Justices Sotomayor, Kagan suggest Hobby Lobby drop insurance for employees, pay tax instead

Both of President Barack Obama’s Supreme Court appointees proposed that if the Affordable Care Act’s contraception mandate violates an employer’s religious beliefs, it might be better not to offer health insurance and allow employees to fend for themselves.

Tuesday’s oral arguments in the Hobby Lobby case focused on whether Obamacare’s contraception mandate violates the First Amendment’s freedom of religion, according to CNS News

Paul Clement, attorney for Hobby Lobby and Conestoga Wood Specialties, argued that employers with deep religious convictions were left with an unsavory choice — to offer coverage for contraceptives, against their beliefs, or pay an exorbitant penalty for excluding it.

“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 the cost of health insurance at all?” Justice Sonia Sotomayor asked, according to CNS News. “Those employers could choose not to give health insurance and pay not that high a penalty, not that high a tax.”

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Clement said Hobby Lobby’s penalty would amount to $500 million a year. Justice Elena Kagan cut in, saying:

No, I don’t think that that’s the same thing, Mr. Clement. 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 than Hobby Lobby probably pays to provide insurance to its employees. 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.

Other businesses were dropping coverage for employees to avoid paying for an Obamacare plan, Kagan said, but such a tactic undermines the Affordable Care Act’s entire purpose — to assure that more Americans are covered.

“I thought that part of the religious commitment of the owners was to provide health care for its employees,” Chief Justice John Roberts said.

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

Hobby Lobby already pays more than 15,000 full-time employees nearly twice the federal minimum wage. It also provides health insurance, dental coverage and a retirement savings plan, according to The Associated Press.

A decision is expected this summer, CNS reported.

Fox News host Greta Van Susteren discussed the oral arguments “On the Record.”


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