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A LOT of people could be affected by the Supreme Court’s birth control decision — theoretically

A man dressed as the Bible protests outside the U.S. Supreme Court on Monday. (EPA/JIM LO SCALZO)

The Supreme Court ruled Monday that "closely held corporations" cannot be forced to pay for their employees' birth control if they have religious objections -- a decision hailed by religious groups and denounced by women's groups.

So what exactly is a "closely held corporation?" And how many people will this effect?

Some initially thought that this verbiage effectively narrowed the decision to a limited number of businesses, but it's actually the same language Hobby Lobby sought in seeking its exemption from the contraception mandate. It's also a term that covers a lot of businesses and Americans -- like, a lot.

Here's how the IRS defines "closely held corporation":

  1. Has more than 50% of the value of its outstanding stock owned (directly or indirectly) by 5 or fewer individuals at any time during the last half of the tax year; and
  2. Is not a personal service corporation.

Basically, "closely held" is a term that covers as much as 90 percent (or more) of all businesses, according to a 2000 study.

But while it covers the vast majority of employers, it doesn't necessarily cover the vast majority of employees. That's because publicly traded companies tend to have many more employees than private ones.

Still, according to studies from Columbia University and New York University, closely held corporations employed 52 percent of the American workforce and accounted for slightly more than half -- 51 percent -- of economic output from the private sector.

In other words, not so narrow.

But does that mean the employers of half of all Americans will suddenly nix contraception coverage? Of course not, for several reasons:

First, according to a Kaiser Family Foundation poll, 85 percent of large employers had already offered contraception coverage before Obamacare mandated it. And while Hobby Lobby fought that mandate, so far few other large companies have joined them.

Second, federal law makes clear that companies seeking religious exemptions from such mandates must demonstrate sincere religious beliefs. In other words, it's not like they can just suddenly decide their religion precludes them from paying for birth control and stop doing so.

And lastly, the vast majority of small businesses (96 percent, according to Kaiser) don't have to abide by the contraception mandate because they have fewer than 50 full-time employees. But, again, larger companies employ a hugely disproportionate percentage of the workforce -- which means a significant chunk of Americans work for large closely held corporations.

Could other "closely held corporations" who previously complied with the mandate change their tune in the wake of today's ruling? Sure. And the numbers above suggest there's at least the theoretical possibility that more than half of employed Americans could lose their contraception coverage.

But given the amount of contraception coverage that existed before the mandate, the hurdles involved, and the risk of political backlash (along with the relatively small savings of not covering contraception), there is little reason to believe that tens of millions of American women will suddenly see their employer contraception coverage come to an end.

Updated at 3:03 p.m.

Aaron Blake covers national politics and writes regularly for The Fix.



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