Ninth Circuit Revives Challenge to California Abortion Coverage Mandate

The James R. Browning U.S. Courthouse in San Francisco, home of the Ninth Circuit Court of Appeals. (Ernest McGray/Associated Press)

SAN DIEGO (CN) – California’s 2013 mandate that all health insurance packages must cover abortion caused a church to suffer an injury when its prior employee insurance plan excluding abortion coverage was axed, the Ninth Circuit ruled Wednesday, reviving the church’s case against the Golden State.

Skyline Wesleyan Church sued the California Department of Managed Health Care and its director Michelle Rouillard in 2016 after the department issued letters to seven health insurers directing them their plans could not exclude coverage for legal abortion – a basic health care service required to be offered by state law.

The DMHC reviewed health insurance plans it regulated after media reports in 2013 Loyola Marymount and Santa Clara Universities offered health insurance plans which excluded abortions deemed “elective.”

Of the 20 million people enrolled in DHMC-regulated insurance plans, the review revealed nearly 29,000 people were enrolled in plans restricting abortion coverage.

Arguing the First Amendment right to free exercise of religion required the DMHC to approve a health insurance plan in line with its beliefs about abortion – which it finds only allowable in “rare pregnancies” where the life of the parent is threatened – Skyline Wesleyan sued the agency for discrimination.

The church employs 100 people, many of them part-time. It switched from its Aetna insurance plan when references to abortion restrictions were removed from its coverage documents, but has not obtained a plan consistent with its beliefs about abortion, even though in 2015 the DHMC approved an Anthem Blue Cross plan for “religious employers” excluding abortion coverage except as a result of rape or incest or when a pregnant person’s life was threatened.

The state’s abortion coverage mandate has also drawn the ire of the Trump administration, which in January threatened to withhold Health and Human Services dollars if the state did not repeal the mandate.

U.S. District Judge Cathy Ann Bencivengo, a Barack Obama appointee, tossed the church’s case, finding she lacked jurisdiction over it and any injury could not be redressed by a court order directed at the DHMC.

Ninth Circuit Judge Michelle Friedland, also an Obama appointee writing for the panel, disagreed, reversing dismissal of the case Wednesday and sending it back to Bencivengo. She found Skyline had suffered an actual – not hypothetical – injury.

“We hold that Skyline has suffered an injury in fact. Before the Letters were sent, Skyline had insurance that excluded abortion coverage in a way that was consistent with its religious beliefs. After the letters were sent, Skyline did not have that coverage, and it has presented evidence that its new coverage violated its religious beliefs. There is nothing hypothetical about the situation,” Friedland wrote in the 30-page order.

Alliance Defending Freedom senior counsel Jeremiah Galus, representing Skyline, said in an interview: “The whole point of this lawsuit is, regardless of one’s view of abortion, most people would agree churches should be able to operate consistent with their religious beliefs and that’s all Skyline wants to do here.”

He said Skyline does not have the Anthem Blue Cross plan for “religious employers” which restricts abortion except in cases of rape or incest or a threat to the pregnant person’s life and that they have “the best plan they could find for their employees given the circumstances.”

Friedland also rejected DHMC’s suggestion any injury suffered by Skyline was “self-inflicted” as it could choose to purchase a non-DHMC regulated plan or refrain from providing employee health coverage at all.

“It can hardly be said that Skyline caused its own injury when it has shown that, if it were to pursue any of the alternatives floated by the DMHC, it would remain worse off than it had been before the DMHC issued the letters,” Friedland wrote.

As for the argument the injury could not be remediated in the present case because Skyline had not shown an insurer would likely offer a plan consistent with its religious beliefs, the panel found the church did have standing because the DHMC’s decision had a “coercive” effect on the seven third-party insurers which previously offered plans consistent with Skyline’s anti-abortion beliefs.

“The fact that insurers had previously offered plans that were acceptable to Skyline is strong evidence that, if a court were to order that the coverage requirement could not be applied to Skyline, at least one of the many insurers who do business in California would agree to offer the type of plan Skyline seeks,” Friedland wrote.

The panel also rejected the argument Skyline should have attempted to find an insurer to request an exemption from the abortion coverage requirement by DHMC before bringing its lawsuit “even though there appears to be no established procedure for doing so.”

Galus said the “Ninth Circuit properly recognized it was an excuse that didn’t hold water.”

“All along the state has been trying to avoid responsibility for what it did … a singling out and targeting of religious groups,” he added.

Judges Mary Schroeder, a Jimmy Carter appointee, and Lee Rosenthal, a George H.W. Bush appointee sitting by distinction for the Southern District of Texas, rounded out the panel.

A request for comment to the Attorney General’s Office was not immediately returned by press time.

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