Thursday, June 23, 2016
California (by order of an administrative agency, not the legislature) has required all insurance companies in the state to include abortion in all health-insurance plans. In particular, it ordered seven commercial insurers (Blue Cross of CA, etc.) to add abortion coverage to their policies that did not already have it. The mandate covers what everyone agrees are abortions; the dispute over whether drugs like Ella or Plan B cause abortions of new embryos is irrelevant here.
There are questions whether the order violated the state administrative procedure act (the agency did not go through notice and comment). But on the substantive questions whether this violates conscience protections, two things happened this week: (1) The US Department of Health and Human Services (HHS) rejected a complaint that that the California order violates the federal Hyde-Weldon Amendment, which prohibits any recipient of federal funds (including a state) from discriminating against a "health care entity," including a "health insurance plan," on the ground that it does not cover abortion. (2) In a federal lawsuit against the state, the district court denied the state's motion to dismiss claims brought by religious organizations alleging that the mandate violates their state and federal constitutional rights of religious freedom. The denial of the motion, of course, simply means that the challenge survives on the pleadings and enters the discovery phase.
Here are some initial thoughts on the case. The California mandate could have a serious effect on the conscience of those opposed to abortion. But there are some complexities in the case that require exploring.
It appears that California has allowed at least one exemption for a plan offered to religious employers. More about that issue in a minute. But first, the main ground for HHS's decision to reject the Hyde-Weldon complaint--a ground that seems incorrect to me.
A. "Plan" versus "Employer"?
In its letter
rejecting the Hyde-Weldon complaint and closing its investigation, HHS says that the "health insurance plan" protected by Hyde-Weldon includes only the insurer who issues the plan, not the employer who maintains it and pays for it. Because the insurers in California did not object to adding abortion coverage, HHS says, Hyde-Weldon is not violated. That reading makes Hyde-Weldon silly and keeps it from accomplishing its goal of protecting conscience on abortion. HHS's position creates a simple end-around by which California and other states can impose on the conscience of thousands of employers simply by ordering that no abortion-excluding plans be available. It is more natural, and more consistent with the Amendment's purpose, to read "health insurance plan" to cover the employer's plan. (For similar reasons, objecting employers should have legal standing to challenge the California mandate; it clearly causes them concrete harm by making plans without abortion coverage unavailable.)
(HHS and the state say that the employer can avoid the imposition on conscience by self-insuring: but that is difficult and complex for many small employers. Just how difficult will probably be an issue emerging in discovery in the litigation. But although self-funding is increasing among small businesses, it still involves taking on risks that many such employers (including, presumably, smaller religious organizations) cannot handle--and reportedly
several states, including California, are considering restricting small businesses' capacity to self-insure.)
But even on the premise that Hyde-Weldon only applies to insurers, HHS's reasoning seems wrong. The HHS letter says that Hyde-Weldon protects only those entities that object to abortion coverage, and these insurers didn't object to adding it. But Hyde-Weldon doesn't require a conscientious objection in order to apply: by its terms, it prohibits a federally-funded state from "subject[ing] any individual or institutional health care entity to discrimination on the basis that the health care entity does not provide for, pay for, provide coverage of, or refer for abortions" (emphases added). The trigger for protection is simply that the plan doesn't cover abortion, not that the insurer objects to covering it. Hyde-Weldon seems literally to prohibit California's order to insurers. Following the plain meaning would also protect the moral objections of employers and employees.
B. A Religious-Employer Exemption that Apparently Has Been Granted
The HHS letter (p. 2) says that Blue Cross of CA received authorization from the state to offer a plan to religious employers that excluded elective abortion. But that does not dispose of the case, for at least three reasons:
First, it sounds like the approval may have been a one-off--its availability not made clear to anyone else.
Second, according to the federal court complaint
(paras. 66-67), California authorized a religious-employer plan, but it covered abortions for rape and incest as well as the mother's life. The plaintiff church, Skyline Wesleyan, objects to paying for abortions in those first two categories.
The district court opinion (at p. 8) notes this partial exemption, saying: "Plaintiff alleges that Defendants have granted partial exemptions to the coverage requirement to religious employers that request such exemptions but that Defendants have been unwilling to grant any employer the complete exemption that Plaintiff seeks." And the court adds that "In light of Defendants’ system for granting exemptions, the parties may wish to investigate whether they can come to an arrangement that will meet the needs of all stakeholders." Id. n.2 (citing Zubik v. Burwell). Given these facts, California arguably has a practice of "individualized exemptions" that triggers strict Free Exercise Clause scrutiny even under Employment Division v. Smith. (The complaint also mentions some categorical secular exemptions in the underlying state statute, which likewise might be enough to trigger strict scrutiny.) The existence of these exemptions may also undercut an asserted compelling interest in mandating that every plan cover abortion. (The compelling interest test cannot apply by virtue of a state RFRA, since California does not have one; and the level of scrutiny under California's free exercise clause is uncertain.)
Third and finally, abortion is a serious enough matter for the objector's conscience--the taking of a distinct human life--that even for-profit businesses (at the very least, some) ought to be protected from being forced to cover it. As the Supreme Court said in Burwell v. Hobby Lobby, if the government mandated employers to cover unquestioned abortions (and here, again, there is no dispute they are abortions), "[t]he owners of many closely held corporations could not in good conscience provide such coverage, and thus [the government] would effectively exclude these people from full participation in the economic life of the Nation." (Again, the self-insurance option can be difficult for smaller businesses.)