February 14, 2008
INFERTILITY COVERAGE AND AGE DISCRIMINATION
By: Meghan Reilly, Legislative Fellow
You asked if the Connecticut law that permits health insurance policies to limit coverage for infertility treatment and procedures to individuals under age 40 violates the federal age discrimination law.
This office is not authorized to issue legal opinions and this report should not be construed as such.
Infertility affects about 10% of the reproductive population. Surgical treatment of infertility shows declining rates of success as patients age. Connecticut law quires health insurance policies to cover medically necessary expenses incurred for the diagnosis and treatment of infertility but allows policies to limit the coverage to patients under age 40 (CGS §§ 38a-509 and 38a-536).
According to the National Conference of State Legislatures, 13 other states require health insurers either to offer or provide coverage for the diagnosis or treatment of infertility. However, the services and procedures those states require insurers to offer vary considerably. Like Connecticut, laws in New Jersey, New York, and Rhode Island refer to a patient's age.
Specifically, New Jersey permits insurers to limit coverage for certain treatments to people age 45 or younger (N.J. Stat. Ann. §§ 17:48-6x, 17:48A-7w, 17:48E-35.22, and 17B:27-46.1x). New York (1) requires coverage for certain infertility treatments for people age 21 through age 44 and (2) permits insurers to provide coverage for people outside that age range (N.Y. Ins. Law §§ 3216(13), 3221(6), and 4303). Rhode Island requires infertility coverage for women between the ages of 25 and 42 (R.I. Public Law No. 2007-411).
The federal Age Discrimination in Employment Act (ADEA) prohibits discrimination against employees over age 40 with respect to compensation, terms, conditions, and privileges of employment. However, it permits bona fide employee benefit plans to provide fewer benefits to older workers so long as the employer spends at least the same amount of money on older workers as on younger workers in providing the benefits. It also permits an employer to take action that would otherwise be prohibited where the differentiation is based on reasonable factors other than age.
The U.S. Supreme Court has considered the inability to reproduce a “disability” because it substantially limits a major life activity under the Americans with Disabilities Act (ADA), but has held that a person is not disabled for purposes of the act if the disability can be overcome by mitigating or corrective measures. Additionally, courts have allowed employers to elect not to provide coverage for fertility treatments in states without mandates as long as the exclusion was not disability- or gender- specific.
To our knowledge, there have been no court cases alleging a violation of ADEA because a state insurance mandate permitted or required an insurance policy to limit infertility coverage to a person under a certain age. Thus, it is unknown how a court would interpret Connecticut's mandate with respect to ADEA.
BACKGROUND ON INFERTILITY
Infertility affects about 6.1 million Americans, or 10% of the reproductive age population. It is usually defined as the inability to get pregnant after trying for one year. Roughly one-third of infertility cases are attributable to female factors and about one-third to male factors. A combination of factors causes most of the remaining cases.
Studies from 2005 show that women seeking treatment for infertility have a “reasonable” chance of having a baby with their own eggs in their early 40s, but success rates drop to close to zero once they reach age 44. Researchers reviewed birth outcomes among 1,263 women over age 40 treated at an infertility clinic in Boston. After three attempted high-tech infertility treatments, birth rates for women 40 years old were 25%. By age 43, the corresponding birth rate was around 10%, and by 44, it was 1.6%. For women who became pregnant with these high-tech procedures, the miscarriage rate per cycle was 24% for 40-year-olds, 38% for 43-year-olds, and 54% for 44-year-olds (http://www.webmd.com/infertility-and-reproduction/news/20050825/after-age-44-fertility-successes-are-few).
PA 05-196, An Act Concerning Health Insurance Coverage for Infertility Treatment and Procedures, requires health insurance policies to cover medically necessary expenses incurred for the diagnosis and treatment of infertility, including ovulation induction, intrauterine insemination, in vitro fertilization, uterine embryo lavage, embryo transfer, gamete intra-fallopian transfer, zygote intrafallopian transfer, and low tubal ovum transfer. It defines “infertility” as the inability of a presumably healthy person to conceive or produce conception or sustain a successful pregnancy during a one-year period. The policy can consider the facilities used for treatment, the number of procedures done, eligibility based on length of coverage, exhaustion of other methods, disclosure of other treatments, and age: i.e., coverage may be limited to individuals under age 40 (CGS §§ 38a-509 and 38a-536).
