Court Rules Religious Employer Violated Title VII by Excluding Same-Sex Spouse from Health Plan Eligibility

Supreme Court decisions in recent years have declared same-sex marriage is legal in all states (Obergefell v. Hodges, 2015) and that Title VII civil rights prohibiting discrimination on the basis of sex includes gender identity and sexual orientation (Bostock v. Clayton County, Georgia, 2020).  In light of these decisions, many religious employers have sought legal counsel about whether and to what extent they are able to place certain restrictions on health coverage to keep that coverage aligned with their religious beliefs.

We had written here in May 2022 how a court had ruled that employers with membership in the Christian Employers Alliance did not violate Title VII when excluding gender affirming care from their health plans.  But now we have a religious employer with a court decision stating they violated Title VII by excluding same-sex spouses from health coverage.  The court determined:

• The Church Autonomy Doctrine did not apply: “this case concerns a social service organization’s employment benefit decisions regarding a data analyst and does not involve CRS’s spiritual or ministerial functions.”
• Religious organizations are only allowed to discriminate in hiring individuals that share their religion.  They do not have the ability to discriminate on other protected characteristics, including sex, race, or national origin.
  • “Though CRS cites Little v. Wuerl, 929 F.2d 944, 951 (3d Cir. 1991), for the proposition that the “permission to employ persons ‘of a particular religion’ includes permission to employ only persons whose beliefs and conduct are consistent with the employer’s religious precepts,” controlling Fourth Circuit precedent holds that§ 702(a) does not exempt religious  organizations from the bar on forms of discrimination based on protected characteristics other than religion.”
• The Religious Freedom Restoration Act (RFRA) “does not apply to suits between purely private parties.”

Religious employers intending to impose some restrictions on their health plans due to religious beliefs will want to keep consulting with their legal counsel each year as new court decisions may alter previous legal opinions and advice.

IMA will continue to monitor regulator guidance and offer meaningful, practical, timely information.

This material should not be considered as a substitute for legal, tax and/or actuarial advice. Contact the appropriate professional counsel for such matters. These materials are not exhaustive and are subject to possible changes in applicable laws, rules, and regulations and their interpretations.