
A number of potential legislative responses have been mentioned since the Court announced its
decision in Hobby Lobby. It is important to remember that the Court’s decision was based on the
statutory protections in RFRA, not in constitutional protections of the First Amendment. Just as
Congress may enact heightened protections for religious exercise as it did in RFRA and as it may
determine the scope of protection available, it may enact statutory language to clarify the effect of
RFRA regardless of the Court’s decision. The Court essentially created a working definition of
person under RFRA, but Congress may confirm or alter that definition at its discretion.
Alternatively, it may consider preempting RFRA with respect to certain legislative requirements.
39 Id. at *82-*83.
40 Id. at *83.
41 Id. at *144-*145 (internal citations omitted).
42 Id. at *86.
43 Id. at *86-*87.
44 Id. at *87.
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Amending RFRA to Clarify the Scope of Applicability
The most direct congressional response to Hobby Lobby would be to amend RFRA to include a
definition of person and in effect clarify the scope of RFRA’s applicability generally. This
legislative option creates a number of possibilities, ranging from a definition of person to include
only natural persons at one end to a definition that includes all natural and artificial persons at the
other end, similar to the definition provided under the Dictionary Act used by the Court.
Aside from these two extreme ends of the spectrum, Congress may consider a number of
intermediate definitions. The working definition resulting from the Court’s decision in Hobby
Lobby has been considered as one type of compromise between eliminating protection for any
corporations and extending protection for all corporations. Although not necessary in light of the
decision, Congress may choose to adopt explicitly the Court’s definition to avoid any future cases
from expanding or restricting the status quo following Hobby Lobby.
Alternatively, Congress may consider other examples when considering the scope of “persons” to
which it wants RFRA to apply. The preeminent example of Congress’s provision of protection for
potential religious objectors from a generally applicable mandate is found in Title VII of the Civil
Rights Act of 1964. Title VII, in part, prohibits employers from discriminating against employees
on the basis of their religious beliefs.45 Because this provision may interfere with religious
employers’ religious practices (e.g., hiring employees of the same faith of the organization),
Congress included an exemption for religious entities, stating that the prohibition against
religious discrimination does not apply to “a religious corporation, association, educational
institution, or society with respect to the employment of individuals of a particular religion.... ”46
This provision explicitly applies only to religious organizations, and courts generally have
interpreted the scope of the provision to take into account (1) the purpose or mission of the
organization; (2) the ownership, affiliation, or financial support of the organization; (3)
requirements placed upon staff and members of the organization; and (4) the extent of religious
practices in or the religious nature of the products and services offered by the organization and
whether it operates for a profit.47 A definition of person that would include language similar to
Title VII likely would cover religious nonprofit organizations (e.g., charities, hospitals, schools),
but would not cover commercial entities like Hobby Lobby.48
Preempting RFRA
Another option that may be used in response to Hobby Lobby would be to consider preempting
RFRA in federal legislation. Under the legal principle of entrenchment, a legislative action in one
Congress cannot bind a future Congress. That is, Congress cannot entrench a legislative action by
providing that it may not be repealed or altered.49 Accordingly, Congress may decide to enact
45 42 U.S.C. § 2000e-2. See also 42 U.S.C. § 2000e(j).
46 42 U.S.C. § 2000e-1(a).
47 See, e.g., LeBoon v. Lancaster County Jewish Community Center Association, 503 F.3d 217, 226-27 (3rd Cir. 2007)
(providing summary discussion of the circuit courts’ interpretations of which organizations qualify for exemption under
Title VII).
48 See Equal Employment Opportunity Commission v. Townley Engineering & Manufacturing Co., 859 F.2d 610 (9th
Cir. 1988).
49 See Fletcher v. Peck, 10 U.S. 87, 135 (Chief Justice Marshall) (“The principle asserted is, that one legislature is
competent to repeal any act which a former legislature was competent to pass; and that one legislature cannot abridge
(continued...)
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legislation that would make RFRA not applicable to certain federal actions. For example, if
Congress determined that it did not want to extend heightened protection that is otherwise
provided under RFRA in certain instances (e.g., the contraceptive coverage mandate), it could
enact a provision in the relevant legislation indicating that RFRA would not apply. Unlike the
previous potential legislative response, this approach would mean that Congress considers
RFRA’s applicability to each present and future law on a case-by-case basis.
