O ne of the ongoing controversies related to the Affordable Care Act (ACA) has been the scope of exemption from certain health care coverage requirements, including the contraceptive coverage requirement. A series of regulations have been promulgated to address concerns of certain entities with religious objections to the coverage requirement, but until 2014, the regulations applied only to churches and nonprofit religious organizations, not to for-profit corporations. Though closely divided, the U.S. Supreme Court's 5-4 decision in Burwell v. Hobby Lobby Stores, Inc . has settled the question of whether certain for-profit corporations must be exempt from the requirement, unless Congress chooses to amend the statute providing those corporations legal protection. Imputing the beliefs of owners of closely held corporations to the corporations themselves, the Court found that the ACA could not require such companies to provide contraceptive coverage in group health plans offered to their employees. It based its decision on the Religious Freedom Restoration Act (RFRA), which provides heightened protection for burdens on religious exercise. Although the case has been analogized to Citizens United v. Federal Election Commission , a 2010 case holding that corporations have free speech rights under the First Amendment, the Hobby Lobby decision was not decided on constitutional grounds. Instead, it provides protection on a statutory basis, meaning that Congress has the ability to respond to the decision if it disagrees with the Court's ruling. This report analyzes the Court's opinions in Hobby Lobby , examining the rights of closely held corporations under the Religious Freedom Restoration Act. It also addresses the implications for the contraceptive coverage mandate under ACA and discusses potential legislative responses to the Court's decision. Finally, it analyzes the impact that Hobby Lobby may have in other contexts in which employers may claim religious objections, including developments in a separate set of legal challenges brought by religious nonprofit organizations, which have claimed that the process for the accommodation imposes an impermissible substantial burden under RFRA. The companies challenging the contraceptive coverage requirement alleged violation of their religious exercise rights under both the First Amendment's Free Exercise Clause and RFRA. The Free Exercise Clause prohibits the government from prohibiting the free exercise of religion. Traditionally it had been interpreted to require that the government show a compelling interest for any government action that interfered with a person's exercise of religious beliefs. However, in 1990, the Supreme Court reinterpreted that standard, explaining that the Free Exercise Clause never "relieve[s] an individual of the obligation to comply with a valid and neutral law of general applicability." The Court's decision lowered the baseline of protection, but emphasized that Congress remained free to consider whether additional protection would be appropriate through the legislative process. Congress responded to the Court's decision by enacting RFRA, which essentially reinstated the heightened standard of protection. RFRA states that the "[g]overnment shall not substantially burden a person's exercise of religion even if the burden results from a rule of general applicability, except as provided in subsection (b)." Subsection (b) requires that any substantial burden must further a compelling governmental interest and use the least restrictive means to achieve that interest. RFRA's language indicates that in order to raise a claim under the statute, "a person's exercise of religion" must be affected. However, when enacting RFRA, Congress never defined the term person for purposes of the act. Only if a court determines that the party challenging the government's action is "a person" under the terms of the statute and that the party exercises religion, can the court address the merits of the case—whether an improper substantial burden has been placed on that party. One of the most significant points of the Hobby Lobby decision was its declaration that closely held corporations are "persons" eligible for protection under RFRA. The Court noted the absence of a statutory definition of person under RFRA and consequently relied upon the Dictionary Act to ascertain the default meaning of the term. The Dictionary Act defines person to "include corporations, companies, associations, firms, partnerships, societies, and joint stock companies, as well as individuals." Rejecting the assertion that businesses organized as corporations are divested of RFRA's protections, the majority wrote that "[t]he plain terms of RFRA make it perfectly clear that Congress did not discriminate [with regard to the business structure chosen by owners] who wish to run their businesses as for-profit corporation in the manner required by their religious beliefs." The Court reasoned that RFRA was enacted to provide broad protection for religious liberty and, without a specifically applicable definition provided in RFRA, explained that the definition of person was not limited by for-profit status: "No known understanding of the term 'person' includes some but not all corporations. The term 'person' sometimes encompasses artificial persons ..., and it sometimes is limited to natural persons. But no conceivable definition of the term includes natural persons and nonprofit corporations, but not for-profit