Supreme Court Issues Narrow Ruling on Hobby Lobby Stores Case

The U.S. Supreme Court ruled 5-4 today -- in Burwell v. Hobby Lobby Stores Inc. (Case number 13-354) -- that closely held corporations do have religious rights, and should be able to avoid complying with the U.S. Department of Health and Human Services (HHS) birth control mandate regulations.

The ruling appears to be narrow in scope, however, as Justice Samuel Alito wrote in an opinion for the majority that the opinion applies only to closely held corporations, and only to the birth control mandate provisions in the regulations that HHS wrote to implement basic preventive services benefits section of the Patient Protection and Affordable Care Act (PPACA).

Justice Alito wrote for the majority that a closely held corporation does have rights under the federal Religious Freedom Restoration Act of 1993 (RFRA).

RFRA prohibits the government from substantially interfering with a "person's exercise of religion, even if the burden results from a rule of general applicability," unless the government shows that applying the burden furthers a "compelling government interest" and is the "least restrictive means of furthering that compelling government interest."

The family that owns Hobby Lobby Stores and Hobby Lobby's sister company, Mardel Inc., and the family that owns Conestoga Wood Specialties Corp., wanted HHS and the courts to respect their ability to get protection from RFRA.  The Hobby Lobby case majority agreed that closely held corporations have RFRA rights, but avoided saying that the ruling applies to other types of corporations.

Alito noted that Hobby Lobby and three similar companies affected by the ruling are not publicly traded and are each owned and controlled by members of a single family.  Additionally, he said that the majority has not written a ruling that will apply to HHS vaccination mandates, blood transfusion mandates, or other mandates other than the birth control mandate.

"HHS points to no evidence that insurance plans in existence prior to the enactment of [PPACA] excluded coverage for such items," Alito wrote.  "Nor has HHS provided evidence that any significant number of employers sought exemption, on religious grounds, from any of [PPACA's] coverage requirements other than the contraceptive mandate."

Critics of the idea that RFRA can apply to companies -- including two dissenting Supreme Court justices: Ruth Bader Ginsburg and Sonia Sotomayor -- argued that RFRA provides religious rights only for individual people, not for companies.

Two other justices Stephen Breyer and Elena Kegan -- said the Hobby Lobby case plaintiffs' challenge to the HHS birth control mandate fails on its merits, but they said they did not need to decide whether for-profit corporations or the owners of for-profit corporations can bring RFRA claims.

In a concurring opinion supporting the majority decision, Justice Anthony Kennedy wrote that the Hobby Lobby opinion is not as sweeping as Ginsburg and Sotomayor fear.  According to Kennedy, HHS at least had an obligation to show that the mandate was the least restrictive means for achieving the goal of providing low cost access to contraceptives - and it did not do that.

The government already lets nonprofit employers avoid paying directly for contraceptive benefits, and that shows there is a less restrictive approach HHS could have used to accommodate the needs of closely held for-profit employers with objections to the birth control mandate, Kennedy wrote.

Not surprisingly, Democrats disagree with today's ruling and do not appear to see any political downside to taking on the decision.  The Democratic Senatorial Campaign Committee sent out an email shortly after the ruling in a fundraising effort, and several vulnerable red-state Democrats up for reelection were quick to criticize the decision.

"It is shameful that a woman’s access to contraception is even up for debate in the year 2014,” Sen. Kay Hagan (D-N.C.) said today.  “The choice about whether to use birth control should be between a woman and her doctor, not her boss, and no employer should be allowed to interfere with a woman’s access to contraception." 

Republicans applauded the decision.  "The Obama administration cannot trample on the religious freedoms that Americans hold dear,” Senate Minority Leader Mitch McConnell said in a statement.

The Kentucky Republican also took the opportunity to deride ObamaCare as “the single worst piece of legislation to pass in the last 50 years.”

House Speaker John Boehner (R-Ohio) said the decision is “another defeat for an administration that has repeatedly crossed constitutional lines in pursuit of its big government objectives.”

Sen. Ted Cruz (R-Texas), a potential 2016 GOP presidential nominee, said the decision is “a repudiation of the Obama administration’s untenable position that people with sincerely held religious beliefs should be forced to comply with an unconstitutional mandate while a parade of waivers, exemptions, and delays are granted for purely commercial and political interests.”

Editor's Note:  Generally this blog does not take sides in political issues, but I offer the following remarks for readers to consider:

1) It is disheartening to me that both political sides continue to demonize each other and further the dysfunction in Washington, D.C.  Political wedge issues such as abortion and contraceptives serve as provocation to distract the citizenry from common agendas that both sides support and carry out effectively.  It seems inappropriate to me that politicians on both sides make inflammatory statements designed to incite and divide.

