The Impact of Hobby Lobby on Compliance Evaluations

Abstract

One of the most significant United States Supreme Court opinions that directly impacts employee health care benefits and women’s access to oral contraceptives was recently rendered. Because business is global, there is a propensity for multinational corporations to have to address internal audit items that include employee benefits. Given the significance of this area in relation to the United States Department of Labor’s check-list for Part 7 of ERISA in relation to the Affordable Care Act, this article looks at process improvement and compliance in relation to recent U.S. case law and IRS provisions and the context of golf.

Notes

i. Burwell v. Hobby Lobby Stores, Inc., 134 S. Ct. 2751 (2014).

ii. King v. Burwell, WL 3582800 (2014); and Halbig v. Burwell, WL 3579745 (2014).

iii. Richard Clough, “General Electric Wants to Act Like a Startup,” Bloomberg Businessweek (August 11–24, 2014), 22–24.

iv. Ibid., 23.

v. Patient Protection and Affordable Care Act, § 1001(a)(5), 42 U.S.C.A. §§gg-13(a)(4).

vi. Religious Freedom Restoration Act of 1993 (Pub. L. 103-141).

vii. Hobby Lobby, 134 S. Ct. at 2751.

viii. Id. at 2755 (noting that the three closely held for profit entities held genuine Christian beliefs about when life begins and being forced to provide “contraceptive drugs or devices” violated their religious freedom).

ix. Id. at 2756.

x. Id. at 2757.

xi. Id. at 2758.

xii. Id. at 2758, citing United States v. Lee, 455 U.S. 252 (upholding that there were no less restrictive alternatives to paying taxes, despite a “religious” objection).

xiii. King at *1.

xiv. Halbig at *2.

xv. Id. at 2757, citing Tilton v. Richardson, 403 U.S. 672, 689, 91 S. Ct. 2091; and Board of Ed. Of Central School Dist. No. 1 v. Allen, 392 U.S. 236, 248-249, 88 S. Ct. 1923, distinguished.

xvi. Id. at 2757.

xvii. Department of Labor, Self Compliance Tool for Part 7 of ERISA: Affordable Care Act Provisions, 18. This segment of the checklist has two clarification items under this question. “For purposes of this provision, a health care professional who specializes in obstetrics or gynecology is any individual (including a person other than a physician) who is authorized under applicable State law to provide obstetrical or gynecological care. The plan or issuer may require such a professional to agree to otherwise adhere to the plan’s or issuer’s authorization and providing services pursuant to a treatment plan (if any) approved by the plan or issuer. See 29 CFR 2590.715-2719A(a)(3)(i)(A). A plan or issuer must treat the provision of OB/GYN care, and the ordering or related OB/GYN items and services by a participating health care professional who specializes in obstetrics or gynecology as the authorization of the primary care provider. See 29 CFR 2590.715-2719A(a)(3(i)(B).”

xviii. Id. at 2762.

xix. See 45 CFR § 147.131(b); 78 Fed. Reg. 39874 (2013); 42 USC §§ 18011(a), (e); 26 USC §4980H(c)(2)(addressing that employers with less than 50 employees are not required to provide any health insurance).

xx. 45 CFR §147.131(c)(2); 26 CFR §54.9815-2713A(c)(2).

xxi. http://www.irs.gov/uac/Newsroom/Employer-Health-Care-Arrangements

xxii. 79 Fed. Reg. 26113 (May 7, 2014).

Additional information

Notes on contributors

Rachel V. Rose

Rachel V. Rose, JD, MBA is a Principal with Rachel V. Rose—Attorney at Law, P.L.L.C. located in Houston, TX. Ms. Rose has a unique background, having worked in many different facets of healthcare throughout her career. She is published and presents on a variety of healthcare and securities topics including: Dodd-Frank,the False Claims Act, the Foreign Corrupt Practices Act, physician reimbursement, ICD-10, access to care, anti-kickback and Stark laws, U.S. Supreme Court cases impacting the medical device industry, international comparative healthcare laws, and the HIPAA/the HITECH Act. Ms. Rose holds an MBA with minors in healthcare and entrepreneurship from Vanderbilt University, and a law degree from Stetson University College of Law, where she graduated with various honors, including the National Scribes Award and The William F. Blews Pro Bono Service Award. Ms. Rose is licensed in Texas. Currently, she is Vice-chair of Publications for the Federal Bar Association’s Corporate and Association Counsel Division, the co-editor of the American Health Lawyers Association’s Enterprise Risk Management Handbook for Healthcare Entities (2nd Edition) and Vice-chair of the Book Publication Committee for the Health Law Section of the American Bar Association, as well as a co-author of the book The ABCs of ACOs. Ms. Rose is an Affiliated Member with the Baylor College of Medicine’s Center for Medical Ethics and Health Policy. The author would like to thank Jackson Nicholson of The Golf Channel for his contributions. She can be reached at [email protected]