by Jourdan Day
The U.S. District Court for the Southern District of Ohio will decide whether an employer’s and its insurer’s denial of coverage for an employee’s sex reassignment surgery constitutes sex discrimination in violation of Title VII.
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Facts of Ohio Case
“Heather,” who works at the Public Library of Cincinnati and Hamilton County, has been diagnosed with gender dysphoria. She has begun to transition her appearance to conform with her gender identity—legally changing her name, growing out her hair, and wearing women’s clothing. After her healthcare providers decided that sex reassignment surgery was necessary to treat her condition, she sought authorization for the procedure.
Although sex reassignment surgery is within the standard of care for treating gender dysphoria, the library’s insurer, Anthem Blue Cross and Blue Shield, denied coverage for Heather’s surgery because the library’s policy excludes coverage for all procedures related to sex transformation. After coverage was denied, Heather took out a private loan to cover the costs of the procedure and her recovery.
Heather filed a charge of sex discrimination with the Equal Employment Opportunity Commission (EEOC), which found no probable cause for discrimination and issued her a right-to-sue letter. In her lawsuit, Heather alleges that the library’s and Anthem’s continued refusal to cover her sex transformation procedures amounts to sex discrimination in violation of Title VII and violates the Affordable Care Act (ACA) and her right to equal protection under the Fourteenth Amendment to the U.S. Constitution.
Similar Case Filed in California
Heather’s lawsuit is similar to a lawsuit filed against Dignity Health by the American Civil Liberties Union (ACLU) on behalf of one of Dignity Health’s employees in June 2016. In that case, the ACLU claims that Dignity Health’s complete exclusion of care for sex transformation surgery is unlawful sex discrimination.
The employee, a nurse at Dignity Health, was denied coverage for a double mastectomy and phalloplasty. While Dignity Health stresses that the coverage exclusion applies to all employees, the ACLU argues that it effectively harms only transgender employees who want to transition.
In the past few years, the EEOC has taken the position that discrimination based on gender identity constitutes sex discrimination under Title VII. Notably, the EEOC has filed an amicus (friend-of-the-court) brief on behalf of the ACLU and the employee, pointing to the line of sex stereotyping cases under Price Waterhouse v. Hopkins, in which the U.S. Supreme Court held that discrimination based on nonconforming gender behavior is sex discrimination.
It remains to be seen whether the EEOC will file an amicus brief on behalf of Heather in the Ohio case.
Discrimination Against Transgender Individuals
The U.S. 6th Circuit Court of Appeals (whose rulings apply to employers in Ohio, Kentucky, Michigan, and Tennessee) has previously held that Title VII’s prohibition against sex discrimination extends to transgender individuals who don’t conform to gender norms. The court hasn’t determined whether sex reassignment surgery would be included under gender nonconformity and would therefore be protected by Title VII.
In addition, the U.S. Department of Health and Human Services (HHS) recently published a final rule establishing nondiscrimination provisions of the ACA. The regulation provides, in part, that employers shall not “have or implement a categorical coverage exclusion or limitation for all health services related to gender transition,” or “otherwise deny or limit coverage, deny or limit coverage of a claim, or impose additional cost sharing or other limitations or restrictions on coverage, for specific health services related to gender transition if such denial, limitation, or restriction results in discrimination against a transgender individual.” Both lawsuits covered in this article include allegations that this regulation was violated.
Takeaways
These two cases bear watching because they have the potential to affect your health insurance policies and may result in higher insurance costs for your company. At a minimum, the lawsuits show that an insurance policy that categorically excludes a certain type of care may be legally challenged if it disproportionately affects transgender individuals. It would be wise to review your policies in light of the recent litigation and the ACA’s nondiscrimination provisions.
Jourdan Day, a contributor to Ohio Employment Law Letter, can be reached at 614-227-1980 or jmanuel@porterwright.com.