How Will Hobby Lobby Affect Californians? - California Case Law
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How Will Hobby Lobby Affect Californians?

The dust is still settling after Hobby Lobby, in which the Supreme Court ruled in favor of exempting closely held corporations from the Obamacare contraceptive mandate, but Californians may not feel the aftershock.

Why? California has laws in place that require employers to include birth control in their prescription drug coverage. But these laws don't cover the same legal ground as the healthcare mandate.

So how will Hobby Lobby affect Californians?

No New Exemption for State Law

There has been a lot of hubbub about how Hobby Lobby will extend the religious rights of corporations, but ultimately the Supreme Court made a narrow decision based on federal laws, not state.

California's Women's Contraception Equity Act, passed in 1999, requires that employers who provide employees outpatient prescription drug benefits "shall include coverage for a variety of federal Food and Drug Administration approved prescription contraceptive methods designated by the plan."

The Act contains its own exemption for "religious employers," but this definition does not map to closely held corporations like Hobby Lobby. This exemption mostly applies to religious non-profits or those employers whose primary purpose is religious.

Self-Insured Employers

The one wrinkle in the WCEA is that it does not apply to companies who are self-insured. According to the Kaiser Family Foundation, 61 percent of insured workers in 2013 were part of a self-funded plan. The California Office of Self Insurance Plans (OSIP) found that almost 10,000 California employers are active self-insurers. The Los Angeles Times reports that state officials doubt this ruling will cause self-insured businesses to drop coverage for birth control, especially since many have done so for years before Obamacare's mandate.

Still, those who are employed by a small or large business that chooses to self-insure should be aware that California law may not pick up where Obamacare leaves off.

The Times notes that California and 27 other states have similar laws requiring inclusion of contraceptives in prescription drug coverage. If not in California, we will likely soon see if Hobby Lobby has any meaningful effect in these states at all.

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