California Employers Must Insure for Contraceptive Coverage
The
California Supreme Court recently upheld a state law that requires
employers, including religiously affiliated organizations, to insure
employees for contraceptives if they provide coverage for other
prescription drugs.
The
6-1 ruling upheld California's
Women's Contraception Equity Act as constitutional. The case has received
nationwide attention as an important test case for other such laws around
the country.
State Law Intended to Address Inequities in Prescription Coverage
In
this case, Catholic Charities, a nonprofit operated in connection with the
Roman Catholic Church, challenged the Women's Contraception Equity Act
(WCEA). WCEA was enacted in 1999 to eliminate gender discrimination in
health care benefits and to improve access to prescription contraceptives.
Evidence before the legislative committee considering the bill showed that
women during their reproductive years spent as much as 68% more than men in
out-of-pocket health care costs, due in large part to the cost of
prescription contraceptives. Evidence showed that many preferred provider
organizations did not provide contraceptive coverage and that approximately
10% of commercially insured Californians did not have prescription
contraceptive coverage.
WCEA
does not require an employer to offer coverage for prescription drugs.
However, if the employer offers a health insurance plan that covers prescriptions, that plan must also cover prescription
contraceptives.
State Law Allows Religious Employer Exception But
Non-Profit Did Not Meet Test
WCEA
does permit a "religious employer" to request a policy that
excludes coverage for contraceptive methods contrary to the religious
employer's religious tenets.
Catholic
Charities did not meet the definition of "religious employer" - -
a fact which it acknowledged. The law exempts nonprofits whose mission is
religious and whose staff and clientele share the organization's religious
tenets. However, the purposes of Catholic Charities is not the
"inculcation of religious values" - - one of the criteria of the
"religious employer" definition. Instead, Catholic Charities'
purpose is to offer social services to the general public, including
non-Catholics. The church offers secular services and employs workers of
different religions. It does not demand that its workers share the church's
philosophy.
Catholic
Charities wanted to offer prescription coverage to its employees, but not
contraceptive coverage. The Catholic Church vies contraception as a sin. It
thus challenged the WCEA as unconstitutional, claiming violation of the
free exercise of religion clauses of the state and federal constitutions.
Catholic Charities contended that the WCEA impermissibly interfered with
matters of church doctrine and internal church governance.
California
Supreme Court Disagrees with Catholic Charities' Position
Catholic
Charities argued, in part, that the WCEA impermissibly draws distinctions
between a religious organization's secular and religious activities. The
court disagreed holding that that the government can properly distinguish
between secular and religious activities for purposes of accommodating
religious exercise.
Moreover,
the court noted that the WCEA does not burden Catholic Charities' religious
beliefs. The court noted that the organization was not required to offer
its employees insurance for prescription drugs. Catholic Charities,
however, argued that part of its religious beliefs require it to offer
"just wages and benefits" to employees.
Even
if there was a burden, the court found that the WCEA serves a compelling
state interest of eliminating gender discrimination. The court noted that
the U.S. Supreme Court and other courts have refused to carve exemptions
for religious objectors into the operation of neutral, generally applicable
laws when the exemption would detrimentally affect third parties. For
instance, the U.S. Supreme Court rejected a religious employer's challenge
to a law requiring him to pay Social Security taxes noting that granting
the exemption would impose the employer's religious faith on the other
employees.
The
decision affects Catholic Charities' organizations throughout California, their
4,100 employees, and other mostly secular enterprises, such as church
affiliated hospitals. Catholic Charities is considering an appeal to the
U.S. Supreme Court.
There
are 19 other states requiring private-sector insurance coverage for
prescription contraceptives including, Arizona, Connecticut, Delaware,
Iowa, Georgia, Hawaii, Maine, Maryland, Massachusetts, Missouri, Nevada,
New Hampshire, New Mexico, New York, North Carolina, Rhode Island, Texas,
Vermont and Washington.
Lone Dissenter
The
sole dissenter in the case was Justice Janice Rogers Brown, who noted that
the ruling could leave women worse off. The only choice for religiously
affiliated employers who are serious about their objections to
contraceptive coverage is to drop all prescription coverage.
Justice
Brown stated that the WCEA definition of "religious employer" is
too limiting if it excludes fait-based nonprofit groups. "Here we are
dealing with an intentional, purposeful intrusion into a religious
organization's expression of its religious tenets and sense of
mission." As Justice Brown put it, the government has no business
"pars[ing] a bona fide religious
organization into "secular" and "religious" components
solely to impose burdens on the secular position."
Brown
rejects the view that the case involves discrimination, noting that
Catholic teaching opposes all forms of "unnatural" birth control,
whether for men or women.
EEOC Takes Same Position as California
Court
The
Equal Employment Opportunity Commission (EEOC) has also held that
prescription contraceptives cannot be excluded from an employer's health
insurance plans. The EEOC has concluded that prescription plans that
exclude the cost of prescription contraceptives violate the federal
Pregnancy Discrimination Act (PDA) and also constitute sex discrimination.
The
PDA requires equal treatment of women "affected by pregnancy,
childbirth or related medical conditions." The PDA prohibits
discrimination against women because they have the ability to become
pregnant. The EEOC found that since under the PDA an employer could not
fire a woman because she uses contraceptives, an employer could not
discriminate in their health plan by denying benefits for contraceptives
when they provide benefits for comparable drugs. The plans at issue in the
charges before the EEOC covered Viagra and surgical sterilization, but not
contraceptives. The EEOC ruled that employers must provide the same
insurance for prescription contraceptives that they do for other drugs,
devices or services used to prevent occurrence of medical conditions other
than pregnancy.
The
EEOC also found that the exclusion of contraceptives was sex discrimination
since prescription contraceptives are only available to women.
Conclusion
Employers
should review their drug policy coverage with their insurers to make
certain that they are in compliance with California law.
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