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Chair Mark C. Bernstein
Michigan Civil Rights Commission
110 West Michigan Avenue, Suite 800
Lansing, MI 48913
January 6, 2006
Dear Chair Bernstein:
We, the undersigned state and national organizations that advocate for women's rights, reproductive rights, civil liberties, and labor rights, are writing to urge the Michigan Civil Rights Commission to issue an interpretation of the Elliott-Larsen Civil Rights Act, Mich. Rev. Stat. Ann. § 37.2202, § 37.2201, finding that an employer's exclusion of prescription contraception from an otherwise comprehensive employee insurance plan is an unlawful employment practice under Michigan law. The Elliott-Larsen Civil Rights Act specifically forbids discrimination in employment on the basis of sex, which is defined to include "pregnancy, childbirth, or a medical condition related to pregnancy or childbirth." Id. Excluding prescription contraception from an employee insurance plan that covers other prescription drugs and devices constitutes sex discrimination in violation of this law. The Commission has the authority to issue such a ruling under Mich. Rev. Stat. Ann. § 37.2601.
The ruling we request is of critical importance to women in Michigan. Unlike 22 other states, [1] Michigan does not have a state law that explicitly requires prescription contraceptives to be covered on the same basis as other prescription drugs.' In addition, although federal law - specifically, Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e-2(a)(1) ("Title VII") - has been interpreted to require employers that offer their employees comprehensive health plans to include prescription contraceptives, many women in Michigan do not receive the benefit of this requirement because they work for employers with fewer than 15 employees, the threshold for Title VII coverage. [2] We believe that the interpretation we seek will protect these women by ensuring that employers are fully aware of their legal obligation under state law to provide contraceptive coverage, and therefore could prove tremendously helpful in bringing about an end to this form of sex discrimination in employment.
Background
Health care professionals consider contraception to be an important component of health care for women and a critical contributor to improved maternal and child health. According to the American College of Obstetricians and Gynecologists, contraception is a medical necessity during 30 years of a woman's lifespan. All FDA-approved prescription contraception is available for use only by women. Thus, where a health benefits plan excludes such coverage, women must either pay the out-of-pocket expenses of purchasing prescription contraception, which can be expensive (hundreds of dollars a year, depending on the form of contraception), or bear all of the health risks associated with unplanned pregnancy, which can be significant.
At the same time, the premium cost to an employer of adding such coverage is, at most, minimal. In fact, when the federal government added contraceptive benefits for its employees, its insurance costs did not change at all. [3] Moreover, studies demonstrate that employers save money through insurance coverage of contraception by eliminating the costs associated with unplanned pregnancies. For example, the National Business Group on Health ("NBGH"), an organization representing 160 large national and multinational employers, has estimated that failing to provide contraceptive coverage could cost an employer 15-17% more than providing it. See Rowena Bonoan & Juliana Gonen, "Promoting Healthy Pregnancies: Counseling and Contraception as the First Step," Family Health in Brief 3 (Washington Business Group on Health: Washington, D.C., 2000). According to NBGH, this is because any premium cost associated with including contraception in employees' insurance coverage is more than offset by avoiding the direct and indirect costs related to childbirth (including costs associated with employee absences, maternity leave, employee replacement, and reduced employee productivity), which can be among the highest cost drivers of an employer's health care expenditures. Id. In fact, when the federal government added prescription contraceptives to the Federal Employee Health Benefits Program (FEHBP), it found that this caused no increase in the government's premium cost. For more information about these and other studies documenting the cost benefits of covering contraceptives, see National Women's Law Center, Contraceptive Coverage Saves Money (2004), available at http://www.nwlc.org/pdf/ContraceptiveCoverageSavesMoneyJuly2004.pdf (last visited January 5, 2006).
