The Supreme Court's Hobby Lobby ruling is sparking new regulatory battles. (EPA photo/Jim Lo Scalzo)

Even four months after the Supreme Court's divisive Hobby Lobby decision, we still have no idea just how broad the ruling's impact will be.

That's thanks to the ambiguity of the 5-4 decision, which said owners of "closely held" for-profit businesses don't have to offer contraceptive coverage that violates their religious beliefs. The problem is the court didn't define what actually constitutes a "closely held" business that could claim such an exemption in the first place. And federal regulators who'll have to enforce the court's decision are looking for clarity.

So the Obama administration over the summer asked for the public to weigh in on just how narrowly or broadly this carve out should be, and formal comments are starting to come in.

The administration offered a couple of approaches, and it's a safe bet that it will try to keep the exemption as narrowly defined as possible to limit the potential erosion of what it sees as one of its key accomplishments — mandated coverage of contraception without cost-sharing for female employees.

There's no universally agreed-upon definition of what constitutes a closely held business. They tend to be smaller companies, but they could even be large firms, like Cargill, which employs 145,000 people. The IRS has its own definition of "closely held" businesses:

  • 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
  • Is not a personal service corporation.

A 2009 study estimated 52 percent of the country's workforce comes from closely held businesses. So it seems like the universe of these firms could potentially be pretty large. That's not to suggest, though, that a vast majority of these firms will suddenly look to drop contraceptive coverage.

But more than three dozen advocacy groups supporting the mandated coverage are pushing for a much narrower definition than the approaches formally proposed by the Obama administration.

They write that the court's Hobby Lobby decision held that corporations can only claim an exemption under the 1993 Religious Freedom Restoration Act when a corporation's business practices "reflect and promote the owners' religious beliefs." The craft store chain Hobby Lobby, for example, has corporate documents indicating an agreement to run their business in accordance with shared religious principles. The groups, which include the Planned Parenthood Federation of America and NARAL Pro-Choice America, say in order for a company to seek such a religious exemption, it should have a unanimous agreement among its owners to run the business under the same religious principles.

However, groups who challenged the birth control coverage requirement see things differently. Alliance Defending Freedom, which represented the second company in the Hobby Lobby case  — Conestoga Wood Specialties — argues that the court's decision prohibits the administration from putting more restrictions on defining "closely held" businesses. The exemption should be even broader, it argues.

"Not only did Hobby Lobby not impose artificial limits on the definition of a close corporation, it did not even say that publicly traded corporations cannot exercise religion," the group writes in formal comments.

The Obama administration will have to review these comments and others before finalizing its policy, which could take a few months. And there's still another round of cases from religiously affiliated nonprofit groups that could reach the Supreme Court this term. So the fight over the birth control mandate is far from settled.