The National Women’s Law Center recently filed sex discrimination complaints with the Office for Civil Rights of the Department of Health and Human Services (HHS) against five employers who sponsor health plans and receive federal funding. The complaints allege that the defendants’ health plans are illegally designed not to provide maternity benefits for pregnant dependents. The complaints allege that the exclusion violates Section 1557 of the Affordable Care Act, which prohibits employers who receive any form of federal financial assistance from denying benefits on the basis of sex.
The Affordable Care Act generally requires health plans to extend coverage to adult children up to age 26. In addition, it requires most plans to provide “first dollar” coverage for preventive services (i.e. no co-pay or cost-sharing). The law defines “preventive services” to include preventive screenings for pregnant women (e.g., for smoking and for STDs), but not all maternity services (e.g., hospital and delivery charges). An earlier federal law, the Pregnancy Discrimination Act of 1978, requires employer sponsors of health plans to provide maternity benefits to the extent that plans cover other conditions similar to pregnancy, but does not apply to dependent children (as long as pregnancy-related conditions are excluded for the dependents of male and female employees equally).
The National Women’s Law Center’s legal theory seeks, in effect, to expand the scope of the PDA as to dependent children.
It also runs afoul of the Supreme Court’s reasoning in General Electric Co. v. Gilbert, 429 U.S. 125 (1976). In Gilbert, the Court said that a pregnancy coverage exclusion does not constitute sex discrimination because not all women are (or become) pregnant. Congress later rejected this reasoning when it passed the Pregnancy Discrimination Act.
Employers should pay close attention to how HHS resolves the latest pregnancy benefits controversy.