Sotomayor, Kagan: Hobby Lobby Should Drop Insurance, Pay Penalty and Let Employees Use Exchange

March 25, 2014 - 3:01 PM
supreme court

Supreme Court justices (AP)

(CNSNews.com) – During oral arguments in the U.S. Supreme Court on Tuesday which focused on whether the contraceptive mandate in the Affordable Care Act violates the free exercise of religion, Justices Sonia Sotomayor and Elena Kagan suggested employers who have moral objections to birth control should not provide health care coverage for their employees.

“But isn't there another choice nobody talks about, which is paying the tax, which is a lot less than a penalty and a lot less than -- than the cost of health insurance at all?”

Sotomayor said during the presentation by attorney Paul Clement, who represents Hobby Lobby Stores and Conestoga Wood Specialties, two companies that sued the federal government over the requirement that businesses provide health insurance plans that cover contraceptives, including abortion-inducing drugs.

“Those employers could choose not to give health insurance and pay not that high a penalty – not that high a tax,” Sotomayor said.

Clement said Hobby Lobby would pay more than $500 million per year in penalties, but Kagan disagreed.

“No, I don’t think that that’s the same thing, Mr. Clement,” Kagan said. “There’s one penalty that is if the employer continues to provide health insurance without this part of the coverage, but Hobby Lobby would choose not to provide health insurance at all.

“And in that case Hobby Lobby would pay $2,000 per employee, which is less that Hobby Lobby probably pays to provide insurance to its employees,” Kagan said. “So there is a choice here. It’s not even a penalty by – in the language of the statute. It’s a payment or a tax. There’s a choice.”

Kagan went on to say that other U.S. businesses are “voluntarily” dropping their health insurance coverage for employees.

“You know Hobby Lobby is paying something right now for the – for the coverage,” Kagan said. “It’s less than what Hobby Lobby is paying for the coverage. There are employers all over the United States that are doing this voluntarily.”

Chief Justice Roberts interjected that this was in opposition to what Hobby Lobby presented in its lawsuit.

“I thought – I thought that part of the religious commitment of the owners was to provide health care for its employees,” Roberts said and Clements agreed.

“Well, if they want to do that, they can just pay a greater salary and let the employees go in on the exchange,” Sotomayor said.

The court seemed divided along ideological lines, with liberal judges – including President Barack Obama’s appointed judges Kagan and Sotomayor – emphasizing the rights of employees to have free birth control as mandated by the law, while others focused on government infringement on religious liberty.

A decision in the case is expected this summer.