EEOC rules employers must cover contraceptives.

The U.S. Equal Employment Opportunity Commission (EEOC) has ruled that excluding prescription contraceptives from a health insurance plan constitutes discrimination under Title VII of the Civil Rights Act of 1964, as amended by the Pregnancy Discrimination Act (PDA).

In a claim filed with the commission, a registered nurse worked for an employer that covered the costs of medical treatments and services--such as prescription drugs, vaccinations, and preventive care like Pap smears--under its health insurance plan. The plan also covered Viagra, a drug used to treat erectile dysfunction, for men and surgical sterilization for men and women, but it excluded coverage for prescription contraceptive drugs and devices.

Another registered nurse, working for an employer that used the same health insurance policy, joined the first nurse in alleging that the failure to provide contraceptive coverage was discrimination on the bases of sex and pregnancy.

Federal law requires insurance plans covering federal employees to provide contraceptive coverage, and at least 13 states have passed legislation requiring insurers that cover prescription drugs or devices to cover contraception. However, the Employee Retirement Income Security Act (ERISA) preempts state legislation for self-insured employers, so almost half the employees in a state may not be protected by a state law requiring contraceptive coverage. In addition, state regulations usually apply only to group plans, so individually insured people aren't covered.

So far, no court has addressed whether exclusion of contraception from an employer's insurance plan violates Title VII.

The EEOC, however, decided in December that it does. "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," said EEOC Chair Ida Castro after the decision was released.

Although this formal statement of commission policy doesn't carry the weight of a court ruling, it provides guidance on the issue for companies and courts. In the wake of the EEOC decision, it remains to be seen whether the courts will follow the commission's reasoning, but the decision could potentially affect millions, primarily women, and may lead to legal action, according to commentators.

In the case filed with the EEOC, the commission based its sex discrimination decision on the PDA, which requires equal treatment of women "affected by pregnancy, childbirth, or related medical conditions" in all aspects of employment. It prevents employers from singling out pregnancy or related medical conditions in benefit plans and bars employers from treating pregnant women differently from others who are similarly able--or unable--to work.

In a 1991 U.S. Supreme Court case, the justices reasoned that the fact that women, rather than men, have the ability to become pregnant cannot be used to penalize them in any way, including the terms and conditions of employment. (International Union v. Johnson Controls, 499 U.S. 187, 199,211 (1991).) The justices held that the PDA prohibits discrimination not only on the basis of pregnancy but on the basis of a woman's potential for pregnancy.

Using this logic, the employment commission includes contraception under the act, so that employers cannot discriminate against women who try to control their ability to get pregnant.

The employers argued excluding coverage for prescription contraceptives wasn't sex discrimination, since it didn't explicitly distinguish between men and women. But the commission said, "Prescription contraceptives are available only for women. As a result, respondents' explicit refusal to offer insurance coverage for them is, by definition, a sex-based exclusion. Because 100 percent of the people affected by respondent's policy are members of the same protected group--here, women--respondent's policy need not specifically refer to that group in order to be facially discriminatory."

The employers also argued that the claims are preempted by ERISA. However, the act explicitly exempts federal law from preemption. The commission also found the employers' argument that they excluded contraception for "strictly financial reasons" legally irrelevant, since Congress wrote no cost defense into the PDA.

After the EEOC concluded that the employers violated Title VII, it ruled that the nurses are entitled to be reimbursed for the cost of prescription contraceptives for the applicable back pay period. In the future, the commission said, employers must cover the expenses of the full range of prescription contraceptive choices to the same extent, and on the same terms, that they cover the expenses of other types of drugs, devices, and preventive care.