Once More Into the Breach: U.S. Supreme Court to Consider New ACA Challenge

The country’s highest Court will again consider the constitutionality of the Affordable Care Act (ACA). The two cases before the Supreme Court challenge the requirement that employers provide employee health insurance that covers contraceptives and pregnancy-related medical services. The plaintiffs, owners of two private corporations, maintain that enforcement of the healthcare law interferes with their religious beliefs.

The key issue this time around is whether for-profit corporations can assert religious beliefs under the 1993 Religious Freedom Restoration Act (RFRA) or the free exercise clause of the First Amendment. So far, the circuit courts are deeply divided on the issue, which is the subject of more than 40 lawsuits around the country.

In the first case, Sebelius v. Hobby Lobby Stores the company argues that the ACA’s contraceptive mandate violates the RFRA, which prohibits the government from imposing a “substantial burden on a person’s exercise of religion,” unless the government can prove that the burden serves “a compelling governmental interest” and that it is also “the least restrictive means” of doing that. Thus, the first issue the Court must consider is whether a corporation is “person” under the RFRA.

The Tenth Circuit Court of Appeals held that for-profit corporations have religious liberty, relying heavily on the Supreme Court’s decision in Citizens United v. Federal Election Commission. In its brief to the Supreme Court, the Obama Administration argued that allowing the ruling to stand would allow the ACA to be used as “a sword used to deny employees of for-profit commercial enterprises the benefits and protections of generally applicable laws.”

The second case Conestoga Wood Specialties Corp. v. Sebelius alleges violations of the RFFA as well the U.S. Constitution. Accordingly, the Court will have to consider whether a corporation is capable of “exercising” religion under the First Amendment.

The Third Circuit Court of Appeals rejected the company’s challenge to the contraception mandate. It held that for-profit, secular corporations couldn’t exercise religion, concluding that ruling otherwise would contradict the longstanding principle that a corporation is distinct from its owners. The appeals court subsequently never reached the merits of the company’s First Amendment claims.

Oral arguments are not expected to take place until March 2014. Therefore, we can likely expect another blockbuster ACA ruling in late June.