A For-Profit, Secular, Catholic-Owned Company May Be Exempt From Offering Employees Insurance Covering Birth Control, Says Judge August 2, 2012

A For-Profit, Secular, Catholic-Owned Company May Be Exempt From Offering Employees Insurance Covering Birth Control, Says Judge

The war over the Affordable Care Act is far from won. The Supreme Court, of course, found the Act to be constitutional back in June; however, the Court was specifically concerned with the complicated Article II limitations on Congressional power to enact the law and enforce the “individual mandate.”

In the wake of the decision, numerous lawsuits have begun winding through the lower courts that challenge the Act on religious exercise grounds. The plaintiffs (just about all are Catholic) argue that by requiring them to offer health insurance for their employees — including no-cost coverage for “preventative care for women,” defined to include all FDA-approved methods of birth control — the government has substantially burdened their ability to practice their faith.

The court hasn’t issued a final, permanent ruling in any of the cases — but on July 27th, Judge John L. Kane for the District of Colorado (10th Circuit) ruled (PDF) that until after their trial is finished and a decision has been reached, the government cannot require Hercules Industries to comply with the preventative care mandate. Known as an injunction, the decision applies only to Hercules (a point which the court highlights more than once) and does not necessarily mean that Hercules will win their lawsuit. However, the decision to grant a preliminary injunction includes the consideration of the party’s likelihood of ultimately winning; this means that even if this order does not control the outcome of the trial, it could be an accurate forecast of the final verdict.

Unidentified participants show protest signs at the Stand Up for Religious Freedom Rally to object to the HHS health care mandate on June 8, 2012, in Bakersfield, California.

The case is going forward under the Religious Freedom and Restoration Act. RFRA can be used against the federal government (but not the states); RFRA claims are very similar to First Amendment claims. If a law places a big enough obstacle in the path to religious free exercise, RFRA requires the government to justify the burden. It’s a legal see-saw; to outweigh the individual’s claim, the government must show that it has taken the least restrictive means of serving a compelling interest (see strict scrutiny). Often, the government can rely on things like protecting children or promoting public health to lend weight to its claims. Not this time.

This ruling suggests that the government has shot itself in the foot.

The court acknowledged that public health is clearly a compelling interest. But, relying on Supreme Court precedent, the court rejected the government’s argument that the serving the interest had to include forcing Hercules, in particular, to comply with the mandate. Why don’t they have to comply? Well, numerous exemptions to the act have already been made for many religious organizations and if the public interest can be served without forcing them to comply, the argument goes, surely there can be room for one more.

The Church may think that the Act is too restrictive, but the court finds the Act too accommodating. The court also feels that the Act is not the least restrictive means of serving the public health, because the government failed to demonstrate that it could not itself provide free contraceptive services to women. Conservatives think the government should stay out of the healthcare business; the court finds that they could do more. Would the Act would have been better able to survive these challenges if the government hadn’t tried to address them before they arose?

The court wanted more before analyzing the substantial burden claim. The defendants (the Departments of Health & Human Services, Labor, and the Treasury) argued that “as a for-profit, secular employer, Hercules cannot engage in an exercise of religion.” But, in its discussion of the arguments, the court paid special attention to the fact that Hercules Industries is an “s-corporation.” This is a tax-code designation allowing small(er), domestically held businesses to be taxed as individuals and pass the corporate tax burden through to the company’s shareholders. This creates a much closer relationship between the individual shareholders and the corporate entity. The question of whether corporations can exercise religion at all, and how the nature of “s-corps” changes that analysis, are difficult, complex, and new; seemingly eager to proceed, the judge has given the parties a month to file a plan for managing the case going forward.

Why is it that Hercules cannot possibly provide birth control to its employees? Well, Hercules Industries is in the very religious (cue snark) business of manufacturing and distributing heating and air conditioning systems. Granted, it always has been and still remains a family-owned business; president, VP, and every member of the board are all descendants of founder William E. Newland. The Newlands, all Catholic, say that they “seek to run Hercules in a manner that reflects their sincerely held religious beliefs.”

