State attempts to define religion: the ramifications of applying mandatory prescription contraceptive coverage statutes to religious employers.

• Author: Stabile, Susan J.

1. INTRODUCTION

   There has been much attention given of late to the issue of whether the law should require private employers to cover prescription contraceptives under their health care plans. Although the exclusion of prescription contraceptive coverage by plans that offer coverage for other prescription medication was for many years not an issue that received attention, the decision by significant numbers of plans in the mid-1990s to cover Viagra made the failure of plans to cover prescription contraceptives a cause celebre of women's groups, who began to fight for such coverage. (1) As a result, at least twenty states have passed laws of various types requiring mandatory coverage of prescription contraceptives. (2)

   For most employers, a requirement that contraceptive coverage be provided in plans that otherwise provide coverage for prescription medication is not a serious matter. Although for the most part employers are free to decide what benefits they will or will not provide to their employees, there have been other instances where state insurance law has imposed mandatory requirements on employers. (3) Moreover, unlike some of those other mandates, providing contraceptive coverage does not tend to increase the cost to an employer of providing prescription coverage. To the contrary, there is some evidence that medical costs in some plans that are amended to provide for contraception coverage actually decline due to a reduction in the costs of unintended pregnancies. (4)

   However, for Catholic organizations, mandatory contraceptive coverage creates an issue of conscience. Because of the Catholic Church's strong moral objection to the use of birth control, (5) forcing organizations affiliated with the Catholic Church to provide prescription contraceptive coverage to their employees is anathema. The same is true of religions organizations affiliated with other religions having moral objections to the use of artificial means of contraception. (6)

   Recognizing the conscience concern, many of the mandatory contraceptive coverage statutes have some carve-out for religious employers. (7) However, the exclusions in statutes adopted in several major states, such as New York (8) and California, (9) define religious employer very narrowly, with the idea of excluding from the operation of the statute Catholic churches themselves, but not arms of the Catholic Church such as Catholic Charities, or Catholic hospitals, universities or nursing homes. (10)

   Because the application of mandatory contraception statutes to religious employers creates a major issue of conscience for the affected religious employers, religious groups in both states have challenged the laws as unconstitutional. Although there has not yet been a final ruling by the New York Court of Appeals on the issue, (11) on March 1, 2004, in Catholic Charities of Sacramento, Inc. v. The Superior Court, (12) the California Supreme Court rejected the constitutional claims of Catholic Charities and held that it must provide its employees with prescription contraception coverage in accordance with the statutory mandate. (13)

   The question of whether the law should so narrowly define what it means to be a religious employer is not a minor one. The number of workers employed by religious employers is extremely large. For example, in California, Catholic Charities of Sacramento has 1600 employees and Catholic hospitals in California employ 52,000 persons. (14) In New York, Catholic affiliated health organizations employ over 50,000 persons and provide health coverage for as many as 500,000. (15) In addition, the Church in New York operates 800 schools, 61 nursing homes and hundreds of social service agencies. (16) Nationwide, Catholic hospitals employ over 620,000 employees. (17)

   This Article does not analyze the constitutional claims of the religious organizations. The ruling by the California Supreme Court comes as no great surprise given the Supreme Court's most recent statement on the subject of burdens on a religion's free exercise, (18) and one would expect the New York Court of Appeals ultimately to reach the same conclusion. Rather, the Article suggests that as a matter of both public policy and respect for religion, state statutes (and, by implication any federal law that may be enacted to address the same issue) should not mandate contraceptive coverage without broadening their definition of who is a religious employer. The failure to broaden the statutory definitions forces religious organizations, which can not provide such coverage to their employees without violating their conscience, into one of several choices, none of which are desirable for either those institutions or for society. The fact that the application of mandatory contraceptive coverage statutes to religious employers may pass constitutional muster does not make the decision to do so desirable or wise.

   More broadly, the Article raises a concern about the implications of the application of mandatory contraceptive coverage statutes to religious employers with respect to issues other than birth control. Regardless of one's own religion or one's personal view of the Catholic Church's position on birth control, (19) the state action here establishes a dangerous precedent that fails to respect the integrity of religious institutions, threatening the Church's autonomy and right of self-definition. For this reason, several religious entities that do not share the Catholic Church's position on birth control joined in amicus briefs in litigation challenging both New York's and California's mandatory contraceptive coverage statutes. (20) The legislation in question raises a fundamental question of who decides what a religious institution is, and who defines the institution's mission. It also sets a dangerous precedent for even greater intrusions on religion in the future. (21)

2. THE BIRTH OF MANDATORY CONTRACEPTIVE COVERAGE

   Although prescription contraceptives have been available for many years, until recently it was very rare for health insurance plans provided by employers for their employees to cover them. (22) While women who used birth control pills may have been unhappy about having to pay for them out of their own pockets, and while other women may have chosen less expensive alternative means of birth control, the issue was not one that received any significant public attention.

   The failure of plans to cover prescription contraceptives started to receive significant attention in 1996, when the FDA approved Viagra. Within a matter of months after the approval, most insurance plans had moved to cover it. (23) The coverage of the latter and not the former led to demand for "contraceptive equity," (24) resulting in a series of lawsuits challenging the failure of private employers to provide for contraceptive coverage as a violation of Title VII (25) and to the passage of contraceptive-equity laws in about twenty states over the last eight years. (26)

   These state law mandates take the form of insurance law provisions that require that insurance plans that provide for any prescription coverage must also provide for coverage of prescription contraceptives. That is, the statutes do not actually mandate that an employer provide employees with contraceptive coverage. Rather, the statutes say that if the employer provides medical benefits to its employees through an insured plan and if the plan provides for any prescription coverage, it must also cover prescription contraceptives. (27)

   Most, but not all, of the state statutes that mandate prescription contraceptive coverage contain some exclusion for churches and other religious organizations. (28) Those exclusions are framed in various ways. Although some statutes exempt church groups and "qualified church-controlled organizations," others are drafted substantially more narrowly. Illustrative of the narrow approach that creates difficulties for Catholic Church organizations are the California Women's Contraception Equity Act, which was enacted in 1999, (29) and the New York Women's Health and Wellness Act, which went into effect in January 2003. (30)

   Both the New York and the California statutes require all commercial health insurance plans that offer prescription drug coverage to provide coverage of prescription contraceptives. (31) The New York and California statutes also impose a four-part test for whether an entity qualifies as a religious employer and is thus excluded from the statutory mandates. To qualify for the religious employer exclusion, (1) the purpose of the organization must be to inculcate religious values; (2) the organization must primarily employ persons of same faith; (3) the organization must primarily serve persons of same faith; (4) the organization must be organized as a non-profit under Internal Revenue Code section 6033(a)(2)(A)(i) or (iii), rather than section 501(c)(3). (32)

   Congress, which has since 1998 required coverage of prescription contraceptives in health plans providing benefits to federal employees, (33) has also considered imposing on private employers a federal contraceptives coverage mandate. Similar to state laws, the Equity in Prescription Insurance and Contraceptive Coverage Act (EPICC), (34) first proposed in 1997, would require private health plans to provide equitable coverage for prescription contraceptives. The bill, both as originally introduced in 1997 and as reintroduced in July 2003, contains no religious employer exemption. The bill has been referred to committee in both the House and Senate and is awaiting further consideration.

   The state interest said to be promoted by mandatory contraceptive coverage statutes is twofold: the promotion of equal treatment of women, and the preservation of public health. The fact that women spend more than men on out-of-pocket health care costs due to the cost of prescription contraceptives and of unintended pregnancies suggested to legislatures and...