Posts Tagged ‘employee health plans’

A provision of the Affordable Care Act  commonly referred to as the “preventive services mandate” requires employers to provide employee health plans that cover, without cost to the employee, contraceptives, abortifacients, abortion, and sterilization.  In Conestoga Wood Specialties Corp. v. Sebelius, a closely held, secular, for-profit corporation, operated by a family of the Mennonite faith, claimed that compliance with that the Affordable Care Act’s preventive services mandate violated the corporation’s sincerely held religious beliefs.

This raised an issue of first impression for the U.S. District Court of the Eastern District of Pennsylvania as to whether a secular, for-profit corporation has religious rights under the First Amendment.  Although federal district and appeals courts are split on the issue of whether secular corporations have a right to challenge the validity of the preventive services mandate, the Eastern District held that a corporation does not possess such a right based upon: (1) a lack of historical support for the proposition that a secular, for-profit corporation possesses the right to free exercise of religion (in other words, religious rights are purely personal guarantees that have only been extended to individuals); and (2) an adherence to the corporate form.

In the Conestoga Wood case, the corporation unsuccessfully argued that it should be considered the alter egos of its shareholders, all of whom practice the Mennonite faith.  In rejecting this argument, the court stated that it would be entirely inconsistent to allow the shareholders to enjoy the benefits and protections of incorporation while simultaneously piercing the corporate veil for the limited purpose of challenging the preventive services mandate.

The court further reasoned that because the ultimate and deeply private choice to use an abortifacient contraceptive rests not with the shareholders of the corporation, but with the corporation’s employees, any burdens imposed upon the employer by the regulations would be too attenuated to be considered substantial.  Moreover, the court stated that the regulations apply to the employer corporation, not to the shareholders individually.  Accordingly, the court said that whatever burden the shareholders may feel from being involved with a for-profit corporation that provides health insurance that could possibly be used to pay for contraceptives, is too indirect of a burden to be considered substantial under the Religious Freedom Restoration Act.

This article is authored by attorney Shannon O. Young and is intended for educational purposes and to give you general information and a general understanding of the law only, not to provide specific legal advice. Any particular questions should be directed to your legal counsel or, if you do not have one, please feel free to contact us.

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