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Religious Groups Battle with California over Abortion Coverage
A position taken by the California Department of Managed Health Care (DMHC) has religious groups and the state of
California battling over whether state law requires health insurance plans to include coverage for abortions. The DMHC
is the state agency that regulates health care service plans, which include managed care plans such as health
maintenance organizations (HMOs) and preferred provider organizations (PPOs).
The DMHC sent letters to California’s major health insurers in August 2014 regarding health insurance coverage for
abortions. According to the DMHC’s letters, all health care service plans must treat maternity services and legal
abortion neutrally, and they must provide coverage for legal abortions. In response, a number of religious groups
have filed formal complaints with the U.S. Department of Health and Human Services (HHS) challenging the legality of
the DMHC’s abortion mandate.
THE DMHC’S POSITION ON ABORTION COVERAGE
Coverage Requirements
On Aug. 22, 2014, the DMHC wrote letters to seven health insurers (Aetna, Anthem Blue Cross. Blue Shield of
California, GEMCare, Health Net, Kaiser and United Healthcare) regarding the coverage of abortion in health insurance
policies.
The DMHC informed the insurers that policy provisions that exclude coverage for “voluntary” or “elective”
abortions or that limit coverage to “medically necessary” abortions violate the state insurance law and the state
constitution.
According to the DMHC, the Knox-Keene Health Care Service Plan Act of 1975 (Knox-Keene Act) requires health care
service plans to provide coverage for medically necessary basic health care services and the California Constitution
prohibits health plans from discriminating against women who choose to terminate a pregnancy. Thus, according to
the DMHC, all health plans must treat maternity and legal abortions neutrally.
The DMHC also pointed out that plans that exclude or limit coverage for abortions are incompatible with both the
California Reproductive Privacy Act and certain California judicial decisions. These decisions have established that
under the California Constitution, every pregnant woman has the fundamental right to choose to either bear a child or
have a legal abortion.
Religious Objections
According to DMHS, every health care service plan must provide coverage for legal abortions. California law does not
include an accommodation for employers that have religious objections to providing coverage for abortions. However,
the DMHC has recognized that no individual health care provider, religiously sponsored health carrier or health care
facility may be required by law or contract in any circumstances to participate in the provision of or payment for a
specific service if they object to doing so for reasons of conscience or religion. Also, no person may be discriminated
against in employment or professional privileges because of these objections.
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Religious Groups Battle with the State of California over Abortion
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Instructions for Insurers
Regardless of existing policy provision, the DMHC instructed the insurers to comply with California law with respect to
the coverage of legal abortions, effective as of Aug. 22, 2014. The DMHC’s letters state that it erroneously approved
or failed to object to discriminatory provisions regarding abortion coverage in the past. The DMHC instructs insurance
companies to take the following steps:

Review all current health plan documents to ensure that they are compliant with the Knox-Keene Act with
regard to legal abortion;

Amend current health plan documents to remove discriminatory coverage exclusions and limitations. These
limitations or exclusions include, but are not limited to, any exclusion of coverage for “voluntary” or “elective”
abortions and/or any limitation of coverage to only “therapeutic” or “medically necessary” abortions;

File any amended health plan documents with the DMHC.
The health insurance companies have indicated that they intend to comply with the DMHC’s directives.
CHALLENGE TO DMHC’S POSITION ON ABORTION COVERAGE
In prior years, some insurers obtained approval from the DMHC to sell health insurance plans that excluded coverage
for abortions that were not “medically necessary.” Also, Anthem Blue Cross and Kaiser worked with Loyola Marymount
University and Santa Clara University, Jesuit-affiliated institutions, to create health plans that would significantly limit
abortion coverage for University employees. The Universities’ plans to remove coverage for “elective” abortions were
announced in 2013 and subsequently met with protests by employees. The DMHC’s letters to the state’s major health
insurers followed these protests.
In addition, following the DMHC’s directive, several churches reportedly received notifications from their insurers that
coverage for “elective” abortions would be required as part of their employee health plans.
The Life Legal Defense Foundation (LLDF) and the Alliance Defending Freedom (ADF) asked the DMHC to overturn its
directive. The organizations argued that the DMHC’s directive was flawed in a number of ways. Following a review of
the LLDF and ADF’s objections, the DMHC informed the organizations that it had no intention of reversing its position.
In response, the LLDF and ADF filed formal complaints with the U.S. Department of Health and Human Services (HHS)
on behalf of a group of Loyola Marymount employees and seven California churches, alleging that the DMHC’s
directive violates federal antidiscrimination laws. Additionally, the California Catholic Conference, a group which
represents California’s bishops and archbishops, has filed a separate civil rights compliant with the HHS, claiming that
the DMHC’s requirement discriminates against those morally opposed to abortion.
EFFECT ON EMPLOYERS
HHS’ investigation into the legality of the DMHC’s directive is ongoing. At this time it is unclear whether the DMHC’s
directive will be overturned or what action, if any, HHS will take. In the meantime, California employers may receive
notices from their insurers that their health insurance plans regulated by the DMHC must include abortion coverage.
Some insurance industry observers have pointed out that employers looking to get around California’s rules could
become self-insured for health coverage. Taking this action would bring their health benefits under the jurisdiction of
ERISA, which does not impose an abortion mandate. However, a move to self-funded plans would likely be more
expensive for employers as they would shoulder more of the risk of their employees’ health care.
This Legislative Brief is not intended to be exhaustive nor should any discussion or opinions be construed as legal advice. Readers
should contact legal counsel for legal advice.
© 2014 Zywave, Inc. All rights reserved.
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Religious Groups Battle with the State of California over Abortion
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MORE INFORMATION
For more information on the DMHC’s directive, employers may consult of the full text the directives sent to the health
insurance companies, which are available on the DMHC’s website.
This Legislative Brief is not intended to be exhaustive nor should any discussion or opinions be construed as legal advice. Readers
should contact legal counsel for legal advice.
© 2014 Zywave, Inc. All rights reserved.
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