Analysis: Do California’s Catholic universities have to include abortion in their health plans?

Denver, Colo., Aug 21, 2023 / 15:15 pm

Several California Catholic universities offer student health insurance plans that provide coverage of abortion, sterilization, and “gender affirming” care. 

While state law mandates such coverage, insurance industry experts say colleges and universities may have options to help them avoid these ethical pitfalls.

The case of the University of San Diego  

The University of San Diego, a Catholic university founded in 1949 by religious from the Society of the Sacred Heart of Jesus, recently drew critical attention in the media for its student health plan, which covers abortion and transgender procedures.

In response to an inquiry from CNA, the university said it is required by state law to offer the coverage treatments the state law considers “health care.”

“As an independent, Catholic university operating in the state of California, the University of San Diego is obligated to align our student and employee health insurance plans with state law,” the University of San Diego (USD) told CNA in an Aug. 3 statement. “We encourage our community members to consult with their medical providers on the best course of treatment for any medical concern.”

Upon enrolling at the university, students, who are required by federal law to have health insurance, can sign up for a student health plan provided by Aetna or submit a waiver proving they are already insured. 

According to the USD student plan’s benefits summary, 100% of the negotiated charge for abortion is included. The plan provides 80% of the cost for voluntary male sterilization. “Gender-affirming treatment” aims to affirm the identified gender, not the biological sex, of a self-identified transgender person. This treatment includes surgery (also known as a sex-change operation), hormone replacement therapy, and counseling, covered under the student health plan according to unspecified behavioral health coverage standards. 

The university said that in fall 2022 about 1,600 students — about 18% of total enrollment — chose coverage under the university’s Aetna plan.

Abortion covered at other Catholic institutions

CNA sought comment from Catholic colleges and universities in California about their health plan coverage and reviewed student health plan information available online.

Like the University of San Diego, student health plans at the University of San Francisco and Loyola Marymount University appear to cover 100% of the costs of abortion. They cover 80% of the costs of voluntary male sterilization surgery as well as “gender-affirming treatment.” 

Abortion is not listed as covered under the University of Santa Clara’s student health plan, but female sterilization and gender-affirming treatment are. A spokesperson for the University of Santa Clara, a Jesuit institution, told CNA that its employee and student health plans “align with the requirements of California law.” Like the University of San Diego, the Santa Clara school is not considered a “religious employer” under the relevant state law and does not qualify for an exemption.

Abortion mandate was in response to pro-life efforts 

California’s redefinition of abortion as basic health care came in response to Catholic and pro-life advocates’ efforts to secure abortion-free health plans.

In 2013, Loyola Marymount University and Santa Clara University removed elective abortion from their employee health care plans. Officials at California’s Department of Managed Health Care, which regulates most health plans in California, initially approved the changes.

However, the move drew opposition from faculty and other abortion advocates. Santa Clara University faculty voiced their rejection of the changes to the health care plan by a vote of 215 to 89 in December 2013. According to court filings, lobbyists from Planned Parenthood wrote to the California Department of Health and Human Services to insist that agency rules be changed to force religious groups to provide coverage for elective abortions. 

The lobbying effort succeeded. In 2014 California officials required health plans to cover abortions on the grounds that abortion constituted basic health care under the provisions of a 1975 law. Officials argued it was discriminatory to cover maternity services but not abortion.

This mandate drew strong objections from Catholics and other pro-life advocates. The requirement was so broad it did not exempt churches and religious communities from paying for abortions in their employee health plans.

A spokesperson for the Department of Managed Health Care told CNA that health plans under its purview must cover “medically necessary gender-affirming care.”

California law also governs how and where “gender-affirming” care is offered.

In 2011, state legislators explicitly barred employment discrimination on the basis of gender identity or expression. In response, the California Department of Insurance required health plans to cover health care services for self-identified transgender people when coverage of the drugs and procedures is provided to non-transgender people. This includes hormonal therapies, hysterectomies, mastectomies, and vocal training used in purported gender transitions, also known as sex change operations.

Legal challenges only partly successful

In August 2022 and May 2023 rulings, federal courts sided with four non-Catholic churches that brought lawsuits arguing they had a First Amendment right to decline to provide employee health insurance plans with elective abortion coverage. The judges ordered the state of California to pay $1.4 million in attorneys’ fees. The churches’ legal counsel included attorneys from the Alliance Defending Freedom legal group.

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“The government can’t force a church or any other religious employer to violate their faith and conscience by participating in funding abortion,” Jeremiah Galus, senior counsel with Alliance Defending Freedom, said in a May 12 statement. 

“For years, California officials, in collaboration with Planned Parenthood, have unconstitutionally targeted faith-based organizations. This is a significant victory for the churches we represent, the conscience rights of their members, and other religious organizations that shouldn’t be ordered by the government to violate some of their deepest faith convictions,” he said.

Catholic universities not ‘religious enough’ in state law

These legal victories, however, have not yet protected Catholic universities.

The University of San Diego told CNA that it does not qualify as a religious employer under the state statute.