Precedent Under Federal Law
Including prescription contraceptives in an employee benefits plan is not only good policy, it is required by law. It is well settled that it is unlawful under Title VII of the Civil Rights Act of 1964 for an employer to discriminate on the basis of sex with regard to fringe benefits, including health insurance. Moreover, Title VII, as amended by the Pregnancy Discrimination Act of 1978 ("PDA"), specifically provides that Title VII's prohibition against discrimination "on the basis of sex" includes discrimination "on the basis of pregnancy, childbirth, or related medical conditions; and women affected by pregnancy, childbirth, or related medical conditions shall be treated the same for all employment-related purposes, including receipt of benefits under fringe benefit programs, as other persons not so affected but similar in their ability or inability to work . . . ." 42 U.S.C. § 2000e(k). Because the condition that contraception addresses, the potential for pregnancy, is a pregnancy-related condition within the meaning of the PDA, International Union, UAW v. Johnson Controls, Inc., 499 U.S. 187, 199 (1991), singling out prescription contraceptive drugs, devices and/or services for disadvantageous treatment in an employer's health plan is, on its face, a violation of the PDA and of Title VII's basic nondiscrimination principles.
The Equal Employment Opportunity Commission ("EEOC"), the primary Title VII enforcement agency, agrees with this interpretation of Title VII. The EEOC has found that an employer's failure to provide insurance coverage for prescription contraceptive drugs and devices, when other prescription drugs and devices are covered, constitutes unlawful sex discrimination under the PDA. Specifically, the EEOC has held that to avoid violating Title VII, employers must (1) cover the expenses of prescription contraception to the same extent, and on the same terms, that they cover the expenses of other drugs, devices, and preventive care; (2) offer the same coverage for contraception-related outpatient services as is offered for other outpatient services; and (3) cover the full range of prescription contraceptive choices in each of the health plans offered to employees. See Commission Decision, http://www.eeoc.gov/docs/decision-contraception.html (copy enclosed for your convenience).
In addition, two federal district courts have confirmed the correctness of this interpretation of Title VII. First, the United States District Court for the Western District of Washington ruled that an employer was violating Title VII by failing to provide insurance coverage for contraception in an employee health plan that covered other prescription drugs and devices. Erickson v. Bartell Drug Company, 141 F. Supp. 2d 1266 (W.D. Wash. 2001). As the Erickson court recognized, the Pregnancy Discrimination Act
is not a begrudging recognition of a limited grant of rights to a strictly defined group of women who happen to be pregnant. Read in the context of Title VII as a whole, it is a broad acknowledgment of the intent of Congress to outlaw any and all discrimination against any and all women in the terms and conditions of their employment, including the benefits an employer provides to its employees. Male and female employees have different sex-based disability and healthcare needs, and the law is no longer blind to the fact that only women can get pregnant, bear children, or use prescription contraception.
Id. at 1272. The court ordered the defendant to cover "each of the available options for prescription contraception to the same extent, and on the same terms, that it covers other drugs, devices and preventative care," as well as related physician visits and outpatient services. Id. at 1277.
More recently, in a class action suit against Union Pacific Railroad for excluding prescription contraception from its employee insurance plan, the United States District Court for the District of Nebraska confirmed the correctness of the Erickson decision, similarly finding that the exclusion of all FDA-approved methods of contraception violates Title VII because it "treats medical care women need to prevent pregnancy less favorably than it treats medical care needed to prevent other medical conditions that are no greater threat to employees' health than is pregnancy." In re Union Pacific Railroad Employment Practices Litigation, 2005 WL 1719664, at *8 (D. Neb. July 22, 2005). Other federal courts that have considered this question have similarly concluded that an employer's exclusion of prescription contraception from an employee insurance plan gives rise to a claim for sex discrimination under Title VII. See, e.g, Cooley v. Daimler Chrysler Corp., 281 F.Supp.2d 979 (E.D. Mo. 2003); Equal Employment Opportunity Comm'n. v. United Parcel Serv., 141 F.Supp.2d 1216 (D. Minn. 2001).
