Contraception as an Employee Benefit

ERISA does not mandate that any health care plan provide any level of benefits. Instead, ERISA leaves benefit decisions to the plan sponsor. Does that mean an ERISA plan sponsor can adopt a health plan that provides benefits in a way that arguably discriminates against women? A recent case from the 8th Circuit (covering Arkansas north to the Dakotas) discusses whether an ERISA health plan violates the Pregnancy Discrimination Act (PDA) by excluding coverage for contraception.

In Union Pacific Railroad Employment Practices Litigation, Union Pacific’s plan excluded from coverage “both male and female contraceptive methods, prescription and non-prescription, when used for the sole purpose of contraception." A class of 1500 female plan participants sued, claiming the exclusion violated the PDA. The District Court agreed, finding that the plan violated Title VII, the foundation of federal anti-job discrimination laws, as amended by the PDA. The court reasoned that the plan “treats medical care women need to prevent pregnancy less favorably than it treats medical care needed to prevent other medical conditions that are no greater threat to employees’ health than is pregnancy.” Although no Courts of Appeal had directly addressed this issue, a 2001 decision from a federal court in Washington required a health plan to provide prescription contraceptives to female participants or beneficiaries.

The 8th Circuit reversed the District Court in a 2-1 decision, finding that “contraception” is not “related to” pregnancy for PDA purposes because the two are mutually exclusive: “contraception is not a medical treatment that occurs when or if a woman becomes pregnant; instead, contraception prevents pregnancy from even occurring.”

The dissent argued otherwise:

When one looks at the medical effect of Union Pacific’s failure to provide insurance coverage for prescription contraception, the inequality of coverage is clear. This failure only medically affects females, as they bear all of the health consequences of unplanned pregnancies. An insurance policy providing comprehensive coverage for preventative medical care, including coverage for preventative prescription drugs used exclusively by males, but fails to cover prescription contraception used exclusively by females, can hardly be called equal. It just isn't so.

Expect more decisions on the collision of federal anti-discrimination statutes and ERISA plan benefits in the future. Although an ERISA plan is not subject to state-mandated benefits, it is subject to other federal laws. That provides an opportunity for plaintiff’s attorneys to argue for an expansion of benefits beyond what the plan sponsor intended to offer.