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ST. LOUISA recent federal appeals court ruling that employers do not have to provide coverage for female contraceptives in their prescription drug plans is unlikely to result in employers dropping the coverage, experts say.
Denial of coverage does not violate federal pregnancy or civil rights laws, the 8th U.S. Circuit Court of Appeals ruled this month in reversing a lower court ruling.
The appeals court, which ruled in favor of Union Pacific Railroad Co. of Omaha, Neb., said the Pregnancy Discrimination Act, which bars health care plan coverage discrimination on the basis of pregnancy, does not apply to contraceptives.
Additionally, the appeals court ruled, the Union Pacific policy did not discriminate against women. Since the railroad's health plans did not provide coverage for any contraceptives, such as birth control pills used by women or condoms used by men, "The coverage provided to women is not less favorable than that provided to men."
As a result, the court concluded, there is no violation of the federal civil rights law that, among other things, bans discrimination on the basis of sex.
The decision--the first time an appeals court has ruled on the issue--is unlikely for several reasons to trigger a wave of employers dropping coverage for prescription contraceptives.
First, coverage for prescription contraceptives has become largely a given--except for organizations with religious objections--with few employers seeing the need to treat prescription contraceptives differently.
"I can't imagine that someone on the basis of this (ruling) would be making any decisions," said Helen Darling, president of the Washington-based National Business Group on Health, adding that providing coverage for contraceptives has become standard among most businesses and that many see coverage as a preventative measure and not as an issue of fairness. "I don't think any employer thinks of it as a civil rights issue."
"A vast majority of employers cover contraceptives," said Usha Ranji, a senior policy analyst with the Menlo Park, Calif.-based Kaiser Family Foundation, which found in a 2005 survey that 89% of employees were enrolled in plans that provide coverage. "It would surprise me to see a reversal of that," Ms. Ranji said.
Additionally, a majority of states have passed measures that require health plans purchased from commercial insurers to provide coverage for contraceptives, while several more states are considering such measures.
At the same time, for competitive reasons, Ms. Darling noted, companies feel they need to provide the coverage to retain employees.
Indeed, Union Pacific began to provide coverage for contraceptives in 2005 and has no plans to reverse that policy, a spokesman said.
Laws and courts aside, covering contraceptives makes fiscal sense for companies, said Ed Fensholt, vp and director of compliance services with Kansas City, Mo.-based Lockton Insurance and Risk Management Specialists.
"Most (companies) cover contraceptives because it's cheaper to do that than cover a pregnancy," said Mr. Fensholt, who added that even self-insured companies provide coverage despite not having to follow state regulations that require employers with health benefits prescription plans to cover contraceptives.
While few current side-by-side comparisons are available, the Guttmacher Institute--a social science research, policy analysis and public education organization with offices in New York and Washington--highlighted one study in a 2003 report that found the annual cost for birth control pills to be about $350 per user vs. the average cost per pregnancy of some $10,000.
The Union Pacific decision comes nearly seven years after the U.S. Equal Employment Opportunity Commission issued an opinion that illegal pregnancy discrimination occurs when an employer's group health insurance plan does not cover prescription contraceptives to the same extent it covers other prescription medications.
Other federal cases have ruled in accordance with the EEOC opinion.
In perhaps the best-known case--which involved Seattle-based Bartell Drug Co.--U.S. District Court Judge Robert Lasnik ruled in 2001 that denial of prescriptive contraceptives discriminated against women.
Excluding a class of prescription drugs used only by women from a generally comprehensive drug plan discriminates against women by providing them with less coverage than is offered to men, Judge Lasnik ruled.
Another federal judge ruled along those same lines in 2003's Cooley, Jackson, Love, and Branham vs. Daimler Chrysler Corp., a similar case in the Eastern District of Missouri in which a group of female employees sued their company claiming discrimination.
Roberta Riley, a Planned Parenthood attorney in Seattle who worked on those cases as well as the one against Union Pacific, said the 8th Circuit Court's recent ruling "appears to be pushing women backwards."
Ms. Riley said a decision on whether to appeal to the U.S. Supreme Court has yet to be made. "The issue is not over; we think the 8th Circuit is wrong."
Brandi Standridge vs. Union Pacific Railroad Co., 8th U.S. Circuit Court of Appeals, No. 06-1706, March 15, 2007.