## Facts

- Federal regulations under the Affordable Care Act required most employer group health plans to cover preventive services for women without cost sharing, as defined by Health Resources and Services Administration guidelines.
- The guidelines required coverage of all FDA-approved contraceptive methods, including four methods the owners of certain closely held companies believed could operate after fertilization.
- Hobby Lobby Stores, Inc., Mardel, Inc., and Conestoga Wood Specialties Corp. were closely held, for-profit corporations controlled by families with sincerely held religious objections to providing insurance coverage for the four challenged contraceptive methods.
- Noncompliance exposed the companies to substantial financial penalties; compliance required providing coverage the owners believed would make them complicit in conduct forbidden by their faith.
- The government exempted religious employers such as churches and created an accommodation for religious nonprofit organizations under which insurers (rather than employers) would provide contraceptive coverage.
- Lower courts reached conflicting results on whether for-profit corporations are protected by the Religious Freedom Restoration Act (RFRA) and whether the mandate violated RFRA; the Supreme Court consolidated the cases for review.

## Issues

1. Whether closely held, for-profit corporations are “persons” capable of exercising religion within the meaning of RFRA.
2. Whether applying the contraceptive-coverage requirement to such corporations substantially burdens their exercise of religion under RFRA.
3. If a substantial burden exists, whether applying the requirement furthers a compelling governmental interest through the least restrictive means.

## Decision

- The Court held (5–4) that, as applied to closely held, for-profit corporations with sincere religious objections, enforcing the contraceptive mandate violated RFRA.
- The Court concluded that closely held for-profit corporations may invoke RFRA’s protections.
- The mandate imposed a substantial burden because the companies faced a choice between providing objectionable coverage or incurring severe financial penalties (including for dropping coverage).
- The Court assumed, without deciding, that the government had a compelling interest in ensuring cost-free access to the challenged contraceptives.
- The government failed RFRA’s least-restrictive-means requirement because less restrictive alternatives existed, including the accommodation used for religious nonprofits and other mechanisms for providing access without requiring the companies to provide the coverage.
- Disposition: the judgment favoring Hobby Lobby/Mardel was affirmed; the judgment against Conestoga was reversed and remanded.

## Legal Principles

- RFRA prohibits the federal government from substantially burdening a person’s exercise of religion unless the government proves the application of the burden serves a compelling interest and is the least restrictive means of doing so.
- For RFRA, “person” can include closely held for-profit corporations, particularly where ownership and control are concentrated and the corporation operates in accordance with the owners’ sincere religious beliefs.
- Courts generally do not second-guess the religious claimant’s sincere view of moral complicity when evaluating whether a regulation imposes a substantial burden.
- A regulatory scheme fails RFRA’s strict scrutiny when the government has workable, less restrictive alternatives that would achieve its objective while imposing less burden on religious exercise.
- The holding was limited to the challenged contraceptive requirement as applied to closely held corporations with sincere religious objections and did not recognize a general entitlement for businesses to opt out of federal laws on religious grounds.

## Conclusion

The Court ruled that RFRA protects closely held, for-profit corporations from being compelled to provide insurance coverage for specific contraceptives when doing so substantially burdens sincere religious exercise and the government has not shown that enforcing the mandate is the least restrictive means of advancing its assumed compelling interests.


Burwell v. Hobby Lobby Stores, Inc., 573 U.S. 682 (2014)