Other States' Laws
Presently three other states have infertility coverage mandates that include a maximum age for patients. New York requires insurers to cover infertility treatment for people, age 21 to 44 years, but permits insurers to provide coverage to people of other ages (N.Y. Ins. Law §§ 3216(13), 3221(6), and 4303)). New Jersey permits insurers to limit surgical treatment of infertility to people 45 years of age or younger (N.J. Stat. Ann. §§ 17:48-6x, 17:48A-7w, 17:48E-35.22, and 17B:27-46.1x)). Rhode Island requires coverage for women between ages 25 and 42. Rhode Island previously extended coverage up to age 40, but recently increased the age to 42 in the 2007 legislation session (R.I. Public Law No. 2007-411).
Infertility in the Courts
The U. S. Supreme Court held in 1998 that infertility can be a disability under the ADA. In Bragdon v. Abbott, 524 U.S. 624 (1998), the Court held that an individual's inability to reproduce due to her HIV is a “disability” under the ADA. A disability is defined as, “a physical ... impairment that substantially limits one or more of [an individual's] major life activities.” The life activity at issue, her ability to reproduce and to bear children, constitutes a “major life activity” under the ADA. Logic then suggests that medical infertility, which also substantially limits the “major life activity” of reproduction, would be equally covered under the ADA. But the Court subsequently held that a person is not considered disabled under the act if the disability can be overcome by mitigating or corrective measures.
In 2000, a lower court held that, while infertility is a disability, an employer's health plan that excludes treatment for it is not discriminatory under the ADA “equal access” test if it applies to all employees (Saks v. Franklin Covey, 117 F.Supp.2d 318 (S.D.N.Y., 2000)). Similarly, in 1996 the Eighth Circuit held that an employer's denial of insurance coverage for plaintiff's infertility treatments was not a disability-based distinction, because it was applied to both disabled and non-disabled employees. “For example,” wrote the court, “the Plan exclusion bars coverage for infertility caused by age, a condition which is not recognized as a disability under the ADA, and for infertility caused by ovarian cancer, which is defined as a disability under the ADA” (Krauel v. Iowa Methodist Medical Center, 95 F.3d 674, 678 (8th Cir.1996)).
The ADEA applies only to employers with 20 or more employees.
As amended by the Older Workers' Benefit Protection Act (OWBPA), the ADEA includes an “equal benefit or equal cost” principle (45A Am.Jur.2d Older Workers Benefit Protection Act; Generally § 814 (1999)). It is not unlawful for an employer to take any action prohibited by the ADEA if it is observing the terms of a bona fide employee benefit plan, as long as the plan is not intended to evade the purposes of the ADEA. Age-based reductions in employee benefit plans are allowed on the basis of actuarially “significant cost considerations” (29 CFR § 1625.10(a)(1)). However, they are allowed only when the actual amount of the payment made or cost incurred on behalf of an older worker is not less than those made or incurred on behalf of a younger worker for each benefit (29 CFR § 1625.10 and 29 USC § 632(i)). Therefore, as long as the amount of payment made or incurred on behalf of an older worker is equal to that of a younger worker, even though that may mean the older worker receives a lesser amount of benefits or insurance coverage, the plan does not violate the ADEA. No employees may be deprived of one benefit because of age without an offsetting benefit being made available to them.
The ADEA also permits an employer “to take any action otherwise prohibited . . . where the differentiation is based on reasonable factors other than age” (29 USC § 623(f)(1)).
Employee Benefit Age Discrimination in the Courts
Equal Cost or Equal Benefit. In E.E.O.C. v. Com. of Mass., 77 F.3d 572 (Mass. 1996), the court more clearly articulated the ADEA's equal cost or equal benefit principle. Massachusetts' statutory retirement benefit plan prevented public employees hired after age 65 from participating in the public employee retirement system. Although the state statute plainly discriminated on the basis of age regarding employment benefits, the Commonwealth argued that the Massachusetts statute was shielded by the equal cost or equal benefit principle. The Commonwealth claimed that this provision effectively codifies a subsection of the cited regulation, 29 CFR § 1625.10(f)(1)(iii)(A) (1989), which allowed an employer to exclude from a retirement plan an employee who begins work after normal retirement age. In 1990, Congress amended the statute, through the OWBPA, to reinstate the equal cost or equal benefit rule and to ensure that the ADEA applied to age-based discrimination in benefit plans. A Senate report said explicitly that Congress intended to incorporate only those portions of the regulation consistent with the amended statute (S.Rep. No. 263, 101st Cong., 2d Sess. 18 (1990)). The amended statute adopts an equal cost/equal benefit test for differentiations “as permissible” under the cited regulation, and the Commonwealth's flat bar fails to conform to any equal cost/equal benefit test. As a result, the court deemed the Commonwealth's plan invalid.
