The regulations set forth two possible approaches to defining a “qualifying closely held for-profit entity” In Burwell v. Hobby Lobby Stores, Inc., 134 S. Ct. 2751 (2014) the Supreme Court held that the requirement to provide contraceptive coverage to employees pursuant to Obamacare by employers with religious objections could not be applied to “closely held for-profit corporations” under the Religious Freedom Restoration Act of 1993 because the government could accomplish its goal of providing such coverage by offering such employers the same accommodation offered to religious nonprofit organizations with religious objections to such coverage. In response, the U.S. Department of Health and Human Services (“HHS”), the Department of Labor, and the Treasury Department have issued interim and final and identical proposed regulations that would extend the exemption for such nonprofits to closely-held-for-profit entities. Those regulations were effective on August 27, 2014. (79 FR 51118) The issue before the various government agencies is the manner in which to define a “qualifying closely held for-profit entity”.
The regulations require that the religious objection be formally made and documented by the entity pursuant to its state’s law and reported to HHS in the manner prescribed in the regulations. The regulations also set forth two possible approaches to defining a “qualifying closely held for-profit entity” as one in which:
- None of the ownership interests in the entity is publicly traded and the entity has fewer than a specified number of shareholders or owners; or
- The ownership interests are not publicly traded, and a specified fraction of the ownership interest is concentrated in a limited and specified number of owners.
The regulations invite commentators to submit other approaches as well. Written or electronic comments and requests for a public hearing must be received by November 26, 2014.
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