We received more bemused comments about this July 30th post than any other – not surprising given the complexity of Obamacare, the Citizens United decision, the role of religion in the US, and the nature of the corporate structure – profit v. non-profit, secular v. non-secular.  But one in particluar was worth a discussion.

The Issue

Since the passage of Obamacare, employers who claim that their religious beliefs prevent them from using, paying for, or supporting the use of contraception, have claimed that this religious claim should be imputed to their wholly-owned companies such that these companies should be exempt from having to provide or participate in health insurance that includes providing contraceptives (or else incur a penalty).

The Court Decision

A federal apeals court has just held that “the law has long recognized the distinction between the owners of a corporation and the corporation itself. A holding to the contrary—that a for-profit corporation can engage in religious exercise—would eviscerate the fundamental principle that a corporation is a legally distinct entity from its owners.”

Readers were perplexed.  Some wondered if a business owner could not express his/her religious beliefs, while others wondered why an owner could not run his/her business according to his/her religious principles.  Others questioned how a corporation could have a religion.

The Reader Comment

One didactic comment from Ian Bush, an HR executive in Ottawa, stood out and made us think, because it cut away some of the complexity, and raised a new and interesting issue: what if this same corporation changed it’s by-laws?

“The legal distinction between the corporation and its owners as separate and distinct persons is consistent since the inception of corporations. This decision is based on this construct. Should any decision be contrary to this, then the foundations of corporate law would be at risk.

With Obamacare, a cost increase is evident, it’s magnitude still uncertain. Thus, as a business, they can do a cost benefit analysis as to reincorporating into smaller units such that they are not subject to Obamacare and its costs. This occurring after they ensure they are operating lean. As such they make the right business decision which may intersect with their personal religious beliefs should the cost benefit analysis show that avoiding Obamacare is best for them.

Of interest to me would be any corporate by-laws or policies which may have religious significance, like holding life as sacred as an integral part of the corporate responsibilities or some such language. We know that in today’s “environmental” sensitive world, corporations have by-laws and policies about saving the world from adverse effects of their activities. The same could be done for human beings. This would make the issue more amenable to the courts as the corporate person respects human life as it respects the life in the environment which it impacts.”