2) Senator Hagan misleads her followers when she remarks that "It is shameful that a woman’s access to contraception is even up for debate in the year 2014."  Most reasonable people hearing that comment would assume that Hobby Lobby Stores did not want its employees having access to any contraceptives; yet further inspection reveals that Hobby Lobby objected to only a handful of contraceptives available - those that work to abort an already conceived embryo (not contraceptives used to prevent conception).  Hobby Lobby's health plan covers 80% of available contraceptives under the PPACA, but Senator Hagan would not want to be bothered by that detail with such a great opportunity to grandstand.

Until next time,

Andrew Herman, President

2014 Choosing a Medigap Policy Guide

The official 2014 Guide to Health Insurance for People with Medicare was published earlier this year by the Centers for Medicare and Medicaid Services (CMS).  This updated guide covers important topics such as:

• What is a Medigap policy
• What Medigap policies cover
• Your rights to buy a Medigap policy
• How to buy a Medigap policy

A Medigap policy is also known as 'Medicare Supplement'.  It is a private health insurance policy that supplements the Original Medicare Program (Parts A and B) by covering out-of-pocket costs not paid for by Medicare (such as co-payments, coinsurance and deductibles).

Medigap, or Medicare Supplement, policies are sold by their plan letter name such as "Plan F" or "Plan N".  Consumers purchasing Medigap typically also buy a Stand-alone Medicare Part D Prescription Drug Plan (PDP) since today's Medigap policies are not designed to cover prescription medicines.

Medigap coverage is not the same as the Medicare Advantage program (Part C of Medicare).  When you enroll into a Medicare Advantage plan, all of your Medicare benefits are delivered by a private insurance company.  Medicare Advantage plans most often are HMOs or PPOs, and they include medical and prescription drug coverage under one roof.  As well as the convenience factor, Medicare Advantage HMOs and PPOs typically have additional benefits and features that are not included with Original Medicare.  The primary downsides of having Medicare Advantage are: 1) the insurance company might have a limited provider network; and 2) you may need to contend with pre-authorization requirements not imposed by Original Medicare and Medicare Supplements.

Contact us if you are unsure which type of coverage is most suitable for you.

Click Here To Download the 2014 Choosing a Medigap Policy Guide

Until next time,

Andrew Herman, President
AH Insurance Services, Inc.

Health Insurance Marketplace - Most Existing Customers Can Auto-Enroll into 2015 Plan

The Centers for Medicare and Medicaid Services (CMS) proposed a rule last week that will allow Health Insurance Marketplace customers enrolled in a 2014 plan to auto-enroll into a 2015 plan. Such an auto-enrollment process will make it easier for satisfied consumers to remain on their health plans.

“As we plan for open enrollment in year two and continue to build a sustainable long-term system, we are committed to simplifying the experience for consumers by allowing auto-enrollment,” said Sylvia Burwell, Secretary of the Department of Health and Human Services (HHS). “We are working to streamline the process for consumers wishing to remain in their current plan.”

HHS noted that nine out of 10 employees covered by the Federal Employment Health Benefits Program typically do not change plans from year to year, and are auto-enrolled into their current plans with updated premiums and benefits. Of course, the Federal program has been in existence for more than fifty years and is much more mature compared to the fledgling federal and state exchanges.

HHS says people who got their health insurance through HealthCare.gov in 2014 will get notices telling them to update their application information with income changes to update their tax credit eligibility.

“Consumers will receive information from their health insurance company about the premium and the amount they are eligible to save on their monthly bill close to the beginning of the open enrollment period, when they will be able to take action should they choose to do so,” it added.

Under the method proposed by federal health officials, the government will renew people in their current health plans as long as their incomes and covered family members are not changing, and as long as their plan will be offered through the federal marketplace for the 2015 plan year.

As long as you gave permission for each year's tax records to be checked by the government when you first applied for exchange coverage, the government will continue your premium subsidy arrangement into next year. Federal officials said that about 100,000 applicants did not provide such permission during the initial sign-up period; these consumers will need to reapply in 2015 or otherwise their plan will be renewed without any premium subsidy. If you are not sure if you gave the requisite permission, call the Marketplace on 1-800-318-2596.

Continuing people's current subsidies makes sense since Marketplace consumers already must report through Healthcare.gov any changes in their income within a month of the change, so that the premium subsidy calculation should be up-to-date.

Under the proposed rules, if a 2014 plan is no longer offered for 2015 those consumers would automatically be assigned to the most similar plan offered by the same insurer; or if that insurer is no longer offering any coverage the consumer would be enrolled in the most similar plan available from a different insurer in the consumer's service area.

It might make sense to shop coverage for 2015, in particular if the federal government auto-assigns a plan from a different company. Open enrollment for the 2015 plan year is scheduled to begin on November 15.

Always feel free to call us at AH Insurance Services, Inc. or send an email if you have any questions about your health plan.

Until next time,

Andrew Herman, President