Equitable Prescription Drug Coverage: Preventing Sex Discrimination in Employer-Provided Health Plans

• Author: Stephen F. Befort; Elizabeth C. Borer
• Position: Gray, Plant, Mooty, Mooty, & Bennett Professor of Law, University of Minnesota Law School; J.D. 2009, University of Minnesota Law School; Associate, Best & Flanagan, Minneapolis, Minnesota.
• Pages: 205-236

Page 205

Introduction

Jennifer Erickson spent more than $300 a year out of pocket on birth control pills because her employer excluded contraceptives from its self-insured health plan.¹ Ms. Erickson, a twenty-six year old pharmacist at the Bartell Drug Company, also frequently had to inform her customers that their insurance would not pay for their contraceptive prescriptions either.² She watched as many women simply gave up their prescriptions because they could not afford the out-of-pocket expense.³ Frustrated by the unequal coverage of prescriptions for men and women,⁴ Ms. Erickson turned to Planned Parenthood of Western Washington for help.⁵ Erickson and Planned Parenthood eventually filed a lawsuit against Bartell, alleging violations of Title VII, as amended by the Pregnancy Discrimination Act (PDA).⁶ In the first court ruling on the issue of gender equity in prescription contraceptive drug coverage, a Special thanks to Amy Monahan for her helpful advice on this article. Page 206 federal judge in Seattle held that Bartell discriminated against women by excluding prescription contraceptives from its employee health plan.⁷

Six years later, the Eighth Circuit-the only federal court of appeals to consider the application of the PDA to employer exclusions of insurance coverage for contraception-reached the opposite conclusion in In re Union Pacific Railroad Employment Practices Litigation (Union Pacific) when it held that the lack of contraception coverage in an employee health insurance plan did not violate the PDA.⁸ Emphasizing the purpose of the PDA, the Planned Parenthood attorney who represented the plaintiffs, Roberta Riley, noted: "It's shocking that this court says that contraception isn't related to pregnancy, since if it weren't for pregnancy, contraception wouldn't exist. It's also shocking that the plan covers Rogaine, for men's baldness, and Viagra, for impotence, but not birth control pills."⁹

The Eighth Circuit's Union Pacific opinion is not likely the definitive answer to the question of whether the PDA prohibits employers from excluding prescription contraceptives from otherwise comprehensive health plans. Indeed, federal district courts across the country are currently split as to whether the PDA requires coverage of prescription contraceptives.¹⁰ Over two-thirds of women of child-bearing age in the United States depend on private health insurance, primarily provided through employer- sponsored health plans, for their health care, and nearly half of Page 207 large group plans do not cover prescription contraceptives.¹¹Prescription contraceptives create a considerable expense for millions of American women and their families.¹² Women pay an estimated sixty-three to sixty-eight percent more than men in outof-pocket health care costs,¹³ and the cost of prescription contraceptives represents the largest share of this disparity.¹⁴Accordingly, working women likely will continue to challenge the exclusion of prescription contraception in courts across the country.¹⁵

Meanwhile, twenty-three states have enacted statutes that mandate the inclusion of prescription contraceptives in group health plans.¹⁶ These state mandates, however, have a limited reach due to the effect of preemption under the Employee Retirement Income Security Act (ERISA),¹⁷ which insulates self-insured plans from state regulation.¹⁸ These statutes, in addition, are far from uniform in terms of their requirements.¹⁹

This Article proposes a two-part strategy for expanding the availability of prescription contraceptives in employer-sponsored health plans. First, employers that exclude prescription contraceptives from employee health insurance plans should be held to violate Title VII, as amended by the PDA. Such a violation occurs because the failure to provide insurance coverage for prescription contraceptives necessarily affects a sex-related medical condition since only women can become pregnant. This Article additionally urges the adoption of an amendment to Page 208 ERISA²⁰-the Equity in Prescription Insurance and Contraceptive Coverage Act (EPICC)-which would mandate all group health plans to include prescription coverage as a matter of federal law. Such an enactment would serve to require prescription contraceptive coverage in both insurance-based and self-insured employer health plans.

