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Supreme Court will take up controversial Obamacare provision on contraception

The Supreme Court will review whether for-profit companies have religious freedom and whether they must comply with the ACA's contraception mandate. Pete Williams reports.

By Pete Williams, NBC News Justice Correspondent

The Supreme Court, taking up a controversial provision of Obamacare, agreed Tuesday to consider whether a company can refuse to provide contraceptive care to female employees on the grounds that doing so would violate its religious freedom.

It’s a question the Supreme Court has never answered: Does a for-profit company have the right to object to a law on religious grounds?

“This case presents, front and center for the justices to decide, a question that’s been open for a long time: Do companies, not just people and churches, have religious freedom?” said Tom Goldstein, a Supreme Court expert and publisher of the SCOTUSblog website.

The court’s action comes at a time when public support for the Obamacare law, officially known as the Affordable Care Act, is declining due to problems with the website and confusion over whether people can keep existing health insurance policies.

The justices agreed to dive into a dispute over a provision of the law that has generated dozens of lawsuits nationwide — the requirement that private companies provide contraceptive care to their female employees.

One of the challenges comes from Hobby Lobby Stores, an Oklahoma company with more than 500 arts-and-crafts stores and more than 13,000 full-time employees. The business is run by founder David Green of Oklahoma City and five members of his family.

“We believe wholeheartedly that it is by God’s grace and provision that Hobby Lobby has been successful. Therefore we seek to honor Him in all that we do,” Green said.

All Hobby Lobby stores close on Sundays, for example. To avoid promoting alcohol, the company does not sell shot glasses.

Green family members say they believe that providing insurance coverage for two types of morning-after pills and two kinds of intrauterine devices would make them complicit in practicing abortions.

They filed a lawsuit claiming that fully complying with the contraceptive mandate in the health care law would violate their religious freedom.

Failing to follow the law, which covers companies that employ more than 50 people, would cost Hobby Lobby at least $1.3 million a day in fines, or almost $475 million a year, the company says.

The Greens “must either violate their faith by covering the mandated contraceptives or pay crippling fines that would destroy their livelihood,” they argued in legal briefs submitted in the case.

The Obama administration urges the Supreme Court to uphold the application of the contraceptive provision to private, for-profit companies. Ruling otherwise, the Justice Department said in court filings, “would disregard fundamental tenets of corporate law that distinguish between the rights and responsibilities of a corporation and those of its owners.”

The Greens themselves cannot claim that their religious freedoms are being violated by the contraceptive provision, the government argued: “Federal law does not require the Greens personally to provide health coverage of any kind to Hobby Lobby employees.”

“The Greens are likewise not personally liable for paying the employees’ salaries,” the government said.

Federal rules exempt churches and nonprofit religious organizations from the contraceptive requirement, but for-profit corporations must comply fully.

In a statement on Tuesday, the White House said that its policy is designed to make sure health care decisions are made “between a woman and her doctor.”

“The president believes that no one, including the government or for-profit corporations, should be able to dictate those decisions to women,” the statement said.

Cecile Richards, the president of the Planned Parenthood Federation of America, said that companies filing cases against the contraceptive mandate have views “far outside the mainstream.” She said that the court, by ruling for the companies, could allow companies to oppose other care, such as vaccines and mental health treatment, based on personal beliefs.

In ruling for Hobby Lobby in late June, the 10th U.S. Circuit Court of Appeals, in Denver, referred to the Supreme Court’s decision three years ago in a case called Citizens United, which held that corporations have free speech rights.

“We see no reason the Supreme Court would recognize constitutional protection for a corporation’s political expression but not its religious expression," the appeals court said.

Three other federal appeals courts have reached the opposite conclusion, ruling that for-profit corporations cannot assert a claim of freedom of religion in seeking to avoid complying with laws that apply generally to all companies.

The court also agreed Tuesday to hear a challenge arising from one of those rulings against a company's claim of religious freedom.  It was brought by a Lancaster County, Pa., woodworking corporation, owned by a family of five Mennonites. The 3rd U.S. Circuit Court of Appeals also rejected the claims made by the family members themselves, ruling that the mandate is imposed on the corporation, not directly on the family members. 

Goldstein of SCOTUSblog, referring to Hobby Lobby, called it a “major religious liberties case.”

“It’s in the important context of Obamacare, so the nation is paying attention,” he said. “And the question of whether these companies can assert religious freedoms is one that will have importance for centuries.”

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