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March 17, 2003 APPELLATE
DECISION IN CASE CONCERNING
A federal appeals court has concluded that a self-insured group health
plan that excludes certain infertility treatment does not violate either
the federal pregnancy nondiscrimination law or constitute illegal sex
discrimination under the federal civil rights law. In a ruling issued
on January 15, 2003, in a case called Saks v. Franklin Covey Co.,
316 F. 3d 337 (2nd Cir. 2003), the Court of Appeals for the
Second Circuit considered an exclusion in Franklin Covey's group health
plan (the Plan) for treatment of surgical impregnation procedures, including
artificial insemination, in-vitro fertilization or embryo and fetal
implants. The Plan did cover other infertility products and procedures
(for both men and women) including oral fertility drugs and penile prosthetic
treatments.
The plaintiff in the case argued that the plan violated the Pregnancy
Discrimination Act (PDA) because the Plan's benefits for infertility
treatment were inferior to its coverage of non-pregnancy-related illnesses.
In addition, she argued that the Plan discriminated on the basis of
sex because it provided incomplete coverage for surgical treatments
that address female infertility but provided complete coverage for surgical
procedures that remedy male infertility.
The court rejected both claims. First, the court held that infertility
alone is not a condition that is unique to women, and, therefore, is
not subject (at least in this particular case) to special protection
under the PDA. Thus, the existence of limited coverage for infertility
treatment alone would not violate the PDA.
Second, the court stated that the exclusion did not constitute sex
discrimination under Title VII of the Civil Rights Act of 1964 because
the Plan exclusion affects a procedure that is used to treat both male
and female infertility (which, the court says, occurs at similar rates
across genders). The court reasoned that, although the impregnation
procedures are performed only on women, the need for the procedure "may
be traced to male, female, or couple infertility with equal frequency."
Also, treatment by surgical impregnation requires the participation
of both male and female partners. The court concluded that because the
exclusion disadvantaged both men and women equally there was no sex
discrimination. The court distinguished this from the EEOC's position
on a plan exclusion for prescription contraceptive drugs and devices.
A 2000 EEOC ruling concluded that an exclusion for oral contraceptives
and certain contraceptive devices violated PDA and Title VII because
the drugs and devices are used by women only. By contrast, the court
in the Saks case stated that the surgical impregnation exclusion
for infertility limits the coverage available to both infertile men
and infertile women, and thus does not violate Title VII.
Legal Impact
of the Decision
Note that the holding
in this case only governs those plans in the Second Circuit. The Second
Circuit covers Connecticut, New York The case did not
discuss whether the exclusion would violate the American with Disabilities
Act (ADA). A lower court had evaluated this question in this same case
and concluded that although infertility could be a disability, the exclusion
applied to both disabled and nondisabled individuals equally. As a result
there was no ADA violation.
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