Hobby Lobby VS. Obamacare
On June 30, 2014, the Supreme Court of the United States returned a verdict in Burwell v. Hobby Lobby Stores, Inc. stating that for-profit corporations like Hobby Lobby are not required to pay for and provide contraception through the insurance policies that they fund for their employees because it violates the Religious Freedom Restoration Act. The 5-4 decision caused a lot of debate and emotion from both sides of the aisle and now the question remains, what other cases are in the horizon that will reshape the boundaries of the Affordable Care Act.
Although the Hobby Lobby decision did not do too much to change the plain language and intent of the Affordable Care Act, it may open the doors for future challenges related to religious beliefs. Although the Supreme Court may have to deal with these expanded issue eventually, there are other challenges making their way through the judicial system across the country, which may hit their doorstep and required their attention sooner.
One such lawsuit is with the D.C. Circuit Court of Appeals, which is deciding presently whether the federal government is only required to provide financial subsidies to healthcare recipients of the federally run exchange only. Currently, if a person lives in a state that manages and implements the Affordable Care Act on its own and through their state exchange, he or she is only eligible for financial assistance from their state and not the federal government. This issue has been a point of contention from the beginning and was an important factor as to whether many states wanted to rely on the federal Marketplace to implement Obamacare, thereby relying on federal monies, or whether they wanted to take on the responsibility themselves.
Appellate Court Implications
If the Appellate Court in D.C. sides with the opponent to the lawsuit and rules that the federal subsidy must be available to every person, in every state, despite whether that state relies on the federal Marketplace, there could be severe financial consequences that were not contemplated or budgeted for in the Affordable Care Act.
In a related case out of Wisconsin, Senator Ron Johnson has filed a lawsuit that challenges federal subsidies for lawmakers and congressional staffers who purchase healthcare through Obamacare. Presently those two categories of people are not allowed to receive federal subsidies even if they live in a state that relies on the federal Marketplace and even if they meet the financial qualifications for support. The Affordable Care Act also requires lawmakers and congressional staffers to buy their insurance through state-based healthcare exchanges so that there was no question that they may be receiving special treatment. A recent compromise to this rule in the ACA allowed for these two groups of people to receive contributions from their employers to pay their insurance premiums, but apparently Senator Johnson wants more.
In a case related to the Hobby Lobby decision, two companies out of Michigan, Eden Foods and Autocam, have brought lawsuits in an effort to try to gain the decision-making power regarding what kind of benefits they can offer their employees. Both of these challenges were founded in the owners’ religious opposition towards certain coverage mandates and they cite their Constitutional rights to free speech and the Religious Freedom Restoration Act that was behind the Hobby Lobby action.
In an open letter from Michael Potter, the President of Eden Foods, he states that he does not want to fund healthcare for his employees that relate to “lifestyle drugs” such as contraceptives, Viagra, smoking cessation, weight loss, infertility and impotency drugs.
In the case Hotze v. Sebelius, a doctor in Texas, Steve Hotze, has filed a lawsuit saying that the employer mandate that requires businesses with more than 50 full-time employees to provide affordable insurance or else they will have to make an Employer Shared Responsibility Payment is a violation of the Fifth Amendment of the Constitution. The Fifth Amendment prohibits the government from seizing private property for public use without “just compensation”. Dr. Hotze apparently believes that the employer mandate falls under this category of taking without “just compensation”. The lower court in Texas ruled against Dr. Hotze in January 2014 saying that there was no “taking” here and that the Employer Shared Responsibility Payment was simply a tax. Dr. Hotze is appealing the district court’s decision.
In Coons v. Lew, the Appellate Court is deciding whether the IPAB, which is the Independent Payment Advisory Board, which was created by the Affordable Care Act to review and make cuts to Medicare, violates the separation of powers under the Constitution. If the court did find that IPAB was unconstitutional and did violate the separation of powers clause, that part would be stricken, which would have very little effect on the Affordable Care Act on a whole. The lower court sided against the Plaintiff, saying that there was no violation of the separation of powers clause.
Another lawsuit fighting against Obamacare, which has not received as much publicity as some of the others reference above is a case filed in the Southern District of Florida by Judicial Watch on behalf of Kawa Orthodontics. The lawsuit was filed after Kawa Orthodontics took certain actions to prepare for the employer mandate under Obamacare, which was to take effect on January 1, 2014. Kawa Orthodontics states that it was harmed and prejudiced when President Obama unilaterally delayed the start-date of the employer mandate by a year and the party believes that this move violated the Administrative Procedures Act (APA).
Kawa Orthodontics believes that the decision to the delay the start-date was arbitrary and unfounded and caused the company to lose “the value of its substantial efforts,” which they measure as the time and energy researching the new requirements and the money that the time and energy translated into to prepare for the initial deadline. Kawa Orthodontics believes that they spent 100 hours preparing for the employer mandate for January 1, 2014 and in that same amount of time, had they not been preparing for the new requirements, could have earned approximately $1.2 Million in new revenue, which they now seek to be reimbursed for by the government. This lawsuit was initially dismissed by the lower court and has been taken up on appeal by the Appellate Court.
Although some approximate that there are at least 100 Obamacare-related lawsuits pending somewhere in the court system today, that number will only grow as companies and individuals struggle to find the exact boundaries of the new law. The new Hobby Lobby decision will be a particularly challenging decision that will most certainly spawn new lawsuits in order to define what kind of religious objections a company must have, how apparent must those religious oppositions be and whether the religious oppositions end with contraception or can it expand to other services mandated by Obamacare.