Judge Upholds State Regulation Requiring Insurers to Cover Abortion

Maria Vullo, superintendent of the Department of Financial Services. Courtesy photo.

A state judge in Albany has upheld a regulation promulgated by the Cuomo administration that mandates health insurance companies in New York provide coverage for abortions without any cost-sharing requirements, such as co-pays or deductibles.

The litigation, which is the culmination of two different lawsuits, was brought by the Roman Catholic Diocese of Albany and other church-affiliated organizations, who claimed the state Department of Financial Services exceeded its statutory authority when the rule was created.

Maria Vullo, superintendent of DFS, said she was pleased with the court’s decision, which also rejected claims from the diocese that the regulation ran contrary to state and federal constitutional protections concerning religious expression.

“When we took the actions we took, we believed those actions were fully in line with New York law,” Vullo said. “I’m pleased the court has recognized that, in an opinion that not only supports the particular actions we did, but DFS’ regulatory authorities to protect New Yorkers to ensure, in this particular case, a woman’s right to health care coverage.”

A spokeswoman for the Albany diocese said in a statement on Thursday that the church would be appealing the ruling based on the alleged constitutional and statutory conflicts of the regulation. The diocese is represented by Michael Costello, an attorney with the Albany's Tobin and Dempf.

“We will be filing an appeal due to the critical constitutional and statutory issues surrounding the ‘abortion mandate,’” said Albany diocese spokeswoman Mary DeTurris Poust.

The first lawsuit in the matter was brought over so-called model contract language the state released in 2016 that required insurance policies in New York to include abortion coverage. The second was over a regulation promulgated by DFS in 2017 that required those insurers to cover abortions without cost-sharing measures. The latter rule included an exemption for religious employers.

“The actions we took at DFS over the past three years to protect women’s health care rights and their right to comprehensive health care coverage include the full panoply of reproductive health care coverage,” Vullo said. “That includes a woman’s right to abortion coverage because that decision is between the woman and her doctor and the insurance companies must cover that.”

State Supreme Court Justice Richard McNally Jr. of the Third Judicial District wrote in the decision that the agency did not act outside its statutory power in either instance when it required state-regulated insurers to pay for abortion coverage.

He attributed part of his decision to another lawsuit brought against the state more than a decade ago by Catholic Charities of the Diocese of Albany. That challenge was over a state law enacted at the time that required employer health insurance to include coverage for the cost of contraceptives for their employees.

Much like the more recent litigation, Catholic Charities argued at the time that the law forced it to contradict its religious beliefs by mandating it offer insurance coverage for contraceptives. The Court of Appeals ruled against Catholic Charities in the case, leaving the law intact.

The plaintiffs in the case against DFS had argued that their litigation could be interpreted differently for a few reasons, according to McNally’s decision.

For one, the more recent case was challenging a regulation, rather than a law. That makes the legal arguments different. The court can use case precedent to analyze whether DFS went beyond its power as a state agency, rather than assessing the constitutionality of the rule alone.

The regulation, the plaintiffs argued, also addressed two different medical services: contraceptives and abortion. McNally wrote that, from a legal perspective, the two are the same.

“Legally, however, petitioners’ claims challenging medical coverage for both contraceptives and abortion are identical,” McNally wrote. “Plaintiffs believe contraceptives and abortion to be a moral ‘evil’ and the legal mandate compelling coverage for the same a violation of their core religious beliefs causing a deprivation of rights.”

McNally wrote that under New York Court of Appeals precedent, the same conclusion had to be reached on the abortion coverage requirement as had been reached on contraceptives.

“The Court finds the constitutional claims challenged in this case to be the same as those raised in Catholic Charities,” McNally wrote. “Given the Court of Appeals addressed and rejected the same arguments, Catholic Charities is binding precedent requiring dismissal of plaintiffs’ constitutional claims in this matter.”

McNally also rejected claims from the plaintiffs that DFS had exceeded its statutory authority as a state agency when it promulgated the rules. He said the state’s Financial Services Law provides the superintendent of DFS with substantial authority when it comes to such regulations. One section of the Insurance Law, he wrote, expressly gives the superintendent power to establish minimum standards to health insurance policies issued in New York.

“The promulgation of the regulation is derived from the above statutory mandates and thus is not an improper delegation of legislative authority to DFS,” McNally wrote.

The case will now be appealed to the Appellate Division, Third Department in Albany. Vullo said she’s not worried about the outcome of the appeal.

“Litigation never worries me,” Vullo said. “I’m now past 30 years of being a litigator, and you can’t be in the business of public service if you fear that someone might sue you. You always have to make decisions you believe are the right decisions consistently with the law.”

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