Business
3:25 pm
Tue July 1, 2014

Hobby Lobby Ruling Raises A Question: How To Define 'Closely Held'?

Originally published on Tue July 1, 2014 6:37 pm

Transcript

ROBERT SIEGEL, HOST:

The Supreme Court ruled yesterday that closely held companies may, for religious reasons, opt out of paying for their workers' contraception. Closely held is the key phrase, here. And as NPR's Yuki Noguchi reports, it's a phrase that is now being closely examined.

YUKI NOGUCHI, BYLINE: Soon after the court handed down the Hobby Lobby decision, opponents argued it was far-reaching. In statements and tweets, House Minority Leader Nancy Pelosi said it will limit health choices for millions of workers because, quote, "over 90 percent of America's businesses are closely held." Pelosi was citing a figure based on the IRS's definition. The tax agency classifies closely held as a company that is majority owned by five or fewer people. But that is not the only definition of closely held. The NASDAQ defines it simply as a company with a small group of controlling shareholders. Other government agencies use other benchmarks.

MICHAEL MINNIS: I'm not sure there's a specific definition.

NOGUCHI: Michael Minnis is a professor at the University of Chicago Booth School of Business who studies privately held firms. It is clear, Minnis says, that the impact will not be so broad as to cover 90 percent of employers.

MINNIS: Broadly held corporations aren't affected. Corporations that have fewer than 50 employees weren't affected in the first place...

NOGUCHI: Because they don't have to provide health insurance under the Affordable Care Act. Plus, Minnis says, if the decision does not apply to limited partnerships or limited liability corporations, such as law firms, the scope would be limited still further. And, at the end of the day, most corporations, whether closely held or not, do not impose the owner's religious beliefs on their workers. Ilya Shapirois a fellow at the libertarian Cato Institute, which supported Hobby Lobby's argument in the case. He notes that there are at least 40 companies that object to the contraception mandates in the healthcare law on religious grounds.

ILYA SHAPIROIS: There are a lot of, you know, people who don't check their beliefs at the office door or at their place of employment.

NOGUCHI: But, he says, the effect of the ruling is not going to be as big as critics are suggesting.

SHAPIROIS: I think they are blowing the impact out of proportion.

NOGUCHI: He says he expects the government will devise another way, through tax credits or other means, to get women contraceptive coverage without having to rely on their employer. Yuki Noguchi. NPR News, Washington.

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