corporations." The majority acknowledged that the threshold issue arguably is conditioned on the person's ability to exercise religion, a point emphasized by the dissent. However, the majority cited previous cases in which the Court had recognized claims involving exercise of religion of individuals who owned for-profit businesses as sole proprietorships and nonprofit corporations. Despite the dissent's argument that religious corporations could be distinguished from for-profit corporations because they "foster the interests of persons subscribing to the same religious faith," the majority held that the Court's precedent indicated that neither for-profit status nor corporate status are prohibitive factors in analysis of an organization's rights under RFRA. Notably, when responding to concerns that applying RFRA to for-profit corporations would raise challenges of ascertaining "the religious identity of large, publicly traded corporations," the majority emphasized that its decision applied only to such companies as the ones challenging the contraceptive coverage requirement in this case. In effect, the decision therefore is limited to "closely held corporations, each owned and controlled by members of a single family." Additionally, the majority alluded to the general requirement inherent to religious exercise cases that the parties must base their challenge on sincerely held religious beliefs, meaning that even if RFRA would apply to a particular entity, if the entity is asserting a religious belief for the convenience of avoiding compliance with an unpopular mandate, it could not claim legal protection. The sincerity of the companies' beliefs in Hobby Lobby was not disputed. Although the majority noted that it was recognizing RFRA's applicability to closely held corporations only, it did not foreclose the possibility that in a future case, a court may extend RFRA protection to other types of corporations such as those which are publicly traded. Instead it suggested only that "it seems unlikely" that such "corporate giants" would assert RFRA rights and that "numerous practical restraints would likely prevent that from occurring." The dissent was highly critical of this point, characterizing the decision as one of "startling breadth:" "The Court's determination that RFRA extends to for-profit corporations is bound to have untoward effects. Although the Court attempts to cabin its language to closely held corporations, its logic extends to corporations of any size, public or private." Indeed, the dissent's argument that the decision may provide a basis for expanding the protection of RFRA further in the future may reasonably give pause. As noted, the majority did not preclude future application of RFRA to a broader range of corporations, using tentative language and noting a lack of obvious challenges. Furthermore, the majority's explanation that the Dictionary Act's definition of person could not be read to distinguish between types of corporations related to the company's profit status suggests that it also may not be read to distinguish between types of corporations on other grounds (e.g., size or public trading status). After determining that RFRA's protections would apply, the Court examined the merits of the RFRA claim, first identifying the burden that compliance with the contraceptive coverage mandate would impose on the companies challenging the mandate. According to the Court, requiring the owners of the companies to arrange for "health insurance that covers methods of birth control that ... may result in the destruction of an embryo" means that the "mandate demands that they engage in conduct that seriously violates their religious beliefs." If the owners were to refuse to comply with the demand, the companies would face penalties under the ACA that the Court characterized as "surely substantial." If the companies continued to provide their preferred health coverage without including the mandated contraceptive coverage, they would face penalties each day of noncompliance, ranging from $40,000 per day to $1.3 million per day. If the companies stopped providing any insurance coverage to avoid covering contraceptives and avoid the consequent daily penalties, they would risk paying a different penalty under ACA, which could range from $800,000 per year to $26 million per year. The majority recognized the substantial burden arising from the owners' religious objections and potential financial penalties over strong objection from the dissenting Justices. Justice Ginsburg, who authored the principal dissent, criticized the majority's assessment as equating a sincere religious objection with a substantial burden, instead of distinguishing between the two. In other words, simply because a government mandate conflicts with a person's religious belief, the mandate is not necessarily a substantial burden. The dissent explained that the relationship between the belief and the burden must be linked in order to identify the requisite substantial burden: [T]he connection between the families' religious objections and the contraceptive coverage requirement is too attenuated to rank as substantial. The requirement carries no command that Hobby Lobby or Conestoga purchase or provide the contraceptives they find objectionable. ... Importantly, the decisions whether to claim benefits under the plans are made not by Hobby Lobby or Conestoga, but by the covered employees and dependents, in consultation with their health care providers.