Supreme Court’s Transgender Care Ruling May Impact Benefits

The U.S. Supreme Court’s June 18 decision upholding Tennessee’s restrictions on gender-affirming health care for youth may impact employers’ benefits offerings. Some employers may explore providing travel benefits to enable plan participants to access types of health care prohibited by state law. 

“This ruling could well reinforce many employers’ decisions to offer travel benefits for covered transgender care services,” said Tim Stanton, an attorney with Ogletree Deakins in Chicago.

Court’s Opinion

In a ruling by Chief Justice John Roberts Jr., the Supreme Court found that Tennessee had a rational basis for banning certain medical treatments for transgender people under the age of 18 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.

The Supreme Court noted that in enacting Tennessee’s law, Senate Bill 1, the state “determined that administering puberty blockers or hormones to a minor to treat gender dysphoria, gender identity disorder, or gender incongruence can lead to the minor becoming irreversibly sterile, having increased risk of disease and illness or suffering from adverse and sometimes fatal psychological consequences.”

The court also said Tennessee found that it was “likely that not all harmful effects associated with these types of medical procedures when performed on a minor are yet fully known,” because many of the procedures on minors are “experimental.” In addition, the state found that “minors lack the maturity to fully understand and appreciate the life-altering consequences of such procedures.”

In this case, United States v. Skrmetti, the Supreme Court declined to apply an intermediate level of scrutiny to the constitutionality of the Tennessee statute, finding that it wasn’t based on sex. Heightened analysis of whether the law was constitutional was unnecessary because SB1 instead classifies on the basis of age and medical use, the court reasoned. The Supreme Court noted that health care providers in Tennessee may administer puberty blockers or hormones to minors to treat certain conditions not related to treating gender dysphoria, gender identity disorder, or gender incongruence.

“SB1 does not mask sex-based classifications,” the court said. “The law does not prohibit conduct for one sex that it permits for the other. Under SB1, no minor may be administered puberty blockers or hormones to treat gender dysphoria, gender identity disorder, or gender incongruence; minors of any sex may be administered puberty blockers or hormones for other purposes.”  

Moreover, the court’s decision in Bostock v. Clayton County (2020) did not alter its analysis in this case. 

“In Bostock, we held that an employer who fires an employee for being gay or transgender violates Title VII [of the Civil Rights Act of 1964]’s prohibition on discharging an individual because of their sex,” the court said. “We have not yet considered whether Bostock’s reasoning reaches beyond the Title VII context, and we need not do so here.”

Dissent

Dissenting from the Supreme Court’s opinion, Justice Sonia Sotomayor wrote, “To give meaning to our Constitution’s bedrock equal protection guarantee, this court has long subjected to heightened judicial scrutiny any law that treats people differently based on sex.” 

She added, “Tennessee’s law expressly classifies on the basis of sex and transgender status, so the Constitution and settled precedent require the court to subject it to intermediate scrutiny.”

Sotomayor added that gender-affirming care is not a matter of cosmetic preference but instead can be a question of life or death. If left untreated, gender dysphoria can lead to severe anxiety, depression, eating disorders, substance abuse, self-harm, and suicide, she wrote. 

Toolkit: Employing Transgender Workers

Other State Restrictions

There are currently at least 26 states with restrictions on medical care for transgender adolescents: Alabama, Arizona, Arkansas, Florida, Georgia, Idaho, Indiana, Iowa, Kentucky, Louisiana, Mississippi, Missouri, Montana, Nebraska, New Hampshire, North Carolina, North Dakota, Ohio, Oklahoma, South Carolina, South Dakota, Tennessee, Texas, Utah, West Virginia, and Wyoming.

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. 

Toolkit: Introduction to Employee Benefits

Evolving Legal Environment

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

With Tennessee prevailing in Skrmetti, “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,” said Sarah Raaii, an attorney with McDermott Will & Emery in Chicago.

About half the states now restrict services like surgeries and hormone therapy to treat gender dysphoria and similar conditions in minors, and with those laws having withstood constitutional challenge in Skrmetti, employers should assume those laws will be on the books for some time to come, Stanton said. 

“Though they would not be required to, more employers may also extend travel benefits now that this case has been resolved,” he added. “Many employer plans do provide gender dysphoria treatments for minors, though often with extra guardrails or age limitations.”