States Must Stop Punishing Religious Organizations for Serving Everyone

May 31, 2024

By Nathan Berkeley

On May 21, the New York Court of Appeals ruled that a state mandate requiring coverage of “medically necessary” abortions in employer health insurance plans does not infringe the free exercise rights of certain religious employers that find abortion to be a grave offense. Specifically, religious organizations that serve everyone without distinction (among other factors) are, according to the court, insufficiently religious to qualify for an exemption. 

The Wisconsin Supreme Court handed down a similar decision involving a different kind of mandate back in March. Countless faith-based adoption and foster care agencies, hospitals, pregnancy resource centers, homeless shelters, health clinics, drug rehabilitation centers, and others, serve God by serving those within and beyond their faith communities. Religious organizations should never be punished for serving everyone. 

At issue in this case is a 2017 New York State regulation that says: “…insurance policies that provide hospital, surgical, or medical expense coverage are required to include coverage for abortions that are medically necessary.” The regulation does, however, provide “an optional, limited exemption for religious employers” that meet the following criteria:

  1. The inculcation of religious values is the purpose of the entity.
  2. The entity primarily employs persons who share the religious tenets of the entity.
  3. The entity serves primarily persons who share the religious tenets of the entity.
  4. The entity is a nonprofit organization as described in Section 6033(a)(2)(A)i or iii, of the Internal Revenue Code of 1986, as amended.

Rejecting the plaintiffs‘ many arguments for why these criteria, and the state’s application of them, violate their First Amendment rights, the New York Court of Appeals ruled, “The proposition that a state has the authority to cabin, through specific criteria, who qualifies as a ‘religious employer’ is consistent with Supreme Court and other state court precedent.” (pg. 20)

My goal here is not to delve into questions of the proper level of judicial scrutiny to be applied, tests of neutrality and general applicability, analyses of impermissible burdens on religion, or other important matters of judicial inquiry. Rather, I want to highlight the prior error by New York State that set these court proceedings into motion. The state’s framework for determining which religious organizations qualify as a religious employer is extremely flawed to the great detriment of religious freedom.  

I especially want to highlight as egregiously wrongheaded the third prong of New York’s test – i.e., “The entity serves primarily persons who share the religious tenets of the entity” – though the first two prongs also pose problems of their own. 

According to Timothy Shah (see page 21), architect and scholar of RFI’s Freedom of Religious Institutions in Society Project (which formally concluded at the end of 2021), institutional religious freedom is: 

the effective power of religious organizations to be independent of control or interference by the state and other social actors and, therefore, to enjoy meaningful self-determination in the conduct of their ‘internal’ affairs or self-governance as well as their ‘external’ affairs or engagement with the wider society.

It is that freedom of “engagement with the wider society” that I want to address. Writing earlier this spring about the Wisconsin case that I mentioned at the outset, my co-author and I explained, “Wisconsin’s top court ruled that Catholic Charities entities…aren’t sufficiently ‘religious’ to be exempt from a state insurance program” even though they “serve the poor, vulnerable, and marginalized through an array of social services…based on the principles of Catholic teaching, ultimately rooted in Christ’s command to care for ‘the least of these.’”

The Wisconsin Supreme Court in that case failed to honor the “external” dimension of institutional religious freedom. So, too, does the New York State abortion coverage regulation. Making the latter exceedingly more troubling, religious organizations in New York that serve everyone – and not “primarily persons who share [their] religious tenets” – now face a terrible ultimatum. As Becket’s Eric Baxter put it recently, religious organizations that are ineligible for the exemption “either have to provide coverage that goes against their beliefs [about the sanctity of human life in the womb] or change the work they do [to serve primarily those in their faith community] to fit under the law’s exemption.” New York’s abortion coverage regulation should be rescinded, but as long as it remains on the books, no religious organization should have this ultimatum foisted upon them. 

Becket is now appealing the decision to the U.S. Supreme Court (read more about the case here). May they prevail. Whatever happens on appeal, however, curtailing the freedom of religious institutions that serve those who do not share their faith is wrong and should have no place in any law or regulation in America. 

Nathan A. Berkeley is RFI’s Communications Director and Research Coordinator.