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Court trims contraceptive coverage

By Crissinda Ponder ·
Monday, June 30, 2014
Posted: 3 pm ET

The U.S. Supreme Court says family-owned companies may ignore an Obamacare provision that requires employers to cover contraceptives as part of their health insurance plans.

The court's 5-4 decision was handed down after two for-profit companies -- arts and crafts chain Hobby Lobby Inc. and cabinet manufacturer Conestoga Wood Specialties Corp. -- sued the federal government over the Affordable Care Act requirement that birth control be offered in employer health insurance plans at no cost to workers, as a preventive health service. Businesses that don't comply can be fined $1.3 million per day.


The companies had objections to the contraceptive mandate on religious grounds and did not want to provide coverage for some Food and Drug Administration-approved contraceptives, including the Plan B One-Step "morning-after" pill. But the Obama administration argued that for-profit companies don't enjoy the same religious freedom as individual Americans and should not be exempt from the mandate.

The Supreme Court sided with the companies.

Other employers are already exempted

"There are other ways in which Congress or (the Department of Health and Human Services) could equally ensure that every woman has cost-free access to the particular contraceptives at issue here and, indeed, to all FDA-approved contraceptives," Justice Samuel Alito writes in the majority opinion.

The ruling is "a realistic decision that does lay out a feasible path for the administration to pursue," says Timothy Jost, a professor and health law expert at the Washington and Lee University School of Law in Lexington, Virginia.

The government already has devised a work-around for faith-based nonprofit employers. People working for those organizations may access free birth control coverage either directly through their health insurance plan or through a third-party administrator, according to the Center for Consumer Information and Insurance Oversight.

If the federal government doesn't find a comparable way to extend contraceptive coverage to employees at Hobby Lobby and similar companies, some states may begin to step forward, says Deborah Chollet, a health insurance research leader at Mathematica Policy Research in Washington, D.C.

A limited ruling

The justices made clear that the ruling applies only to contraception coverage and only to for-profit corporations that are "closely held," meaning family-owned and operated.

The decision is "very limited" in its scope, Jost says. "(It) doesn't undermine anything else in the Affordable Care Act."

However, more than 90 percent of all corporations in the U.S. are closely held, according to business publication, which suggests that the Court's decision could reach further than expected.

Women workers affected by the Supreme Court's decision will have a hole in their health coverage, Chollet says.

"For women of childbearing age, not to have contraceptive coverage is a real cut in pay, effectively," she says.

Here's a look at Obamacare's 10 essential benefits.

Follow me on Twitter @CrissiPonder.

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