Religion Impacts Employee Benefits

July 16, 2014

In Burwell v. Hobby Lobby Stores, Inc. (Hobby Lobby”), the Supreme Court showed employers that religious beliefs can affect the governance of employee benefits, specifically in closely-held corporations (private corporations with limited ownership).

In Hobby Lobby, the U.S. Supreme Court found that requiring closely-held, for-profit employers to provide health coverage, which included access to contraceptives, violated the Religious Freedom Restoration Act of 1993 (“RFRA”). The majority opinion, authored by Justice Alito, clearly intends to restrict this decision in two aspects: applying it only to the contraceptive mandate, contained in the Affordable Care Act, and only allowing closely-held corporations to make use of the decision.

Many non-religious groups are concerned that the Court’s decision may lead religious companies to use religion as a guise to try and opt out of laws they do not agree with. For example, can companies use religion as a basis to discriminate against employees who may otherwise be protected by Title VII, such as race? Although the Court attempted to restrict the scope of the decision, it remains to be seen how it will affect the corporate landscape, and consequently, the workplace.

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