An Argument from the Hobby Lobby Hearings You Probably Haven’t Heard: There’s No Mandate

by Patrick Brennan

Liberal justices reportedly argued at several points today that one element of Hobby Lobby’s case against the HHS mandate that health insurance must cover contraception and certain controversial drugs doesn’t add up because . . . Hobby Lobby doesn’t have to provide health insurance. Thus, the ACA and the mandate don’t burden employers. But wait, doesn’t the ACA require that large employers provide health insurance? In the eyes of the Supreme Court, the individual mandate was a tax you could choose to pay in lieu of buying health insurance — and Justice Kagan argued today, essentially, that the same idea applies here.

Former solicitor general Paul Clement, who’s representing Hobby Lobby against the government, explained that the HHS mandate is a substantial burden on the firm’s religious liberty because providing coverage — sans all the contraception HHS requires — could cost them $500 million a year in fines. Here was Kagan’s response (via Dan Diamond of the Advisory Board):

Under this argument, the effect of the ACA is still that Hobby Lobby cannot provide health insurance without violating its conscience or paying $500 million a year in fines (whether it wants to do so by buying health insurance for them or providing self-insurance). The fact that it can pay $2,000 per employee per year instead of providing health insurance, and that some justices see this as a choice rather than a penalty, is absolutely not dispositive on whether the government is imposing a burden on their religious liberty. They can enter the market without a substantial burden, Kagan’s argument goes — but they can’t enter the market for health insurance. It’s an interesting point nonetheless.

This isn’t an entirely new argument — the New York Times’ recent editorial about the issue raised the idea, pointing to Georgetown law professor Martin Lederman’s use of it. ​ Ed Whelan, our ace legal blogger, has debated the topic with Lederman here, here, and here. In part Whelan offers the “modest proposition that people have religious-liberty rights under RFRA in how they carry out all the activities that they freely choose to engage in [i.e., including purchasing health insurance], not just in how they do the tasks that the federal government places substantial pressure on them to do.”

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