Transgender Health Benefits Come Out of the Closet

Another step toward meeting the needs of a diverse workforce

Stephen Miller, CEBS By Stephen Miller, CEBS May 6, 2016

With transgender rights at the forefront of lesbian, gay, bisexual and transgender (LGBT) issues, a new survey finds that a small but growing number of U.S. organizations—currently, 12 percent—offer one or more transgender-inclusive health care benefits.

“Employers continue to expand their employee benefit offerings to attract the best employees—including LGBT workers,” said Julie Stich, CEBS, director of research at the International Foundation of Employee Benefit Plans (IFEBP) in Brookfield, Wis., which conducted the survey. “Offering transgender-inclusive benefits is another step toward meeting the needs of a diverse workforce.”

The organization surveyed 577 HR and benefits professionals, trustees, administrators and industry experts representing a wide range of U.S. organizations. Among employer-provided health plans, the findings showed that:

  • 8 percent cover gender-reassignment/affirmation surgery.
  • 11 percent provide mental health counseling pre- and/or post-surgery.
  • 9 percent cover prescription drug therapy (hormone replacement therapy, etc.).
  • 10 percent include physician visits.
  • 9 percent cover lab tests.
  • 2 percent include cosmetic surgery (facial feminization, Adam’s apple reduction, etc.).

Altogether, 12 percent of all survey respondents offer one or more transgender-inclusive health benefits.

Not surprisingly, large employers are more likely than small organizations to offer transgender health benefits. The survey found that 27 percent of responding employers with 10,000 or more employees offer one or more of these benefits, whereas only 4 percent of those with 50 or fewer employees do. Transgender benefits are also more common in the West and the Northeast, and among self-funded employers.

“Employees are looking for inclusive organizations that offer a range of benefits to serve a diverse population,” Stich said. “I expect going forward, we’ll see even more organizations offering transgender benefits as part of their overall health care offerings.”

Complex Coverage Issues

Gender-transition benefits are “the big issue that’s come up” for employers as transgender issues gain increasing public attention, said Todd A. Solomon, a partner at law firm McDermott Will & Emery in Chicago, when he spoke in March at the Society for Human Resource Management’s (SHRM’s) 2016 Employment Law & Legislative Conference in Washington, D.C.

One major issue: Health plans that cover sexual-reassignment surgery need to consider whether related procedures—such as facial shaping and hair removal—will be insured, Solomon noted. This can get tricky because health plans may have coverage exclusions for “cosmetic” surgery. Also, expenses related to cosmetic procedures generally only receive favorable tax treatment if they are deemed medically necessary. But when they are part of a gender transition, “there is some case law holding that these related procedures may be considered medically necessary,” Solomon pointed out.

Because issues involving gender transition are complex, “employers will need to work closely with insurers or third-party administrators to add this benefit,” Solomon advised.

Solomon will be presenting an overview of the state of LGBT benefits in June at the SHRM 2016 Annual Conference & Exposition in Washington, D.C.

Stephen Miller, CEBS, is an online editor/manager for SHRM. Follow me on Twitter.

Related SHRM Articles:

Supporting Transgender Employees, HR Magazine, September 2015

Proposed Rule Expands Transgender Health Coverage, SHRM Online Benefits, September 2015

Related News Article:

Franklin County workers’ gender-transition surgeries now covered by insurance, The Columbus Dispatch, April 2016

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