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A two-insurance-card system?

ST. PAUL — Imagine a day when you’d carry two health insurance cards in your wallet.

You’d use one card at the pharmacy for medicine your boss has agreed to pay for as part of the company’s health plan.

The second card would go for prescriptions that your employer objects to on religious grounds, with costs being charged directly to your health insurance company.

The scenario is far-fetched for the vast majority of workers today.

But a landmark decision last month from the U.S. Supreme Court means the two-card system might be in the realm of possibility for at least a slightly larger group of workers in Minnesota.

Experts stress that they aren’t sure exactly how the government, employers and insurance companies will respond to the court’s decision, which found that crafts retailer Hobby Lobby can’t be forced to pay for contraceptives under the federal Affordable Care Act.

There are questions about how many employers might be entitled to health law exemptions under the ruling, and whether the ruling could be extended beyond contraceptive benefits to medical services and employment questions. All the uncertainty likely means at least one thing: more litigation.

“As a legal matter, this opens the door for people to test the boundaries,” said Heidi Kitrosser, a law school professor at the University of Minnesota. “I do think this definitely opens the floodgates.”

In the case, Hobby Lobby objected to a portion of the Affordable Care Act that requires employers to pay for all forms of government-approved contraceptives as part of employee health plans. The mandate violates principles of religious freedom, the company argued, because its owners believe four of the approved contraceptive methods facilitate abortions.

Hobby Lobby objected to covering the cost of two emergency contraception pills plus two types of intrauterine devices, or IUDs. In a filing with the court, though, medical experts say the contraceptives don’t cause abortions.

A majority of five justices on the court sided with Hobby Lobby.

“Because the contraceptive mandate forces them to pay an enormous sum of money — as much as $475 million per year in the case of Hobby Lobby — if they insist on providing insurance coverage in accordance with their religious beliefs, the mandate clearly imposes a substantial burden on those beliefs,” wrote Justice Samuel Alito on behalf of the court’s majority.

The federal government has provided a less restrictive way of providing the benefit, Alito wrote, in allowing an accommodation for faith-based nonprofit employers. Employees of those nonprofits can obtain contraceptives, and the bills are sent to the health insurance company and not the employer.

“Our decision in these cases is concerned solely with the contraceptive mandate,” Alito wrote. “Our decision should not be understood to hold that an insurance-coverage mandate must necessarily fall if it conflicts with an employer’s religious beliefs.”


But in her dissenting opinion, Justice Ruth Bader Ginsburg wrote that the court majority’s ruling had “startling breadth” and broke new ground in letting a for-profit corporation qualify for a religious exemption from a generally applicable law.

Ginsburg argued that the court’s reasoning could be applied to all forms of contraceptives — not just the four singled out by Hobby Lobby. She also questioned whether the ruling could be applied in cases of religiously grounded objections to blood transfusions by Jehovah’s Witnesses, antidepressants by Scientologists, and vaccinations by Christian Scientists and others.

“Although the court attempts to cabin its language to closely held corporations, its logic extends to corporations of any size, public or private,” Ginsberg wrote.

The court’s ruling stopped short of prescribing that the government’s accommodation for faith-based nonprofits be extended to companies like Hobby Lobby. Another way to provide the benefit without infringing on religious beliefs, the justices ruled, is for the federal government to simply pay for the coverage.

Even so, the ruling put a spotlight on the work-around for faith-based nonprofit groups, which has been in place since August 2013. In Minnesota, fewer than 10 nonprofit employers are receiving the accommodated benefit at Eagan-based Blue Cross and Blue Shield of Minnesota.

“In those cases, female (health plan) members receive a second ID card in the mail that can only be used for contraceptive coverage provided by the Affordable Care Act,” Blue Cross spokesman Jim McManus said in a statement. “Those benefits are provided and paid for by Blue Cross, and not the employer.

“To date, we have issued less than a thousand of the second cards,” McManus said.


Minnetonka-based Medica also has provided an accommodation for one employer by issuing second ID cards to women in the company’s health plan, said spokesman Larry Bussey.

Whether the Hobby Lobby ruling will mean that insurance companies will wind up providing the accommodation to more employers is far from certain, said Laurie Sobel, senior policy analyst with the Kaiser Family Foundation. For one thing, some nonprofits have filed legal challenges to the accommodation rule.

As for the larger question of whether Hobby Lobby means more employers will stop paying for contraceptives, Sobel said it’s hard to say.

Before the Affordable Care Act, 85 percent of companies with more than 200 employees covered the cost of prescribed contraceptives, as did two-thirds of firms with three to 199 employees, Sobel said. Laws in 28 states stipulate that contraceptives must be covered if a state-regulated employer health plan has pharmacy coverage.

In Minnesota, seven for-profit businesses have filed lawsuits on the contraceptive mandate, said Erick Kaardal, a Minneapolis attorney who represents the plaintiffs. One of the cases was argued before the 8th U.S. Circuit Court of Appeals in October, and a forthcoming ruling will guide next steps for employers, Kaardal said.

But Kaardal said he doubted many for-profit companies will use the Hobby Lobby ruling to avoid paying for contraceptives. That’s because the Supreme Court’s ruling was based on the Religious Freedom Restoration Act, where companies trying to assert a claim must have a history of putting a religious aspect into their business, Kaardal said.

“There are so few private corporations that have that,” he said.

Gretchen Borchelt of the National Women’s Law Center said her group is worried, nonetheless, because it’s unclear how many new plaintiffs might now come forward. It’s also not clear, she said, how deeply the government will scrutinize professed beliefs when granting exemptions.

Until the federal government decides how to react to the court’s ruling, women at companies like Hobby Lobby face the threat of losing access to contraceptives, said Beth Johnson, the president of MN NOW. The women’s rights group hosted a protest against the court’s ruling Tuesday in Woodbury, saying in a statement that it “opened the floodgates for widespread discrimination in the guise of religious freedom.”

Daniel S. Kleinberger, a professor at William Mitchell College of Law in St. Paul, said he expected very few employers actually would win exemptions under the Hobby Lobby decision.

The court’s ruling focused on closely held corporations, Kleinberger said, adding that it didn’t clearly define which of those companies might qualify.

“Someone is going to have to tell federal employees how to decide whether to grant an exemption,” Kleinberger said. “Whatever they do, there likely will be litigation over that.”