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EEOC rules omission of contraceptive coverage is unlawful in some cases

The Equal Employment Opportunity Commission (EEOC) has ruled that it's against federal law for employers to exclude contraceptives from their health insurance plans when those plans cover other preventive treatments such as vaccinations, routine physical examinations, and dental care.

It has far-reaching implications for the millions of others who have health insurance plans that don't cover contraceptives.

The decision, issued by the EEOC on Dec. 13, 2000, only applies to the two women who filed complaints with the commission. However, it has far-reaching implications for the millions of others who have health insurance plans that don't cover contraceptives such as birth control pills, diaphragms, and injectable prescription contraceptives such as Depo Provera.

The women are nurses who work for two commonly owned companies that offer their employees the same health insurance policy and benefits. Based on confidentiality provisions in the law, the EEOC is prohibited from naming the women who brought the complaints or their employers.

The EEOC concluded that the employers' plan — which covers other preventive treatments, but not oral contraceptives — violates the Pregnancy Discrimination Act (PDA). Enacted in 1978, the law requires equal treatment of women "affected by pregnancy, childbirth, or related medical conditions" in all aspects of employment, including the receipt of fringe benefits.

"The selective exclusion of health coverage for prescription contraceptives by this employee health plan violates the law since it covers a number of comparable prescription drugs and other services," says EEOC Chairperson Ida L. Castro.

The commission also found that excluding contraceptives amounts to sex discrimination because these prescriptions are available only to women.

Although Congress has considered explicitly requiring health plans to cover contraceptives, debate over the legislation has stalled. Several states require insurers to cover contraceptives if they cover other prescriptions, but those laws only apply to state-regulated insurance plans. For more information on states that mandate contraceptive equality, see Insure.com's Health Insurance Laws and Benefits Tool.

Employers' defense and EEOC response

The employers cited four alleged reasons as to why their exclusion of prescription contraceptives did not violate federal law:

  • The health plan covered only abnormal physical or mental conditions; therefore they had no obligation to cover contraceptives. But the EEOC ruled the argument was without merit because the plan does cover numerous other preventive treatments, including surgical sterilizations and Viagra, the drug prescribed for men to boost sexual performance.
  • The exclusion was permissible because it was based on cost considerations. However, the commission rejected cost as a defense for pregnancy and sex discrimination; and, in any event, it ruled the cost of contraceptives is low compared to the cost of childbirth.
  • The exclusion of contraceptives does not constitute sex discrimination. But the EEOC said that because prescription contraceptives are available only to women that, by definition, the exclusion amounts to sex discrimination.
  • The women's claims are preempted by the Employee Retirement Income Security Act (ERISA). However, the EEOC ruled that while ERISA does preempt certain state laws that regulate insurance, it explicitly exempts the federal law from preemption.

The employers must comply

Trade organizations representing insurers are wondering whether the decision will ultimately cause consumers more harm than good.

The EEOC said the employers must reimburse the women for the costs of their prescription contraceptives for the applicable back pay period. In order to comply with the PDA, they must also now cover prescription contraceptives to the same extent, and on the same terms, that they cover comparable drugs, devices, and preventive care. The EEOC sent the charges back to its field agents with instructions for further processing in accord with the commission's decision. This will include efforts to resolve the case through mediation.

While consumer health advocates laud the EEOC's ruling, trade organizations representing insurers are wondering whether the decision will ultimately cause consumers more harm than good. "You know the adage, 'There's not such thing as a business tax?'" asks Richard Coorsh, spokesperson for the Health Insurance Association of America (HIAA). "Whenever a business gets taxed, it ultimately passes the costs on to the consumer. The same principle may apply here. If employers are pressured into providing more costly benefits, they will charge employees more or it's possible they might drop coverage altogether."

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