By Terry Baynes
June 27 (Reuters) - Arts and crafts chain Hobby Lobby may be entitled to an exemption from a requirement in President Barack Obama's 2010 healthcare overhaul to include free contraception coverage in its employee health insurance plans, a federal appeals court ruled on Thursday.
The Denver-based 10th U.S. Circuit Court of Appeals reversed a lower-court ruling that had rejected the family-owned company's request for temporary protection from the regulation.
The chain operates 525 retail stores across the country and employs more than 13,000 full-time workers. The Green family, which owns the Oklahoma-based company, says having to provide coverage for the morning-after pill and similar contraceptives, which they regard as tantamount to abortion, violates their Christian beliefs.
A divided 10th Circuit found that Hobby Lobby and its smaller sister operation, Mardel, a Christian-oriented bookstore and educational supply company, have a right to religious freedom under federal law.
Five of the nine judges found that the company met at least some of the requirements needed to win temporary protection from the mandate while their lawsuit proceeds in court.
"Because the contraceptive-coverage requirement places substantial pressure on Hobby Lobby and Mardel to violate their sincere religious beliefs, their exercise of religion is substantially burdened," a majority of the judges concluded.
The appeals court sent the case back to the district court in Oklahoma to consider several additional factors that Hobby Lobby must prove to obtain temporary shelter from the mandate, including whether an exemption would serve the public interest.
Hobby Lobby's challenge is one of over 60 lawsuits filed against the contraception mandate, according to the Becket Fund, a non-profit law firm in Washington, D.C. that represents the company.
The case is Hobby Lobby Stores Inc et al v. Sebelius et al, 10th U.S. Circuit Court of Appeals, No. 12-6294. (Reporting by Terry Baynes in New York; Editing by Richard Chang)