Abortion Coverage Mandate Gets Skepticism From NY Top Court

Judges on New York’s highest court questioned whether the state’s insurance coverage requirements for medically necessary abortions are constitutional, referencing a 2021 US Supreme Court decision at oral arguments Tuesday.

The New York Department of Financial Services’ 2017 regulations improperly give the state discretion to “pick winners and losers” when deciding which religious organizations are exempt, said Noel Francisco of Jones Day, arguing for the Roman Catholic Diocese.

The regulations, which require health insurance policies in the state to provide coverage for medically necessary abortions, must provide an exemption for religious employers who certify that their purpose is to teach their religious values and who employ and primarily serve those who share the same religious tenets of the employer. But that criteria unconstitutionally burdens religious entities, Francisco said.

Judges Michael Garcia and Jenny Rivera of the New York Court of Appeals questioned whether the rule’s criteria forces organizations to choose between serving the broader population or serving only those who share their religion.

“Aren’t they faced with the very choice the Supreme Court talks about in Fulton between curtailing activities—meaning we’re not going to serve a broader population—or providing this type of coverage?” Garcia asked, referring to the US Supreme Court’s 2021 decision that found Philadelphia violated the US Constitution when officials excluded a Catholic charity from part of the city’s foster-care program because the group wouldn’t help place children with same-sex couples.

This case and Fulton deal with different types of exemptions, Assistant Solicitor General Laura Etlinger said while arguing on behalf of the state. The exemptions in the Department of Financial Services rule are based on objective and standardized criteria, she said, whereas the exemptions in Fulton were individualized, meaning that the decisionmakers were allowed to “make value judgments about the motivations of parties seeking an exemption.”

The question in this case, Etlinger added, is whether the rule is neutral and generally applicable.

"[W]e have a scheme here that’s neutral and generally applicable. We have an exemption here that the state decided would best serve its regulatory interests,” she said.

Twice Upheld

The New York Supreme Court Third Appellate Division has twice upheld a lower court’s decision to dismiss the Roman Catholic Diocese’s case against the state—once in 2020 and again in 2022. The US Supreme Court vacated the 2020 decision and sent it back in light of its decision in Fulton.

The state appellate court then reaffirmed the dismissal, saying the high court’s decision in Fulton didn’t “explicitly overrule” the Court of Appeals’ 2006 decision in Catholic Charities of Diocese of Albany v. Serio, and that the law is exempt from strict scrutiny rules that incidentally burden religion since it is neutral and generally applicable.

In Catholic Charities, the state high court rejected a similar challenge to a New York statute that required insurance policies providing prescription coverage to include contraceptive drugs and devices.

Francisco on Tuesday said Catholic Charities was “wrongly decided” because it wasn’t neutral, and the Court of Appeals should make clear the decision “is no longer good law.”

“When you have factors that require you to assess the religious tenets of an organization, its employees, and the people it serves and requires you to assess whether the purpose is the inculcation of religious values or providing services to the poor—I can tell you from my client’s perspective there’s no difference between the two—I don’t think that’s a neutral law,” Francisco said.

Religious Objectors

The New York regulations do allow religious employers to buy a group insurance policy that doesn’t cover abortions. Religious employers are defined as nonprofits whose purpose it is to teach its religious values and that employ and primarily serve those who share the same religious tenets of the employer.

But the diocese says that exemption is narrow and doesn’t account for groups who object to abortion based on their religious beliefs, including the plaintiff organizations that employ people from different religious backgrounds.

The law can’t be considered generally applicable, the diocese argues, as it doesn’t apply to “broad swaths of both New York employers and women in New York.” Under the regulations, many secular and religious employers that don’t provide medical insurance aren’t required to provide employees with coverage for abortion services, the group says. The abortion mandate also doesn’t apply to employers who use a self-insured ERISA plan for employees, nor does it ensure unemployed women are covered for abortion services.

The state argued in its brief that employers who self-fund insurance or don’t provide insurance are outside the scope of the New York regulation because federal law preempts state regulation of the insurance they provide.

“The coverage requirement thus is not underinclusive in a manner that implicates the principle of general applicability that is relevant to a free-exercise claim,” the state says. “Except for the accommodation for religious employers, as defined, the regulation applies to all insurance policies subject to New York regulation, and to all employers who obtain such group policies.

The case is Roman Cath. Diocese of Albany v. Vullo, N.Y., No. APL-2022-00089, oral argument 4/16/24.