In Burwell v. Hobby Lobby, decided 5–4 in June 2014, the Supreme Court ruled that closely held for-profit corporations may refuse to comply with the Affordable Care Act’s contraceptive coverage mandate when doing so would violate their owners’ sincere religious beliefs.1Justia. Burwell v. Hobby Lobby Stores, Inc., 573 U.S. 682 (2014) Writing for the majority, Justice Samuel Alito concluded that the mandate violated the Religious Freedom Restoration Act because the government already had a less intrusive way to deliver contraceptive coverage to employees.
The Families and the Four Contraceptives They Objected To
Hobby Lobby is a national arts-and-crafts chain with more than 13,000 employees, owned and operated by the Green family, devout Christians who ran the business according to their faith. The companion case involved Conestoga Wood Specialties, a cabinet manufacturer owned by the Mennonite Hahn family.
Both families believed life begins at conception. They did not object to most contraceptives. They objected to four specific methods they viewed as capable of ending a life after fertilization: the emergency contraceptive pills Plan B and ella, and two types of intrauterine devices.1Justia. Burwell v. Hobby Lobby Stores, Inc., 573 U.S. 682 (2014)
The financial stakes drove the case to the Court. The ACA requires group health plans to cover all FDA-approved contraceptive methods for women, without cost sharing, as part of preventive services.2Office of the Law Revision Counsel. 42 U.S. Code 300gg-13 – Coverage of Preventive Health Services Non-compliance carries a tax of $100 per day for each affected employee.3Office of the Law Revision Counsel. 26 U.S.C. 4980D – Failure to Meet Certain Group Health Plan Requirements For a company Hobby Lobby’s size, the annual exposure ran into hundreds of millions of dollars.
How RFRA Framed the Case
The families sued under the Religious Freedom Restoration Act of 1993. RFRA sets a two-part test: the federal government may not substantially burden a person’s exercise of religion unless it shows the burden serves a compelling interest and is the least restrictive means of doing so.4Office of the Law Revision Counsel. 42 U.S. Code 2000bb-1 – Free Exercise of Religion Protected
Both prongs count. A compelling interest is more than a sensible policy goal. And even when the government has one, it still has to prove no gentler alternative exists. If a workable option would burden religious exercise less, the government must use it.
Whether a For-Profit Company Can Have Religious Beliefs
The government’s opening argument was that RFRA protects “persons,” and for-profit corporations are not persons with beliefs. The Court rejected that. Under the Dictionary Act, which sets default definitions across federal statutes, “person” includes corporations unless context indicates otherwise.5Office of the Law Revision Counsel. 1 U.S. Code 1 – Words Denoting Number, Gender, and So Forth Nothing in RFRA’s text ruled out for-profit companies.
The majority framed the point through the people behind the company. Protecting a corporation’s religious exercise, Justice Alito wrote, protects the humans who own and run it. When a family builds its faith into a business it controls, forcing the business to act against those beliefs forces the family to do the same. Modern corporate law lets companies pursue any lawful purpose, running along religious lines included.1Justia. Burwell v. Hobby Lobby Stores, Inc., 573 U.S. 682 (2014)
The holding was limited to closely held corporations, where a small group of owners controls the company. The Court did not set a numerical threshold. The IRS uses a tax-specific definition under which five or fewer individuals own more than half the stock,6Internal Revenue Service. Entities 5 but the majority did not adopt that standard. It observed only that for companies like Hobby Lobby and Conestoga Wood, where one family held all the voting shares, identifying a coherent religious identity was easy. The more diffuse the ownership, the harder that becomes.
Why the Government Lost on Least Restrictive Means
The Court assumed, without deciding, that the government had a compelling interest in guaranteeing women access to contraception. The assumption did not save the mandate.
The government had already built an accommodation for religious nonprofits. A qualifying nonprofit could certify its objection, and its insurer or third-party administrator would then provide contraceptive coverage directly to employees at no cost to the employer.7Centers for Medicare and Medicaid Services. Womens Preventive Services Coverage, Non-Profit Religious Organizations, and Closely-Held For-Profit Entities The employer did not arrange, pay for, or refer anyone for the disputed coverage.8U.S. Department of Labor. FAQs about Affordable Care Act Implementation Part 36
That existing mechanism sank the government’s case. If a system was already in place that got employees the same coverage without burdening a religious employer, and the government simply chose not to extend it to for-profit companies, then the mandate was not the least restrictive means. The Court concluded the same result could be achieved with “greater respect for religious liberty,” and that made enforcement against these companies unlawful under RFRA.1Justia. Burwell v. Hobby Lobby Stores, Inc., 573 U.S. 682 (2014)
What the Court Said It Was Not Deciding
The majority worked to narrow its own opinion. Justice Alito wrote that the ruling did not license employers to opt out of any law they disliked on religious grounds. Other coverage requirements, such as immunizations, might rest on different governmental interests and different least-restrictive-means analyses.1Justia. Burwell v. Hobby Lobby Stores, Inc., 573 U.S. 682 (2014) Winning a RFRA challenge to the contraceptive mandate does not automatically mean an employer could refuse to cover blood transfusions or vaccinations. Each objection would need its own analysis.
The ruling also did not reach large publicly traded companies. Where ownership is spread across thousands of shareholders with varying beliefs, no coherent religious identity exists to protect. Where the line falls between “closely held” and “too diffuse” was left unresolved.
Justice Ginsburg’s Dissent
Justice Ruth Bader Ginsburg, joined by three colleagues, wrote a pointed dissent. For-profit corporations, she argued, are legal creations without conscience or belief, and RFRA was written to protect natural persons and religious organizations, not commercial enterprises. Extending religious exercise rights to for-profit companies had no precedent.9Legal Information Institute. Burwell v. Hobby Lobby Stores, Inc.
She also raised a practical worry. If a commercial business can claim exemptions from generally applicable laws, where does the line fall? Ginsburg warned that the majority’s reasoning could invite claims for exemptions from other health coverage rules, anti-discrimination statutes, or wage laws.9Legal Information Institute. Burwell v. Hobby Lobby Stores, Inc.
And she drew a sharp distinction between a religious nonprofit and a commercial company. A church exists to carry on shared beliefs. A for-profit business exists to sell goods and generate revenue, and its employees may hold entirely different views from its owners. Granting the corporation a religious identity, in her view, put the owners’ faith ahead of the workforce’s interests.
What Changed After Hobby Lobby
The decision opened the way for broader regulatory changes. In 2017, federal rules extended the religious exemption well beyond closely held corporations. Any employer with a sincere religious objection, including publicly traded companies, could drop contraceptive coverage entirely. A separate rule created a moral exemption for any employer other than publicly traded ones. Both exemptions also reached private colleges and universities that offer student health plans.
Those expanded exemptions were upheld in 2020. In Little Sisters of the Poor v. Pennsylvania, the Court found that the agencies had the authority under the ACA to grant both the religious and moral exemptions.10Supreme Court of the United States. Little Sisters of the Poor Saints Peter and Paul Home v. Pennsylvania The religious exemption now covers any employer with sincere religious objections, not only closely held ones. The moral exemption covers any non-publicly-traded employer with sincere moral objections. More than a decade after Hobby Lobby, the scope of religious and moral exemptions from the contraceptive mandate is still shifting through regulation and litigation.