This Article proceeds in three parts. Part I examines the statutory foundations of Title VII and the PDA. Part II analyzes recent cases considering the legality of contraceptive exclusions from employer-provided health plans and ultimately advocates for judicial adoption of Judge Bye's dissenting opinion from the Eighth Circuit's Union Pacific majority holding. Part III considers mandated health benefit legislation and supports the adoption of the proposed federal EPICC legislation, which would require comprehensive employer health plans to cover prescription contraceptives.

I Statutory Protections: Title Vii And The Pregnancy Discrimination Act

In 1964, Congress passed Title VII of the Civil Rights Act, prohibiting employment discrimination based on race, color, national origin, religion, and sex.²¹ The inclusion of sex discrimination in the Act was an eleventh-hour addition.²² While legislators debated the bill on the House floor, Howard W. Smith of Virginia, a devoted opponent of civil rights legislation, proposed to add the word "sex" to the bill in order "to prevent discrimination against another minority group, the women."²³ Representative Smith's suggestion stimulated several hours of laughter-filled debate, later enshrined as "Ladies Day in the House," before the amendment passed by a vote of 168 to 133.²⁴

A sweeping remedial response to the problems of employment discrimination in the United States, the Civil Rights Act also Page 209 established the Equal Employment Opportunity Commission (EEOC) as an administrative enforcement body.²⁵ Charged with investigating claims of discrimination made under Title VII,²⁶ the EEOC also has the authority to sue employers allegedly engaged in discriminatory conduct²⁷ and to provide interpretative guidance on Title VII.²⁸ Initially, the EEOC refused to enforce Title VII claims of sex discrimination because the agency considered the inclusion of "sex" in the Act a "fluke."²⁹ Nevertheless, one-third of the complaints filed with the EEOC during its first year charged sex discrimination,³⁰ and the widespread problem of gender discrimination in the workplace could no longer be ignored. In 2008, more than 28,000 charges of sex-based discrimination were filed with the EEOC.³¹

A Discrimination Based on Pregnancy, Motherhood, and Childcare

Title VII prohibits an employer from discriminating against any individual with respect to "compensation, terms, conditions, or privileges of employment, because of such individual's . . . sex."³²Early Title VII cases invalidated state laws prohibiting women from employment in certain jobs.³³ Courts later used Title VII to establish sexual harassment as sex-based discrimination in the workplace.³⁴ Recognizing pregnancy discrimination as a form of sex discrimination proved more challenging for working women.

In a significant step toward remedying discrimination based on pregnancy and motherhood, the United States Supreme Court Page 210 recognized the viability of "sex-plus" claims.³⁵ Sex-plus claims recognize discrimination against women who are treated disparately, not only because of gender, but also because of an additional characteristic such as weight or marital status.³⁶ In Phillips v. Martin Marietta Corp., the Supreme Court held that treating mothers with pre-school aged children differently than fathers, without proof of a bona fide occupational qualification, constituted sex discrimination in violation of Title VII.³⁷

Despite the recognition of some sex-plus claims, the Court initially held that pregnancy discrimination was not based on sex. In Gedulig v. Aiello, six Justices ruled that California's failure to insure the risk of disability from normal pregnancy did not constitute discrimination in violation of the Equal Protection Clause.³⁸ Specifically, the Court noted that even though only women can become pregnant, the exclusion of pregnancy from disability-benefits coverage was not discrimination based on sex.³⁹The Court reaffirmed the logic of the Gedulig holding in General Elec. Co. v. Gilbert (Gilbert).⁴⁰ In Gilbert, the Court held that an employer's failure to cover pregnancy-related disabilities under its disability benefits plan did not violate Title VII absent any indication that the exclusion of pregnancy disability benefits was a pretext for discriminating against women.⁴¹ The Supreme Court's decision rejected EEOC guidelines and the unanimous conclusion of all six federal courts of appeals that had addressed the issue⁴² on Page 211 the grounds that General Electric's policy covered the same illnesses and conditions for both men and women. According...