On June 15, 2020, the U.S. Supreme Court ruled that Title VII of the 1964 Civil Rights Act barring sex discrimination in the workplace also protects LGBTQ employees from being fired or disciplined based on their sexual orientation.
In a 6-3 ruling
,
the Court found that, "In Title VII, Congress adopted broad language making it illegal for an employer to rely on an employee's sex when deciding to fire that employee. We do not hesitate to recognize today a necessary consequence of that legislative choice: an employer who fires an individual merely for being gay or transgender defies the law."
Implications for Employee Benefit Plans
The Supreme Court’s ruling in
Bostock
specifically addressed hiring, firing, and disciplinary actions by employers. However, Title VII also prohibits employers from discrimination when it comes to the provision of “fringe benefits,” which have been defined by federal regulations (
29 CFR § 1604.9
) to include “medical, hospital, accident, life insurance and retirement benefits; profit-sharing and bonus plans; leave; and other terms, conditions, and privileges of employment.”
Since the
Bostock
ruling became effective immediately, employers need to review employee benefit plans to ensure they do not discriminate against LGBTQ employees. Specifically, plans should:
- Provide coverage for employee spouses regardless of sexual orientation;
- Provide coverage for domestic partners regardless of sexual orientation;
- Not be denied to any employee based on sexual orientation;
- Not discriminate in premium cost based on sexual orientation;
- Provide mental and physical health benefits for transgender employees for sex reassignment surgery, hormone therapy, etc.;
- Not impose limitations on medical care based on sexual orientation;
- Provide family planning benefits for employees regardless of sexual orientation; and
- Provide disability benefits for employees that may qualify for short- or long-term disability due to sex reassignment surgery or gender dysphoria treatment.
Does the Ruling Impact HHS Final Regulations Under Section 1557 of the ACA?
On June 12, 2020, three days prior to the
Bostock
ruling, the U.S. Department of Health and Human Services (HHS) released final regulations under Section 1557 of the Affordable Care Act (ACA).
The
Final Rule
, which becomes effective on August 18, 2020, eliminates nondiscrimination rules as defined in the 2016 implementing regulations for Section 1557 of the ACA, essentially rolling back prohibitions against discrimination based on sex that included pregnancy, gender identity and sex stereotypes.
In its
Final Rule Fact Sheet
, HHS stated that it would “enforce Section 1557 by returning to the government’s longstanding interpretation and ordinary meaning of the word ‘sex’ in the statute. Neither the Section 1557 statute nor Title IX includes prohibitions on discrimination on the basis of sexual orientation or gender identity, or define ‘discrimination on the basis of sex’ to include such categories.”
While the HHS’ Final Rule is not directly impacted by the
Bostock
ruling, its stance that “sex” under Section 1557 does not include gender identity or sexual orientation will likely be challenged based on Title VII protections for LBGTQ employees under
Bostock
. Employers should be cautious about implementing changes to employee benefits plans based on the new HHS regulations that could be challenged as discriminatory on the basis of sex per
Bostock
.
The Hall Benefits Law team has been paying careful attention to this evolving area of employee benefits regulation and will continue to provide updates. To speak with someone about how we can be a resource for your employee benefits legal compliance needs, call 678-439-6236, or visit the
Hall Benefits Law website
for more details.
