WASHINGTON, D.C. – Today's Supreme Court ruling exempting the owners of “closely held” corporations from complying with the HHS mandate if they have sincere religious objections applies to a lot of U.S. businesses – more than 90 percent of them, in fact.
Under IRS regulations, a business qualifies as a closely held corporation if five people or less own at least 50 percent of its stock (directly or indirectly) and it is not a personal service corporation.
According to a study conducted in 2000, as well as the online business hub Inc.com, “Over 90 percent of all businesses in the United States are closely held.”
“Everything from a mom & pop shop to a large chain like Hobby Lobby can qualify. Family ownership is possible but not required,” Robert Laurie wrote on the website of former presidential candidate Herman Cain. “This was a huge decision.”
Already, businesses across the nation may be ready to opt out of the HHS mandate of the Affordable Care Act. The Wall Street Journal reported that these companies include Weingartz Inc. of Michigan, Atlas Machine and Supply Inc. of Kentucky, and Hastings Automotive Inc. in Minnesota – each of which is owned by religious owners who strongly opposed paying for potentially abortifacient forms of contraception. Dan Weingartz had considered dropping health care coverage altogether to avoid paying for such drugs.
The decision to recognize that business owners preserved their rights under the strict criteria the court established in today's 5-4 ruling divided its more conservative and liberal justices.
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“There is in that case law no support for the notion that free exercise rights pertain to for-profit corporations,” Ruth Bader Ginsburg wrote in her 35-page dissent. “Until this litigation, no decision of this Court recognized a for-profit corporation's qualification for a religious exemption from a generally applicable law, whether under the Free Exercise Clause or RFRA…for the exercise of religion is characteristic of natural persons, not artificial legal entities.”
However, Justice Samuel Alito's majority decision said the Constitution intended to grant rights to corporations in order “to provide protection for human beings.”
“A corporation is simply a form of organization used by human beings to achieve desired ends,” he wrote. “When rights, whether constitutional or statutory, are extended to corporations, the purpose is to protect the rights of these people.”
The justices ruled such rights did not necessarily apply to larger corporations whose stock is held by the public at large. Some justices argued it would be difficult to discern a commonly shared religious outlook among so large a body of stockholders.