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Religious Liberties and Who Pays for Contraception

February 8th, 2012 | 4 min read

By Matthew Lee Anderson

The discussion last week about the HHS decision to require religious organizations (excluding churches) to pay for contraception through their insurance plan was, in short, excellent.   My hope in what follows it to hastily outline a few thoughts in response to it.

But first, two news stories to keep an eye on.  First, even Chris Matthews has come out against the HHS on religious liberty grounds.  Which means it's not just conservatives who are concerned here.

Second, the White House is floating language about a compromise because of the backlash.  That's good news.

For the backstory, read Michael Brendan Dougherty, who has brought the A-game to this issue.  This question seems exactly right:

Isn't this a case of conflicting rights? 

Yes, basically. Proponents of the regulation say that women of all faiths have a right to health-care and the way we provide health-care in this country is through employer-based health insurance. If contraception and sterilization and all these other things are health-care, then employers have to provide it. To them this is a simple uncontroversial idea, hindered only by the dogmas of a medieval Church.

The discussion last week centered on the question of whether it is an infringement of religious liberty to require religious institutions to pay for things they are morally opposed to.  One of my favorite commenters, "Christian Lawyer," suggested that it was not on grounds that such institutions won't actually be paying for contraception:

When paying salary, the funds flow from the university to the employee, who then chooses how to spend the money. Thus, no one argues that a Catholic university is being required to “fund” or “pay for” contraception when one of its employees uses their salary from the University to make such a purchase. The university’s religious liberty does not extend to dictating how funds are used once they are provided to a non-ministerial employee as salary because the funds go out of the control of the employer and into the control of the employee.

Health insurance is another form of compensation provided to an employee. Employer-sponsored or -provided insurance policies are a form of non-monetary compensation in which the employer contracts with an insurance company and pays a portion of the premiums to the insurer, which holds the money to be paid out only as directed by the employee. We know that this non-monetary form of compensation is substantively and legally no different from monetary compensation (salary) because, without the specific exemption in the IRS Code, the employer-paid cost of the health insurance policy would be taxed as ordinary income to the employee even though the employee receives it in the form of non-monetary insurance benefits.

Even if the government requires the employer to make arrangements for an insurance plan that covers contraception, there is no funding that ever flows from the employer to the actual provider of the contraceptives or abortion. The insurance company is not “providing” contraception. It merely holds the funds (or benefits) controlled by the employee. Thus, funds only go from the insurer to the actual provider of contraception if the employee so directs.

This is about as good an argument as you're going to see on this, quite frankly.  Solid work, of the sort that makes me love Mere-O that much more.

But--and you certainly knew this was coming, didn't you?--I don't think it's successful.   It's absolutely true that Catholic employees can take their salary and do whatever they want with it (within the bounds of the law) without their employers saying, well, anything.

But the question of insurance funding is different:  while the decision to activate that particular part of the insurance plan might lie with the employee, the funds come directly from the employer.  The insurance company is simply a mediator, and as such has no moral significance (it seems to me).  It is the employer who presents the plan to the employee and outlines the benefits, the employer who has (or had, anyway) final say over what benefits get covered, and the employer whose money goes into the account to pay for it.  The actual insurance company serves at the will of the employer, which is why employers are frequently shopping companies trying to get better rates and packages for their employees.

Consider the parallel case of 401ks.  Employers are the "plan trustees," but they are almost universally run and sourced by third parties.  But as the trustees, the employer funds them, approves the fund choices, etc. and so is materially responsible for their operation.   If, for instance, employers do not provide sufficient education for employees around investment options, the employer can be subject to lawsuit.

Insurance benefits function very similarly.  As such, it is absolutely the case that the regulation is forcing Catholic employers to pay for contraceptives--even if such contraceptives have to be requested by employees.

Let's go at it this way, in case the argument hasn't taken hold yet:  when an employees insurance covers something, who pays for it?  The insurance company or the employer?   The fact that insurance counts as non-monetary compensation within the tax code doesn't much matter, as when such compensation is delivered in the form of contraceptives (or insurance checks paying for contraceptives) it's still the employer writing the check.  To put it differently, the non-monetary compensation is compensation from the employer, not the insurance company who is managing the plan.

The money might end up in contraception one way or the other, if employees go spend their monetary compensation on it in the open market.  But when it comes to how it's being paid for and who is footing the bill, the  difference in agency makes all the difference in the world.

Matthew Lee Anderson

Matthew Lee Anderson is an Associate Professor of Ethics and Theology in Baylor University's Honors College. He has a D.Phil. in Christian Ethics from Oxford University, and is a Perpetual Member of Biola University's Torrey Honors College. In 2005, he founded Mere Orthodoxy.