Shortly after Hobby Lobby was announced, the House and Senate in the 113th Congress
introduced legislation that used this approach.50 The Protect Women’s Health From Corporate
Interference Act of 2014 prohibited employers from denying coverage of any health care services
required to be covered under federal law or regulation.51 However, to prevent employers from
claiming exemption under RFRA, the bill stated that the prohibition “shall apply notwithstanding
any other provision of Federal law, including [RFRA].”52 Accordingly, to the extent that a party
may be covered by RFRA as a general matter, such parties would not be protected from coverage
requirements imposed by federal law or regulation if the bill were enacted.
Effect on Contraceptive Coverage Requirements
Generally speaking, the Hobby Lobby decision clarified the scope to which persons may be
eligible for protection under RFRA, but in the practical context of the contraceptive coverage
requirement, it essentially addressed the question of whether the requirement’s implementing
regulations sufficiently addressed the range of entities with religious objections. Since ACA’s
enactment, HHS has developed various iterations of administrative regulations to address
religious objections.53 The rules in effect at the time Hobby Lobby was decided were promulgated
in July 2013, and respond to religious entities’ objections to contraceptive coverage in two ways:
(1) an exemption for religious employers covered under subsections (a)(3)(A)(i) or (a)(3)(A)(iii)
of Section 6033 of the tax code and (2) an accommodation for other eligible organizations.54
Entities covered by the relevant provisions for the exemption generally include churches, church
auxiliaries, church associations, or other religious orders.55 Under the exemption, employees of
religious employers would not receive contraceptive coverage either from their employers or
from the issuers directly. Eligible employers that are not covered by the exemption may instead
seek protection through the accommodation. To qualify for the accommodation under the July
2013 final rules, an organization was required to (1) object to coverage of at least some of the
contraceptive services based on religious beliefs; (2) be a nonprofit entity; (3) hold itself out as a
(...continued)
the powers of a succeeding legislature.”). The Supreme Court has noted the long history of this rule. See United States
v. Winstar Corp., 518 U.S. 839, 872-74 (1996).
50 H.R. 5051/S. 2578, 113th Cong. (2014).
51 Id. at § 4(a).
52 Id. at § 4(b).
53 See CRS In Focus IF10169, The Affordable Care Act’s Contraceptive Coverage Requirement: History of
Regulations for Religious Objections.
54 See Coverage of Certain Preventive Health Services Under the Affordable Care Act, 78 Fed. Reg. 39,870 (July 2,
2013).
55 See 26 U.S.C. § 6033(a)(3)(A)(i), (iii).
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religious organization; and (4) comply with the self-certification requirements of the rule.56 Under
the accommodation, employees of eligible organizations would not receive contraceptive
coverage from their employers, but would have coverage provided directly through the health
plan issuers at no cost to the employee or the employer.
Simply put, Hobby Lobby held that the regulations also must provide some accommodation for
closely held for-profit corporations. However, the Court did not examine the sufficiency of the
existing regulations with regard to other types of entities with religious objections. It did not
decide any legal issues with respect to the merits of the exemption or accommodation available to
churches and religious organizations, respectively,57 nor did it address protection from state
contraceptive coverage requirements. As a result, a number of legal questions remain with regard
to the obligations of employers to provide contraceptive coverage.
Current Status of the Regulatory Accommodation
In addition to its decision in Hobby Lobby, the Court has considered procedural requests filed by
nonprofits that objected to the process under which they could qualify for accommodation,
specifically claiming that the certification process required under the July 2013 rules burdens
their religious exercise.58 Notably, three days after the Hobby Lobby decision was announced, the
Court issued an injunction in Wheaton College v. Burwell, effectively preventing enforcement of
the contraceptive coverage requirement against Wheaton College pending a final decision in its
case if the school provided written notice to HHS of its qualifications for the accommodation.59
Providing such a letter would allow the school to claim eligibility without using the official
form—to which it objects—prescribed by the regulations. Although the order explicitly
emphasized that it was not “an expression of the Court’s views on the merits” of the case, three
Justices wrote in dissent from the Court’s order.60 The dissenting Justices stated that the college’s
assertion “that its filing of a self-certification form will make it complicit in the provision of
contraceptives by triggering the obligation for someone else to provide the services to which it
objects” was not a viable claim under RFRA and therefore not eligible for injunctive relief.61 The
dissenters noted that the Hobby Lobby decision considered the accommodation to be “‘an
alternative that achieves all of the Government’s aims while providing greater respect for
religious liberty.’”62 Despite the widespread attention focused on the Wheaton College order, it
indeed does not provide any final decision on the merits of the challenge to the accommodation.
