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Bell Nunnally’s Alana Ackels Explores Employer Takeaways From High Court's Hobby Lobby Ruling

Bell Nunnally attorney Alana K. Ackels published the Law360 article “Employer Takeaways From High Court's Hobby Lobby Ruling.” The piece offers a case analysis of the U.S. Supreme Court’s 5-4 decision that held in favor of three employers, finding that the federal government could not force privately held companies controlled by religious families to provide coverage for contraception methods that violate their sincerely held beliefs. Previously, this coverage was mandated under the Affordable Care Act (ACA).

Ackels outlines the questions that the U.S. Supreme Court evaluated in reaching its decision. These included: the application of the Religious Freedom Restoration Act (RFRA) to different types of corporations;  whether the contraception mandate significantly burdened the corporations’ exercise of religion; whether the ACA’s contraceptive mandate is a continued compelling governmental interest; and whether the mandate is the least restrictive means of furthering the governmental interest.

She notes that the court found that RFRA applies to corporations and people alike and that the ACA contraceptive mandate substantially burdened the exercise of religion on the grounds that there are high fees, up to $475 million a year, for companies that do not comply.

While the court acknowledged that guaranteeing cost-free access to contraception is a compelling interest within the meaning of the RFRA, in terms of other options for women seeking contraceptives, Ackels writes that the court found at least two alternatives for women to obtain contraceptives through the government without the ACA plan offered by employers. As such, the mandate was not the least restrictive means of furthering the compelling government interest.

Ackels acknowledged that potential employees are also generally able to view an employer’s benefits package before they accept a position. If an applicant is unhappy with the benefits offered by an employer, the applicant can choose not to work for that company.

Ackels cautioned employers thinking about opting out of coverage under this recent ruling, as it could result in higher long-term costs. For example, without this coverage, employers may find themselves covering increased maternity leave, prenatal care and postnatal care for female employees.  In this specific case, Ackels notes that cost was not a priority for these three employers—their objection was grounded in their sincerely held religious beliefs, not the cost of coverage.

The article concludes by acknowledging the significance of this decision in the development and implementation of the ACA, as it explored and established a limit previous undefined.

Full text of the article is below and available on Law360 by clicking here.

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