On July 14, 2014, the EEOC issued new Enforcement Guidance on Pregnancy Discrimination and Related Issues.  The immediately-effective Guidance sets forth the EEOC’s policies with regard to its enforcement of pregnancy-based employment discrimination prohibitions under Title VII — as clarified by the Pregnancy Discrimination Act of 1978 — and other federal laws.

With regard to contraception, the Guidance provides that employers violate Title VII by providing health insurance that excludes coverage for prescription contraceptives, whether the contraceptives are provided for birth control or medical purposes.   

The Guidance further explains that, in order to comply with Title VII, employer provided health plans must cover prescription contraceptives on the same basis as other prescription drugs, devices and services that are used to prevent the occurrence of medical conditions other than pregnancy:  if an employer provided health plan covers preventive care for vaccinations, physical examinations and prescription drugs to prevent high blood pressure or to lower cholesterol levels, then prescription contraceptives must also be covered.

The Guidance noted that Title VII makes it clear that employer provided health plans are not required to provide coverage for abortions except where the life of the mother would be endangered if the fetus were carried to term or where medical complications have arisen from an abortion. 

Hobby Lobby

In Burwell v. Hobby Lobby Stores, Inc., owners of a closely-held for-profit corporation objected to including certain Affordable Care Act (ACA)-mandated contraception — including IUDs, Plan B and Ella — based on their view that those contraceptive methods caused very early term abortions, by precluding the fertilize egg from implanting in the uterus.  Abortion, in turn, violated the Hobby Lobby owners’ religious beliefs.  The Supreme Court ruled that the ACA contraception mandate violated the Religious Freedom Restoration Act (RFRA) as applied to closely-held for-profit corporations whose owners had religious objections to providing certain types of contraception. 

The EEOC’s Q & A concerning the Guidance contained the caveat that the Guidance did not address whether certain employers might be exempt from Title VII’s requirements under the RFRA or First Amendment of the Constitution.  Certainly, one can expect this question to be addressed by the courts.  Although there is no way of knowing, it is difficult to imagine how a court could distinguish Hobby Lobby in a challenge to the Guidance’s rules around contraception — especially contraceptive methods that an employer equates to abortion –, particularly in light of Title VII’s existing exception for abortion coverage.

In addition, the Guidance did not address the impact on other employers who are currently exempt from existing contraception requirements — such as those employers who maintain plans that are grandfathered under the ACA.

Key Take Away:  The Guidance would seem to open the door for employees to submit to the EEOC’s administrative review process complaints of Title VII discrimination based on an employer provided plan’s failure to include requisite contraceptive coverage.  How the Guidance will be applied to employers who are currently exempt from existing contraception requirements — and what the challenges to any such enforcement might be — remains to be seen.

Also, please see our Disability, Leave & Health Management blog for an employment law analysis of the Guidance.

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Photo of Melissa Ostrower Melissa Ostrower

Melissa Ostrower is a principal in the New York City, New York, office of Jackson Lewis P.C. and co-leader of the firm’s Employee Benefits practice group. She counsels clients in a broad range of employee benefit matters, including general compliance and administration of…

Melissa Ostrower is a principal in the New York City, New York, office of Jackson Lewis P.C. and co-leader of the firm’s Employee Benefits practice group. She counsels clients in a broad range of employee benefit matters, including general compliance and administration of qualified retirement plans and nonqualified retirement plans.

Melissa assists clients with welfare plan issues involving cafeteria plans, health plans, flexible spending accounts, COBRA and the Affordable Care Act. She regularly speaks on all benefits issues including federal health care reform, fiduciary compliance and executive compensation.

Melissa regularly advises on executive compensation matters, including issues related to compliance with Section 409A, 162(m) and 280G of the Internal Revenue Code.

Melissa represents clients in connection with Internal Revenue Service and the Department of Labor audits and information requests. She also regularly assists clients in fixing plan operational and document errors. Melissa negotiates with benefits providers, volume submitter and prototype vendors, TPAs, insurers and auditors.

Melissa also advises clients in connection with phantom and equity based compensation arrangements.

Photo of Stephanie O. Zorn Stephanie O. Zorn

Stephanie O. Zorn is a principal in the St. Louis, Missouri, office of Jackson Lewis P.C.

Stephanie has over twenty years of experience representing management in employee benefits and employment matters, both as in-house counsel and in private practice.

Stephanie is co-lead of…

Stephanie O. Zorn is a principal in the St. Louis, Missouri, office of Jackson Lewis P.C.

Stephanie has over twenty years of experience representing management in employee benefits and employment matters, both as in-house counsel and in private practice.

Stephanie is co-lead of the firm’s Transactional Services group and spends a substantial amount of her practice assisting clients with the employment and employee benefits matters implicated in mergers and acquisitions, with a special focus on clients in the private equity, technology, consumer goods, manufacturing and healthcare sectors. Stephanie leads due diligence review, the drafting and negotiation of definitive deal documents, insurer and co-investor interface and closing and post-closing business integrations.

Stephanie’s employee benefits practice includes assisting clients with all aspects of a broad range of plans including retirement plans, health and welfare plans, nonqualified plans, executive compensation plans, severance plans and voluntary early retirement plans. Stephanie also defends plans and plan administrators in disability, group health plan and life insurance claim litigation including ERISA section 502(a)(1)(B) and (a)(3) claims. Stephanie’s practice also includes counseling clients on Internal Revenue Code, ERISA, COBRA, ACA, HIPAA and fiduciary compliance including investment selection, service provider reviews and plan committee issues.

Stephanie’s employment practice consists of counseling employers in connection with discrimination, harassment, disability accommodations, family and medical leave and wage and hour matters. Stephanie also assists clients with reductions in force and reorganizations, noncompete and confidentiality agreements, retention agreements, service provider classification, outsourcing and international labor and employment matters.