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Health Overhaul

Some battle for exemptions in full view; others win quietly


Beth Ewen

Thomas Monaghan, the founder of Domino’s Pizza and a devout Catholic, is the most famous man tied to franchising to sue the government over requiring his company to pay for employee contraceptives—although Domino’s executives emphasize he cut all ties to the company when he sold it in 2008, indicating just how little a pizza company wants to tussle in public over birth control.

 “This is a case about religious freedom,” says the suit against the federal government over—what else—the Affordable Care Act. Monaghan and his real estate company Domino’s Farms Corp. join a long list of private employers suing to seek exemptions from the law, in a church vs. state issue that’s likely to go all the way to the Supreme Court.

Flying under the radar is another trend that’s striking in both its volume and the relative silence surrounding it: 1,231 private employers, labor groups and government agencies and counting have obtained one-year waivers exempting them  from the law for practical reasons, saying they can’t continue to offer employees affordable insurance without them.

Those include a franchising who’s who: McDonald’s, Jack in the Box, Ruby Tuesday, Denny’s, Noodles & Co., Jamba Juice, Wendy’s, Panera and many more. But there are plenty of franchise brands not on the list, raising questions over fairness, not to mention the obvious: If so many companies gain exemptions, who will end up paying for this enormous overhaul?

The exemptions have officially reached critical mass, launching a campaign called “Yo, Where’s My Waiver?” Sponsored by Let Freedom Ring, the campaign suggests: “In the land of equal protection under the law, all deserve to be protected from ObamaCare’s harm or none should. If you agree, send an email asking for YOUR waiver.” 

The rights of conscience

Domino’s Farms and Monaghan’s lawsuit cites a letter written by founding father Thomas Jefferson. “No provision in our Constitution ought to be dearer to man than that which protects the rights of conscience against the enterprises of the civil authority.”

Holy Bible

While lawsuits rage over religious freedom, hundreds of companies already gained waivers.

A federal district court ruling in December granted a temporary moratorium on religious grounds for Domino’s Farms, and it now joins a growing list of private companies flooding the Obama administration with lawsuits and waiting for exemptions. Given the volume of lawsuits and conflicting rulings, many expect this fight to end up in the Supreme Court. 

By contrast to the Domino’s Farms outcome, for example, Hobby Lobby Stores is the largest private company to sue on religious grounds. A U.S. District Court judge ruled against its request to block parts of the contraceptive requirement its owners abhor, specifically paying for the so-called morning-after pill that works by preventing ovulation or fertilization.

(Separately, churches and religious organizations received a compromise proposal in February from the administration, which would likely extend to the other institution Monaghan founded, Florida’s Ave Maria University. That proposal, which shifts the requirement to cover contraceptives to third-party insurers, remains hotly debated.)

Monaghan sold Domino’s in 1998 and today has no active affiliation with the brand, but that didn’t stop the blogosphere from lighting up with comments, including an assertion that Domino’s doesn’t cover contraceptives in its healthcare plans. Domino’s took to Facebook in late December to set the record straight, and responded to questions via email.

“Our benefits do cover contraceptives,” wrote Tim McIntyre, vice president of communications for Domino’s, based in Ann Arbor, Michigan. “The statement we posted on our Facebook page in response to many inaccurate reports in the media is true: We are not a political company; we are not a religious company. We are a pizza company, plain and simple.”

Some are more equal

As for the waivers being granted, few corporations are commenting publicly, but some healthcare policy experts point out there’s nothing illegal about them—they’re being granted by the U.S. Department of Health & Human Services, after all. Advocates call them “safety valves” to avoid too much disruption in the run-up to 2014, when full provisions of the healthcare law take effect.

So-called mini-medical plans are the issue for many, offered by corporations for workers who can’t afford traditional coverage. McDonald’s Corp. reportedly offers a plan that costs $14 in weekly premiums and pays $2,000 a year in benefits, an amount too low to pass muster with Affordable Care Act requirements. Those who offer the plans counter that’s the only coverage their low-wage employees can afford.

What about the multiple companies screaming about the costs, vowing to keep employee hours below the threshold—or suing all the way to the Supreme Court, if necessary?

As one sage commented to the Las Vegas Review-Journal, quoting George Orwell’s classic book Animal Farm: “Some animals are more equal than other animals.” 

Beth Ewen is managing editor of Franchise Times. Send interesting legal cases to bewen@franchisetimes.com.

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