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EEOC Fires Shot At Hobby Lobby Ruling


EEOC Fires Shot At Hobby Lobby Ruling

Hot on the heels of the United States Supreme Court’s landmark ruling in Hobby Lobby, new guidelines issued by the EEOC caution employers against dropping contraceptives from employee health insurance plans or risk facing liability under Title VII of the Civil Rights Act for gender discrimination. 

In June, in Burwell v. Hobby Lobby Stores, the United States Supreme Court ruled that the Religious Freedom Restoration Act (RFRA) protects closely held corporations from being compelled by the Affordable Care Act to provide certain forms of contraceptive coverage to its employees, if such coverage violates the owners’ sincerely held religious beliefs.  The following day, the Supreme Court issued rulings that suggested that the right not to provide contraceptive services extends beyond the specific methods at issue in the Hobby Lobby decision.  In the wake of these rulings, the question of whether employers will eliminate all contraceptive coverage from the insurance plans offered to their employees remains to be seen.  

On July 14, 2014, the EEOC issued new enforcement guidance on pregnancy discrimination for the first time in over thirty years.  The new guidance includes a sweeping expansion of employer obligations relating to pregnant workers, as well as past-pregnant workers, potentially-pregnant workers, and caretakers of infants.  The guidance also provides protection for women using contraception, including a statement that an employer cannot discharge an employee because she does or does not use contraception. 

In a step further, the EEOC went on to take a direct shot at the Hobby Lobby ruling by stating that an employer who fails to provide prescription contraceptives, while providing a full range of coverage for preventive care, would be in violation of Title VII on the basis of gender discrimination.  The guidelines state in relevant part:  

Employers can violate Title VII by providing health insurance that excludes coverage of prescription contraceptives, whether the contraceptives are prescribed for birth control or for medical purposes.  Because prescription contraceptives are available only for women, a health insurance plan facially discriminates against women on the basis of gender if it excludes prescription contraception but otherwise provides comprehensive coverage.  To comply with Title VII, an employer’s health insurance plan must cover prescription contraceptives on the same basis as prescription drugs, devices, and serves that are used to prevent the occurrence of medical conditions other than pregnancy.  For example, if an employer’s health insurance plan covers preventive care for medical conditions other than pregnancy, such as vaccinations, physical examinations, prescription drugs that prevent high blood pressure or to lower cholesterol levels, and/or preventive dental care, then prescription contraceptives also must be covered. 

EEOC Enforcement Guidance on Pregnancy Discrimination and Related Issues, http://www.eeoc.gov/laws/guidance/pregnancy_guidance.cfm, at § I(A)(3)(d). 

The EEOC’s message is clear:  removal of contraceptive coverage from employee insurance plans will place employers at risk of complaints of gender discrimination.  While these guidelines are not “binding” on the courts, they do reveal the EEOC’s approach to such claims and perhaps telegraph a heightened sensitivity to issues relating to contraceptive coverage by the EEOC in the wake of the Hobby Lobby ruling.  It is safe to say that this is not the last we have heard on the contraceptive coverage issue.  The question of whether the RFRA protects employers from complying with Title VII’s laws relating to discrimination on the basis of gender is yet to be decided.  Nonetheless, the new EEOC guidelines suggest, in no uncertain terms, that employers should think carefully before removing all contraceptive coverage from employee health plans.