Much like having a lukewarm dinner date, employers find themselves in the position to try to interpret mixed signals on where to go from here when it comes to discrimination on the basis of gender in group health plans. HHS and the Supreme Court have taken different positions on the meaning of “sex” over the last few weeks. Employers would be wise to re-examine their benefit plans for any potential risk.
Section 1557 of the ACA prohibits discrimination on the basis of race, color, national origin, sex, or disability in health activities and programs that receive federal funding from HHS. HHS issued regulations on this new rule in 2016. While the rule and regulations did not directly apply to many group health plans, the rules garnered attention because they proffered that discrimination on the basis of sex not only includes gender, but sex stereotyping and gender identity providing that medically appropriate services could not be denied based on the participant’s sex or gender identity. Many insurers and self-funded plans removed exclusions from their plans in response. However, in December 2016, the day before the rules were to go into effect, a federal court in Texas issued a nationwide injunction prohibiting the enforcement of the portion of the regulation requiring group health plans to cover gender dysphoria services. The court's finding was that HHS overreached its authority in its interpretation.
In response to this decision, HHS issued regulations in June that significantly rolled back the reach of the ACA’s nondiscrimination provisions. Specifically, as it relates to the meaning of “sex,” HHS indicated that it would return to the government’s interpretation of “sex.” Government interpretation is the plain meaning of the word – “male” or “female” as determined by biology. Because the final rules also eliminate all definitions and examples of specific discrimination, plans and employers with self-funded group health plans might think they are able to consider coverage specific exclusions related to treatment of gender dysphoria in their health plans.
Not so fast… The Supreme Court’s decision in Bostock v. Clayton County, Ga. issued on June 15th found that discrimination on the basis of sex under Title VII of the Civil Rights Act extends to discrimination based on sexual orientation and gender identity. In general, Title VII of the Civil Rights Act prohibits discrimination in all aspects of employment – hiring, firing, compensation, and other terms, conditions, and/or privileges of employment. This also includes employer provided healthcare benefits.
Much like the Supreme Court’s decision regarding same-sex marriage in Obergefell v. Hodges, the Court’s decision in Bostock v. Clayton County, Ga. does not directly impact group health benefits or require specific coverage at all. But, it does mean that employers that specifically exclude medically necessary services to participants for treatment related to gender identity may be at risk of litigation. Further, it validates the risk under Title VII to employers who choose not to extend employer-sponsored benefits to same-sex spouses.
This means that employers should review their definitions of plan eligibility, coverage, and exclusions to ensure the conditions for enrollment and benefits are provided consistently without regard to sexual orientation or gender identity. Plans that have a religious exemption or a blanket exclusion and wish to retain them, should seek the guidance of legal counsel for additional direction. HORAN is currently working with its vendor partners to understand if any necessary action is required.
If you have additional questions, please contact your HORAN Account Manager or Client Specialist.