Labor & Employment Law Daily Wrap Up, PENSION AND BENEFIT PLANS—9th Cir.: Employer group health insurance policyholder had no standing to challenge Parity Act, (Mar 17, 2025)

By Sara Cracau, J.D.

Employer group health insurance policyholder had no standing to challenge the Parity Act as loss of its no-abortion health plan did not constitute an injury-in-fact.

The United States Court of Appeals for the 9th Circuit has affirmed the district court’s decision finding that an employer group health insurance policyholder (hereinafter the “employer group”) had no constitutional standing to challenge the Parity Act because loss of its no-abortion health plan did not constitute an injury in fact. Even if it did suffer an injury-in-fact, there was no evidence tracing the objectional conduct to actions of the federal government. Furthermore, even if the Parity Act which is at issue in this action, were to be struck down, this would not redress the alleged injury and, therefore, redressability was also lacking (Cedar Park Assembly of God of Kirkland, Washington v. Kreidler, Nos. 23-35560, 23-35585 (9th Cir. Mar. 6, 2025)).

Background. Washington’s Reproductive Parity Act (the “Parity Act”) enacted in 2018 requires insurers to provide health coverage for all federally approved contraceptives and for abortions if maternity care is covered. Implementing regulations promulgated in 2019 did not diminish or affect any rights provided under Washington’s existing conscientious-objection statute, which enables insurers to accommodate an employer’s religious objections to an insurance plan. The conscientious-objection statute also provides that employees could obtain coverage for abortion services through their employer’s insurer even when the plan itself does not provide that coverage. An employer group claimed that before the implementing regulations of the Parity Act were implemented to clarify that conscience-based exemptions were still available, its insurer stopped accommodating the abortion exclusion. It further contends that although its insurer has since offered a health plan that excluded abortions, the plan is not comparable and it has not been successful in finding a substitute plan that would accommodate its religious objections. It brought an action challenging the constitutionality of the Parity Act under the Free Exercise Clause of the First Amendment. After summary judgment had been granted in favor of the state and the case remanded to state court with instructions to dismiss the action, the adjudicating panel held that the employer group lacked standing to challenge the Parity Act. The panel had first held that the employer group had adequately pleaded an injury-in-fact to survive a motion to dismiss which did not bind it under the law-of-the-case doctrine. The employer group appealed.

Law-of-the-case doctrine. The court determined that the court’s earlier conclusion that the employer group adequately pleaded an injury-in-fact to survive a motion to dismiss did not bind the court under the law-of-the-case doctrine when evaluating a summary judgment ruling. A prior ruling from the same court is treated as law of the case only “when the case return[s] in virtually the same procedural posture.” Here, however, this case entered a new procedural posture and the burden to allege standing at the pleading stage and the burden to demonstrate standing at the summary judgment stage differ. At the pleading stage, a plaintiff must “allege sufficient facts that, taken as true ‘demonstrat[e] each element of Article III standing.” At the summary judgment stage, however, there is higher hurdle to meet. At that stage, a plaintiff must “offer evidence and specific facts [that demonstrate] each element.

Article III standing. The court found that the employer group failed to demonstrate standing sufficient to overcome the motion for summary judgment. The employer group contended that it suffered an injury-in-fact because it lost access to its no-abortion health plan and was not able to secure a substitute plan that would accommodate its religious objections. The court noted, however, that more than three months before the employer group had filed the operative complaint, its insurer had offered it a health plan that was cheaper than the plan that was terminated and that also excluded abortion services. If the substitute plan was comparable to the previous plan, then the employer group’s alleged injury is purely self-inflicted and would not suffice to establish standing. Furthermore, the employer group’s claimed injury was not traceable to the Parity Act. The Parity Act, its implementing regulation, and the state’s conscientious-objection statute and regulations operate to make the employer group’s desired no-abortion group health coverage possible. The law does not prohibit an insurer from providing a health plan that excludes direct coverage for abortion services. Here, traceability was lacking because the alleged injury is premised on the alleged acts of independent decisions of non-parties to this action. Furthermore, even if the Parity Act was struck down, the alleged injury would not be redressed. Redressability is also lacking based on a direct-facilitation theory. Under the conscientious-objection statute and the Parity Act, employers with a religious objection need not purchase coverage for abortion for their employees. Rather, employees had the right to obtain such coverage through their insurers when their employers do not provide the service. Accordingly, the employer group was not able to establish traceability or redressability under its direct facilitation theory.

It contended, in the alternative, that if an employer purchases a no-abortion plan in Washington, it “indirectly facilitates” the provision of abortion services to its employees. The court rejected this theory also as the employer group was not challenging the law that established an individual’s right to choose to have an abortion which existed independently from the Parity Act. Nonetheless, even if this alternative theory was viable, the court found that the employer group would still lack standing because its claimed injury was premised entirely on speculation. There was no evidence that the employer group was being forced to subsidize abortions because the insurer might pass on the cost of these services to the employer group by raising the premiums. Additionally, the record did not show that any of the employees of the employer group or their family members had ever used, planned to sue, or might even consider using their workplace health plan to procure any services to which the employer group objected.

Dissent. The dissenting judge disagreed with the majority’s opinion on the basis that, because of the Parity Act, this employer group may no longer provide a health plan to its employees that excludes coverage for abortion services. Therefore, he opined that the employer group had standing to challenge this statute.

The cases are Nos. 23-35560 and 23-35585.

Judge: Graber, S.

Attorneys: John J. Bursch (Bursch Law PLLC) for Cedar Park Assembly of God of Kirkland, Washington. Marta DeLeon, Office of the Washington Attorney General, for Myron Kreidler and Jay Robert Inslee.

Companies: Cedar Park Assembly of God of Kirkland, Washington

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