The U.S. Supreme Court has ruled that the Affordable Care Act’s requirement that non-grandfathered group health plans provide certain contraceptive coverage without cost-sharing, as applied to closely held corporations, violates the Religious Freedom Restoration Act (RFRA). As a result of the ruling, closely held for-profit corporations that object to this requirement based on sincerely held religious beliefs cannot be required to provide such coverage.

Key Highlights of the Ruling According to the opinion, the contraceptive mandate substantially burdens the exercise of religion in violation of the RFRA with respect to closely held corporations. The federal government did not prove that the mandate is the least restrictive means of furthering the governmental interest in guaranteeing cost-free access to certain methods of contraception.

The decision does not address the RFRA’s applicability to publicly traded corporations. In addition, the opinion makes clear that the decision concerns only the contraceptive mandate and does not render all insurance-coverage mandates (e.g., for vaccinations or blood transfusions) in violation of the RFRA if they conflict with an employer’s religious beliefs.

Existing Religious Employer Exemption & Other Non-Profit Accommodations An exemption from the contraceptive mandate currently exists for religious employers. Effective for plan years beginning on or after January 1, 2014, certain accommodations are also provided for non-exempt, non-profit religious organizations that self-certify that they meet specific eligibility requirements. Under this accommodation, an eligible organization does not have to contract, arrange, pay or refer for contraceptive coverage. More information on the exemption and accommodations is available from the Center for Consumer Information and Insurance Oversight.

Stay tuned as we bring you more information regarding the impact of this decision, and be sure to check for updates in the online HR library within the Client Resource Center.