Protect employers on health-care reform
BY ROBIN WILSON
Saturday, January 26, 2013
1/26/13 at 3:31 AM
Federal courts have once again denied Hobby Lobby protection in its fight to avoid having to provide contraceptives and "abortion-causing drugs and devices" over its deeply held religious convictions.
This defeat came at the hands of U.S. Supreme Court Justice Sonia Sotomayor, who said that Hobby Lobby must comply with the new federal health-care reform law's mandates - even as Hobby Lobby continues to litigate whether guarantees in the First Amendment and federal Religious Freedom Restoration Act protect businesses like it. On the heels of this loss, Hobby Lobby petitioned the 10th Circuit U.S. Court of Appeals to reconsider.
Lawsuits in neighboring Colorado are percolating up to the 10th Circuit as well. Hercules Industries, an HVAC manufacturer, won a preliminary injunction in district court against the mandates' application to Hercules - and only Hercules.
It is unclear how lawsuits by for-profit employers ultimately will fare. But Congress can protect these employers - and President Obama can, too.
So, who gets hurt if religious objectors are not protected? Surprisingly, not the employer.
Cardinal Frances George says that paying "exorbitant annual fines to avoid paying for ... abortifacient drugs, artificial contraception and sterilization ... is not economically sustainable."
But over the short-term, crunching the numbers reveals a surprising truth: Most objecting employers will do just fine financially if they take the "nuclear option" and drop their employees' health-care coverage.
How can that be? First, employers with under 50 workers will face no penalties at all. Obeying their convictions will be cost-free.
What about larger employers? As the number of employees swells, so does the annual penalty, until it sounds massive. Colorado Christian University, a nondenominational, evangelical university that employs 922 people, faces a penalty of $1,784,000 annually if it drops coverage, prompting it to sue the Obama administration.
For Catholic Charities in Washington, D.C., an employer with more than 1,000 employees, penalties would crest at $2 million annually. The University of Notre Dame, with its 16,445 employees, faces an annual penalty of $32,830,000.
It sounds like Cardinal George is right: The mandates precipitate crushing penalties that no institution could sustain. Except for one thing: If these employers drop health-care coverage, incurring the fines, they no longer pay for the even greater per-employee cost of health-care coverage. Today, an individual plan costs $5,429 annually on average, a family plan $20,728 - with businesses footing from 70 percent to 80 percent of the cost.
True, employers might be forced to raise salaries to compete for higher-income employees. Economists generally agree employee benefits are a dollar-for-dollar substitute for wages. But, lower-income employees will not get salary boosts because they will be made better off financially by receiving premium tax credits.
All of this means that the cost of the nuclear option may not be nearly so grave as calculated penalties would lead one to believe.
Hobby Lobby will be fine.
By contrast, the group that the mandates really punish are individuals who share the same religious objections as Hobby Lobby and other high-profile litigants. These ordinary individuals will not be allowed to buy health-care coverage that excludes contraceptives and "abortion-causing drugs." If these individuals go without insurance, they will be fined - and worse, they will still have no health insurance.
Ironically, then a law designed to maximize insurance coverage will instead encourage objecting employers to throw employees onto public exchanges. Ordinary people who share those convictions will not only be fined, but be stripped of all health-care coverage.
This makes no sense. Public policy that punishes objecting employers and individuals for refusing to pay for contraceptives and "abortion-causing drugs" is bad enough. Public policy that financially rewards employers for dropping coverage is just plain dumb - not to mention contrary to the whole point of the federal health-care reform law.
President Obama could order expanded protections today. Congress could do it tomorrow.
America's rich history of religious liberty protections provides a beacon. Will anybody pay attention?
Robin Wilson is a professor of law at Washington & Lee University and co-editor of the book "Same-Sex Marriage and Religious Liberty: Emerging Conflicts." She will speak at noon Monday at the University of Tulsa College of Law about Hobby Lobby and the HHS contraceptive coverage mandate, in a public debate with TU Associate Dean Tamara Piety, a law professor and First Amendment expert.
Robin Wilson: Public policy that financially rewards employers for dropping coverage is just plain dumb