Catholic Benefits Association and Catholic Insurance Company: Should You Join?

Within the last week, we have been asked by several member organizations about a letter that leadership received from The Catholic Benefits Association. A copy of the letter is depicted below for the purpose of assisting our members in understanding this explanation.

First, our members have indicated that they have never heard of The Catholic Benefits Association (CBA). Neither had we at RCRI until the first such letter came to our attention last week. We did some research, and since there are so many members contacting us, we thought that it might be helpful to our members to have this blog post as a reference to share with others in leadership.

The CBA's website, www.lifeaffirmingcare.com, says this about the organization:

Led by archbishops from throughout the United States, The Catholic Benefits Association (CBA) has formed The Catholic Insurance Company (CIC) and staffed it with a team of organizations and professionals with deep experience in the administration, delivery and operation of self-funded health care plans, in addition to legal counsel experienced in the defense of religious liberty. The CBA owns the CIC, a captive insurer domiciled in and regulated by the State of Oklahoma.

From their website you will see that CBA is a membership organization and that there is an affiliated organization called The Catholic Insurance Company (CIC), which is the "captive insurer" of the CBA. This is what they say about their services:

Membership in The Catholic Benefits Association (CBA) means acquiring a team of highly qualified professionals committed to helping Catholic employers navigate the ever-changing landscape of health care law in the United States while remaining faithful to their religious beliefs. Services of the CBA to its members include:

• Life-affirming health coverage consistent with Catholic values through The Catholic Insurance Company (CIC), the captive insurer of the CBA
• Stop-loss insurance through the CIC to protect employers from large claims
• A national third-party administrator that can customize benefit programs for members and handles full-service claims administration and customer service
• National provider networks (Aetna, Cigna and others, depending on region)
• Vigorous advocacy and defense of members’ First Amendment religious liberty
• Education on the changing requirements of health care regulations

Essentially the CBA and CIC were formed in response to the "contraceptive mandate" as it is being implemented by the final regulations from the U.S. Department of Health and Human Services (HHS). RCRI members may recall that this is one of the provisions in the "essential health benefits" that are required to be provided under the Affordable Care Act (ACA). Specifically, the "women's preventive services" requires group health plans to cover objectionable services or products such as  sterilization and contraception, including all drugs and other devices that have been approved by the Food and Drug Administration or other federal agencies.

When the HHS regulations were being implemented, there were provisions made for religious organizations. The Obama Administration knew that there wold be religious objections to coverage for some of these mandated items. For that reason, HHS built in two exceptions, saying that

• religious employers are exempt all together from providing these objectionable services or products, and 
• other organizations that hold themselves out as religious can be considered qualified employers and seek an accommodation.

It is the second of these two exceptions that is primarily of concern to CBA and CIC. The accommodation requires an organization to sign a self-certification, usually Form EBSA 700, to give to its insurance provider or third party administrator (TPA), stating that the employer will not provide these objectionable products or services. That notice then triggers or transfer the mandate to the insurer or TPA, who then must issue a separate policy or make other arrangements for the employees to receive the objectionable covered items free of charge to the employees and employer.

Some religious institutes and their sponsored ministries have chosen to provide full coverage, including all of the women's preventive services. Others have chosen to sign the EBSA Form 700 and rely on the accommodation. But other Catholic organizations that do not qualify as religious employers (entitled to complete exemption)  have expressed their deeply held belief that the accommodation is not an adequate solution to the problem Rather, it merely shifts the requirement to someone else (the insurer of the TPA), and results in a but-for situation: but-for the employer saying the premiums for its employees, there wold be no entitlement to these preventive services. This is what Archbishop Lori means in the letter when he says, "One does not escape a moral problem by causing someone else to provide the immoral service."

This is why CBA and CIC were formed. CBA was incorporated in Oklahoma in the fall of 2013. The two images below are screen shots from public records available on the Oklahoma Secretary of State website.

CBA's record on the OK SOS website. Note it is a Limited Liability Company. It is unclear whether it is tax-exempt, as the 2014 Official Catholic Directory has not yet been distributed, and that is the most likely way it would obtain tax-exemption.

CIC was formed in February of 2014. Compare the record of the CIC in the Oklahoma records.

CIC's record expressly states that it is a "For Profit Business Corporation" as opposed to a tax-exempt 501(c)(3).

CBA file its lawsuit against the HHS over the contraceptive mandate on March 12, 2014. On June 4, 2014, an Oklahoma federal district court granted it an injunction that exempted all then-current members from having to comply with the contraceptive mandate, until further orders issue. The CBA website links to a number of news stories on their legal battle.

This brings us back to the letter from CBA and Archbishop Lori, and what it means for RCRI members. CBA is soliciting new members to itself (a membership organization) and to its affiliated insurance company, CIC. The letter dated June 19, 2014, expressed an urgency and said "you must move quickly." In marketing circles, this push for expediency is often a red flag that something fishy is up. But in this case the urgency was because it was the intention of CBA to go back to court by June 30 and ask the judge to extend the injunction to cover other organizations that have become members since the date that the injunction was granted. We do not know if CBA successfully got a hearing. There is nothing on their website to indicate it did.

Should religious institutes or their sponsored ministries join this initiative? Every organization must answer this question for itself. Keep in mind that this coverage only applies to employees, not to members of religious institutes. As indicated earlier, leadership in some religious institutes have already made a decision on the preventive services items as they apply to their employees and their insurance coverage. Indeed, many of our RCRI members are affiliated with Christian Brothers Services, who already have a lawsuit under way and who already have an injunction in place protecting them for the time being from the HHS contraception mandate. In addition, there are per employee monthly fees for CBA membership and an additional fee to cover litigation costs. If a member then opts for coverage through CIC, the health insurance premiums will be calculated separately.

Lastly, yesterday's ruling by the Supreme Court in the case Burwell v. Hobby Lobby did not resolve the issue of how the contraceptive mandate applies to (non-profit) religious organizations. Indeed, some have noted initially that the decision actually puts for-profit closely-held companies in a better position than religious organizations since there is no provision in place at this point for the for-profit  employees to receive the objectionable coverages. However, it is almost a certainty that the Obama administration will now go back and add to the existing regulations a provision similar to the accommodation and apply it to closely-held businesses, so that the employees of those companies have the same option as employees of qualified employers whose insurance company or TPA have to cover the contraception products.

As it stands, the issue is far from settled.