A Court of Appeals ruling in respect of insurance coverage for employees of religious charities is raising questions about the separation of church and state and religious liberties, but the issue is something else entirely. The state’s highest court held that a group of charities, mostly Catholic, must follow a law requiring employers to include contraception in prescription drug coverage despite the fact that use of contraceptives is at odds with Catholic teaching. It may seem unfair, but the solution isn’t necessarily a different ruling. It’s a more restrained legislature.

The law at issue is New York’s Women’s Health and Wellness Act, passed in 2002. The law requires employers to buy policies that cover procedures like mammography, cervical cancer screenings, and tests to detect osteoporosis. It also requires that if employers buy insurance that includes prescription expenses, that policy must cover contraceptives. The law carved out a relatively narrow exemption for religious organizations.

The religious charities opposing the law fall outside the exemption, generally because their missions extend beyond mere proselytizing and they draw employees from outside their own faiths. The charities argued that the exemption was too narrow and that forcing them to comply with the law would violate their rights under the free exercise clauses of the American and New York Constitutions. The Court of Appeals has rebuffed that argument, finding that the legislature was within its rights to tailor the exemption as closely as it did.

For all the mentions of religion in the Constitution, the Founders neglected to provide a definition. That has created contention over where the line between religion and not-religion lies.Witness the long-running feud between the Church of Scientology and the Internal Revenue Service over whether the group is a real religion for purposes of tax exemption.

Legislators and regulators have it in their power to minimize those conflicts by showing restraint, not just by being sure to carve out religious exemptions for laws that might offend the religious sensibilities of some, but by reducing the number of areas of daily life in which the government tries to intrude. The Women’s Health and Wellness Act was almost certain to create the kind of conflict on display in this lawsuit, and there was no good reason for it.

What public interest is the legislature serving by requiring insurers and employers to subsidize what is, in essence, a voluntary behavior? The legislature could have allowed a freer health insurance market to prosper in the state, and avoiding the religious issue would have been a beneficial side effect. The court appears to have followed precedent in deciding that offering only a slim exemption to a law like this is permissible. The real problem here isn’t one of free exercise, it’s one of legislative overreach. The ball is now in the legislature’s court to correct this so that this law is no longer biased against Catholics.