In the wake of this summer’s Supreme Court’s Hobby Lobby decision, which allowed for closely held corporations to refuse, based on religious objections, to provide contraceptive coverage as part of their employee’s health insurance, there is now the question of what exactly it means to be a “closely held corporation.”
How regulators define such corporations is important, because it will determine which for-profit companies can refuse to provide contraception coverage — or refuse coverage for any other services they oppose based on religious beliefs.
Late last month, a notice was published in the Federal Register that suggests a couple of approaches to defining “closely held corporation.” Public comment is requested on whether these definitions are appropriate.
Both approaches would define a closely held corporation as a company that is not publicly traded (i.e., is not selling shares/stock). The difference between them is that the first proposed approach would mandate that a closely held corporation has fewer than a specified number of shareholders or owners, while the second proposal would mandate that a specified fraction of the ownership interest is concentrated in a limited and specified number of owners.
Both of these approaches are intended to ensure that companies claiming this religious exemption really are “closely held,” as they are controlled by a limited number of people.
Comments are also being solicited on whether to require companies to document their decision-making process and disclose that they’re refusing coverage based on religious objections.
Public comments are also needed on any additional steps the government should take to help ensure coverage of the full range of FDA-approved contraceptives without cost sharing for people whose health plans are provided by these corporations.
Comments can be submitted through Regulations.gov and are due no later than 5 p.m. on Oct. 21, 2014.
For additional exploration of the definition of “closely held,” check out: