A panel of judges of the U.S. Court of Appeals for the 8th Circuit has ruled 2-1 that an employer may exclude contraception coverage from its health plan without violating the Pregnancy Discrimination Act.

The ruling came in a case in which unionized female employees sued Union Pacific Railroad Company for discrimination under the Pregnancy Discrimination Act of 1978. The women argued that the company violated the law by excluding prescription contraception from coverage under its healthcare plan. The policy excluded both male and female contraceptive methods, prescription and nonprescription, when used for the sole purpose of contraception.

In reversing a district court's ruling, the appeals court said that the company's policy wasn't discriminatory because it also excluded contraceptive methods that affected men, such as condoms and vasectomies.

"Contraception, like infertility treatments, is a treatment that is only indicated prior to pregnancy because contraception actually prevents pregnancy from occurring. Furthermore, like infertility, contraception is a gender-neutral term. Therefore, Union Pacific's denial of coverage for contraception for both sexes did not discriminate against its female employees in violation of Title VII, as amended by the PDA."

The U.S. Equal Employment Opportunity Commission has interpreted the PDA as requiring employers to cover prescription contraception for women if they cover "other prescription drugs and devices, or other types of services, that are used to prevent the occurrences of other medical conditions."

However, the majority of the panel said it found the EEOC's decision "unpersuasive" in the case before the court.

"The decision addressed a policy that denied coverage of prescription contraception but included coverage of the surgical contraceptive methods of vasectomies and tubal ligations," the panel wrote. "Union Pacific's coverage is different because it excludes coverage of all contraception for women and men, both prescription and surgical. Additionally, the decision compares prescription contraception to the broadest possible spectrum of other preventive treatments and services without citing a persuasive basis for doing so. Furthermore, the EEOC did not issue any guidance on the issue of coverage of prescription contraception until 22 years after the enactment of the PDA. The delay brings into question the consistency and persuasiveness of the EEOC's position."

In a dissenting opinion, Judge Kermit E. Bye agreed with the district court's ruling, saying the appeals court panel should have compared contraceptive coverage and other preventive coverage to see if they are equal, instead of comparing female contraception (prescription contraception) and male contraception (condoms and vasectomies).

"When one looks at the medical effect of Union Pacific's failure to provide insurance coverage for prescription contraception, the inequality of coverage is clear," Bye wrote. "This failure only medically affects females, as they bear all of the health consequences of unplanned pregnancies. An insurance policy providing comprehensive coverage for preventative medical care, including coverage for preventative prescription drugs used exclusively by males, but fails to cover prescription contraception used exclusively by females, can hardly be called equal. It just isn't so."

The U.S. Court of Appeals for the 8th Circuit covers Arkansas, Iowa, Minnesota, Missouri, Nebraska, North Dakota, and South Dakota.

Note: State insurance laws in Arkansas, Iowa, and Missouri require insured group health plans that cover prescription drugs to cover prescription contraceptives on the same basis.

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• Text of Ruling