Employers might be scratching their heads trying to keep up with statutory and regulatory changes and court decisions addressing sex discrimination in health care benefits.
In 2016, the Obama administration passed regulations under the Affordable Care Act that prohibited certain health plans from discriminating on the basis of sex. In June 2020, the Trump administration largely overturned the 2016 regulations and in the same month, the Supreme Court (in Bostock v. Clayton County) held that sexual orientation and gender identity are protected classes under Title VII of the Civil Rights Act of 1964, stating that “it is impossible to discriminate against a person for being homosexual or transgender without discriminating against that individual based on sex.”
And in 2021, the Supreme Court may hold the entire ACA unconstitutional.
So what is the current status of the law and what steps can employers take to ensure that their health plans do not unlawfully discriminate?
In 2016, President Obama’s last full year in office, the Obama administration issued ACA regulations that included protections against sex discrimination and also stated that sex discrimination includes discrimination based on gender identity and sex stereotyping. Last summer, the Trump administration issued new regulations under the ACA that basically removed the protections in the 2016 regulations.
Meanwhile, a challenge to the constitutionality of the entire ACA (which includes the regulations passed under the ACA) has made its way to the Supreme Court. In 2012, the Supreme Court upheld the ACA’s individual mandate as a constitutional tax. The Trump administration eliminated the tax in 2019 and, not surprisingly, a Texas court determined that the individual mandate is no longer constitutional because it is no longer a tax. The individual mandate is often cited as the foundation upon which many of the ACA’s key provisions are built. In November, the Supreme Court heard arguments as to whether the entire ACA must be struck down if the individual mandate cannot be upheld. A decision is not expected until this spring at the earliest.
Title VII prohibits employers (with at least 15 employees) from discriminating on the basis of several protected classes, including sex, with regard to the terms and conditions of employment, including employer-provided health benefits. The Bostock decision provides that sex discrimination includes discrimination against a person for being homosexual or transgender. Employers should consider that the Bostock decision will continue to prohibit sex discrimination in employer-provided health benefits regardless of the anticipated Supreme Court ruling on the ACA.
What does all this mean for employer-provided health care plans? Employers should review their group health plans (both the written document and the operation of the plan) to avoid the forms of discrimination prohibited under Bostock, regardless of the outcome of the pending Supreme Court decision on the ACA. As you review these plans, pay special attention to provisions that exclude expenses related to gender identity, gender expression, and transgender status.
For example, provisions that exclude sex or gender reassignment surgery are facially discriminatory and should be removed from the plan. Employers should also review the operation of their plans to ensure that facially nondiscriminatory provisions are applied in a nondiscriminatory manner.
For example, a plan that covers hormone therapy generally is not facially discriminatory, but is discriminatory in operation if in practice it denies coverage for hormone therapy to address gender dysphoria.
A version of this article was originally published in the Portland Business Journal.
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