INSURANCE COVERAGE FOR BIRTH CONTROL: THE EEOC SPEAKS
By JOANNA GROSSMAN
Tuesday, Jan. 02, 2001
In an important recent ruling, the Equal Employment Opportunity Commission (EEOC) held that employers who fail to provide insurance coverage for prescription contraceptives such as birth control pills, Norplant, Depo Provera, or intrauterine devices (IUDs) may be unlawfully discriminating against their female employees (and male employees with female dependents) on the basis of sex, if they cover other preventive treatments.
The basis for the EEOC decision is somewhat unusual, for the decision is based on the theory that excluding contraception from insurance coverage constitutes pregnancy discrimination, rather than simply sex discrimination. However, sex discrimination law alone, as I will explain, provides a strong alternative basis for the decision.
Most women do not have insurance coverage for birth control. Indeed, studies estimate that two-thirds of large group insurance plans do not provide any coverage for oral contraceptives, the most commonly used reversible method of birth control, and nearly half do not cover any prescription contraceptive drug or device. Many plans do, however, cover surgical sterilization for both men and women.
Before the EEOC came down with this decision, no court had addressed whether exclusion of contraception from an employer's insurance plan violates Title VII. There are, however, other federal and state laws governing the content of insurance plans. Federal law, for example, requires that insurance plans covering federal employees provide contraceptive coverage.
Since 1998, thirteen states have passed legislation mandating benefits for prescription birth control, and one more introduced similar legislation in the last two weeks. In those states, covered insurance plans must provide coverage for prescription contraceptives, regardless of what federal law requires.
The Limited Reach of State Laws on Insurance Coverage for Contraception
But these state laws are sometimes controversial, facing opposition from those who complain of the increase in cost and concomitant lessening of access to insurance. Opposition also may come from religious conservatives who object to forced participation in an insurance plan that reimburses for contraception or abortion, which they oppose.
Even without opposition, the effectiveness of mandated benefits legislation in making sure all women have access to birth control is limited in two ways. First, ERISA, a federal law regulating pensions and other employment benefits, preempts state mandates for self-insured employers. As a result, nearly half of all employees are not protected by any state law requiring that birth control be covered. Second, most state mandates apply only to group plans, not individually purchased policies. That further reduces the number of people protected by the legislation.
Insurance coverage for contraceptives is an important issue on the feminist agenda. The EEOC's decision comes after eighteen months of pressure from advocates for women's and workers' rights.
It was June 1999 when a conglomerate of public interest organizations representing those and other interests requested that the EEOC issue a policy guidance taking a position on insurance coverage for contraception. Specifically, the advocates asked that the EEOC declare that an employer's failure to provide insurance coverage for birth control is pregnancy discrimination and so it did, though through an opinion in an individual case rather than a policy guidance.
The Legal Basis for the EEOC's Decision: Pregnancy Discrimination
How did it reach that result? The starting point is the Pregnancy Discrimination Act of 1978 (PDA), which amended Title VII to say that discrimination on the basis of "pregnancy, childbirth, or related medical conditions," is sex discrimination, and that women so affected are entitled to equal treatment. That promise of equal treatment applies to all aspects of employment including, the Supreme Court held in an early case interpreting the PDA, the doling out of benefits like insurance.
To reach the result it did, the EEOC had to establish two things: first, that a classification based on contraception is a classification based on pregnancy; and second, that the insurance plans at issue impose unequal (and therefore unlawful) treatment on the basis of pregnancy.
The first of these hurdles is the harder one, in that it requires one to believe that being pregnant and avoiding being pregnant are essentially the same thing.
The EEOC made this leap based on the Supreme Court's third PDA case, International Union, UAW v. Johnson Controls. There, an employer had only permitted infertile women to hold certain jobs involving lead exposure. The Court held that the PDA prohibits discrimination not only on the basis of pregnancy itself, but also on the basis of fertility that is, a woman's potential for pregnancy.
The EEOC relied on Johnson Controls to pull contraception within the PDA. What that decision means, the EEOC reasoned, is that employers cannot discriminate against women who try to control their ability to get pregnant. Because prescription contraception is one way women exercise that type of control, the EEOC concluded that excluding contraceptive drugs and devices from insurance coverage is pregnancy discrimination.
In other words, when an employer refuses to pay for prescription contraceptives, it draws a pregnancy-based classification. The fact that only women (and generally only fertile woman, who have the potential for pregnancy) use prescription contraceptives is important to the ultimate conclusion that such contraception is pregnancy-related.
The second question is whether such a classification is unlawful: Are women without insurance coverage for contraception being denied equal treatment on the basis of pregnancy?
To answer that question, the EEOC examined the other insurance benefits offered by those two particular employers, to see whether the plans in question singled out pregnancy for disadvantageous treatment.
The comparison the EEOC drew was between prescription contraceptives, which were excluded from the plans, and other prescription drugs designed to prevent rather than cure disease, which the plans covered. Because the plans covered vaccinations, preventive dental care, and a variety of drugs to prevent the development of certain medical conditions, the EEOC found that women were being denied equal treatment.
It may be that courts ultimately agree with the outcome of the EEOC's decision, but not with its reasoning. The idea that the use of contraception falls within the category of pregnancy, childbirth, or a related medical condition (the only category of conditions covered by the PDA) is vulnerable to challenge. In fact, a federal appellate court rejected a very similar argumentthat infertility falls within that categoryin a recent case.
However, women employees may be able to invoke other potential legal theories rooted strictly in sex, rather than pregnancy, discrimination to reach the same result. They could, for example, argue that the exclusion of contraception from an insurance plan constitutes a formal policy of sex discrimination that violates Title VII.
The argument would be that even though the plan does not advert specifically to women, in carving out the exclusion for contraceptives, it disadvantages only women, because only women use prescription contraceptive drugs and devices (at least so far) and only women can become pregnant (probably forever).
An employment policy that explicitly applies to a subset of one sexand only one sexis sexually discriminatory. So too is a policy that regulates a female-only condition or circumstance, even though it does not specifically mention women.
The idea once advocated by the Supreme Court that one could distinguish between pregnant and non-pregnant persons without drawing a sex-based classification was repudiated by Congress when it enacted the PDA. Such an elevation of form over substance should not prevent courts from characterizing an exclusion of prescription contraceptives, available only to women, as sex discrimination even though the policy does not expressly speak in terms of "men" and "women."
Women could also argue that the policy, even if facially neutral, imposes a disparate impact on women. Because only women use prescription contraceptives, they are the ones who suffer 100% of the burden of the exclusion in terms of cost and of the ability to obtain contraception. And because women are the only ones who become pregnant when contraception is unavailable, they suffer an additional burden from the exclusion.
Employers have the opportunity to prove a "business necessity" defense to a disparate impact claim, but the cost of providing this coverage will not suffice. While significant, it is no more so than the cost of some other commonly-covered drugs and in, in any case, is unlikely to put employers out of business.
There is at least one case currently being litigated that is pursuing these claims. Only time will tell which theory, if any, will ultimately prevail.