DENVER, CO – The Justice Department last week presented the owners of Hercules Industries an ultimatum: Give up your religion or your business. Hercules, founded by the Newland family in 1962, is a family-owned business employing 265 people.
Under the Obamacare law, businesses that have more than 50 employees must provide health insurance to their employees or face a penalty. To satisfy the mandate, the insurance must include the cost-sharing-free sterilization-contraception-abortifacient benefit. The regulation takes effect on Aug. 1, which means that as soon as any business starts a new plan-year for its health-insurance program after that date it must comply.
The Newlands, devout Catholics, filed a law suit in Federal court challenging a regulation issued by Health and Human Services Secretary Kathleen Sebelius earlier this year that requires essentially all health plans to cover sterilizations and all FDA approved contraceptives, including those that induce abortions.
The Newlands currently run a generous self-insurance plan, providing their employees with superior health-care coverage that, consistent with the teachings of the Newlands’ church, does not cover sterilizations, contraception and abortifacients. That requirement is something the Newlands say they will not comply with. In part, their suit against the governments contends:
Hercules Industries, Inc. … (seeks) to run Hercules in a manner that reflects their sincerely held religious beliefs. The Newlands, based upon these sincerely held religious beliefs as formed by the moral teachings of the Catholic Church, believe that God requires respect for the sanctity of human life and for the procreative and unitive character of the sexual act in marriage.
Applying this religious faith and the moral teachings of the Catholic Church, the Newlands have concluded that it would be sinful and immoral for them to intentionally participate in, pay for, facilitate, or otherwise support abortifacient drugs, contraception, or sterilization, through health insurance coverage they offer at Hercules. As a consequence, theNewlands provide health insurance benefits to their employees that omits coverage of abortifacient drugs, contraception, and sterilization. The Newlands’ plan is self-insured, and th eplan year renews each year on November 1, the next renewal date thus occurring on November1, 2012.
As have many entities organized by people of faith, the Newlands have concluded that compliance with Defendants’ Mandate would require them to violate their deeply held religious beliefs as formed by the moral teachings of the Catholic Church. The Mandate illegally and unconstitutionally coerces the Plaintiffs to violate their sincerely held Catholic beliefs under threat of heavy fines and penalties. The Mandate also forces the Plaintiffs to fund government-dictated speech that is directly at odds with the religious ethics derived from their deeply held religious beliefs.
The Justice Department responded to the suite by arguing that if the Newlands’ Roman Catholic faith kept them from following the Obama administration’s directive to provide employees with cost-sharing-free coverage for sterilizations, contraception and abortion-inducing drugs, the Newland family could divest themselves of their business.
The Justice Department further argued that people owning for-profit secular businesses do not have a First Amendment right to the free exercise religion in the way they conduct their businesses—particularly if their business is incorporated. The DOJ told the court:
“Here, plaintiffs have not sufficiently alleged that the preventive services coverage regulations substantially burden their religious exercise. Hercules Industries, Inc., is not a religious employer; it is ‘an HVAC manufacturer.’”
“The First Amendment Complaint does not allege that the company is affiliated with a formally religious entity such as a church. “Nor does it allege that the company employs persons of a particular faith. In short, Hercules Industries is plainly a for-profit, secular employer.”
The Alliance Defending Freedom, which represents the Newlands, disputed the claim that the First Amendment does not apply to corporations let alone to family-owned businesses. “The government argues that the Newlands forfeited their right to religious liberty as soon as they endeavored to earn their living by running a corporation,” said the Newlands’ brief. “Nothing in the Constitution, the Supreme Court’s decisions, or federal law requires—or even suggests—that families forfeit their religious liberty protection when they try to earn a living, such as by operating a corporate business.”
Should this lawsuit fail, the Newlands would pay a steep price for maintaining their religious freedom. With 265 employees, Hercules Industries would have to pay the government $26,500 per day if it decided not to comply with the regulation and insure its employees anyway. That would amount to well over $9 million in one year.