On Saturday the NY Times presented a story on the contraception controversy that raised more questions than it answered. However, we see the glimmer of a possible further accomodation by Team Obama that may resolve this puzzle. Organizations that self-insure are subject to Federal, not state law; but the Federal law has not achieved its final finalization. Wiggle room!
Back to the Times:
N.Y. Law on Contraceptives Already in Place, and Catholic Institutions Comply
By JOSEPH BERGER and THOMAS KAPLAN
Although Archbishop Timothy M. Dolan of New York has vociferously argued that a national requirement for religiously affiliated institutions to cover birth control in their insurance plans is immoral and unacceptable, some Roman Catholic organizations in his own backyard have for 10 years been grudgingly complying with a state law making them do precisely that.
Then why, one wonders, are Catholic leaders so wound up now about the Federal rule after suffering in silence for so long? And why do only "some" organizations comply?
Some New York Catholic institutions — including the Archdiocese of New York, led by Archbishop Dolan, and the Diocese of Brooklyn — chose to self-insure rather than pay for contraception after New York State adopted a requirement in 2002 that any insurance policy with a prescription drug benefit provide coverage for birth control.
We hear about California:
One of the most contentious laws was approved in California in 1999; the measure effectively provided an exemption to churches but not to religiously affiliated hospitals, universities or social service organizations. Catholic Charities of Sacramento unsuccessfully challenged the law in court.
“It was pretty much a useless exemption, because the large employers are not churches,” said Carol Hogan, a spokeswoman for the California Catholic Conference. She said many large Catholic institutions in California, like hospitals, have since elected to sidestep the law by insuring themselves.
Self-insurance is the escape hatch, but it may not work at the Federal level; this is from a fact sheet prepared by the office of the Governor of Massachusetts:
State insurance laws apply only to the "fully insured" market, which is regulated by the state Division of Insurance. If an organization elects to self-fund its employee benefits plan – i.e., pay health claims from its own resources rather than buy health insurance – that organization is not subject to Massachusetts state insurance laws and would not be required to provide any particular outpatient services.
Some large employers, including municipalities, corporations, hospitals and universities, have their own private agreements with insurers and are considered to be "self-insured." Pursuant to the federal Employee Retirement Insurance Security Act (ERISA), self-insured plans are regulated only by federal law, and would not be subject to Massachusetts health insurance laws. However, both fully insured and self-insured health plans will have to comply with the federally mandated benefits under the Affordable Care Act.
So a Federal rule could eliminate the escape hatch employed by many Catholic entities. But what is the new Federal rule? The latest protest from the bishops hints that the status of self-insured plans is still a bit of a jump ball:
Second, the President has announced some changes in how that mandate will be administered, which is still unclear in its details. As far as we can tell at this point, the change appears to have the following basic contours:
·It would still mandate that all insurers must include coverage for the objectionable services in all the policies they would write. At this point, it would appear that self-insuring religious employers, and religious insurance companies, are not exempt from this mandate.
Hmm. One wonders whether a further compromise might be reached on the topic of the self-insured - perhaps they could be allowed the same escape hatch that has already been adopted in many states. Smaller Catholic entities in the currently free states would be affected (as they have been in New York), but large entities would probably soldier on on a self-insured basis.
Certainly, the President's Immaculate Contraception fantasy - the insurance companies will provide it for free - makes no sense in the context of self-insurance.