Federal regulatory or judicial enforcement of the PDA is only one means by which discrimination against women seeking coverage for contraceptive services might be addressed. In the 1990s, a growing number of pro-choice women's organizations and individuals have begun to address the problem of insurance coverage for contraception as well. ¹⁵² Employers should be educated to understand that excluding coverage for contraception burdens women and generates financial costs that are significantly greater than those of providing insurance for contraception.

A. State Legislation

In the late 1990s, several states have considered measures to remedy the common problem of insurance plans treating contraceptive services unfavorably. These legislative approaches, debated in California, ¹⁵³ Virginia, ¹⁵⁴ New York, ¹⁵⁵ and Connecticut, ¹⁵⁶ would prohibit insurance plans that treat contraception less favorably than other medical services or prescription drugs. The debates in these states illuminate the substantive issues at stake in considering whether basic health insurance coverage should include payment for contraception. Three arguments have been offered against mandatory equal coverage for contraception.

First, those who oppose legal requirements that treat contraception equally with other physician services and prescription drugs have relied on general arguments opposing laws requiring employers or health insurers to provide coverage for particular benefits. ¹⁵⁷

Second, opponents of state laws requiring equal coverage for contraception further assert that "a mandate would put too great a burden on small businesses." ¹⁵⁸ Given that contraception costs much less than abortion, delivery, or the treatment of newborns, which are typically covered by health insurance, ¹⁵⁹ this cost argument is difficult to understand.

Third, opponents contend that contraceptive coverage would violate the religious freedom of those who believe contraception is immoral. For example, Catholic organizations led opposition to a proposed mandate in California that required equal treatment for prescription contraception, arguing that "religious hospitals and Catholic employers must abide by ethical directives forbidding the use of contraceptive drugs to regulate births." ¹⁶⁰ Most U.S. employers and hospitals, however, do not share religious convictions forbidding the use of contraceptive devices. Even Catholic employers who regard contraception as a sin cannot justify discriminating against women on the basis of pregnancy or contraceptive use. ¹⁶¹

B. ERISA Limitations on State Authority

ERISA ¹⁶² severely limits the traditional power of the states to regulate insurance, prohibit discrimination, and promote health and welfare. One goal of ERISA is to protect employers from conflicting commands of state and federal law. ¹⁶³ ERISA prohibits states from mandating benefits or defining discrimination in self-insured employee benefit plans more broadly than federal law. ¹⁶⁴ In areas where state and federal laws do not conflict, ERISA preserves state authority to regulate insurance. States, therefore, retain significant power to mandate benefits and prohibit insurance discrimination in all health insurance programs other than those of self-insured employee benefit plans covered by ERISA. ¹⁶⁵

Since 1995, the U.S. Supreme Court has interpreted ERISA narrowly to allow states greater flexibility to regulate health insurance plans traditionally within the scope of ERISA. ¹⁶⁶ Despite this new federal recognition of state power to regulate health insurance, this section assumes that ERISA still prohibits states from imposing mandatory benefit requirements or anti-discrimination rules that go beyond what is required by federal law.

C. State Authority to Enforce Title VII

Even though ERISA prohibits states from imposing mandatory benefit requirements or anti-discrimination rules that go beyond what is required by federal law, states continue to play an important role in interpreting and enforcing Title VII. As the enforcer of federal law, a state may-and indeed it must-interpret Title VII as amended by the PDA.

Washington State leads the nation in legislation addressing insurance coverage for contraception. In 1973, prior to the adoption of the Pregnancy Discrimination Act, the state Human Rights Division adopted a rule requiring the following: "Insurance benefits provided by the employer must be equal for male and female employees. For example:

(a) If full health insurance coverage is provided for male employees, then full coverage, including maternity and abortion, must be provided for female employees." ¹⁶⁷ In 1991, Washington voters affirmed this commitment to reproductive choice, adopting Initiative 120, which provides:

(1) Every individual has the fundamental right to choose or refuse birth control;

(2) Every woman has the fundamental right to choose or refuse to have an abortion . . . ;

(3) Except as specifically permitted by [this Act], the state shall not deny or interfere with a woman's fundamental right to choose or refuse to have an abortion; and

(4) The state shall not discriminate against the exercise of these rights in the regulation or provision of benefits, facilities, services, or information. ¹⁶⁸

Insofar as these Washington provisions affirm, clarify, and enforce the requirements of the PDA, they constitute state implementation of federal anti-discrimination requirements and are not preempted by ERISA. But to avoid federal ERISA preemption, Washington lawmakers must act to implement the federal law, and not rely simply on their own local sense of justice.

Shaw v. Delta Air Lines, Inc. ¹⁶⁹ is the central case addressing the relationship between state implementation of Title VII and federal preemption of state laws that relate to employee benefit plans. Shaw arose in 1976 when, two weeks after the U.S. Supreme Court's Gilbert decision holding that Title VII did not prohibit discrimination against pregnant women, ¹⁷⁰ the New York Court of Appeals held that an "employer whose employee benefit plan treats pregnancy differently from other nonoccupational disabilities engages in sex discrimination within the meaning of the [New York] Human Rights Law." ¹⁷¹ Thus, the New York law prohibiting health insurance discrimination against pregnant women came into direct conflict with the U.S. Supreme Court's interpretation of Title VII in Gilbert. While New York was free to apply a concept of discrimination broader than that defined by Title VII to actors other than ERISA plans, the Court in Shaw held that the ERISA preemption prohibited the state from applying the broader law to ERISA plans during the period after the U.S. Supreme Court held in 1976 that Title VII did not prohibit discrimination on the basis of pregnancy and before the effective date of the PDA in 1978. ¹⁷²

