Historically, many benefit plans contained exclusions for gender dysphoria treatments, including gender affirmation surgery. The reasons for this exclusion may have been the result of a number of considerations, including, at a basic level, managing the costs of the plan. However, in recent years, as more attention has been paid to transgender considerations, an increasing number of plans have removed these exclusions and provided different levels of coverage.
Recent legislation and court decisions mean that all employers that sponsor self-funded health plans should review their plan documents and determine whether any changes are warranted in regard to these coverage issues. Because the law in this area is changing at a rapid pace, many plan sponsors may not have revisited this issue recently, but now is a good time to do so.
In general, any plan or plan sponsor that is subject to Section 1557 of the Patient Protection and Affordable Care Act (the “ACA”) will need to ensure that benefits for gender dysphoria satisfy all legal requirements. Moreover, even if not explicitly required to cover these services under Section 1557, the U.S. Supreme Court’s recent decision in Bostock v. Clayton County means that plans that do not cover transgender benefits are likely to face increased litigation risk. This article discusses some of the recent legal developments and considerations for plan sponsors of self-funded health plans.