Reasonable Factor Unrelated to Age. In E.E.O.C. v. Com. of Mass., 987 F.2d 64 (1st Cir. 1993), the court addressed the reasonable factor principle considering a law requiring state employees over age 70 to pass annual physical examinations. If an employee failed the physical, the Commonwealth terminated the person's employment. There, the Commonwealth argued that employees over age 70 were not involuntarily retired because they are over age 70, but because their mental and or physical faculties were failing.
The court rejected the argument, citing Los Angeles Dep't of Water & Power v. Manhart, 435 U.S. 702, (1978), where the Supreme Court confronted and rejected a similar argument. Manhart involved a policy of the Los Angeles Department of Water and Power requiring larger contributions from women than men to the department's pension fund because women as a group live longer than do men as a group. Plaintiffs claimed that the contribution differential constituted discrimination on the basis of sex. The department answered that sex was not the factor on which the distinction was being drawn; it was longevity. The Court rejected this contention, holding that but for their sex, women would not be required to pay more for their retirement benefits. While as a class women tend to live longer than men, all individuals in the respective classes do not share the characteristics that differentiate the average class representatives (Id. at 708). Thus, the Court reasoned that even where characteristics may be class-based, Title VII of the Civil Rights Act requires fairness to individuals rather than to classes (Id).
In E.E.O.C. v. Com. Of Mass (1993), the Commonwealth argued that the physical examination requirement was based on fitness rather than age. But the court found that an individual's fitness to work is based on a number of factors, of which age is only one. And, as in Manhart, the record contains no evidence that any factor other than the employee's age was taken into account in requiring an annual medical examination.
APPLYING THE ADEA TO PA 05-196
Neither the public hearing nor floor debate addressed the age limit issue in Connecticut. We found no cases directly challenging the validity of age limits in infertility coverage provisions.
When lower courts have evaluated the validity of treatment denial, they have approved plans meeting the ADA “equal access” test as applied to all employees (Saks v. Franklin Covey, 117 F.Supp.2d 318 (S.D.N.Y., 2000). Courts have held exclusions barring coverage for infertility caused by ovarian cancer or aging as valid because they do not specifically discriminate against the disabled person (ovarian cancer) versus a non-disabled person (age).
PA 05-196 does not distinguish between able-bodied and disabled. Instead, the law distinguishes between older and younger employees. An employer offering an insurance policy with infertility coverage limited to people up to age 40 would be observing the terms of a bona fide employee benefit plan and not intending to evade the purposes of the ADEA.
There could be two arguments, one for and one against an ADEA violation. On one hand, age-based reductions in benefit plans are allowed on the basis of actuarially “significant cost considerations,” valid only when the actual amount of the payment made or cost incurred on behalf of an older worker is not less than those made or incurred on behalf of a younger worker for each benefit (See 29 CFR § 1625.10 and 29 USC § 632(f)(2)(B)). Connecticut's infertility mandate permits a limit on the number of procedures per individual and procedure costs do not vary based on age of patient. As a result, an employee over age 40 likely would incur no greater cost than a younger employee for the same number and type of procedures. Thus, one may argue a violation of the equal cost/equal benefit principle.
On the other hand, ADEA permits an employer “to take any action otherwise prohibited . . . where the differentiation is based on reasonable factors other than age” (29 USC § 623(f)(1)). Given that the results of infertility procedures vary by age, one could argue that the likelihood of success is a reasonable factor for different treatment based on age. However, similarly to Manhart, while as a class women over age 40 are less likely to conceive than women under 40, all individuals in the respective classes do not share the characteristics that differentiate the average class representatives. Furthermore, the Connecticut law applies to men and women equally, despite the fact that male infertility is not age-based.