Discrimination in Design of an Rx Drug Insurance Program?

Issue of the Case

All female employees of the UnionPacific Railroad Co filed suit against theiremployer claiming that failure to includecoverage for contraceptives in the healthinsurance benefit plan was discriminatoryand violated Title VII of the Civil Rights Actof 1964 as amended by the PregnancyDiscrimination Act of 1978. Members ofthe class of employees filing this classaction lawsuit were female employeeswho were enrolled in the employer'shealth insurance plan as a fringe benefitand who used prescription contraceptivesat least in part to prevent pregnancy. Thecore allegation was that the selectiveexclusion of the FDA-approved prescriptioncontraceptives was discriminatoryaction by the employer.

Facts of the Case

The Union Pacific Railroad had about48,000 employees, approximately 1300women who were covered by the collectivebargaining agreement that led to thefringe benefit offering. Of that number, itwas estimated that about 450 femaleemployees were of childbearing age.

In fact, the employer offered 5 differenthealth insurance benefit plans to itsmale and female employees. Those planscovered a variety of prescription medicationproducts that the plaintiffs viewedas "preventive" —blood pressure andcholesterol-lowering drugs, hormonereplacement therapy, immunizations,etc. Moreover, the plans covered servicesthat could be classified as preventive,such as routine physicals, cancer screeningtests, smoking cessation programs,and dental examinations and cleanings.

The fringe benefit plans did excludefrom coverage or provide for limitationson coverage for fertility, infertility, and familyplanning services. Sterilization proceduresand procedures to facilitate pregnancywere excluded, as was coveragefor prescription contraception to preventpregnancy. The court did note that "all 6available methods of prescription contraceptionare used exclusively bywomen"—oral contraceptive tablets,intrauterine devices, Depo-Provera injections,barrier methods such as adiaphragm or cervical cap, contraceptivepatches, and the contraceptive ring. Thebenefit plans would provide coverage forprescription contraceptives only if prescribedfor "noncontraceptive purposes."

The Court's Ruling

The court granted summary judgment,meaning that it ruled in favor of the plaintiffs/employees without conducting afully developed trial process. The courtconcluded that the insurance plans didviolate the federal statute in question,"because they treat medical carewomen need to prevent pregnancy lessfavorably than it treats medical careneeded to prevent other medical conditionsthat are no greater threat toemployees' health than is pregnancy."

The Court's Reasoning

The court started by looking at thePregnancy Discrimination Act of 1978,the statute relied on by the womenemployees. It is part of the Civil RightsAct of 1964, a statute that prohibitsemployment discrimination based oncolor, national origin, race, religion, andsex. The judge concluded that the statuteapplies to women affected by pregnancy,as well as to women who are indeedpregnant. As a result, the insuranceplans challenged in this case must treatthe risk of pregnancy no less favorablythan the health plans treat other similarhealth risks. The employer's health planscover a number of other products andservices designed to prevent adversehealth events and consequences, anapproach the judge referred to as "comprehensive."To exclude coverage forprescription contraceptives violates TitleVII of the Civil Rights Act of 1964 asamended by the Pregnancy DiscriminationAct of 1978.

The defendant/employer unsuccessfullyargued that providing coverage forthese gender-specific medications wouldincrease the cost of health insurance.The judge conceded that this might infact be true but that this argument wastrumped by the provisions of the federalstatutes in question. Attorneys for therailroad also advanced the innovativeargument that the "imminent" developmentof male contraceptives available byprescription would eliminate the basisfor this suit—discrimination on the basisof sex. The judge rejected that argumentas well, observing that "the exclusion ofcoverage for prescription contraceptivesfor men and women would still affectonly the health of women." Consequently,the net effect would still bediscriminatory.

Interestingly, the judge went on toacknowledge that health benefit policyinclusion and exclusion decisions by theemployer to deny coverage for fertilitytreatments or sterilization procedurescould apply equally to both male andfemale employees and not violate thestatutes in question here. Yet, plan structuresor policies that deny coverage forcontraceptives affect only the health ofwomen, regardless of whether contraceptionmedication for men is available.

Dr. Fink is professor of pharmacylaw and policy at theUniversity of KentuckyCollege of Pharmacy,Lexington.