Free Exercise of Religion by Secular Organizations and Their Owners: Implications for the Affordable Care Act (ACA) - R43329

Cynthia Brougher
Legislative Attorney

The Supreme Court’s grant of review in Conestoga Wood Specialties Corp. v. Secretary of U.S. Department of Health and Human Services and Hobby Lobby Stores v. Sebelius, along with recent federal court decisions, has highlighted the ongoing controversy over the scope of the Affordable Care Act’s (ACA’s) contraceptive coverage requirement, which requires an employer to provide certain contraceptive coverage to its employees under its group health plan. Some employers have objected to the requirement, citing objections to the facilitation of the use of contraceptives in conflict with the religious tenets by which their businesses operate. An analogous issue has arisen in state courts in the context of same-sex weddings. Several private businesses that qualify as public accommodations have objected to state requirements that they provide services without discriminating based on sexual orientation despite the owners’ religious objections to same-sex marriage. These issues have raised a novel legal question for the courts: What rights do secular businesses that operate for profit have to pursue legal claims to protect their religious exercise?

Although a number of statutory exemptions exist to protect individuals and organizations’ religious beliefs and objections (e.g., employment discrimination under Title VII, disability discrimination under the Americans with Disabilities Act, etc.), courts have applied those exemptions only to individuals and nonprofit, religious organizations. A number of legal challenges to the contraceptive coverage requirement have examined a range of questions related to the rights of these businesses. As a threshold question, courts have had to analyze whether the business itself is eligible for protection under the Religious Freedom Restoration Act (RFRA) and Free Exercise jurisprudence. The businesses have asserted that they qualify as “persons” under RFRA and, in the alternative, that they are entitled to pursue their claims on behalf of their owners under what is known as the “pass-through” theory of corporate rights. Courts have also considered whether the business owners may pursue independent legal claims asserting their objections, or if their individual rights are forfeited at the time of the company’s incorporation.

If a court determines that the business or its owners are eligible for free exercise protection, it may then consider the merits of the case, including whether the mandate constitutes a substantial burden on religious exercise; whether the government has a compelling interest to do so; and whether the government used the least restrictive means to achieve that interest. Five federal circuit courts have considered these questions in the context of the contraceptive coverage requirement, and have reached different conclusions on the range of questions raised.

This report examines the constitutional and statutory protections related to free exercise of religion, including current Supreme Court interpretations, as well as judicial and legislative avoidance of defining the parameters of religious belief. It also discusses significant examples of existing religious exemptions in current law, including employment nondiscrimination, health care, and public accommodations law. Finally, it analyzes recent federal judicial decisions that have considered the religious freedom rights of commercial entities whose owners have religious objections to the contraceptive coverage requirement.

Date of Report: December 4, 2013
Number of Pages: 23
Order Number: R43329
Price: $29.95


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