“The University of San Diego is proud of its history and affiliation with the Catholic Church,” the university said. “Inspired by the centuries-old tradition of Catholic higher education, USD welcomes people of all faith traditions and any, or no, religious background to its community as students and employees. Because of this inclusive approach to education and employment, USD doesn’t fit the statute’s definition of a ‘religious employer.’”

Relevant state health codes define a “religious employer” as a nonprofit entity whose purpose is the inculcation of religious values and which primarily employs and serves those who share its religious tenets. A spokesperson for the Department of Managed Health Care told CNA that it reviews exemption requests based on the requirements of California law and the Health and Safety Code.

Weldon Amendment appeals have stalled

California’s mandatory abortion coverage in employee health plans drew legal challenges based on the federal Weldon Amendment. The amendment, first passed in 2005, bars states that accept federal funds from discriminating against institutions and health care entities that do not provide coverage of abortion or refer for abortions.

In theory, the Weldon Amendment could protect Catholic universities that reject health plans that cover abortion.

In practice, the protections have proved elusive. As CNA previously reported, pro-life advocates including the U.S. bishops have called for stronger “conscience protections” that would allow them to contest pro-abortion state mandates. At present, they depend on federal authorities to enforce the rules.

The California Catholic Conference filed a Weldon Amendment complaint against California with the U.S. Department of Health and Human Services’ Office of Civil Rights, which was rejected by the Obama administration in June 2016. 

In January 2020, the Trump administration sided with another Weldon Amendment complaint from a Catholic mission and a Wesleyan church. The Trump administration demanded that the state comply with the Weldon Amendment and threatened to cut all HHS funding from California.

The current U.S. Secretary of Health and Human Services is Xavier Becerra, the strongly pro-abortion rights former attorney general of California. In his former role, he refused to comply with the Trump administration’s demands.

Alliance Defending Freedom told CNA that the Biden administration reversed the Trump administration’s decision. 

In an Aug. 13, 2021, letter to California Attorney General Rob Bonta, Robinsue Frohboese, acting director and principal deputy of the HHS Office for Civil Rights, said that the Office of Civil Rights would withdraw its notice of violation against the state of California and close the complaints regarding the Weldon Amendment.

Have other Catholic institutions found a way?

Some Catholic colleges do not provide student health plans in California.

“Most students remain on their parents’ plans until they are 26, so most have no need for an alternative plan,” Anna Velasco, vice president of human relations at John Paul the Great Catholic University in Escondido, told CNA.

“As mandated by law, we offer a variety of health plans for employees to choose from,” she said.

To the question of whether these health plans include coverage of abortion, male sterilization, and gender-affirming care, Velasco responded: “California plans, by law, unfortunately, include these objectionable services.”

Thomas Aquinas College in Santa Paula also does not provide a student health plan. Students are required to have their own health plan, and this is their parents’ health plan “in nearly all instances,” Chris Weinkopf, the college’s executive director of college relations, told CNA.

“The college provides full health care — which includes dental and vision care, as well as zero monthly premiums — to all its full-time employees and their families,” Weinkopf said. “We consider providing medical coverage an essential part of our character as a Catholic institution.”

However, this health plan isn’t bound by California rules mandating abortion because it is self-insuring — one of the few exemptions in California regulations. This means the employer funds its own health plan, collects premiums, and pays enrollee health claims.  

“Since we self-insure, the college is exempt from California insurance law and regulations that require insurance coverage that is at odds with Catholic moral teaching,” Weinkopf said.  

The college is a member organization of the Reta Trust, a national health benefits trust based in Walnut Creek, California. Among other employee benefits, Reta provides employee health plans that follow Catholic social and moral teachings, including the U.S. Conference of Catholic Bishops’ Ethical and Religious Directives for Catholic Health Care.

California’s hostile legal environment a barrier

Kathryne McGowan, CEO of Reta Trust, spoke with CNA about the regulatory situation in California.

“It’s a very difficult environment for employers and student health plans to be able to offer Catholic-compliant benefits because, as a result of the local environment, you just can’t offer compliant benefits,” she said.

With some exceptions, Catholic institutions offering a fully insured health plan in California must include the coverage benefits for drugs and procedures that violate Catholic teaching.

Qualified California entities can organize church plans under state law, which can allow greater flexibility but still require legal fights with any coverage mandated by state laws or rules, according to McGowan.

Another option is an ERISA health plan compliant with federal rules and laws under the Employee Retirement Income Security Act of 1974 (ERISA). These are regulated by the federal Department of Labor and don’t have to comply with state laws’ requirements for abortion coverage.

“Employers will often use an ERISA plan so that they can offer benefits that are compliant with their belief sets,” McGowan said. “For most employers, state laws are the problem.”

In theory, federal legislation could still mandate coverage that conflicts with religious beliefs, but McGowan said she was not aware of any interference.

Another option for Catholic institutions is to join a group like Reta Trust, which is bound by federal law, not state law.

“Reta makes it very simple and easy to move over,” McGowan said. “The pricing is competitive, and we have a very high touch service model and are very successful in moving groups over and minimizing disruption.”

CNA sought comment from all Catholic colleges and universities in California but as of publication had received comment only from John Paul the Great Catholic University, Santa Clara University, Thomas Aquinas College, and the University of San Diego.