Indeed, the court noted that board members are permitted to prioritize “religious, moral, and ethical standards” at the expense of profitability, an unusual position for any corporation to take. This pious policy has been part of their articles of incorporation for an entire year and a half; it was implemented as part of a program, also in place for an astounding 18 months, “to build their corporate culture based on Catholic principles.” Oh, did I forget to mention that the company was founded 50 years ago? (They must not have needed to “build a corporate culture” until now.)

In all seriousness, the Newlands didn’t need a paper policy emphasizing their sincerely held religious beliefs until the ACA was passed in 2010. They’ve been using those standards to avoid providing coverage for contraception for as long as they’ve been offering health plans to their employees without ever having to formally declare it so. In fact, the preventative care mandate strikes directly at the heart of this problem — without minimum standards, access to employee benefits for healthcare services can be determined by whether or not the employer approves of that service. The mandate was designed to remove substantial impediments that prevent women from having access to basic healthcare services — impediments like employers who want all the benefits of secularity without having to follow any of the secular rules.

The Newlands may not want anyone to take birth control; they are perfectly free to take that position, and their right to do so is one of the best things about this country. What rankles me is that they are using their position of power over their employees to inject themselves into what should be a private decision. Employees want paychecks and benefits, not another set of parents. Moral choices aren’t moral when they aren’t choices.

The government isn’t asking religious organizations to undermine their anti-birth control rhetoric by passing out condoms and Plan B pills. They’re not forcing anyone to take birth control, nor do they advocate it. They’re requiring large bodies like hospitals, universities and corporations, which exist for the purposes of healthcare, education and profit, to provide the same insurance coverage regardless of whether they are secular or religiously affiliated. Why on earth should this company be exempt? How can anyone who claims to champion the individual right to exercise religion dare to make moral decisions for their employees? It’s never been about individual rights, has it?

The Church has been losing power for years, and they’ve finally found a weak target — a bill unpopular for using purportedly authoritarian means to achieve ostensibly humanitarian goals. (Kind of like… a church?) Never mind the fact that non-profit organizations which exist for the purpose of practicing their faith (read: actual religious organizations) are exempt. Ignore the multitudes of sexually experienced Catholic women who have used birth control without, it seems, being excommunicated or otherwise burdened in their ability to practice their faith. (That’s 98% of them, to be precise — see PolitiFact’s Truth-O-Meter.) It makes no difference that the provisions apply to employers who voluntarily participate in the secular marketplace, serving and employing individuals who do not necessarily belong to the same religion as those who happen to be running the company. No matter, though, since “preventative care” apparently includes such tools of the devil as birth control, tubal ligation, and mammograms. The Church simply will not allow this attack on religious liberty masquerading as a “neutral, generally applicable law furthering the interest of public health and making numerous accommodations for religious exercise” to go unchallenged. They can’t afford to.

(Image via Shutterstock)

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What Are Your Thoughts?leave a comment
  • Verimius

    This will make it harder for companies like Hercules to hire and retain qualified female employees. If they don’t care about that, then fine, but in the long term they’ll lose out.

  • If Hercules Industry was so determined to obey Catholic dotrines, then why are they named after a greek demigod?  Shouldn’t we be stoning them for worshiping the wrong gods?

  • Stev84

    In a sensibly run, non-theocratic country a court would simply find that that running a business is not an exercise of religion and that merely providing insurance for certain medication isn’t the same as dispensing it personally

  • Paul Clapham

    The underlying problem here is that the system is set up so that people have to get their health-care needs via their employers. That’s an obvious design flaw right there and this post is just pointing out one of the many consequences of that design flaw.

