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Cutting health insurance costs by declining to cover contraception

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in Discrimination and Harassment,Employee Benefits Program,Human Resources,Maternity Leave Laws

Q. Our company is trying to reduce our medical insurance costs. I have been asked whether we could eliminate coverage for contraceptives. If we provide health care that includes a prescription drug benefit, are we required to provide coverage for contraceptives?

Your question requires us to look at Title VII of the Civil Rights Act, which prohibits sex discrimination, as amended by the Pregnancy Discrimination Act of 1978 (PDA). The PDA amended Title VII to state that:

“[T]he terms ‘because of sex’ or ‘on the basis of sex’ include, but are not limited to, because of or on the basis of pregnancy, childbirth, or related medical conditions; and women affected by pregnancy, childbirth, or related medical conditions shall be treated the same for all employment-related purposes, including receipt of benefits under fringe benefit programs, as other persons not so affected but similar in their ability or inability to work ….” 

The EEOC has issued a decision that excluding contraceptives is illegal because of the PDA—the rationale being that an employer that provides prescription drugs that prevent other diseases cannot exclude pregnancy. The legal discussion seems to be focused on whether contraception is a “related medical condition” to pregnancy, and therefore cannot be treated differently in an employer’s benefit plan.

Federal district courts have split on the issue, some finding that contraceptives are used before pregnancy and also noting that men or women may use contraceptives. One U.S. Court of Appeals (the 8th Circuit, which does not include Michigan) has heard the issue and found that excluding contraceptives does not violate either Title VII or the PDA.

My view is that contraceptives do not have to be included in your drug prescription plan, but this is a controversial subject. There are groups advocating new legislation requiring that contraceptives be included in health care plans. If you are thinking about this change, you will want to make sure you know your actual cost savings and check with your attorney for any changes in the law. 

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