- Mandatory Coverage for Prescription Contraceptives
- April 30, 2003
- Law Firm: Kaufman & Canoles, A Professional Corporation - Norfolk Office
In December 2000, the Equal Employment Opportunity Commission (EEOC) issued a Commission Decision in favor of two female employees who alleged violations of Title VII of the Civil Rights Act of 1964, as amended by the Pregnancy Discrimination Act (PDA), by their employers. The employers' health care plans excluded the cost of prescription contraceptives, available only to women, from their employee health care plans, while other preventive drugs, devices, and services were covered.
In its decision, the EEOC first addressed the issue of whether the PDA applies to prescription contraceptives. Congress enacted the PDA in 1978 as an amendment to Title VII in order to clarify the proposition that Title VII's prohibition against sex discrimination includes discrimination on the basis of pregnancy. The PDA mandates the equal treatment of women "affected by pregnancy, childbirth, or related medical conditions" in all areas of employment, including the receipt of fringe benefits. In furthering the reach of the PDA, the Supreme Court held that the PDA protects women from discrimination because they have the ability to become pregnant, not just because they are already pregnant. Int'l Union, UAW v. Johnson Controls. Thus, the PDA covers a health care plan's exclusion of prescription contraceptives since they are the means by which a woman may control her ability to become pregnant and requires that employers provide the same insurance coverage for prescription contraceptives as those covered for other drugs, devices, or services used to prevent the occurrence of medical conditions other than pregnancy.
The EEOC analyzed that since contraception is the means by which a woman controls her ability to become pregnant, "[t]he PDA's prohibition on discrimination against women based on their ability to become pregnant thus necessarily includes a prohibition on discrimination related to women's use of contraceptives."
The EEOC next addressed the extent to which the PDA requires the coverage of prescription contraceptives in the case at issue. The EEOC reasoned that contraception is a means to prevent (or control the timing of) the medical condition of pregnancy. Since the health care plans at issue covered other preventive health care, such as vaccinations, drugs to lower or maintain blood pressure or cholesterol levels, and preventive care, such as laboratory services and screening tests, then prescription contraceptives should also be covered under the employers' health care plans.
The EEOC concluded that for an employer to avoid violations of the PDA, employers' health care plans must:
1. cover expenses of prescription contraceptives to the same extent, and on the same terms, that they cover the expenses of other types of drugs, devices, and preventive care described in the opinion;
2. offer the same coverage for contraception-related outpatient services as are offered for other outpatient services; and
3. offer a full range of prescription contraceptive choices.
This EEOC Commission decision opened the floodgates to charges of discrimination on a federal level against many employers who are accused of violating the PDA and other anti-discriminatory legislation for not covering prescription contraceptives and reproductive care for women. In basing their opinions, at least in part, on the EEOC ruling, two Federal District Courts recently denied the defendant employers' Motion to Dismiss and Motion for Summary Judgment respectively.
In April 2001, the United States District Court, District of Minnesota denied United Parcel Services, Inc.'s (UPS) Motion to Dismiss from a Title VII discrimination action brought by the EEOC on behalf of employees at UPS and their dependent spouses. Equal Employment Opportunity Comm'n v. United Parcel Service, Inc.
UPS's Health Benefit Plan excluded coverage of oral contraception for all purposes, including treatment of female hormonal disorders; however, UPS's plan did not exclude approved prescription treatments for male hormonal disorders. UPS claimed that the exclusion of oral contraceptions was gender neutral and that dependent coverage negates any alleged disparate impact by female employees and spouses of male employees.
The EEOC argued this matter on two grounds. First, the EEOC alleged that UPS discriminated against female employees by refusing to provide coverage for female hormone treatments, while coverage for male hormone treatments was provided under the plan. Additionally, the EEOC alleged that UPS discriminated against male employees by failing to provide the spouses of male employees with the same coverage provided to spouses of female employees. In its defense, UPS argued that the exclusion is gender neutral because it applied to both male and female employees - neither female employees nor spouses of male employees were provided coverage for oral contraception under the plan. On this ground, the court held that while UPS's plan exclusion applied to both male and female employees, the exclusion burdened only females and thus was not gender neutral. The court found that the complaint sufficiently alleged an intentional disparate treatment claim against UPS.
The second claim alleged by the EEOC was that UPS's exclusion of coverage had a disparate impact on females because of their sex. UPS argued that no disparate impact claim existed because both male and female employees were equally affected by the exclusion. The court agreed with the EEOC and held that the employment practice was discriminatory in operation because the exclusion fell more harshly on both female employees and spouses of male employees than on male employees and spouses of female employees.
The court denied defendant UPS's motion to dismiss and found that the allegations in plaintiff's complaint sufficiently stated Title VII claims.
In a more recent decision, the United States District Court, Western District of Washington denied defendant employer's Motion for Summary Judgment and ruled that the Bartell Company's "exclusion of prescription contraceptives creates a gaping hole in the coverage offered to female employees, leaving a fundamental and immediate healthcare need uncovered" and constituted sex discrimination under Title VII of the Civil Rights Act of 1964. Erickson v. Bartell Co.
This case was filed as a class action lawsuit alleging that the Bartell Company's self-insured plan covered prescription drugs, while excluding all prescription contraceptives.
The court ordered the defendant employer to provide coverage for all "available options for prescription contraception" to the same extent and on the same terms that the employer's plan covered other drugs, devices, and preventive care for employees in the health plan. Additionally, the Court extended the coverage provided by the Bartell Company to include contraception-related services, such as "the initial visit to the prescribing physician and any follow-up visits or outpatient services."
As many cases on this issue were being filed at the federal level, action at the state level commenced in order to resolve this issue before parties entered the litigation process. Thirteen states, including the Commonwealth of Virginia, presently mandate coverage for prescription contraceptives.
Virginia Code § 38.2-3407.5:1 was enacted in 1997 and mandates employer health care plans to provide coverage for prescription contraception if the employer/corporation provides individual or group accident and sickness subscription contracts whose policy, contract, or plan includes coverage for prescription drugs on an outpatient basis. The prescription contraception at issue must be approved by the United States Food and Drug Administration for use as a contraceptive.
Under the Virginia statute, the employer is not permitted to impose a co-payment, coinsurance payment, or additional fee on an employee receiving prescription contraceptive benefits that is not equally imposed upon any other participant that falls into the same benefit category, class, coinsurance level, or co-payment level and receives a benefit for prescription medications. However, the statute does not require coverage for prescription contraception if the health care policy, contract, or plan does not otherwise provide coverage for any other prescription medications.
With the advent of the recent EEOC Commission Decision, court rulings, and the increasing number of states imposing mandated coverage for prescription contraception on employers who offer coverage for prescription medications to their employees, employers and their insurance representatives must be cognizant of the changes in the law and amend their coverage provisions appropriately in order to avoid adverse consequences in the future.