Court Rules that A County’s Health Plan Violated Title VII by Excluding Gender Transition

There has been health plan confusion relating to coverage of gender affirming care since the §1557 regulations in 2016, amendments in 2020, and SCOTUS’s Bostock decision stating that discrimination on the basis of sex under Title VII civil rights would include sexual orientation, gender identity, and gender stereotyping.  Employers and the courts have primarily grappled with whether and to what extent employers’ religious objections allow them to limit or exclude gender affirming care.

From a total plan view, there are few laws outright mandating a certain level of care, and they are often very narrow in scope.  However, there are usually laws which contend that if a plan targets specific types of care for a limitation or exclusion, it must justify the reasoning.  In the context of gender affirming care:

• Section 1557 outright mandates coverage for gender affirming care, but §1557 only applies to those plans or entities receiving Medicare or Medicaid funds.
• Title VII civil rights protections do not outright mandate gender affirming care like §1557, but a limitation or exclusion focused on gender affirming care is discrimination on the basis of sex and is thus impermissible under Title VII unless some superseding exemption applies.

We wrote here about the Christian Employers Alliance winning a religious objection case allowing member employers to exclude gender affirming care without violating Title VII, but that is specific to employers in that alliance.  All other employers at this point should have coverage for gender affirming care (or be actively working toward such coverage) unless their legal counsel has advised them how they specifically qualify for an exception.

Employers can now see evidence of this understanding in a new court case, Lange v. Houston County, 2022 WL 1812306 (M.D. Ga 2022). The US District Court ruled that even where §1557 didn’t apply to the plan, Title VII prohibits plans from categorically excluding gender affirming care.  Since the employer was a county government, religious exemption was not part of the case.  The court noted “the plan pays for mastectomies when medically necessary for cancer treatment but not when mastectomies are medically necessary for sex change surgery. And the plan pays for hormone replacement therapy medically necessary for the treatment of menopause, but not hormone replacement therapy medically necessary for “sex change.” The undisputed, ultimate point is that the Exclusion applies only to transgender members” and thus violated Title VII.

A similar decision was reached in June that the North Carolina State Health Plan for Teachers and State Employees violated Title VII by excluding coverage for treatments “leading to or in connection with sex changes or modifications.”

So unless an attorney has legally advised an employer they can claim exemption, all employer plans should have already removed limitations and exclusions aimed at gender identity and transition services and medications, or should be taking action to do so.

On another note, the court did reject the employee’s ADA claim, explaining the ADA excludes from its definition of disability “gender identity disorders not resulting from physical impairments.”  This may provide clarity for employers that gender identity disorders are only a disability requiring an interactive discussion for reasonable accommodation when it results from physical impairments.  A footnote on page 32 of the court decision gives examples to help.