Time to Lift the Veil of Inequality in Health Care Coverage: Using Corporate Law to Defend the Affordable Care Act

42 Pages Posted: 25 May 2014 Last revised: 13 Jun 2015

See all articles by Seema Mohapatra

Seema Mohapatra

Indiana University Robert H. McKinney School of Law

Date Written: May 23, 2014

Abstract

Two Circuit Court of Appeals cases involving the contraceptive mandate were heard by the Supreme Court in late March 2014 and will be decided by June 2014: Hobby Lobby Stores, Inc. v. Sebelius and Conestoga Wood Specialties Corp. v. Sebelius. Both cases involve claims by corporations that the preventative case requirements implemented by the Affordable Care Act ("ACA"), particularly the contraceptive care requirements, are unconstitutional.

This Article will attempt to answer the question of whether for-profit corporations are capable of exercising religion through a corporate law lens and argues that a shareholder’s constitutional religious exercise rights do not and normatively should not extend to the corporation itself, even in a closely held business. Furthermore, this Article argues that in the ACA context, allowing employers to opt out of certain provisions of ACA, harms women employees, and that this harm trumps the argument that somehow the beliefs of the owners “pass through” to the corporation itself.

To support this assertion, Part I of this Article reviews the recent cases where for profit corporations are claiming that certain ACA provisions violate the religious rights of not just the owners and shareholders of the corporation, but of the corporation itself (referred to collectively as the ACA Mandate Cases).

Part II of this Article reviews theories of the corporation that have historically been adopted by the Supreme Court and concludes that regardless of the theory one ascribes to, the assertions of the corporate plaintiffs in the ACA Mandate Cases run counter to the prior precedent of the Court.

Part III of this Article discusses corporate doctrine that deems a corporation as a separate entity from its shareholders, even in a closely held corporation. This Part also argues that a “pass-through beliefs” approach would be misguided and begin a slippery slope that could lead to many additional inequalities in the workplace.

Part IV of this Article explains the concept of Corporate Social Responsibility (“CSR”) and disputes the notion that some scholars have asserted: that the CSR movement somehow “proves” that corporations may indeed have religious beliefs. Rather, this Part explains that CSR is a normative concept that advocates for shareholders and directors of corporations to make socially responsible decisions that lead to a better society, including environmental benefits and equality for women, minorities, and other discriminated groups. In fact, the theory behind CSR comports with the rationale for rejecting the notion that a corporate entity can have religious beliefs that pass through from its owners. This Part also examines how an employer providing contraceptive access could be seen as a part of a corporation’s corporate social responsibilities.

Finally, Part V of this Article describes how the ACA helps eliminate gender-based disparities that exist in current health insurance coverage and the health care system. It also addresses how the focus on the contraceptive provision has taken attention away from the non-reproductive health care provisions, which promote better health care for women from disadvantaged groups. The public discourse of the ACA has essentialized women by focusing on their capacity as baby making machines. In reality, the ACA covers a whole host of preventative care services that will go a long way in closing the gap in health care outcomes for poor and minority women.

Women make up a larger part of the workforce in the United States each year, and as employees, deserve equal treatment in all benefits, including health care coverage. The owners of the for-profit corporations who oppose certain contraception for religious reasons are not being required to use them, nor are they advocating their use when they comply with the provisions of the ACA. The ACA’s contraception provisions are only a small, albeit important, part of the ACA. Using legal arguments counter to corporate law to escape the ACA fundamentally harms women employees. The rights of women employees are as important as the religious rights of employers, and more important than the non-existent religious rights of a corporation. As this Article has demonstrated, regardless of the theory of the corporation that one ascribes to, the rights of the women employees trumps the owner’s rights in the ACA context. Even if the Supreme Court decides the Hobby Lobby and Conestoga Wood cases in a narrow manner to avoid answering the overarching question about whether a corporation can practice religion, this is an important question. This Article concludes that a for-profit corporation cannot and should not be able to be deemed as having religious beliefs. Any decision otherwise does not comport with corporate law will begin a slippery slope that will potentially harm women, minorities, and other vulnerable populations.

Keywords: Hobby Lobby, corporate personhood, corporate social responsibility, Affordable Care Act

Suggested Citation

Mohapatra, Seema, Time to Lift the Veil of Inequality in Health Care Coverage: Using Corporate Law to Defend the Affordable Care Act (May 23, 2014). Wake Forest Law Review, Forthcoming. Available at SSRN: https://ssrn.com/abstract=2441414

Seema Mohapatra (Contact Author)

Indiana University Robert H. McKinney School of Law ( email )

530 West New York Street
Indianapolis, IN 46202
United States

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