Additionally, though the majority in Hobby Lobby noted the possibility that the accommodation
could be a “less restrictive” means to achieve the government’s interest in the contraceptive
56 See 45 C.F.R. § 147.131(b).
57 Litigation of the regulations related to the potential burden imposed on nonprofit organizations to qualify for the
accommodation has been considered or is pending in a number of federal courts, but is beyond the scope of this report.
For more information, see CRS Legal Sidebar WSLG1214, Another Year, Another Hobby Lobby? Challenges to the
Contraceptive Coverage Requirement by Religious Nonprofits Continue Winding Through the Courts.
58 See Wheaton College v. Burwell, No. 13A1284 (U.S. July 3, 2014); Little Sisters of the Poor v. Sebelius, No.
13A691 (U.S. Jan. 24, 2014).
59 Wheaton College v. Burwell, No. 13A1284 (U.S. July 3, 2014).
60 Id. at 2.
61 Id. at 3.
62 Id. (“After expressly relying on the availability of the religious-nonprofit accommodation to hold that the
contraceptive coverage requirement violates RFRA as applied to closely held for-profit corporations, the Court now, as
the dissent in Hobby Lobby feared it might, retreats from that position.” (citations omitted)).
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coverage mandate, it did not determine it to be the least restrictive means.63 In other words,
simply because the Court pointed to the accommodation as an option that burdened the
companies’ religious exercise less does not mean that there may not be a third option that
minimized the burden even more effectively.
In August 2014, the Obama Administration announced new regulatory actions to address the
Supreme Court’s decisions with respect to the contraceptive coverage requirement.64 Under new
interim final rules, eligible employers may satisfy the requirements for accommodation either by
using the standard self-certification form (known as EBSA Form 700) or by notifying HHS in
writing.65 The rules reflect the Court’s order in Wheaton College, allowing nonprofit employers
with religious objections to the self-certification form to use alternative means to identify their
objections. The rules took effect upon publication “[i]n order to provide other eligible
organizations with an option equivalent to the one the Supreme Court provided to Wheaton
College on an interim basis.”66
At the same time, separate rules were proposed to address the scope of organizations eligible for
accommodation, particularly with respect to the status of for-profit entities with religious
objections.67 Under the August 2014 proposed rules, the definition of eligible organization for
purposes of the accommodation would be amended to include certain closely held for-profit
entities. Citing examples in federal law, the proposed regulations offered two options for
comments to determine which closely held organizations should qualify for accommodation,
depending either on (1) a maximum threshold number of owners or (2) a minimum threshold
concentration of ownership.68
Thus, the new standard for the accommodation would require organizations to (1) object to
coverage of at least some of the contraceptive services required under ACA based on religious
beliefs; (2) be organized either as a nonprofit entity holding itself out as a religious organization
or as a closely held for-profit entity with objections based on the owners’ religious beliefs, as
determined under its rules of governance; and (3) comply with self-certification requirements or
provide the prescribed written notice to HHS.69 It is unclear whether these rules would resolve the
objections that have been asserted by nonprofit organizations with regard to the accommodation
in pending litigation.
State Coverage Requirements
Hobby Lobby involved a challenge to the federal contraceptive coverage requirement by
companies seeking protection under the federal RFRA. Thus, the decision to expand protection
under RFRA to closely held corporations affects only federal law. A number of states have
63 See Hobby Lobby, 2014 U.S. LEXIS 4505 at *82 (“We do not decide today whether an approach [of the
accommodation] complies with RFRA for purposes of all religious claims.”).
64 See Coverage of Certain Preventive Services Under the Affordable Care Act (Interim final rules), 79 Fed. Reg.
51,092 (Aug. 27, 2014); Coverage of Certain Preventive Services Under the Affordable Care Act (Proposed rules), 79
Fed. Reg. 51,118 (Aug. 27, 2014).
65 79 Fed. Reg. 51,092 (Aug. 27, 2014).
66 Id. at 51,095-96.
67 79 Fed. Reg. 51,118 (Aug. 27, 2014).
