Yesterday, the Eighth Circuit Court of Appeals issued a stay†blocking the Obama administration's requirement that employer health-insurance plans cover contraception. The related suit was filed by Frank O'Brien, a Roman Catholic business owner who claimed that the mandate violated his rights under the free exercise clause of the First Amendment.
It's not clear whether the stay indicates a real chance that the mandate will ultimately be ruled unconstitutional. It was granted in a one-line order, with one of the judges in a three-judge panel dissenting. The stay order indicates that the two other judges consider the suit non-frivolous, but this does not necessarily mean that O'Brien will ultimately prevail.
Still, the appeals court would have been better not to issue the stay, because the free exercise argument being made against the contraception mandate is indeed frivolous. The key precedent, Oregon v Smith, makes it clear that generally applicable laws do not violate the First Amendment unless they were specifically targeted at religious expression, which of course the Affordable Care Act was not. The First Amendment does in some cases prevent generally applicable laws from applying to religious institutions under the "ministerial exception," but again this doesn't apply O'Brien's business. Moreover, the contraception mandate would be a particularly bad case for a new exception to Smith, since requiring employers to impose their religious faith on employees who do not share it would result in a net diminution of religious freedom.
That the argument is bad, however, does not necessarily mean that it is doomed. After all, the ad hoc arguments conservatives developed against the ACA based on the Commerce Clause weren't much more plausible, and yet they got five votes from the Supreme Court. The Eighth Circuit may well reject the arguments after the appeal is heard, but the stay should be cause for at least a modicum of concern.