Future Look |

Small Benefits Changes Now Could Pay Big Dividends in the Future

A major decision came down from the U.S. Supreme Court on Monday, as it ruled that it is illegal for an employer to fire someone because of their sexual orientation or gender identity.


The 6-3 ruling extends the scope of Title VII of the Civil Rights Act, which prohibits discrimination on the basis of sex, race, color, national origin and religion, to include LGBTQ people. While the ruling is only specific to employment, it could have wide-ranging affects to other areas of an LGBTQ employee’s work experience.

One component that could be heavily influenced going forward is benefits, as there could be heightened compliance risk for health plans that cover and treat individuals differently based on sexual orientation and/or gender identity.  

“We advise employers to review plan terms, include coverage exclusions, and make any necessary changes as soon as practicable to minimize this risk,” said Michael Garrett, principal at Mercer’s total health management practice. “In particular, employers that don’t offer coverage to same-sex spouses should reverse course on this decision immediately to avoid legal exposure.”

Mercer has identified several areas of health benefit plans that could be affected and should be reviewed by organizations.

  • Benefit eligibility for same-sex spouses. Employers with self-funded group health plans could still offer coverage to opposite-sex spouses and not same-sex spouses. Many state non-discrimination laws require equal coverage in insured group health plans, but employer plans that still include such an exclusion should remove it.
  • Medical plan design. Blanket exclusions of transgender-related services, including treatment for gender dysphoria and gender affirmation surgeries, should be reviewed for compliance risk. According to Mercer’s “2019 National Survey of Employer Sponsored Health Plans,” only around a third of employers with 500 or more employees offered coverage for gender-reassignment surgery. However, 69% of companies with 20,000 or more employees offered such coverage.
  • Disability plan. Employers should confirm that disability plans cover disability periods due to gender affirmation surgeries, whether or not the surgeries are covered by the group health plan.
  • Non-discrimination policy. Employers should update policies to specifically state that discrimination on the basis of sexual orientation and gender identity is prohibited.

Garrett noted that employers should also look at their coverage for services such as fertility, adoption and surrogacy to make sure they’re inclusive of same-sex couples as well.

Per Mercer, gender affirmation services for transgender individuals are typically a very small percentage of overall costs, Garrett said. An estimated 13 million Americans age 13 and older identify as lesbian, gay, bisexual or transgender. Approximately 1.4 million adults in the U.S. identify as transgender and not all have surgery; some choose only hormone treatment or only behavioral health care, and some don’t seek any services. National utilization of services related to gender affirmation surgery is estimated to be approximately 0.05 to 0.2 claimants per 1,000 employees per year, and the typical annual cost per claimant may be $15,000 to $75,000, depending on the needed surgeries.

While some of these actions by employers are to mitigate legal risk, it’s also a good benefits practice that can better situate a company for success. 

“It’s a commitment to diversity and inclusiveness,” Garrett said. “Employers have a renewed interest in D&I as a result of social justice issues, so it’s brand image, it’s attracting and retaining talent, it’s their strategy to maintain a productive workforce. Companies committed to D&I usually perform better … really, it’s part of the values those organizations have to support a diverse and inclusive workforce.”

Outside of regular health-care offerings, employers can make other adjustments to the benefits they offer and the way they communicate them to enhance diversity and inclusion. Garrett said rather than providing standard benefits information for your entire employee group during onboarding or open enrollment, it’s best to personalize the materials for different groups; what’s relevant to a 23-year old female employee likely isn’t relevant to a 50-year old male employee. The same principle should extend to the LGBTQ community as it relates to health-care information that is applicable to them, he said.

Organizations can lead the charge to make health-care more affordable and more inclusive for the LGBTQ community. Because while Monday’s SCOTUS ruling was a step in the right direction, there’s still plenty of hurdles that still have to be overcome.

“LGBTQ still have challenges in accessing providers who are confident in the care of LGBTQ people. It’s not like we can wipe our hands and say, ‘OK this is done,’ particularly because this decision was related to employment and not health care,” Garrett said. “So, I think we still have a ways to go in meeting the needs of not just the LGBTQ population, but also providing culturally competent care for people of color and people of different faiths.”




HHS Rolls Back LGBTQ Health-Care Protections
The U.S. Department of Health and Human Services (HHS) removed protection for gay and lesbian people from federal health-care program anti-discrimination regulations, writes Benefits Pro. HHS officials said they are deleting sexual orientation and gender identity from the regulations because they believe Obama-era HHS officials interpreted Section 1557 of Patient Protection and Affordable Care Act (PPACA) incorrectly.

Negotiating Benefits
Citing a survey by Paychex, Ryan Golden of HR Dive writes about how many job candidates want their potential employer to be open to negotiating benefits. The survey indicated that 64% of respondents feel this way and 87% said they had done so during the hiring process, while 60% attempted negotiations after being hired.

Helping Women Reclaim Pre-COVID Workplace Gains
With unemployment at its highest levels since the Great Depression, a mass return to work uncertain, and remote work the new office norm, there is potential for many of those female gains in the workplace to unravel, writes Tracey Welson-Rossman of Forbes. Welson-Rossman asserts that childcare benefits have a huge role to play in women’s continued battle for workplace equity.

How Employers Can Mitigate a Future Retirement Gap
In the midst of the COVID-19 pandemic, gender pay gap may not seem like the highest priority for businesses, and some countries are even rolling back gender pay gap reporting requirements. However, the gravity of this issue has not been lost on consumers, writes Tanya Jansen of Employee Benefits Adviser. Jansen lists different ways businesses can implement solutions that will create pay equity for generations to come.

About the Author

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Brett Christie is the managing editor of Workspan Daily.

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