/publications/issue/2006/2006-08/2006-08-5809

Discrimination in Design of an Rx Drug Insurance Program?

Author: Joseph L. Fink III, BSPharm, JD

Issue of the Case

All female employees of the Union Pacific Railroad Co filed suit against their employer claiming that failure to include coverage for contraceptives in the health insurance benefit plan was discriminatory and violated Title VII of the Civil Rights Act of 1964 as amended by the Pregnancy Discrimination Act of 1978. Members of the class of employees filing this class action lawsuit were female employees who were enrolled in the employer's health insurance plan as a fringe benefit and who used prescription contraceptives at least in part to prevent pregnancy. The core allegation was that the selective exclusion of the FDA-approved prescription contraceptives was discriminatory action by the employer.

Facts of the Case

The Union Pacific Railroad had about 48,000 employees, approximately 1300 women who were covered by the collective bargaining agreement that led to the fringe benefit offering. Of that number, it was estimated that about 450 female employees were of childbearing age.

In fact, the employer offered 5 different health insurance benefit plans to its male and female employees. Those plans covered a variety of prescription medication products that the plaintiffs viewed as "preventive" —blood pressure and cholesterol-lowering drugs, hormone replacement therapy, immunizations, etc. Moreover, the plans covered services that could be classified as preventive, such as routine physicals, cancer screening tests, smoking cessation programs, and dental examinations and cleanings.

The fringe benefit plans did exclude from coverage or provide for limitations on coverage for fertility, infertility, and family planning services. Sterilization procedures and procedures to facilitate pregnancy were excluded, as was coverage for prescription contraception to prevent pregnancy. The court did note that "all 6 available methods of prescription contraception are used exclusively by women"—oral contraceptive tablets, intrauterine devices, Depo-Provera injections, barrier methods such as a diaphragm or cervical cap, contraceptive patches, and the contraceptive ring. The benefit plans would provide coverage for prescription contraceptives only if prescribed for "noncontraceptive purposes."

The Court's Ruling

The court granted summary judgment, meaning that it ruled in favor of the plaintiffs/ employees without conducting a fully developed trial process. The court concluded that the insurance plans did violate the federal statute in question, "because they treat 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."

The Court's Reasoning

The court started by looking at the Pregnancy Discrimination Act of 1978, the statute relied on by the women employees. It is part of the Civil Rights Act of 1964, a statute that prohibits employment discrimination based on color, national origin, race, religion, and sex. The judge concluded that the statute applies to women affected by pregnancy, as well as to women who are indeed pregnant. As a result, the insurance plans challenged in this case must treat the risk of pregnancy no less favorably than the health plans treat other similar health risks. The employer's health plans cover a number of other products and services designed to prevent adverse health events and consequences, an approach the judge referred to as "comprehensive." To exclude coverage for prescription contraceptives violates Title VII of the Civil Rights Act of 1964 as amended by the Pregnancy Discrimination Act of 1978.

The defendant/employer unsuccessfully argued that providing coverage for these gender-specific medications would increase the cost of health insurance. The judge conceded that this might in fact be true but that this argument was trumped by the provisions of the federal statutes in question. Attorneys for the railroad also advanced the innovative argument that the "imminent" development of male contraceptives available by prescription would eliminate the basis for this suit—discrimination on the basis of sex. The judge rejected that argument as well, observing that "the exclusion of coverage for prescription contraceptives for men and women would still affect only the health of women." Consequently, the net effect would still be discriminatory.

Interestingly, the judge went on to acknowledge that health benefit policy inclusion and exclusion decisions by the employer to deny coverage for fertility treatments or sterilization procedures could apply equally to both male and female employees and not violate the statutes in question here. Yet, plan structures or policies that deny coverage for contraceptives affect only the health of women, regardless of whether contraception medication for men is available.

Dr. Fink is professor of pharmacy law and policy at the University of Kentucky College of Pharmacy, Lexington.