68 Id. at 51,122.
69 See id. at 51,127.
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enacted separate contraceptive coverage requirements, predating ACA.70 Therefore, the closely
held companies that now have been recognized as protected by RFRA may still be obligated to
provide contraceptive coverage under state requirements if the states do not have an applicable
exemption to such coverage requirements.71
In some cases, such companies may seek protection under state versions of RFRA, as the federal
RFRA only applies to protect against burdens imposed by federal actions.72 Many states enacted
laws modeled on the federal RFRA to prohibit state or local governments from substantially
burdening religious exercise.73 The applicability of these state RFRAs to various types of
organizations would depend on each state’s legislative language. If the state RFRA did not define
the entities which may claim protection, a court may look to Hobby Lobby as guidance in
interpreting the proper scope, but would not be bound to reach the same conclusion as the Court
did. Notably, a recent trend in state RFRA legislation has reflected a broader approach to religious
freedom protections, though proposed laws have had mixed success. For instance, in March 2015,
Indiana enacted a version of RFRA that defined covered “persons” to include individuals,
religious organizations, and a broad range of business entities, regardless of their for-profit or
nonprofit status or the type of ownership, if the entity exercised religious beliefs held by its
owners.74 That definition extends further than the Supreme Court’s interpretation, which presently
includes only business entities that are closely held. However, a similar law was vetoed in
Arizona in February 2014.75
The controversy raised over the expansion of persons and entities subject to RFRA protection has
highlighted one of the potential impacts of Hobby Lobby—could a RFRA be used to avoid
compliance with a variety of laws of general applicability, including, as one example, public
accommodations requirements in civil rights laws?76 In response to these concerns, Indiana
enacted an amendment to its RFRA, stating that the law does not authorize individuals or entities
generally “to refuse to offer or provide services, facilities, use of public accommodations, goods,
employment, or housing ... on the basis of race, color, religion, ancestry, age, national origin,
disability, sex, sexual orientation, gender identity, or United States military service,” or establish a
defense to such claims in civil or criminal proceedings.77 The amendments do not apply to entities
70 See State Policies in Brief: Insurance Coverage of Contraceptives, Guttmacher Institute (July 2, 2014), available at
http://www.guttmacher.org/statecenter/spibs/spib_ICC.pdf.
71 Legal protection from state requirements may be available from a variety of potential sources, including the state
constitution, a state RFRA statute, or a religious exemption adopted as part of the state legislation that created the
mandate.
72 The Supreme Court has held that RFRA can be applied only to federal government actions, and cannot extend to
state or local government actions. See Boerne v. Flores, 521 U.S. 507 (1997).
73 National Conference of State Legislatures, State Religious Freedom Restoration Acts (March 30, 2015), available at
http://www.ncsl.org/research/civil-and-criminal-justice/state-rfra-statutes.aspx. Almost two dozen states have enacted a
state version of RFRA. Id. Other states have interpreted state constitutional protections to provide the heightened
protection without RFRA legislation. See, e.g., State Map of Religious Exercise Protections, available at
http://www2.law.ucla.edu/volokh/relmap.pdf.
74 See Indiana Senate Enrolled Act No. 101, 119th Gen. Assembly, 1st Regular Sess. (2015), available at
https://iga.in.gov/legislative/2015/bills/senate/101#document-92bab197.
75 See Arizona Senate Bill 1062, 51st Legislature, 2nd Regular Sess. (2014), available at http://www.azleg.gov/legtext/
51leg/2r/bills/sb1062s.pdf.
76 See Hobby Lobby, 134 S.Ct. at 2804-05.
77 See Indiana Senate Enrolled Act No. 50, 119th Gen. Assembly, 1st Regular Sess. (2015), available at http://iga.in.gov/
static-documents/1/b/d/f/1bdf457b/SB0050.05.ENRS.pdf.
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which are tax-exempt churches and nonprofit religious organizations, or to ministerial employees
of a church or nonprofit religious organization.78
Author Contact Information
Cynthia Brown
Legislative Attorney
cmbrown@crs.loc.gov, 7-9121
78 Id. At the same time that Indiana was considering and amending its legislation, Arkansas considered a proposed
version of a state RFRA which would have applied to a broader range of persons than Indiana’s legislation. See
Arkansas House Bill 1228, 90th Gen. Assembly, Regular Sess. (2015), available at http://www.arkleg.state.ar.us/
assembly/2015/2015R/Bills/HB1228.pdf. Governor Asa Hutchinson requested that the legislation be amended before
submitted for his signature. See Campbell Robertson and Timothy Williams, Arkansas Governor Asks Lawmakers to
Recall Religious Exception Bill, N.Y. TIMES (April 1, 2015), available at http://www.nytimes.com/2015/04/02/us/
arkansas-indiana-religious-freedom-hutchinson-pence.html. Arkansas enacted amended legislation that more closely
resembled the federal RFRA. See Arkansas Senate Bill 975, 90th Gen. Assembly, Regular Sess. (2015), available at
http://www.arkleg.state.ar.us/assembly/2015/2015R/Bills/SB975.pdf.
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