Hobby Lobby Affordable Care Act Contraception Update: Retailer Could Suffer from Supreme Court Case on Obamacare's Contraception Mandate
As the U.S. Supreme Court debated Tuesday about whether for-profit companies could refuse the Affordable Care Act's mandate for contraception coverage to its employees citing religious beliefs, Hobby Lobby became part of a list of organizations to publicly take a religiously conservative stance on socioeconomic topics.
The current state of President Barack Obama's heath care plan requires that companies are to pay for the coverage of contraception including birth control and other reproductive health for its female employees.
Under the mandate, and after some compromises, churches, church-run hospitals, universities, parochial schools and charities can opt-out of direct coverage and hire a third-party insurance provider to pick up the cost.
Hobby Lobby, a chain of arts and crafts stores with 500 locations and 13,000 employees across the U.S., challenged the law's contraception mandate. Hobby Lobby's attorney Paul Clement argued that, based on the owners' previously held religious values opposing abortion, they can object to cover two forms of contraception -- IUDs and morning-after pills.
The justices are expected to write an official final ruling in late June but the court could conduct a preliminary vote this week.
During the 90-minute long discussion among the conservative majority Supreme Court, the arguments seemed to draw the line between most of the male justices and the female justices.
Justice Sonia Sotomayor asked the key-question of the day's hotly contested debate: "How does a corporation exercise religion?"
Hobby Lobby's appeal to the Supreme Court comes alongside Conestoga Wood Specialties claim of its religious rights in the contraception debate.
Advocates for the contraception mandate, however, argue that if the Supreme Court rules in favor of the corporations, it could open the door for other companies to cite religious freedoms as a reason to avoid paying for certain medical coverage for its employees.
Sotomayor brought up the possibility of companies seeking to avoid covering other medical procedures such as blood transfusions, immunizations or medical products that include pork.
Justice Elena Kagan also included the possibilities of organizations refusing to comply with sex discrimination, minimum wage, family leave and child labor laws based on the owner or executives' previously held religious beliefs.
Kagan later brought up the fact that corporations could opt-out all together of providing insurance and paying the mandatory fine to do so, which she said costs less than the insurance.
However, under the law, the penalties for not providing health care are the payment of $100 a day per employee. With 13,000 employees, Hobby Lobby could be paying $475 million annually if it chooses to go that route.
Solicitor General Donald Verrilli attended Tuesday's hearing in defense of the Affordable Care Act and the federal government.
Verrilli argued against Hobby Lobby's view that IUDs and the morning-after pill are forms of abortion. He also added that the mandate does not require companies to cover abortions, and reiterated that the two forms of contraception are both legal and approved by the FDA.
Eric Schiffer, chairman of Reputation Management Consultants, said he believes Hobby Lobby will certainly see some backlash from its stance on the contraception mandate but could gain some business as well.
"They risk alienating a large portion of the public," Schiffer said. "My guess is that they'll lose some business from this but also build some business with the base. I don't believe this position will destroy Hobby Lobby."
Hobby Lobby's view and stance on the issue is not so different from millions of other Americans. The argument over contraception coverage under the Affordable Care Act and the decades-old debate of abortion has had a polarizing effect on the nation for some time.
"We've seen this, this is not the first time that we've seen leadership and ownership of a brand bringing out their personal orientations, either religious or clerical," Schiffer said. "Sometimes it blows back against them."
He also said Hobby Lobby will mainly be see a loss in female shoppers, primarily in more liberal states.
Further rippling the fabric of our society have been other socioeconomic issues including immigration reform, gun control reform and minimum wage increases. But none compare to the same-sex marriage debate, which has considerable amount of supporters on both sides.
In mid-2012, Chic-fil-A Chief Executive Officer Dan Cathy publicly stated that he was a supporter of traditional-marriage based on his Christian beliefs in the Bible. His remarks created a firestorm of both criticism from gay rights organizations and support from conservative religious groups.
The Atlanta-based fast-food chain was already known for its deeply held religious beliefs as it has touted since established in 1946 that its shops are to be closed every Sunday in observance of a day of family, rest and church.
Yet, it came as a shock to many in the U.S. that its president and CEO publicly supported traditional-marriage values and financially backed organizations that advocated against same-sex marriage.
Through the WinShape Foundation, a non-profit organization created by the Cathy family, Cathy donated millions of dollars to groups including The Family Research Council and the Alliance Defense Fund. The former was considered a "hate group" by the Southern Poverty Law Center in 2010 and the latter publicly supported Proposition 8 in California.
Chic-fil-A has since stopped funding such groups.
Late last year, Phil Robertson from A&E's hit show Duck Dynasty, in an interview with GQ Magazine, compared homosexuality to bestiality and prostitution. He continued to make remarks about pre-Civil War black slaves being happy with their plight and that Japan bombed Pearl Harbor because they didn't have Jesus in their life.
Again, another firestorm caught ablaze as the LGBT community voiced their damnation of Robertson and the show while Fox News and religious organizations came to his side.
A&E, the network that brought Duck Dynasty to life, and those who watched the show were already familiar with the character's strong Christian beliefs, but when the story was released, the network was quick to pull Robertson from the show and went into PR mode.
"We are extremely disappointed to have read Phil Robertson's comments in 'GQ,' which are based on his own personal beliefs and are not reflected in the series 'Duck Dynasty,'" according to the network's statement. "His personal views in no way reflect those of A&E Networks, who have always been strong supporters and champions of the LGBT community. The network has placed Phil under hiatus from filming indefinitely."
While it has been more than a year since Cathy's remark, the idea that "all press is good press" seemed to be true for the chicken-slinging company as it reported a 12 percent sales increase in 2012 from 2011 as it raked in $4.6 billion.
Although in the case of Duck Dynasty, they weren't as lucky to maintain its viewers as its current season saw a sharp decline in ratings, according to Deadline Hollywood.
For the first time in its five-season run, it didn't produce any ratings records as it had a 33 percent drop in viewer ratings from the end of the fourth season to the start of the fifth. The current season has had an average of about 10 million viewers while last season's average was an outstanding 15 million.
Schiffer said that owners and executives have their right to free speech under the First Amendment, but in terms of a business stand point it's often better to just keep your views to yourself.
"Keep your mouth shut," Schiffer suggested. "I would say that I respect your religious beliefs, that you have every right to practice them and support those that do, but that you must realize that if you do it within a business environment you will face unforeseen negative consequences."
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