Analysis of Michigan Law
Michigan's Elliott-Larsen Civil Rights Act forbids discrimination in employment, including discrimination in employee benefit plans, on the basis of sex.' As in the federal PDA, "sex" is defined to include "pregnancy, childbirth, or a medical condition related to pregnancy or childbirth." Mich. Rev. Stat. Ann. § 37.2202, § 37.2201. The analysis outlined above that has been adopted with respect to Title VII is equally applicable to Michigan's parallel law. The language defining sex discrimination in both Title VII and in the Elliott-Larsen Civil Rights Act is almost identical. Therefore, just as the EEOC and federal courts have found that excluding the full range of prescription contraception from an employee insurance plan constitutes sex discrimination in violation of Title VII, so too should the Michigan Civil Rights Commission find that this practice constitutes sex discrimination in violation of the Elliott-Larsen Civil Rights Act.[4]
Indeed, the Michigan Supreme Court has recognized that federal law is "analogous" to the Elliott-Larsen Civil Rights Act with respect to discrimination on the basis of pregnancy. Koester v. City of Novi, 458 Mich. 1, 15 (1998). The Court noted that the Michigan legislature amended the Elliott-Larsen Civil Rights Act to define sex discrimination to include pregnancy shortly after Congress amended Title VII by passing the Pregnancy Discrimination Act. Id. Although Koester was subsequently reversed in another case with respect to sexual harassment law, see Hayne v. State, 468 Mich. 302, 321 (2003), this case does not affect the Court's holding in Koester that the Elliot-Larsen Civil Rights Act and Title VII are analogous with respect to pregnancy discrimination. Therefore, Title VII precedent can and should be used to interpret Michigan's law with respect to pregnancy discrimination.
Accordingly, we respectfully request that the Michigan Civil Rights Commission, pursuant to its authority to interpret the Elliott-Larsen Civil Rights Act, find that it is unlawful sex discrimination to exclude the full range of prescription contraception from insurance plans—that is, all FDA-approved prescription contraceptive drugs and devices. Specifically, we ask that the Commission hold, as the EEOC did with respect to employers covered by Title VII, that Michigan employers must (1) cover the expenses of prescription contraception to the same extent, and on the same terms, that they cover the expenses of other drugs, devices, and preventive care; (2) offer the same coverage for contraception-related outpatient services as is offered for other outpatient services; and (3) cover the full range of prescription contraceptive choices in each of the health plans offered to employees.
We appreciate this opportunity to submit our views and look forward to hearing from you. If you have any questions, please contact Kary Moss, Executive Director of the ACLU of Michigan, at (313) 578-6813 or kmoss@aclumich.org.
American Association of University Women of Michigan
American Association of University Women-Grand Rapids Branch
American Civil Liberties Union of Michigan
Grand Rapids Institute for Information Democracy
Greater Kalamazoo Chapter of the National Organization for Women
MARAL Pro-Choice Michigan
Men's Resource Center (based in Grand Rapids)
Metro-Detroit Chapter of the Coalition of Labor Union Women
MI List
Michigan Chapter of the National Association of Social Workers
Michigan Council for Maternal and Child Health
Michigan Conference of the National Organization for Women
Michigan Section of the American College of Obstetricians and Gynecologists
National Council of Jewish Women/Greater Detroit Section
National Family Planning & Reproductive Health Association
National Women's Law Center
Planned Parenthood Advocates of Michigan
Planned Parenthood Centers of West Michigan
Planned Parenthood of East Central Michigan
Planned Parenthood Mid-Michigan Alliance
Planned Parenthood Northern Michigan
Planned Parenthood of South Central Michigan
Progressive Women's Alliance of West Michigan
YWCA of Kalamazoo
Enclosure
[1] For a complete list of states that have enacted contraceptive equity laws, see National Women's Law Center, Contraceptive Equity Laws in Your State: Know Your Rights - Use Your Rights (updated Aug. 2005), available at http://www.nwlc.org/pdf/ConCovGuideAugust2005.pdf.
[2] Over 60% of Michigan employees work in small businesses with fewer than 10 employees, according to the U.S. Small Business Administration's latest data. Office of Advocacy,
[3] When the Federal Employee Health Benefits Program implemented a contraceptive coverage requirement, the Office of Personnel Management (OPM), which administers the program, arranged with the health carriers to adjust the 1999 premiums in 2000 to reflect any increased insurance costs due to the addition of contraceptive coverage. But OPM found that no such adjustment was necessary, and reported that "there was no cost increase due to contraceptive coverage." Letter from Janice R. Lachance, Director, U.S. Office of Personnel Management (Jan. 16, 2001) (on file with the National Women's Law Center).
[4] Please note that Wisconsin's Attorney General reached this conclusion with respect to that state's employment discrimination law. See Letter from Wisconsin Attorney General Peggy A. Lautenschlager to State Senator Gwendolynne Moore, October 17, 2003.
