New Birth Control Mandate Rules Open Door to Corporate Morality Rights

Today the Department of Health and Human Services (DHHS) issued two new final rules related to the the Affordable Care Act’s birth control mandate.

The ACA requires that birth control be 100% covered as a preventive service under every employer-offered health insurance plan. However, a recent Supreme Court case (Burwell v. Hobby Lobby) allowed closely-held companies (ex. family-run businesses) and non-profits to opt out of that mandate if they had religious objections to contraception. The first of the two new regulations simply promulgates that high court decision.

Opening the Floodgates

The second rule is rather interesting because it potentially opens the court door to an argument that publicly-traded, large corporations have moral beliefs. In this second rule, the DHHS allows entities to object and opt out of the mandate on the “basis of moral conviction which it not based in any particular religious belief. ” (DHHS news release 10-6-17)

More specifically, the rule allows virtually any type of organization to submit for this moral objection to the mandate, including large, for-profit corporations. The following entities are includes as eligible organizations:

(A) A church, an integrated auxiliary of a church, a convention or association of
churches, or a religious order.
(B) A nonprofit organization.
(C) A closely held for-profit entity.
(D) A for-profit entity that is not closely held.
(E) Any other non-governmental employer.

Subsection (D) – “A for-profit entity that is not closely held” – covers virtually every other entity that the Burwell case didn’t.

To qualify for the exemption, the employer has to be an organization that:

objects to its establishing, maintaining, providing, offering, or
arranging (as applicable) coverage, payments, or a plan that provides coverage or payments for
some or all contraceptive services, based on its sincerely held religious beliefs. (emphasis added) [147.32(a)(2)]

This is the issue that some have feared since Citizens United v. FEC, the case in which the Supreme Court functionally gave for-profit corporations the personal 1st Amendment rights to free speech with unlimited independent election campaign spending.  With this new rule, we now have the potential for large, for-profit entities to argue that they have a “sincerely held religious belief” or any kind of established set of morals.

‘Sincerely Held Religious Beliefs’

But how can a multinational corporation prove that it has a “sincerely held religious belief” against birth control?

The law is inconsistent on what it takes to prove religious beliefs – it is different in each area of law. In employment and labor law, for example, the courts often aren’t willing to ask too much about employers’ religious activities in fear that it violates the 1st Amendment’s Free Exercise Clause (see Univ. of Great Falls v. Montana Fed. of Teachers). In child abuse cases where parents argue religious freedom to decline necessary medical treatment for their kids, the courts look at the parents’ past religious-oriented activities – the extent of them and how long they have been practiced.

It’s hard to tell what would be considered enough of a trend of activities to count as a corporate belief system. Tyson Foods (NYSE: TSN) employs over 1,200 chaplains on staff and advocates as a “faith-friendly company.” Is that enough to get the exemption? Marriott International (NASDAQ: MAR) is run by highly-active members of the Mormon Church and supply every room with the Book of Mormon (the religious text, not the Broadway Hit). Is that enough? What would push a company over the threshold into a “sincere religious belief?”

Even in Burwell v. Hobby Lobby , the Supreme Court hesitantly evaluated whether Hobby Lobby had a real objection rooted in religious beliefs. They looked at the companies’ public statements, policies, and business documents, treating it more like a fraud investigation than a religious inquiry. Theoretically, the courts could carry out religious and moral objection reviews as fraud cases instead of First Amendment matters, but that’s probably a stretch.

Meanwhile, it’s not even guaranteed that the courts would even be involved in determining whether a company’s religious or moral beliefs were authentic. As Ben Adams and Cynthia Barmore wrote in their 2014 article in the Stanford Law Review, cases like Burwell only occur after an administrative agency (like DHHS) makes decisions on these kinds of exemptions.  Pro-employee advocates would likely file lawsuits on behalf of employees unable to get their ACA-mandated birth control, but there is a long history of the federal courts deferring to the rationale and autonomy of government agencies.

Birth Of A New Corporate Era?

As of the time of this writing, the ACLU had already announced its plans to challenge the rules as a violation of the Affordable Care Act. If these new rules are allowed to stand, it could create a new world of corporate law where entities need to consider how their documents, marketing, and policies sculpt an outward-facing set of beliefs. This could lead to other rights being extended to corporate entities as well.  Only time (and probably several lengthy court cases) will tell.

Should corporations have rights like individuals? Do you think Citizens United and Burwell are on the right path or taking us down the wrong one, legal-wise? Tell me in the comment section!



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