It’s delicious irony that Hobby Lobby’s 401(k) plan invests in pharmaceutical companies that provide contraception, while it’s been making headlines, and history, over the past year because it doesn’t want to give its employees access to health care plans that offer birth control. Notwithstanding, some say that this isn’t as devastating a tale of hypocrisy as people think. Forbes’ Ryan Ellis argues that, because 401(k) plans are only indirectly supported by employers, and the mutual funds therein are actually chosen by employees and plan administrators, Hobby Lobby is too remote from its 401(k)’s investments for spectators like me to call out this clear conflict. In fact, though, these features of 401(k) plans make them almost identical to health care plans, in terms of the level of employer/employee involvement. Hobby Lobby’s 401(k) plan choices show that the “sincerely held religious beliefs” of the family that runs the corporation don’t apply to every employee benefit.
401(k) plans, like health insurance plans, have very little to do with employers. Outside administrators run employee retirement plans, investing money in mutual funds (not stocks) on employee’s behalf. Plan administrators choose which mutual funds to invest in by contracting with select mutual fund companies to provide basic investment products in various sectors, and these products are diversified by a variety of factors. The plan administrator offers all of these investment choices to a corporation’s employees, and they, not the corporation, choose which to invest in. Employees pay into the 401(k) they’ve chosen, and Hobby Lobby (and a decreasing number of other corporations), matches their contribution. It appears that Hobby Lobby does not withhold their match from employees who choose a 401(k) plan that supports big pharmaceutical companies that profit from making birth control pills and devices.
Similarly, Hobby Lobby doesn’t offer health plans itself. Instead, health insurance companies offer insurance plans with a variety of coverage options. Hobby Lobby doesn’t choose what coverage each employee needs, the employees do. And now, instead of simply paying its promised portion of its employees’ compensation, the way it does with its 401(k) plans, Hobby Lobby literally made a federal case out of it, because all of the health care plans available offer contraception (in accordance with the new mandate in the Affordable Care Act.)
All of this hypocrisy serves to highlight an extremely important issue in this case. Employers pay compensation to employees, and that compensation becomes the property of employees to do with what they like. Medical benefits are part of an employee’s total compensation package in exactly the same manner as a 401(k) is. Both are paid for in part by the employer and in part by the employee. And neither should be considered property of the employer, since they are a paid benefit, offered in exchange for working. This is easy to understand when it comes to money: my boss doesn’t come tell me how to spend my money, and neither should yours. But, by Hobby Lobby’s logic, bosses should get to dictate what employees invest in, and buy at the store, as well as the healthcare benefits they receive. That is simply unacceptable.