  • Stev84

    Employer-provided health insurance in the US is a historical artifact. During WWII wages were regulated and capped by the government. Secondary benefits weren’t. So companies used additional benefits to compete for workers and started to offer health insurance. That proved to be popular and was kept after the war. But it should have long since been replaced by a proper health care system.

  • This is good information, but I felt like the sarcastic and snarky tone towards the end was unnecessary. That isn’t what I come to read FriendlyAtheist for.

  • Curt Cameron

    It seems to me that the government is providing a privilege to certain religions, if it excludes them from obeying secular laws.

    What if I made up a religion that was opposed to paying employees more than $4/hour? Would I be exempt from minimum wage laws?

    According to this court’s reasoning, I could argue that the minimum wage law is not the least restrictive way of implementing their policy, because the government itself could make up the difference between what I want to pay and the federal minimum wage.

  • The difference between a cult and a religion is the number of adherents.

  • The Other Weirdo

    Male employees, too, if they’ve got wives on birth control.

  • So, if an otherwise secular company that is simply owned by a religious organization such as the RCC can deny coverages that conflict with the owner’s religious beliefs, how much ownership is required to exercise the religious exclusion?

    What if the RCC owns 10% of the stock in a company? Is that sufficient for them to claim that the free exercise of their religion is impinged if the company is required to offer female employees birth control as part of their health coverage? Would it require ownership of at least 51% of the stock, or could they say that as a minority owner, they’re still entitled to special dispensation of any responsibility that conflicts with their religious doctrine?

  • Dreamer!

  • Joannaa

    Someone please find a company owned by Jehova’s Witnesses who will sue for the right to exclude blood transfusions from their coverage. That should take care of this.

  • ortcutt

    Judge John Kane was born in 1937.  Do you ever get the impression that old folks are just out of touch with the new reality in this country?  I’m sick and tired of old people with bad ideas running things. 

  • Randomfactor

    Love the picture.  I may actually be in it somewhere in the background.  I was at that rally, holding 2 signs, one saying “Church-owned businesses do NOT have religious rights” and the other reading “LEARN from your parents’ mistakes:  Use birth control!

    I was the only dissenting voice there.  It’s Bakersfield…

  • It’s what *I* come here for. The sarcasm and snark don’t take anything away from the validity of this post.

  • Then you’re coming here for the wrong reasons. You’ll rarely/never see Hemant write like this.

  • Sunny Day

    This is easy enough to bust.  The insurance companies themselves have the data.

    Birth control is cheap.
    Pregnancies are not.

    More pregnancies means more costs which means higher premiums that have to be paid.

    Birth control saves insurance companies money and drives downs costs of the insured.

    This is not a burden to anyone except to the medieval fantasies of religious leaders.

  • Sunny Day

    I guess you’ll have to suffer the slings and arrows of guest posters.

  • I think we should start claiming that the flying spaghetti monster is against some basic health necessity (e.g blood tests, physical exams) and refuse to cover it because it violates our faith.
    Besides, the flying spaghetti monster was created to demonstrate the slippery slope of accommodating religions in essential places like schools. This isn’t too far of a leap.

  • Revyloution


  • Revyloution

    I’ve tried.  The problem with this approach is that Jehovas Witnesses are forbidden to engage in political activity.  They are even forbidden to vote.

  • Revyloution

    I think the FSM should be against the military.  We should demand that all corporations owned by adherents to the FSM faith be allowed to not pay any taxes that support the military.

  • Corey

    I’ve got to get on this “for profit – not for profit” band wagon. There seems to be so much excitement from and for organizations that believe they are against “man’s law”, and only follow their perception of their “god’s law”, which varies from state to state, year to year and person to person. Seeing as I am an Atheist, god of my thoughts and actions, I too should be able to have the legal rights to make money, be exempt from laws I don’t like and actually believe that I am so important that I am willing to take states to court, so they can waste their money on me in court. Talk about feeling like a rock star, a politician…lol

  • Luther

     I bet they condone and promote some graven images too.

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