Supreme Court’s Transgender Case May Affect Travel Benefits

If the U.S. Supreme Court upholds Tennessee’s ban on gender-affirming care for youth in a case before it this term (U.S. v. Skrmetti), some employers may explore providing travel benefits to enable participants to access types of health care prohibited by state law. They may also offer these benefits in circumstances where there is a plan-covered service unavailable within a certain geographic distance, experts say.

So far, “most of the state laws focused on gender-affirming care have targeted medical providers rather than insurance carriers or service providers for employer-sponsored coverage,” said Xavier Baker, an attorney with Groom Law Group in Washington, D.C.

 “Employers face an increasingly complex and contentious environment when determining plan benefits, especially for gender-affirming care. Employers should be mindful that this remains an evolving legal environment.”

If the court rules for Tennessee, group health plans that want to provide travel benefits will need to do so cautiously, said Alden Bianchi, an attorney with McDermott Will & Emery in Boston. “Where abortion-related travel is concerned, employers have tended to adopt a broad-based travel policy that includes abortions,” he said. Following a Supreme Court decision in 2022 allowing states to restrict or end abortion access, some companies announced abortion-travel benefits. “Gender-affirming care would likely be treated in a similar fashion.”

Sarah Raaii, an attorney with McDermott Will & Emery in Chicago, said if Tennessee prevails, “employers will be confronted with the issue of how to balance benefits for employees and their dependents with company culture, recruiting and retention, public relations, legal risk, and potential criminal liability.”

Background

The case involves Tennessee’s SB1 (2023), which bans medical treatments for transgender individuals under the age of 18 but only when those treatments are prescribed for the purpose of enabling an individual to: 1) live consistently with their gender identity, or 2) treat gender dysphoria—a feeling of distress or discomfort that occurs when a person’s gender identity differs from their sex assigned at birth. Adolescents who need those treatments for other conditions (that is, not for gender-affirming care) do not come within the scope of SB1, said Denise Visconti, an attorney with Littler in San Diego.

Visconti noted that the case involves:

• The petitioner, who filed the appeal to the Supreme Court, and which is the United States. The Biden administration joined the case when it was filed in federal district court, challenging SB1 with violating the U.S. Constitution’s Equal Protection Clause.
• The respondents/plaintiffs (the plaintiffs in the trial court), who are the individuals impacted by the Tennessee law and include: 1) three adolescent teenagers who identify as transgender and have been receiving gender-affirming care from their physicians, 2) their parents, and 3) a doctor who treats transgender patients.
• The respondents/defendants (who were the defendants in the federal district court and who filed the appeal with the 6th U.S. Circuit Court of Appeals), which is the state of Tennessee; this includes the Tennessee attorney general, the Tennessee Department of Health, the Tennessee Board of Medical Examiners, and various members of the Tennessee Board of Medical Examiners.

“While SB1 bans all medical procedures that would ‘alter a minor’s hormonal balance, remove a minor’s sex organs, or otherwise change a minor’s physical appearance,’ the primary medical treatments at issue for the plaintiffs included puberty-delaying medication and hormone therapy. Any challenge to surgical procedures was dropped from the case,” Visconti said.

Lower Court Rulings

The plaintiffs challenged SB1 by filing a lawsuit against Tennessee officials in a federal district court, seeking to bar the state from enforcing the ban on gender-affirming care. 

The federal district court found that parents have a fundamental right to direct the medical care of their children, which includes the right of parents to request certain medical treatments on their children’s behalf.

The judge also found that the ban on gender-affirming care violated the Equal Protection Clause because it prohibited medical procedures for transgender adolescents that it would allow for cisgender adolescents, Visconti said.

“Because the trial court found that SB1 treated adolescents differently depending on their sex—that is, whether or not they were transgender—the court applied heightened intermediate scrutiny when enjoining SB1’s enforcement, creating a higher burden of proof that the state of Tennessee could not meet,” she noted.

The Tennessee respondents appealed to the 6th Circuit, which declined to apply heightened scrutiny. The appeals court then determined that, because SB1 only restricted medical procedures unique to each sex, the plaintiffs challenging SB1 had failed to invalidate a democratically enacted law that was supported by a rational basis. The state was exercising its power to regulate the practice of medicine for youth in the state of Tennessee, which met the lower burden of proof, the appeals court found. 

States with Similar Laws

The challenge to the Tennessee law was considered by the 6th Circuit along with a similar law in Kentucky, Visconti noted. Both laws are at issue before the Supreme Court.

There are currently at least 26 states that ban various types of medical care for transgender adolescents. Other states that have such laws, in addition to Kentucky and Tennessee, are: Alabama, Arizona, Arkansas, Florida, Georgia, Idaho, Indiana, Iowa, Louisiana, Mississippi, Missouri, Montana, Nebraska, New Hampshire, North Carolina, North Dakota, Ohio, Oklahoma, South Carolina, South Dakota, Texas, Utah, West Virginia, and Wyoming.

“Arizona and New Hampshire only ban surgical care and still allow youth to access hormones and puberty blockers,” Visconti said. “There are a number of lawsuits challenging these laws, most of which likely would become moot if the Supreme Court finds in favor of upholding SB1—and the similar law in Kentucky.”

Proponents of laws banning gender-affirming care suggest that providing such treatments is problematic as some people later regret undergoing gender transitions, said Sam Schwartz-Fenwick, an attorney with Seyfarth in Chicago. He added that opponents of the Tennessee law say that it is at odds with the medical literature and medical community that support this care in minors and that it conflicts with the will of transgender youth’s parents.

Possible Impact on Employers

Based on the current focus of the laws at issue in this case, the potential impact on employers is minimal, Visconti said. For example, Skrmetti will not alter the cases that have deemed health care plans with transgender-specific exclusions or blanket exclusions for gender-affirming care—particularly if that care is provided to others for purposes unrelated to gender affirmation—violative of Title VII of the Civil Rights Act of 1964, she explained.

Michelle Phillips, an attorney with Jackson Lewis in White Plains, N.Y., said the majority of Supreme Court justices seemed hesitant during the oral argument of the case to strike down SB1. She said the case “is part of an effort to roll back many of the rights granted to LGBTQ+ individuals and their families.”

Health insurance carriers in affected states may stop offering policies that cover gender-affirming care for minor children if Tennessee wins, noted Keith Dropkin, an attorney with Jackson Lewis in White Plains, N.Y.

While the Supreme Court has already held, in Bostock v. Clayton County, Ga., that anti-transgender discrimination in employment is sex discrimination prohibited by Title VII , the case before the court this term could still impact how courts treat other transgender discrimination cases under the Constitution, Visconti said. 

“If that happens, then a carve-out allowing discrimination against transgender individuals may blend into other areas, including questions that employers face, such as gender-appropriate restrooms and locker rooms, name and gender marker changes, provision of benefits for transgender workers, etc.,” Visconti said.

While a ruling for Tennessee seems likely, according to Baker, the court could issue a narrow ruling that heightened scrutiny applies and send the case back to the 6th Circuit.

How the Supreme Court will rule in Skrmetti is uncertain at this point, Schwartz-Fenwick noted.