Who Pays for Minnesota Employee's Infertility Treatments: The EEOC Says Employers Must Provide Infertility Coverage
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Must Employers provide insurance coverage for infertility treatments? Until last April, the answer in Minnesota appeared to
be no. But an April determination letter issued by the U.S. Equal Employment Opportunity Commission (EEOC) ruled that an insurance
plan's exclusion of coverage for medically necessary infertility treatment violates the ADA and the Civil Rights Act, further
confusing an unsettled area of law and complicating employers' decisions about what health insurance benefits to offer employees.
Disability, sex and pregnancy
Rochelle Saks worked in White Plains, N.Y., for Franklin Covey, a store that sells educational and organizational materials and motivational books. Franklin Covey's self-insured health benefits plan explicitly excluded coverage for surgical impregnation procedures, including in vitro fertilization, artificial insemination and injectable drugs that assist conception. Saks began a course of fertility drugs in 1997 and was artificially inseminated with her husband's sperm. She eventually became pregnant but miscarried soon after. Her insurance company denied more than $17,000 in claims out of a total of $20,000, based on the policy's express exclusions.
In late 1998, Saks filed a complaint with the EEOC, charging that the Franklin Covey health plan's failure to provide coverage for infertility treatments was unlawful discrimination under the ADA, which prohibits discrimination based on disability, and under the Civil Rights Act, which prohibits discrimination based on sex and pregnancy.
In a determination issued last April, the EEOC agreed. The EEOC found that Franklin Covey discriminated against Saks based on disability, sex and pregnancy by maintaining a self-insured health benefits plan that excluded virtually all medically necessary treatment for women suffering from infertility. Although the plan did cover the oral medication Saks was prescribed to treat a hormonal imbalance linked to her infertility, the EEOC noted that Franklin Covey's plan provided more extensive infertility treatment benefits for men than it did for women. The EEOC also determined that the plan adversely affected a class of individuals suffering from infertility.
Not uncommon
Infertility is a relatively common medical condition. The American Society for Reproductive Medicine estimates that about 10 percent of the reproductive-age population suffers from infertility - approximately six million couples. Treatments range in price and complexity from injectable drugs that stimulate ovulation to artificial insemination to in vitro fertilization. According to the American College of Obstetricians and Gynecologists, success rates for infertility treatment vary from 14 percent to 25 percent. Treatment can be expensive. Resolve, an infertility advocacy group, estimates that one course of in vitro fertilization treatment usually costs between $8,000 and $10,000. Successive attempts at high-tech procedures can cost more than $100,000.
Because of the high cost of treatment and the increasing number of claims, some insurers have ceased providing some infertility coverage. Aetna U.S. Healthcare, the nation's largest health insurer and one of the few carriers that offered infertility treatment coverage, announced last year that it would no longer offer coverage for in vitro fertilization and other advanced reproductive technologies in its basic benefits package.
The law regarding health insurance coverage of infertility treatment is a crazy quilt of state insurance statutes, federal anti-discrimination laws and court decisions interpreting both. Currently, 13 states - not Minnesota - have some sort of law governing coverage of infertility treatments. The more comprehensive of those laws mandate that health insurance plans cover the treatments. Others require only that plans offer employers the option of purchasing infertility coverage as part of their insurance plans but contain no requirement that employers must in fact provide the infertility coverage. The state laws do not affect employers who self-insure, because self-insured plans are governed by federal law under ERISA. But there were two federal bills introduced in the House of Representatives in August that mandated insurance coverage of infertility services. The bills represent legislative thinking that may eventually present complications for employers who self-insure. One bill was to apply to all insurance plans; the other, only to plans covering federal employees.
The courts
The status of judicial interpretation of federal anti-discrimination laws, such as the ADA and the Civil Rights Act, and their applicability to health insurance coverage for infertility treatment is even less certain. In Krauel vs. Iowa Methodist Medical Center, a 1996 federal appeals court decision that applies to Minnesota, the court held that an employer's failure to offer health insurance coverage for infertility treatments is not a violation of the ADA or the Civil Rights Act. The court concluded that infertility is not a disability as defined by the ADA, because infertility did not affect the employee's ability to perform her job as a respiratory therapist. Therefore, the employer's business decision not to provide insurance coverage for infertility treatment was not discrimination based on disability and did not violate the ADA.
