AHLAlerts: American Health Line’s Blog

Texas Rep. Jonathan Strickland (R) on Thursday introduced a bill (HB 649) that would give a tax break to secular businesses whose religious owners object to complying with the federal contraceptive coverage rules.

The rules, which are being implemented under the Affordable Care Act (PL 111-148), require health plans issued or renewed after Aug. 1 to cover contraceptive services without copayments or deductibles. HHS has given religiously affiliated entities, such as colleges and hospitals, a one-year delay period to come into compliance, and religious institutions, such as churches and synagogues, are exempt altogether.

If a Texas business with religious objections to contraceptive coverage is penalized for not complying with the rules, the bill would allow that business to claim a state tax break up to the total amount of its state tax bill. One company that would be eligible for a tax break is Hobby Lobby, which has unsuccessfully challenged the rules in court and will owe $1.3 million daily if it does not comply with them.

WHAT SUPPORTERS SAY: Strickland said, “When a [business] is being stressed nearly to the point of bankruptcy by punitive federal taxes, of course the state should give them relief.” He added that any revenue lost through the tax exemptions could be made up by more businesses relocating to Texas.

WHAT OPPONENTS SAY: Kathy Miller, president of the abortion-rights group Texas Freedom Network, argued that the bill would give businesses an incentive to “deny women access to birth control.”

OUR TAKE: The legislation doesn’t make sense for Texas’ budget or its employers. It is doubtful that revenue from more businesses relocating in Texas would offset the loss of millions of tax dollars. Further, it is unlikely that the bill would survive a court challenge because it directly conflicts with federal law.

– by Michelle Stuckey, staff writer