Gender-Affirming Care Exclusions and Title VII

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By: Colin Clark | Staff Attorney

Introduction

A federal court in Georgia recently held that a self-funded plan’s exclusion for gender-affirming surgery violated Title VII of the Civil Rights Act of 1964. This decision is likely to have far-reaching effects on fully insured and self-insured plans. While there is no black-letter-law requiring health plans to cover gender affirming/sex change surgery, a ruling such as this from a federal appeals court could effectively requires plans to cover these benefits – lest they run afoul of Title VII and open themselves up to potential liability.

The Case and Decision

Title VII makes it unlawful for employers to discriminate against an individual based on an individual’s race, color, religion, sex or national origin. In Lange vs. Houston County, Georgia, in the US District Court for the Middle District of Georgia (the “District Court”), a transgender employee successfully sued their employer for refusing to cover gender-affirming surgery – in this case, sex-change surgery – alleging discrimination under Title VII. The District Court agreed with Lange, and, on appeal, the Eleventh Circuit Court of Appeals (the “Eleventh Circuit”) affirmed the District Court’s decision. The Eleventh Circuit was clear in its rationale for affirming the lower court’s decision, reasoning that because transgender persons are the only plan participants who would seek and qualify for gender-affirming surgery, the plan denies health care coverage based on transgender status by having a blanket exclusion for sex change surgery. The court elaborated, stating “There is no genuine dispute of fact or law as to whether the Exclusion unlawfully discriminates against Lange and other transgender persons. The Exclusion is a blanket denial of coverage for gender-affirming surgery. Health Plan participants who are transgender are the only participants who would seek gender-affirming surgery. Because transgender persons are the only plan participants who qualify for gender-affirming surgery, the plan denies health care coverage based on transgender status.” Based on the aforementioned reasoning, the Eleventh Circuit affirmed the District Court’s order that the claim denial be reversed and further affirmed the District Court’s injunction preventing the employer from further excluding gender-affirming surgery.

The Dissent

While the Eleventh Circuit affirmed the District Court’s decision, there was a notable dissent from one circuit judge. The dissent largely centered on the fact that the exclusion for gender-affirming surgery was not based on whether or not an individual was transgender – the exclusion was a blanket exclusion that applied equally to all plan participants. The dissent noted, “On the face of this policy, it doesn’t treat anyone differently based on sex, gender nonconformity, or transgender status.” The dissent further elaborated that a plan that excludes something for everyone (as opposed to excluding something for particular participants based on protected characteristics) cannot be discriminatory. The plan did cover treatment related for gender dysphoria, but did not go as far as to cover sex-change surgery. As the dissent eloquently put, “It’s not discriminatory; it’s just a cheap plan.”

Moving Forward

Along with this decision from the Eleventh Circuit, there are similar decisions in the Fourth Circuit. While it is true there is no black-letter-law that specifically requires plans to provide gender-affirming care, excluding this coverage could potentially be discrimination under Title VII based on recent federal court decisions. For now, the cases say what they say. Employers and plan sponsors should keep a close eye on this topic as more courts address this issue, but for now it is apparent that exclusions on gender-affirming care can create unwanted liability under Title VII.