The Affordable Care Act continues to cause confusion for employers. The latest concern is whether a healthcare plan that fails to provide maternity coverage for an employee’s dependent daughter runs afoul of the law.
Under the Pregnancy Discrimination Act, the law is clear that employers who provide health insurance are required to treat pregnancy the same as other medical conditions. However, the requirements are less clear when it comes to an employee’s dependent daughter, who under the ACA, may stay on a parent’s insurance until the age of 26.
The National Women's Law Center (NWLC) recently filed discrimination complaints against five institutions that exclude pregnancy coverage from the health insurance benefits provided to their employees’ dependent children. They include Gonzaga University, Auburn University, and the Pennsylvania State System of Higher Education.
The complaints were filed with the U.S. Department of Health and Human Service’s Office of Civil Rights. They allege violations of Section 1557 of the ACA, which prohibits discrimination based on sex, race, color, national origin, age, disability, gender identity, and sex stereotypes in health care programs that receive federal funds.
“When an institution excludes maternity coverage for the female dependent children of its employees, it means that young women on their parents’ plans receive benefits that are less comprehensive than those provided to young adult men,” said Judy Waxman, NWLC Vice-President for Health & Reproductive Rights. “Providing a less favorable set of benefits to employees’ daughters compared to their sons is not only unfair, it is also discrimination on the basis of sex – a violation of Section 1557 of the ACA.”
Despite the strong statements from the NWLC, it is still unclear if failing to provide maternity coverage is discriminatory. This is the first legal challenge to address dependent pregnancy coverage exclusions under Section 1557, and we are in uncharted legal waters. Nonetheless, the consensus among employment attorneys is that the court will have to determine whether the total value of the insurance benefits provided to female dependents is less than that of male dependents after taking the pregnancy exclusions into consideration.
As this test case highlights, many provisions of the ACA will be tested in the coming months. Companies are advised to monitor legal developments and seek the advice of an experienced employment attorney.