In its analysis of this claim, the Court began by recognizing that "[s]tate laws obviously play a significant role in the enforcement of Title VII." ¹⁷³ Title VII expressly preserves state anti-discrimination laws that do not conflict with it. ¹⁷⁴ Moreover, Title VII requires recourse to available state administrative remedies, and the EEOC accords "substantial weight" to state administrative determinations. ¹⁷⁵ Thus, the Shaw Court concluded, "Given the importance of state fair employment laws to the federal enforcement scheme, [federal ERISA] pre-emption of the [state] Human Rights Law would impair Title VII to the extent that the Human Rights Law provides a means of enforcing Title VII's commands." ¹⁷⁶ Therefore, the Court held that ERISA prevented New York from imposing a rule that was flatly inconsistent with Title VII as then interpreted. ¹⁷⁷

At the same time, the Shaw Court recognized that states play a vital role in interpreting and implementing Title VII. In dealing with ERISA plans that may not be subject to state regulation:

Courts and state agencies, rather than considering whether employment practices are unlawful under a broad state law, will have to determine whether they are prohibited by Title VII. If they are not, the state law will be superseded and the agency will lack authority to act. It seems more than likely, however, that state agencies and courts are sufficiently familiar with Title VII to apply it in their adjudicative processes." ¹⁷⁸

The Court here underscores that, under Title VII, state courts and agencies must consider, interpret, and enforce federal Title VII law as well as state anti-discrimination laws. If a practice is not regulated by Title VII, then ERISA precludes the state from regulating it in the context of employee benefit plans. If, however, a practice is prohibited by Title VII, the state may act and state authority is not preempted by ERISA.

The only other case addressing the conflict between anti-discrimination rules and ERISA preemption of state regulation is Champion International Corp. v. Brown.. ¹⁷⁹ In Brown, the Montana Human Rights Commission found that an ERISA employer pension plan violated the Montana age discrimination law, because it gave no credit for service after age sixty-five. ¹⁸⁰ The pension plan challenged by the state regulators in Brown was "in compliance with ERISA provisions and the treasury regulations interpreting them." ¹⁸¹ As in Shaw, federal law specifically addressed the issue, ¹⁸² but the state sought to apply a rule inconsistent with federal law. The Ninth Circuit held that ERISA does not allow states to subject employers to rules that are flatly inconsistent with federal law. ¹⁸³

In relation to contraception, Washington's rules are the most reasonable interpretation of the PDA. Insofar as state rules implement and enforce the federal PDA, they are not preempted by ERISA. This analysis suggests that Washington and other states are free to interpret the federal PDA to prohibit health insurance plans from discriminating against contraception and to apply such an anti-discrimination rule to plans governed by ERISA. Washington's regulation ¹⁸⁴ prohibits plans that disfavor maternity and abortion services, but does not explicitly address the question of coverage for contraception. The Washington Reproductive Privacy Act ¹⁸⁵ prohibits insurance plans that disfavor either birth control or abortion. The analysis offered here suggests that ERISA precludes states from applying these state rules to plans governed by ERISA. Under Title VII, the state Human Rights Commission may interpret Title VII and apply those interpretations to ERISA plans, but may not apply state law that is inconsistent with Title VII to ERISA plans.

Washington's prohibition against insurance plans that do not cover abortion is inconsistent with Title VII and is preempted by ERISA. The federal PDA explicitly authorizes insurance plans to exclude abortion from coverage, ¹⁸⁶ except in narrow circumstances. Under Shaw and Brown, therefore, Washington may not apply its discrimination rules regarding abortion to ERISA plans. In contrast, under the analysis of the PDA in this Article, the Washington prohibition against excluding contraception from coverage would simply be implementing Title VII as amended by the PDA, and would not be preempted by ERISA. ¹⁸⁷

Because ERISA preempts so much of states' traditional authority to regulate the content of benefits provided by employment-based health insurance programs, federal approaches-either through interpretation and enforcement of the existing provisions of Title VII or through new federal legislation-are particularly important.

D. Federal ERISA Amendment

In yet another approach to this issue, in May 1997, a bipartisan coalition of Senators introduced the Equity in Prescription Insurance and Contraceptive Coverage Act of 1997 (EPICC), which would prohibit discrimination against contraception in insurance coverage. ¹⁸⁸ A federal law such as EPICC would avoid ERISA preemption of state efforts to define discrimination or mandate benefits. EPICC is modeled after the Newborns' and Mothers' Health Protection Act, which amended ERISA to require that health insurance plans allow doctors and women to decide how long the woman needs to stay in the hospital following the birth of a child. ¹⁸⁹

From a policy perspective, one could question the wisdom of Congress making health insurance coverage decisions on a condition-by-condition basis. ¹⁹⁰ Moreover, as this Article has argued, the proposed federal regulation may be superfluous in that the PDA already requires coverage of contraception. ¹⁹¹ But as this Article has also pointed out, the PDA's application to insurance coverage for contraception has been widely ignored; an additional federal law clarifying that excluding contraception from insurance coverage may be salutatory. It is not uncommon for Congress to adopt "redundant" legislation. circumstances, an ad hoc congressional effort to address real human problems may make sense.

VII. CONCLUSION

Unintended pregnancy is a serious problem in the United States. Insurance policies that exclude contraception from otherwise comprehensive coverage for prescription drugs and medical services contribute to this problem. Excluding contraception from employment-based insurance violates the Civil Rights Act of 1964, as amended by the Pregnancy Discrimination Act. Women, employers, the EEOC, private lawyers, and states should use the analysis presented here to do what they can to seek equal coverage for contraceptive services.

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