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Northwest OH Legal Blog

Monday, March 9, 2015

Equal Employment Opportunity Commission Issues - Guidance on Pregnancy-Related Benefits

On July 14, 2014, the Equal Employment Opportunity Commission (“EEOC”) issued new enforcement guidance pertaining to pregnancy-related benefits under a group health care plan.  The new guidance appears in an updated chapter of the EEOC’s enforcement manual and a related set of questions and answers.  Covering developments from the past 30 years, the guidance discusses the requirements of the Pregnancy Discrimination Act and, of particular import, also addresses the application of the Americans with Disabilities Act to pregnancy-related impairments.

Summary.  The new guidance explains when an employer’s policies affecting pregnant employees might violate federal law.  Among other topics, the guidance addresses the rights of pregnant employees under employer health care plans, fringe benefit programs, and other benefit plans.

The guidance emphasizes that employers offering group health care coverage must—

  • include coverage of pregnancy, childbirth, and related medical conditions, and
  • apply the same terms to pregnancy-related costs that they apply to other costs.

An express exception in the Pregnancy Discrimination Act permits employers to refuse to cover the cost of abortions, except in cases in which the life of the mother would be endangered by a full-term pregnancy.  To the extent that medical complications arise from an abortion, however, the group health care plan must cover the cost of treating the complications.

Prescription Contraceptives.  The new guidance also confirms that the Pregnancy Discrimination Act requires group health plans to cover prescription contraceptives to the same extent that the plans cover prescription drugs, devices, and services designed to prevent medical conditions other than pregnancy.  The guidance acknowledges that employers with religious objections to contraceptives may fall within statutory or constitutional exceptions.  It does not explain, however, to what extent these exceptions apply under the Pregnancy Discrimination Act.  In Burwell v. Hobby Lobby Stores, Inc., the United States Supreme Court ruled that the Patient Protection and Affordable Care Act’s contraceptive mandate violated the Religious Freedom Restoration Act as applied to closely held, family for-profit corporations whose owners had religious objections to providing certain types of contraceptives.

The new EEOC guidance on contraceptive coverage is consistent with the position that the EEOC has taken in individual enforcement actions against employers.  The issue concerning mandatory contraceptive coverage in health care plans has been litigated in federal and state courts, with mixed results.  Although the Patient Protection and Affordable Care Act (“ACA”) has largely resolved the issue by requiring non-grandfathered group health care plans to cover most contraceptive methods and services as a form of preventive care, the guidance does not specifically address its impact on plans that are grandfathered under the ACA and thus exempt from the ACA’s preventive-care mandate.

Some commentators have taken the position that because the Employee Retirement Income Security Act of 1974 (“ERISA”) does not preempt other federal laws relating to employee benefit plans, laws like the Pregnancy Discrimination Act that, in accordance with Title VII of the Civil Rights Act of 1964, provide employees with protection from pregnancy-based discrimination would not be preempted by ERISA.  Accordingly, any guidance issued by the EEOC on pregnancy-based discrimination under the Pregnancy Discrimination Act would apply to all self-funded ERISA-governed health care plans, whether grandfathered or non-grandfathered.

Key Takeaways.  Plans that offer prescription benefits should be reviewed to determine whether the benefits that are offered under the plan are consistent with the new EEOC guidance.  In particular, the plan’s prescription drug program should be reviewed to determine whether prescription contraceptives are covered to the same extent as prescription drugs, devices, and services that are used to prevent the occurrence of medical conditions other than pregnancy.


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