Georgetown Law School professor and religious freedom expert Marty Lederman is out with an important new series of posts at the Balkanization blog on the Hobby Lobby and Conestoga Wood Supreme Court cases, all of which are worth reading. But one, in particular, raises an issue that thus far has not been raised by any of the litigants, or, to my knowledge, observers.
Lederman’s argument is pretty straightforward. The for-profit companies that have sued the Department of Health and Human Services argue that the “employer mandate” (to provide insurance) requires them to cover contraceptive drugs and devices. Some of those drugs and devices, they claim, violate their sincerely held religious beliefs that abortion is wrong. (Set aside, for a moment, that Hobby Lobby’s and Conestoga Woods’ definition of emergency contraception and IUDs as “abortifacients” is factually inaccurate, a topic Lederman takes up in the second of three posts). The “penalty” written into the law for failing to provide the contraception coverage, the plaintiffs’ argument goes, results in the companies facing a “Hobson’s choice:” provide the objectionable coverage or face onerous “fines” by the government.
Except, Lederman argues, the idea of an “employer mandate” is a fiction. The money the companies would be required to pay is not a “penalty” or “fine.” It is a tax, and in any case, however one characterizes them, they are not as onerous as the plaintiffs suggest. In the absence of the “Hobson’s choice,” Lederman concludes, there is no “substantial burden” under the Religious Freedom Reformation Act, and therefore, no case to be made. (I’d suggest reading the post in full if you’re interested in the legal minutiae on this point.)
Lederman points out the continuity between the Affordable Care Act’s “individual mandate” and the so-called “employer mandate,” through which the religious objectors suggest the government is compelling them to provide insurance to their employees, and include contraception coverage in it. In the challenges to the individual mandate the Supreme Court decided two years ago, Lederman argues, the Court found the “mandate” constitutional because the “penalty” for not having insurance was merely, in reality, a tax that enables the government to subsidize the exchanges. The section of the law dealing with employer-provided coverage is similar; if employers aren’t going to provide insurance to their employees, they will be required to pay a tax to subsidize the exchanges, through which (presumably) their employees will obtain coverage.
As Lederman puts it, “the principal function of the assessment is merely to ensure that large employers make a reasonable contribution to the cost imposed upon the federal government to provide affordable insurance to individuals on the exchanges—including the employers’ own employees, if they are forced onto the exchange by virtue of the employer’s choice to discontinue its own plan. (In this respect, it is a compensatory measure.)”
Lederman says every court to decide a challenge, on religious freedom grounds, to the contraception coverage rule by a for-profit company has read the statute incorrectly, an echo of the errors made by lower courts deciding challenges to the individual mandate (until the Supreme Court decided it, that is):
Courts of appeals offered virtually the same exact mistaken reading of the ACA in the so-called “individual mandate” cases—until the Solicitor General and then the Supreme Court corrected them in the landmark Health-Care Cases (a/k/a NFIB v. Sebelius). You may recall that § 5000A of the Act—the provision at issue in the Health Care Cases—actually provides that an individual “shall” maintain a minimum level of health coverage, and that a “penalty” shall be imposed on any person who “fails to meet th[at] requirement.” Even in light of this language of obligation, the Court held that the “shared responsibility payment” of § 5000A “merely imposes a tax citizens may lawfully choose to pay in lieu of buying health insurance,” 132 S. Ct. at 2597.
So, too, § 4980H merely imposes a tax that employers may lawfully choose to pay “in lieu of” offering their employees access to a health insurance plan. And, most importantly, here, too, “[n]either the Act nor any other law attaches negative legal consequences to not [providing employee] health insurance, beyond requiring a payment to the IRS,” so that if an employer “chooses to pay rather than [provide] health insurance, they have fully complied with the law.” Id. at 2597. Indeed, in this respect, construing § 4980H to offer a choice among lawful options is a considerably easier task than it was for § 5000A, for there are no comparable terms of apparent compulsion (such as “shall provide insurance”) in § 4980H—the requirement of an “assessable payment” to the IRS, denominated a “tax” rather than a “penalty,” is all there is.
(emphasis in original)
What’s more, Lederman performs some calculations and determines that paying the tax “will generally be far less costly to an employer than retaining an employee health insurance plan.” If you were to read the court papers in the for-profit cases, you would think that, because the plaintiffs would prefer to give up providing their employees health insurance rather than covering contraceptives, the penalties could be so severe as to put them out of business.
If the Supreme Court were to adopt Lederman’s sort of reasoning—which is actually based its own precedent—it would essentially eliminate the “substantial burden” argument the plaintiffs are making. Put simply, no Hobson’s choice, no catastrophic penalties, no burden on religion.
It’s hard for me to imagine—no, I take that back, I can imagine—the reaction in conservative quarters if the Court were to make these cases, the fulcrum of an epic conservative religious freedom campaign, go away without even addressing the religious issues. It would be staggering. And, I’m sure, the conservative justices know it. That’s not a prediction, mind you—I wouldn’t even attempt one. It’s just an observation.