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Recent US Supreme Court Decision Impacts Employee Benefits

on Friday, 10 July 2020 in Labor & Employment Law Update: Sarah M. Huyck, Editor

On June 15, 2020, the US Supreme Court held in Bostock v. Clayton County that, under Title VII of the Civil Rights Act of 1964, employers cannot discriminate on the basis of sexual orientation or gender identity. Title VII protects employees, at companies with 15 or more employees, from discrimination based on an employee’s “race, color, religion, sex, or national origin.” In Bostock, the Supreme Court explained that discrimination based on sex includes discrimination based on sexual orientation or gender identity because, “it is impossible to discriminate against a person for being homosexual or transgender without discriminating against that individual based on sex.”  (For additional background on the Bostock decision, click here.)

Although Bostock focuses on unlawful terminations based on sexual orientation and gender identity, the Bostock decision impacts all employment actions protected under Title VII, including “discrimin[ation] against any individual with respect to compensation, terms, conditions, or privileges of employment.” Employee benefits, including employer-sponsored health care plans, are included in “compensation, terms, conditions, or privileges of employment.” Thus, employers may want to review their employee benefit plans, including group health plan coverage, in light of the Bostock decision to evaluate and address any possible instances in which LGBTQ+ employees may be treated differently. In addition to a general benefit review, employers may find it useful to review plans for the following items:

  • Benefits for gender dysphoria or gender affirmation surgery
  • Availability of temporary disability due to gender-affirmation surgeries
  • Access to in-network health care providers supportive of and knowledgeable about LGBTQ+ healthcare
  • Health care coverage for same-sex spouses and same-sex domestic partners
  • Availability of family-planning benefits that include LGBTQ+ employees
  • Potential discrimination concerns in benefit plan administration and benefit claim forms

The above list is not comprehensive, and employers always have the option to maintain more expansive benefit policies than state and federal laws require. Additionally, the Bostock decision does not address how religious liberty concerns interact with the newly defined Title VII protections. However, considering the most recent Supreme Court decision, Little Sisters of the Poor v. Pennsylvania, this will likely be litigated in subsequent cases. In Little Sisters of the Poor, the court upheld two rules, promulgated by the Departments of Health and Human Services, Labor, and the Treasury, exempting employers from providing contraceptive coverage for both religious and moral reasons.

Notably, the Bostock decision was decided just after the release of the Department of Health and Human Services’ updated rule under the Affordable Care Act. The final rule rescinds nondiscrimination requirements based on gender identify, gender expression, and sex stereotyping for any healthcare program or activity receiving federal financial assistance. While the ACA’s final rule does not go into effect until August 18, 2020, the Bostock decision will likely play a role in possible challenges to the ACA’s rule and may influence outcomes of discrimination claims under the ACA in federal courts.

Morgan L. Kreiser

Claire Haney (Summer Associate)

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