Risk Managers Face Birth Control Exposures

The Equal Employment Opportunity Commission concluded late last year that excluding prescription contraceptives from otherwise comprehensive health plans violates Title VII. The EEOC reasoned: "Contraception is a means by which a woman controls her ability to become pregnant. The PDAs prohibition on discrimination against women based on their ability to become pregnant thus necessarily includes a prohibition on discrimination related to a womans use of contraceptives."

The EEOC found a reasonable cause to believe that the employers involved in the dispute had engaged in an unlawful employment practice under Title VII. The employers were ordered to cover the expenses of prescription contraceptives and outpatient services as they would cover other drugs, devices, preventive care, and services.

In alignment with the EEOCs decision is a case of first impression in the federal courts addressing the same issue, Erickson v. The Bartell Drug Co., 141 F. Supp.2d (W.D. Wash. 2001).

Bartells self-insured benefit plan covered all prescription drugs, including preventative drugs and devices such as blood-pressure lowering medications. However, the plan specifically excluded contraceptive devices. A class action suit was filed on behalf of Bartells female employees who were using prescription contraceptives and enrolled in the companys prescription benefit plan after Dec. 29, 1997.

Bartell argued that contraceptives are voluntary, preventative drugs that do not treat or prevent illness or disease, and are not even a healthcare issue. The court countered that contraceptives help prevent many physical, emotional, economic, and social consequences. The court said: "The fact that prescription contraceptives are preventative appears to be an irrelevant distinction in this case: Bartell covers a number of preventative drugs under its plan."

Bartell further debated that controlling fertility is not pregnancy, childbirth, or a related medical condition. But the relevant issue, the court said, is whether excluding prescription drugs made for women is sex discrimination under Title VII. The prevention of pregnancy may not specifically fall within the phrase used in the PDA , but the court interpreted Title VII to preclude Bartells prescription drug coverage practices.

Under the plan, both men and women were covered for all services and protected from the same risks. Bartell chose to omit services that are available only to women–prescription contraceptives. Thus, the court determined that the exclusion of women-only benefits from a comprehensive prescription plan is considered sex discrimination under Title VII and the PDA.

In essence, the court found that Bartells prescription drug plan provided less coverage for its female employees than for men. By excluding drugs exclusively used by women, Bartell created a hole in the coverage offered to its female employees, leaving a need uncovered.

To add another facet to the debate, a California court ruled that a Catholic social service agency was not exempt as a religious employer from providing contraceptive coverage for its employees under California state law in Catholic Charities of Sacramento v. The Superior Court of Sacramento County, C037025, 2001 Cal. App. Lexis 515 (July 2, 2001).

Catholic Charities provides social services to the community. Its health insurance plan offered coverage for prescription drugs, but not contraceptives. The organization asserted that to offer contraceptive coverage was contrary to its religious beliefs and in violation of its religious freedom guarantees within the U.S. and California Constitutions.

The court noted that "religious employers" are narrowly defined by satisfying four specific criteria under California law:

The inculcation of religious values is the purpose of the entity.

The entity primarily employs persons who share the religious tenets of the entity.

The entity serves primarily persons who share the religious tenets of the entity.

The entity is a nonprofit organization pursuant to a specific section of the Internal Revenue Code.

Because Catholic Charities did not meet any of the four criteria, it did not qualify for the religious employer exemption to the statutory contraceptive coverage requirement.

Californias statute was not enacted to inhibit religion, but the court said that "excluding prescription contraceptive methods from the prescription drug coverage of employee health insurance discriminates against women by excluding items essential to the medical needs of women during their reproductive years."

As indicated by these recent decisions, Title VII requires employers to recognize the differences between men and women and to provide equally comprehensive coverage. Additional benefits, and expense may be necessary to cover women-only healthcare needs. These measures might ultimately prove to be less costly than lengthy sex discrimination court battles.

Susan Massmann is a staff writer for the FC&S Bulletins, published by the National Underwriter Company in Erlanger, Ky. The editors welcome comment and questions and may be reached by fax at 859-692-2237 or via e-mail at FCS@NUCO.COM.

Reproduced from National Underwriter Property & Casualty/Risk & Benefits Management Edition, September 10, 2001. Copyright 2001 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.

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