Less than two years ago, the U.S. District Court for the District of Nebraska joined a trio of federal courts following the Equal Employment Opportunity Commission's ("EEOC") Decision holding that a health plan's exclusion of prescription contraceptive drug coverage violates Title VII of the Civil Rights Act of 1964, as amended by the Pregnancy Discrimination Act ("PDA"). Not so fast says the Eighth Circuit whose March 15, 2007 decision called the EEOC's position "unpersuasive."
In re Union Pacific Railroad Employment Practices Litigation
District Court Decision
Union Pacific's health plans excluded from coverage both male and female contraceptive methods, prescription and nonprescription, when used for the sole purpose of contraception. The U.S. District Court in Nebraska granted class certification to "[a]ll females employed by Union Pacific Railroad Company after February 1, 2001, enrolled in one of the Agreement Plans who used prescription contraception, at least in part for the purposes of preventing pregnancy, without insurance reimbursement from said Plan."
The District Court held that the Union Pacific health plans violated Title VII, as amended by the PDA, because the plans treat medical care that women need to prevent pregnancy less favorably than the plans treat medical care needed to treat medical conditions other than pregnancy even though such conditions pose no greater threat to employees' health than does pregnancy.
Eighth Circuit Decision
The Eighth Circuit decision marks the first appellate ruling regarding the exclusion of contraceptives from health plan coverage. At the heart of the ruling, the Eighth Circuit held that Title VII and the PDA "do not require coverage of contraception because contraception is not 'related to' pregnancy for PDA purposes and is gender-neutral."
In determining that contraception is not 'related to' pregnancy for PDA purposes, the Court applied its 1996 decision in Krauel v. Iowa Methodist Med. Ctr., which held that the PDA does not extend to infertility treatments because the PDA's reference to "related medical conditions" refers only to conditions associated with pregnancy and childbirth. The Court ruled that "like infertility treatments, contraception is a treatment that is only indicated prior to pregnancy" and "is not a medical treatment that occurs when or if a woman becomes pregnant." The Court further found persuasive that the plain language of the PDA makes no reference to contraception. The Court held that "[t]his silence by Congress on the issue of contraception cannot be interpreted to expand the PDA to cover contraception."
The Court also rejected the employees claims that the exclusion of contraceptives treated women less favorably than men and held that the district court incorrectly characterized Union Pacific's policy as the denial of coverage for women. Judge Raymond W. Gruender, who authored the majority opinion, held that the exclusion applied equally to men and women because "Union Pacific's health plans do not cover any contraception used by women such as such as birth control, sponges, diaphraghms, intrauterine devices or tubal ligations or any contraception used by men such as condoms and vasectomies."
Finding the EEOC's decision on coverage of contraception unpersuasive, the Court opined that "the decision compares prescription contraception to the broadest possible spectrum of other preventative treatments and services without citing a persuasive basis for doing so." The Court further remarked that the "EEOC did not issue any guidance on the issue of coverage of prescription contraception until 22 years after the enactment of the PDA," a delay says the Court that "brings into question the consistency and persuasiveness of the EEOC's position."
Equal Employment Opportunity Commission Decision On Coverage of Contraception
On December 14, 2000, the Equal Employment Opportunity Commission (EEOC) announced its position on contraceptive prescriptions as follows:
- The Pregnancy Discrimination Act ("PDA") prohibits discrimination against a woman based on her ability to become pregnant and/or to control pregnancy not just pregnancy itself
- The PDA requires employers to provide the same coverage for prescription contraceptives that they do for other drugs, devices, or services that are used to prevent the occurrence of medical conditions other than pregnancy
- The exclusion of prescription contraceptives constitutes sex discrimination, regardless of whether the contraceptives are used for birth control or other medical purposes
How does this ruling affect my health plan?
It is clearly the EEOC's position that health plans may not exclude prescription contraceptives from coverage without violating Title VII and the PDA. The Eighth Circuit case reversed the position of two of three federal courts (In re Union PacificRailroad Employment Practices Litigation in Nebraskaand Cooley v. DaimmlerChrysler Corp. in the Eastern District of Missouri). However, the Eighth Circuit's position is binding only within its jurisdiction which covers the states of Arkansas, Iowa, Minnesota, Missouri, Nebraska, North Dakota and South Dakota. Exclusion of contraceptives from health plans may still be found violative of Title VII and the PDA in other jurisdictions such as in the U.S. District Court for the Western District of Washington which was the first court to give credence to the EEOC's Decision in Erickson v. The Bartell Company. Interestingly, following the District Court's decision, Union Pacific added contraceptive coverage to its health plans and the Company recently stated that despite the Eighth Circuit's decision, it intends to continue such coverage.
For more information about your health plans and the court decisions regarding the exclusion of contraception coverage, please contact any member of Dinsmore & Shohl's Compensation and Benefits Group listed here.