HHS Blocked from Rolling Back Health Care Protections for Transgender Workers

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A federal judge in New York temporarily blocked a regulation that would have removed certain health care protections for transgender individuals. The regulation was scheduled to take effect on Aug. 18.

The U.S. Department of Health and Human Services (HHS) said the protections were going to be removed because they were previously deemed unenforceable. However, Judge Frederic Block of the U.S. District Court for the Eastern District of New York said in an Aug. 17 order that the administration should consider the impact of a recent U.S. Supreme Court decision holding that sexual orientation and gender identity are protected under Title VII of the Civil Rights Act of 1964.

The regulation was put on hold while the court case proceeds. 

Timing Matters

The HHS announced a final rule on June 12 amending regulations interpreting the Affordable Care Act's (ACA's) main anti-discrimination provision. When it passed the ACA, Congress prohibited ACA-covered health programs from discriminating based on protected categories, such as race and sex, under federal civil rights statutes. In 2016, President Barack Obama's administration interpreted "sex discrimination" to include gender identity. However, in December 2016, a judge issued a preliminary injunction halting the interpretation, and in October 2019, a federal court held that the provisions were unlawful.

HHS's new rule eliminated the anti-discrimination protections based on gender identity. The agency claimed the provisions were unenforceable and exceeded the prior administration's authority.

Three days after the final rule was announced—and before it was published—the Supreme Court held that employers can't terminate workers' employment based on their lesbian, gay, bisexual, transgender or queer (LGBTQ) status. The high court said "it is impossible to discriminate against a person for being homosexual or transgender without discriminating against that individual based on sex."

The HHS interpretation is based on Section 1557 of the ACA, while the Supreme Court was interpreting provisions of Title VII. But in the Aug. 17 ruling, Block noted that Title VII case law has often been informative about the definition of sex discrimination under other federal laws.

"Timing, the saying goes, is everything," Block said. "When the Supreme Court announces a major decision, it seems a sensible thing to pause and reflect on the decision's impact."

Workplace Protections

Under Title VII, employers are prohibited from discriminating against workers because of their color, national origin, race, religion or sex. The act makes it unlawful for an employer to "fail or refuse to hire or to discharge any individual, or otherwise to discriminate against any individual with respect to his compensation, terms, conditions, or privileges of employment."

The Supreme Court held in its landmark ruling, Bostock v. Clayton County, Ga., that an employee's "homosexuality or transgender status is not relevant to employment decisions."

The decision focused on unlawful terminations, which were the subject of the cases before the court, but the ruling extends to all employment actions that are protected under Title VII.

"The Supreme Court's decision not only prohibits an employer from refusing to hire or discharging an employee based on LGBTQ status, but also prohibits treating employees differently in the spectrum of compensation, terms or conditions of employment because of the individual's LGBTQ status," explained Amy Blaisdell, an attorney with Greensfelder, Hemker & Gale in Chicago and St. Louis.

Employers should note that Title VII applies to employers with at least 15 employees, though many state and local anti-discrimination laws that protect LGBTQ workers apply to smaller employers.

[Need help with legal questions? Check out the new SHRM LegalNetwork.]

Employers should undertake a comprehensive review of their job application, hiring practices and ongoing work processes, noted Randy Coffey, an attorney with Fisher Phillips in Kansas City, Mo. Employers should also conduct a thorough review of how they respond to internal concerns and ensure that processes are fair and decisions are not being made in ways that would adversely affect LGBTQ employees, he said.

Regina Faul, an attorney with Phillips Nizer in New York City, recommended that employers review their training protocols to ensure that they adequately address the extended protections. "Additionally, further training of managers, supervisors and employees should be contemplated and should include best practices for implementing and maintaining a diverse workforce with a culture of inclusion and acceptance," she said.

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