Supreme Court, citing religious liberty, limits contraceptive coverage in Obamacare

Reporting from Washington —  The Supreme Court ruled for the first time Monday that private companies had a religious right to be exempted from federal law, saying a business owned by devout Christians may refuse to pay for insurance covering contraceptives for female employees.

The 5-4 ruling was a victory for social conservatives and the high court’s most significant statement on religious liberty in years.

The majority did not spell out how far the new religious exemption might reach, leading the four dissenters and many outside legal experts to predict it would open the door for religiously devout business owners to seek similar exemptions from antidiscrimination laws and other federal mandates.

Justice Samuel A. Alito Jr., who wrote the majority opinion, disputed that interpretation, emphasizing that the decision addressed only the contraceptive mandate, not other types of insurance-coverage mandates. “Nor does it provide a shield for employers who might cloak illegal discrimination as a religious practice,” he wrote.

Ironically, the ruling may have limited impact on the subject immediately at issue: the contraceptive coverage required by President Obama’s healthcare law. Justice Anthony M. Kennedy, who provided the fifth vote for the majority, noted that the administration already had found alternative ways to guarantee contraceptive coverage to women who worked for explicitly religious nonprofit organizations and said that compromise would work in the case of for-profit companies as well. Alito suggested that too.

Nevertheless, the ruling, along with a second case decided Monday, may signal a new era of legal exemptions to government programs. The pair of decisions handed down on the final day of the court’s term — both written by Alito — afforded new rights to conservatives who wish to opt out of what they view as liberal government rules.

In the contraceptive case, owners of closely held for-profit companies who object to the contraceptive mandate under the Affordable Care Act won the right to opt out if they have a “sincere religious belief that life begins at conception.” In a separate organized labor case from Illinois, the court said home healthcare workers had a free-speech right to avoid paying union fees if they didn’t want to.

Alito brushed aside arguments that the court should not extend religious freedom rights to corporations. “A corporation is simply a form of organization used by humans to achieve desired ends,” he wrote. “And protecting the free-exercise rights” of corporations such as the ones that brought the current case “protects the religious liberty of the humans who own and control those companies.”

By giving corporations the right to exercise religion, the court’s opinion echoed its much-disputed Citizens United ruling of 2010. Then, the same justices decided corporations had a free-speech right to spend unlimited independent funds on political ads.

Justice Ruth Bader Ginsburg called the Obamacare case — Burwell vs. Hobby Lobby Stores Inc. and Conestoga Wood Specialties Corp. vs. Burwell — a “decision of startling breadth.”

The court “holds commercial enterprises, including corporations, along with partnerships and sole proprietorships, can opt out of any law (saving only tax laws) they judge incompatible with their sincerely held religious beliefs,” she wrote in her dissent. “Until this litigation, no decision of this court recognized a for-profit corporation’s qualification for religious exemption from a generally applicable law.”

Citing the difficulty of deciding which religious claims will be considered valid, she said, “The court, I fear, has ventured into a minefield.” She warned of similar religiously grounded objections, such as Jehovah’s Witnesses refusing to cover blood transfusions or Scientologists opposed to antidepressants.

Supporters of the decision said it fits with the American tradition of honoring religious liberty. “This is a landmark decision for religious freedom,” said Lori Windham, counsel for the Becket Fund, a public interest law firm that represented Hobby Lobby. “The Supreme Court recognized that Americans do not lose their religious freedom when they run a family business.”

Critics focused on the impact on women. Nancy Northup, president of the Center for Reproductive Rights, called it an “astonishingly backward-looking decision” that has “given bosses the power to dictate how their employees can and cannot use their health insurance.”

White House Press Secretary Josh Earnest said Obama “believes that women should make personal healthcare decisions for themselves.... We will work with Congress to make sure that any women affected by this decision will still have the same coverage for vital health services.”

It is not clear how many employers might try to take advantage of the exemption. Such a move could alienate female workers.

Companies that try may run afoul of state law. In 28 states, including California, insurance laws require most employers who cover prescription drugs to cover contraceptives. Those laws would not be affected by the ruling, which applies only to federal law.

The decision represents a shift within the high court’s conservative ranks. In 1990, Justice Antonin Scalia spoke for the court in rejecting the notion that the 1st Amendment’s protection for the “free exercise of religion” gave some people a right to be exempted from general laws that apply to everyone.

Then, the court’s conservatives were skeptical of claims from minority religions, including Native Americans and the Amish, that sought to opt out of laws.

A coalition of liberals and conservatives in Congress rallied to reverse that ruling. The Religious Freedom Restoration Act, passed in 1993, said the government “shall not substantially burden a person’s exercise of religion.”

That law became the focus of the challenge to the contraceptive rule. The Affordable Care Act said employers with 50 or more full-time employees must offer health insurance that includes “preventive care and screening” at no cost.

Obama’s health regulators in 2011 decided preventive care included the full range of approved contraceptives, including “morning after” pills and intrauterine devices. The administration said churches and church-affiliated employers, including schools and hospitals, need not pay for contraceptives if they had a religious objection. Instead, their insurers were told to pay. Profit-making companies were told to comply.

The Hobby Lobby chain of arts and craft stores was founded by David and Barbara Green of Oklahoma City. Run as a closely held corporation — i.e., one owned by a relatively small number of investors — Hobby Lobby has more than 500 stores and 13,000 employees. The family also owns Mardel, a chain of Christian bookstores.

The Greens provide health insurance, including most contraceptives, to their employees. But they objected to “morning after” pills and IUDs, which work by preventing fertilized eggs from developing into pregnancies. Viewing such contraceptives as a form of abortion, they sued, seeking an exemption from the federal law.

A similar suit was filed by Norman and Elizabeth Hahn and their sons, a Mennonite family that owns a woodworking business called Conestoga Wood Specialties in Pennsylvania.

Because the Hahns and Greens run their companies as family businesses, the court decided the contraceptive mandate “demands that they engage in conduct that seriously violates their religious beliefs.”

Chief Justice John G. Roberts Jr. and Justices Antonin Scalia, Anthony M. Kennedy and Clarence Thomas joined Alito in the majority.

Ginsburg said any decision to use contraceptives should be “the woman’s autonomous choice.” Justices Stephen G. Breyer, Sonia Sotomayor and Elena Kagan also dissented, saying the contraceptive rule did not put a substantial burden on the business owner’s religion.

david.savage@latimes.com