But the U.S. Supreme Court recently concluded that impairment of a person's reproductive capability is a disability for the purposes of the ADA. The Supreme Court's decision did not address infertility per se but rather, nonsymptomatic HIV and its consequences for reproduction. Nevertheless, the Supreme Court's conclusion that impairment of the ability to reproduce is a disability casts doubt on the Krauel decision, which was based on the conclusion that infertility is not a disability. At the very least, the Supreme Court decision and the new EEOC determination will likely impel Minnesota employees to challenge the Krauel case and argue that it is no longer good law.
Employees seeking to challenge employers' failure to offer insurance coverage for infertility treatments also will look to plaintiffs' success in other jurisdictions. An employee of the city of Chicago sued the city after it denied reimbursement for the in vitro fertilization treatments that led to the birth of her two children. The federal court ruled that the employee's infertility was a disability under the ADA. Soon after the court issued that ruling, the city settled with a class of city employees who had been denied coverage of infertility treatments. The city paid $1.5 million to the class members and changed its self-insured health plan to cover all employees who required specified infertility treatments. Other courts have concluded that because infertility is a disability under the ADA, an employer is prohibited from demoting or terminating an employee who has missed work in order to go to medical appointments for infertility treatments.
There is no doubt that if courts adopt the EEOC's reasoning and require employers to provide health plans with coverage for infertility treatment, employers' costs will increase. The critical question is, How much? In several states that have passed laws requiring such coverage, studies indicate that the costs per member are between $0.25 and $3.00 per year. A study in Massachusetts, based on the state's actual experience in requiring such coverage, found that the additional cost of infertility coverage was $1.71 per member per year. The additional cost per policy of adding coverage for infertility treatment may be outweighed by avoiding potential litigation costs in this unsettled area of the law.
Susan E. Oliphant, J.D., a partner with Minneapolis-based Maslon Edelman Borman & Brand, conducts employment litigation and practices in medical ethics and related areas.
Laura E. Walvoord J.D. is a litigation associate and member of the firm's labor and employment team.
Disability, sex and pregnancy
Rochelle Saks worked in White Plains, N.Y., for Franklin Covey, a store that sells educational and organizational materials and motivational books. Franklin Covey's self-insured health benefits plan explicitly excluded coverage for surgical impregnation procedures, including in vitro fertilization, artificial insemination and injectable drugs that assist conception. Saks began a course of fertility drugs in 1997 and was artificially inseminated with her husband's sperm. She eventually became pregnant but miscarried soon after. Her insurance company denied more than $17,000 in claims out of a total of $20,000, based on the policy's express exclusions.
In late 1998, Saks filed a complaint with the EEOC, charging that the Franklin Covey health plan's failure to provide coverage for infertility treatments was unlawful discrimination under the ADA, which prohibits discrimination based on disability, and under the Civil Rights Act, which prohibits discrimination based on sex and pregnancy.
In a determination issued last April, the EEOC agreed. The EEOC found that Franklin Covey discriminated against Saks based on disability, sex and pregnancy by maintaining a self-insured health benefits plan that excluded virtually all medically necessary treatment for women suffering from infertility. Although the plan did cover the oral medication Saks was prescribed to treat a hormonal imbalance linked to her infertility, the EEOC noted that Franklin Covey's plan provided more extensive infertility treatment benefits for men than it did for women. The EEOC also determined that the plan adversely affected a class of individuals suffering from infertility.
Not uncommon
Infertility is a relatively common medical condition. The American Society for Reproductive Medicine estimates that about 10 percent of the reproductive-age population suffers from infertility - approximately six million couples. Treatments range in price and complexity from injectable drugs that stimulate ovulation to artificial insemination to in vitro fertilization. According to the American College of Obstetricians and Gynecologists, success rates for infertility treatment vary from 14 percent to 25 percent. Treatment can be expensive. Resolve, an infertility advocacy group, estimates that one course of in vitro fertilization treatment usually costs between $8,000 and $10,000. Successive attempts at high-tech procedures can cost more than $100,000.
