Recent Court Action May Result in 2021 Benefit Plan Design Changes

Recent Court Action May Result in 2021 Benefit Plan Design Changes

Three recent Federal Court rulings extend civil rights and nondiscrimination protections to individuals based on sexual orientation and gender identity. As a result, group benefit plan designs may need to change for the upcoming policy year.

On June 15, 2020, the Supreme Court of the United States (SCOTUS) announced a landmark 6-3 decision in Bostock v. Clayton County. The ruling extends the scope of the Title VII of the Civil Rights Act’s workplace anti-discrimination protections to include sexual orientation and gender identity. Since this law applies to fringe benefit programs, group health plans are affected.

Then, on August 17, 2020, the United States District Court of the Eastern District of New York issued a ruling preventing the Trump Administration from enforcing parts of their new ACA Section 1557 nondiscrimination regulation. This rule limited the definition of discrimination based on sex only to refer to males and females.

Finally, a September 2, 2020 ruling from the United States District Court of the District of Columbia in a separate case reaffirmed the August 17th ruling and expanded upon it.  In that case, not only did the judge bar the Trump Administration from enforcing the new rule’s would-be elimination of protections based on sex stereotyping, it also invalidated a religious-based exemption to the nondiscrimination provisions. The upshot of all of these decisions is now health plan nondiscrimination provisions must extend to all LGBTQ individuals.

To ensure all necessary discrimination protections are part of group health plans moving forward, plan designs may need to change. In all likelihood, carriers that previously excluded coverage for gender dysphoria and related conditions and procedures, such as gender reassignment surgery and associated medications, will cover these things. If recovery from this surgery was not previously a qualifying event for short and long-term group disability coverage, it might be in the future. Also, look for gender-specific plan design language and benefits regarding family planning, infertility, and other services to change in the year ahead.

Beyond plan design changes, group plan sponsors should review any plan eligibility criteria that could be considered discriminatory. For example, if a group relies on state law regarding same-sex marriage and domestic partnership relationships, that language should be revised since many state laws are discriminatory. Instead, the plan should allow blanket eligibility for same-sex marriage and same-sex and opposite-sex domestic partners.

Your Kistler Tiffany Benefits/OneDigital Client Executive will discuss the gender equity rulings with you.  They will also discuss them with the carriers and third-party administrators you deal with, in case policies and procedures and plan documents need to change!