Transgender-Inclusive Healthcare: Law and Company Policies

Forward-thinking employers have moved ahead of legal requirements

By Benjy Schirm, J.D. | Reviewed by Canaan Suitt, J.D. | Last updated on March 8, 2024 Featuring practical insights from contributing attorney Malaika K. Caldwell

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Employers must annually evaluate their employee benefits packages and plans for compliance under both federal and state law. One often overlooked area is transgender-inclusive benefits.

“There has been a huge push for offering transgender health benefits, including gender-affirming care,” says employment attorney and benefits expert Malaika K. Caldwell.

Traditionally, most companies have excluded these services from their medical plans, but Caldwell says that’s changing fast. “Many companies are going back to these plans and revisiting, from an employer’s perspective, what coverage their employees will have going forward.”

In recent years, many states have banned or restricted gender-affirming care, while other states have legal protections in place that prohibit transgender exclusions in healthcare benefits. “If you have a company that falls under [a latter] state law, that demands a fully insured plan and inclusive benefits.”

Transgender-Inclusive Healthcare and the Corporate Equality Index

Some states mandate larger companies to have health insurance coverage for gender reassignment surgery, but the majority of companies fall under what is called a self-insured medical plan. The umbrella to this is ERISA, which doesn’t recognize transgender-inclusive healthcare. An employer can’t discriminate against transgender employees, but there is no mandate or penalty for not offering these services.

There is, however, a Corporate Equality Index (CEI). This is a national ranking system by the Human Rights Campaign (HRC) that selects the best places to work for LGBTQ+ equality and may be beneficial to companies that wish to be at the forefront of inclusive employee relations. “To be included in the index,” Caldwell says, “companies must offer transgender-inclusive benefits within their healthcare benefits packages. So, there is a push for companies to update these plans to get on the list of this index.”

There has been a huge push for offering transgender health benefits, including gender-affirming care… Many companies are going back to [their benefit] plans and revisiting, from an employer’s perspective, what coverage their employees will have going forward.

— Malaika K. Caldwell

Four Key Criteria for the Corporate Equality Index

It looks at a lot of different areas, and the standard is high. Only 545 companies earned a 100 percent rating from the HRC in its most recent CEI. Employers featured in this report took concrete steps to ensure greater equity for LGBTQ workers and their families in the form of comprehensive policies, benefits, and practices. The CEI rating criteria have four key pillars:

  1. Non-discrimination policies and advocacy across business entities;
  2. Equitable benefits for LGBTQ+ and nonbinary workers and their families
  3. Internal education and accountability metrics to promote LGBTQ+ inclusion competency;
  4. Public commitment to LGBTQ+ equality.

The Importance of Getting Benefits Right

Employee benefits and health plans are often the second-largest budget item for companies after paying salaries, and it’s a vital tool in attracting and retaining quality candidates to your business. “Things like this index are a great way to pull in more diverse and stronger workforces,” says Caldwell.

In order to successfully navigate the ever-changing landscape of employee benefit law, be certain that you contact a reputable and experienced attorney. For more information about this area, see our overviews on labor lawemployment law for employees, and employment law for employers.

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