Because of the high cost of treatment and the increasing number of claims, some insurers have ceased providing some infertility coverage. Aetna U.S. Healthcare, the nation's largest health insurer and one of the few carriers that offered infertility treatment coverage, announced last year that it would no longer offer coverage for in vitro fertilization and other advanced reproductive technologies in its basic benefits package.
The law regarding health insurance coverage of infertility treatment is a crazy quilt of state insurance statutes, federal anti-discrimination laws and court decisions interpreting both. Currently, 13 states - not Minnesota - have some sort of law governing coverage of infertility treatments. The more comprehensive of those laws mandate that health insurance plans cover the treatments. Others require only that plans offer employers the option of purchasing infertility coverage as part of their insurance plans but contain no requirement that employers must in fact provide the infertility coverage. The state laws do not affect employers who self-insure, because self-insured plans are governed by federal law under ERISA. But there were two federal bills introduced in the House of Representatives in August that mandated insurance coverage of infertility services. The bills represent legislative thinking that may eventually present complications for employers who self-insure. One bill was to apply to all insurance plans; the other, only to plans covering federal employees.
The courts
The status of judicial interpretation of federal anti-discrimination laws, such as the ADA and the Civil Rights Act, and their applicability to health insurance coverage for infertility treatment is even less certain. In Krauel vs. Iowa Methodist Medical Center, a 1996 federal appeals court decision that applies to Minnesota, the court held that an employer's failure to offer health insurance coverage for infertility treatments is not a violation of the ADA or the Civil Rights Act. The court concluded that infertility is not a disability as defined by the ADA, because infertility did not affect the employee's ability to perform her job as a respiratory therapist. Therefore, the employer's business decision not to provide insurance coverage for infertility treatment was not discrimination based on disability and did not violate the ADA.
But the U.S. Supreme Court recently concluded that impairment of a person's reproductive capability is a disability for the purposes of the ADA. The Supreme Court's decision did not address infertility per se but rather, nonsymptomatic HIV and its consequences for reproduction. Nevertheless, the Supreme Court's conclusion that impairment of the ability to reproduce is a disability casts doubt on the Krauel decision, which was based on the conclusion that infertility is not a disability. At the very least, the Supreme Court decision and the new EEOC determination will likely impel Minnesota employees to challenge the Krauel case and argue that it is no longer good law.
Employees seeking to challenge employers' failure to offer insurance coverage for infertility treatments also will look to plaintiffs' success in other jurisdictions. An employee of the city of Chicago sued the city after it denied reimbursement for the in vitro fertilization treatments that led to the birth of her two children. The federal court ruled that the employee's infertility was a disability under the ADA. Soon after the court issued that ruling, the city settled with a class of city employees who had been denied coverage of infertility treatments. The city paid $1.5 million to the class members and changed its self-insured health plan to cover all employees who required specified infertility treatments. Other courts have concluded that because infertility is a disability under the ADA, an employer is prohibited from demoting or terminating an employee who has missed work in order to go to medical appointments for infertility treatments.
There is no doubt that if courts adopt the EEOC's reasoning and require employers to provide health plans with coverage for infertility treatment, employers' costs will increase. The critical question is, How much? In several states that have passed laws requiring such coverage, studies indicate that the costs per member are between $0.25 and $3.00 per year. A study in Massachusetts, based on the state's actual experience in requiring such coverage, found that the additional cost of infertility coverage was $1.71 per member per year. The additional cost per policy of adding coverage for infertility treatment may be outweighed by avoiding potential litigation costs in this unsettled area of the law.
Susan E. Oliphant, J.D., a partner with Minneapolis-based Maslon Edelman Borman & Brand, conducts employment litigation and practices in medical ethics and related areas.
Laura E. Walvoord J.D. is a litigation associate and member of the firm's labor and employment team.
© 2000 Maslon Edelman Borman & Brand, LLP
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