How Much Money Is Hobby Lobby's Morality Worth?

In March, the company will make arguments before the Supreme Court, defending the right not to provide contraceptive coverage to employees. But what happens if it loses?

How much money is morality worth? This is one of the questions looming in the recent slew of court cases concerning birth control and the Affordable Care Act. As judges at the district, federal, and Supreme Court level decide whether religious groups and businesses can be exempt from new rules about contraceptive coverage, organizations are having to make a choice: Are moral objections to birth control and pregnancy prevention worth millions of dollars?

Under the health care law, big companies that have made recent changes to their insurance plans are required to cover 20 FDA-approved forms of birth control—or face significant fines if they refuse. Only companies with more than 50 employees have to provide insurance coverage; small businesses are exempt. Large companies can also choose to opt out of providing plans, but at a significant cost: $26 million in fines every year, plus any intangible losses that might come from not being able to offer insurance as an employee benefit.

One of the most prominent cases, Sebelius v. Hobby Lobby, will be argued before the Supreme Court in late March. It concerns David and Barbara Green, the owners of the Hobby Lobby craft store chain. The couple have expressed moral objections to four of the 20 forms of contraception included in the mandate—specifically, types of birth control that keep a fertilized egg from implanting in the uterus.

In a brief filed on Monday, their lawyers argue that religion plays a big role in how the Greens run their company: They keep the stores closed on Sundays; they play Christian music; they offer free spiritual counseling services to employees. Requiring the Greens and their company to cover these kinds of birth control would be a burden on their ability to practice their religion, their lawyers say; the Greens feel like they would be complicit in helping others do something they find morally wrong.

In a press call on Monday, one of Hobby Lobby's lawyers from the Becket Fund for Religious Liberty said the Greens intend to refuse to cover these kinds of contraception no matter what, even if they don't win their Supreme Court case. "The Green family has always stood by their convictions, and they will continue to stand by those convictions no matter what happens in federal court," said Kyle Duncan, the lead counsel on the case. If they were to lose in court, this stance would almost certainly be a financial catastrophe for Hobby Lobby: They would be forced to drop their insurance plan and pay the $26 million penalty, or else provide insurance without birth control and pay up to $100 per day per employee for not complying with the health care law. With 13,000 employees currently covered by Hobby Lobby's plan, their legal team estimates that this could mean up to $1.3 million in fines every day, or $475 million each year.

That's a pretty big hit for a company's bottom line. The Greens have said that they feel a religiously motivated obligation to provide their employees with health insurance, but it seems highly implausible that they would pay the government up to $475 million each year just to keep offering their current plan. Although the Greens are apparently quite wealthy—David Green was said to be worth $5 billion as of September 2013—any fine this substantial would definitely affect their business. That might mean layoffs, pay cuts, benefit reductions, and closed stores—all of which would hurt their employees.For their part, the Greens seem to believe that the possibility of being inadvertently responsible for a terminated pregnancy is more morally objectionable than any of these possibilities. But it doesn't seem like any path will leave the Greens with an entirely clear conscience.

In the case of Hobby Lobby, this is all speculative. But in other cases, it's not. In January, Notre Dame University became the only religious non-profit organization to face a setback in its legal fight against the birth control coverage rules for religious non-profit groups: Although the university has a lawsuit pending, a judge denied its request for a stay on enforcement, meaning that it became fully responsible for complying with the law or paying penalties starting on January 1. Notre Dame's situation is different from Hobby Lobby's because the university is a non-profit organization, and the government has made a different kind of accommodation for these groups. The moral question is similar, though: The school says it has a religious objection to being involved in any way with providing insurance coverage for birth control. But when faced with the choice of complying or paying a hefty fine, Notre Dame chose to comply, at least until its court case is resolved.

Is birth control a matter of public health or a matter of conscience?

Does this mean that Notre Dame has weaker moral convictions than the Greens? The glib answer would be "yes"—facing the possibility of a heavy financial burden, Notre Dame showed that its morals could be "bought," so to speak. But that assessment seems too simple. The university is a large employer, responsible for the education of several thousand bright young people each year. In this case, paying a multimillion dollar fine would seem like shallow ethical choice: It might protect the conscience of Notre Dame's administrators, but it would cripple the university's ability to do good in other ways.

Of course, none of this touches on the moral question that's arguably at the center of this debate: Should organizations be compelled by the government to cover birth control in their insurance plans? This is not a matter of whether women should be able to buy birth control—it's about whether birth control is affordable, and who should have to offset the cost. In the Hobby Lobby case, the government is arguing that birth control access improves the quality of life for women and men, creating better sexual health and facilitating better family planning. But the Greens and other religious groups see it differently: To them, some kinds of birth control negate life altogether. In their view, refusing to cover these four kinds of birth control gives them the moral high ground. The question is how much they're willing to pay to stay there.