California sues over Trump administration’s rollback of birth control mandate

California Attorney General Xavier Becerra on Friday sued the Trump administration, arguing that its rollback of an Affordable Care Act requirement for employers to provide contraceptive coverage to workers is unconstitutional and unlawfully targets women.

The lawsuit, filed in U.S. District Court for the Northern District of California, comes hours after the Department of Health and Human Services on Friday issued a rule change that allows more employers to opt out of the ACA birth control mandate by claiming religious or moral objections.

Prior to this rule change, only houses of worship, religiously affiliated nonprofits and some private companies with few shareholders, such as Hobby Lobby, could opt out of providing birth control coverage by seeking what’s known as an “accommodation” — a workaround in which the health insurance company rather than the employer pays for the contraception, but women still get access to birth control.

Now, those employers can go a step further in restricting birth control coverage by seeking an all-out exemption — which means women in those workplaces, and their dependents, will no longer have contraceptive coverage at all, said Laurie Sobel, associate director for women’s health policy at the Kaiser Family Foundation, a nonprofit unaffiliated with Kaiser Permanente.

The new rule also allows publicly traded companies and all nonprofits and universities to take a religious exemption.

“It’s more expansive than anything that’s been offered in the past in terms of types of companies that can (seek an exemption),” Sobel said.

The lawsuit claims the rule change is unconstitutional because it specifically targets and harms women — thus denying their Fifth Amendment rights to equal protection under the law — and allows employers to use their religious beliefs to discriminate against employees. The suit also accuses the Trump administration of violating a federal law that requires regulatory changes to go through a public comment period before taking effect. It seeks an injunction to stop the policy change from taking effect.

About 10 percent of large nonprofits with more than 1,000 employees — mostly faith-based hospital systems and universities — sought the religious accommodation in 2015, according to Kaiser Family Foundation data.

Some religious organizations have long opposed the contraceptive mandate, arguing that certain forms of birth control go against their beliefs about abortion.

“The Trump administration has no business putting employers in the position of preventing women from accessing contraceptives,” said California Insurance Commissioner Dave Jones in a statement. “It’s not too long ago that women were asked routinely in job interviews if they used contraceptives and when they planned to have children — we will not go back to those days.”

California is one of eight states that have passed laws mandating employer-based health plans to provide free birth control to workers — in part to ensure coverage in case the ACA was repealed.

California’s law, the Contraceptive Coverage Equity Act, was passed in 2014. It is more expansive than federal law because it also covers Medicaid-managed health plans and requires plans to cover different methods of birth control if, for instance, one method is not suitable.

The new federal policy, effective immediately, could impact some but not all employers in California. Employers with self-funded plans, which are regulated by the federal government, can now choose to take the expanded exemptions allowed by the new rule.

However, employers that have fully insured plans, which are regulated by the state, will not be affected and will still have to comply with state law, Sobel said.

Nationally, 61 percent of workers in employer-sponsored health plans are in self-funded plans, according to Kaiser Family Foundation data. In California, an estimated 6.6 million people are in employer self-funded plans, the California Health Care Foundation said.

“We’re grateful that in California, we have legislation in place that protects most women from this discrimination, but it doesn’t protect everyone,” said Crystal Strait, CEO of Planned Parenthood of California. “There are millions this will affect here in California that won’t be able to afford contraception.”

Fully insured plans have been the traditional way employers have provided health insurance to workers. But self-funded plans — where employers take on the cost and risk of covering employees’ health needs, rather than pay premiums to an insurer to do so — are on the rise among private-sector companies, according to a 2016 report by the Employee Benefit Research Institute.

Between 1996 and 2015, the percentage of private companies that offered self-insured plans grew from 29 percent to 39 percent, according to the institute.

Some experts say this is because self-funded plans are generally regarded as less expensive for employers.