Hobby Lobby challenges birth control coverage

DENVER In the most prominent challenge of its kind, Hobby Lobby Stores Inc. is asking a federal appeals court Thursday for an exemption from part of the federal health care law that requires it to offer employees health coverage that includes access to the morning-after pill.

The Oklahoma City-based arts-and-crafts chain argues that businesses -- and not just the currently exempted religious group -- should be allowed to seek exception from that part of the health law if it violates their religious beliefs.

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"They ought to be able, just like a church, just like a charity, to have the right to opt out of a provision that infringes on their religious beliefs,'' said Kyle Duncan, who will argue before the 10th U.S. Circuit Court of Appeals on behalf of the Green family, the founders of Hobby Lobby Stores Inc. and a sister company, Christian booksellers Mardel Inc.

The Greens contend that emergency contraception is tantamount to abortion because it can prevent a fertilized egg from implanting in the womb. They also object to providing coverage for certain kinds of intrauterine devices.

Lower courts have rejected Hobby Lobby's claim, saying that for-profit businesses aren't covered by an exemption added to the law for religious organizations. That exemption applies to churches themselves, but not to affiliated nonprofit corporations, like hospitals, that do not rely primarily on members of the faith as employees.

In a decision issued late last year, a federal judge concluded simply, "Hobby Lobby and Mardel are not religious organizations.''

But U.S. District Judge Joe Heaton in Oklahoma City also wrote that "the court is not unsympathetic'' to Hobby Lobby's dilemma and that the question of compelling employer health coverage for certain procedures "involves largely uncharted waters.''

Other businesses in multiple states are challenging the contraception mandate, too. Hobby Lobby is the most prominent company making the claim. Two smaller companies based in Indiana and Illinois made similar arguments in the 7th U.S. Circuit Court of Appeals in Chicago on Tuesday.

As in Chicago, the Justice Department will argue for the government that the contraception mandate should stay.

The 10th Circuit opted to hear the case before eight active judges, not the typical three-judge panel, indicating the case's importance.

In December, the 10th Circuit denied Hobby Lobby's request for an injunction to prevent it from being subject to fines while its argument was on appeal. The Supreme Court also denied an injunction, with Justice Sonia Sotomayor writing that it was not "indisputably clear'' that Hobby Lobby needed immediate protection.

In response, the company restructured its health insurance, Duncan said. But Hobby Lobby, which is self-insured, will face fines by July 1 if it does not provide the coverage, he said.

Hobby Lobby calls itself a "biblically founded business'' and is closed on Sundays. Founded in 1972, the company now operates more than 500 stores in 41 states and employs more than 13,000 full-time employees who are eligible for health insurance.

The Hobby Lobby case has attracted broad interest from health groups and religious groups. A panel including reproductive rights organizations and the American Public Health Association banded together last year to ask the court to reject Hobby Lobby's claim. The groups argued it would be dangerous precedent to allow for-profit private businesses to use religious beliefs to deny coverage.

In a brief to the court filed last year, the health groups argued that allowing businesses not to cover some contraceptives would be like allowing businesses to tell employees they can't use wages to buy morning-after pills or other products that offend the employer's religious belief.

"Of course, no one would argue that [Hobby Lobby owners] could seek, on religious grounds, to preclude their employees from spending their wages on contraception. This same rationale requires rejecting employers' demands to impose their religious views on employees through restrictions on the use of health insurance benefits,'' the health groups argued.

Susan Polan, associate executive director of the American Public Health Association, said the Hobby Lobby case is an important test of how far businesses can go in seeking to exempt coverage of health procedures they don't like.

"We're talking about women's access to reproductive health. That should be a decision between a patient and her health care provider, not a patient and her employer,'' Polan said this week.