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Bostock v. Clayton County Supreme Court Ruling – Time to Review Your Employee Benefit Plans

Background:

The Civil Rights Act of 1964 is an important law that is both a civil rights and labor law and on its basic level outlaws discrimination on the basis of race, color, religion, sex, or national origin. More specifically under Title VII, which governs equal employment opportunity, it is unlawful for an employer to fail or refuse to hire or to discharge any individual, or otherwise to discriminate against any individual with respect to his compensation, terms, conditions, or privileges of employment for any of the basis of race, color, religion, sex, or national origin.

The heart of the most recent Supreme Court ruling on Title VII in Bostock v. Clayton County was an employee’s “sex” included an employee’s sexual orientation or gender identity, therefore, protecting an employee from termination (or being hired) because they were gay or transgender.

The Supreme Court’s ruling answered that question by definitively stating “[a]n employer who fires an individual for being homosexual or transgender fires that person for traits or actions it would not have questioned in members of a different sex. Sex plays a necessary and undisguisable role in the decision, exactly what Title VII forbids.” The Supreme Court made clear that under the Civil Rights Act “sex” includes gender identity and sexual orientation.

What Does This Mean for Employee Benefit Plans?

Although Bostock v. Clayton County was specifically focused on the hiring and termination of LGBTQ individuals it may have implications for employee benefits. Employee benefits are a fringe benefit program and receipt of benefits under fringe benefit programs also are protected from discriminatory practices and decisions under Title VII.

In light of this Supreme Court decision, employers sponsoring group health plans may want to review their benefit plans to assess whether coverage discriminates on the basis of sex, for instance:

  • Eligibility terms:
    • If the plan covers spouses, does it allow same sex-spouses?
    • If the plan permits coverage of domestic partners, does it allow for same-sex domestic partners?
  • Benefits:
    • Does the plan cover gender dysphoria and related services? 
    • Do the family-planning benefits need to be expanded?
      • What are the infertility services & how does one qualify?
    • Is gender-affirmation surgery considered a temporary disability under the disability plan?

If an employer discovers their plans may be viewed as discriminatory or they prefer not to implement coverage changes impacting LGBTQ participants (i.e. cover gender dysphoria and related services), or have a self-funded plan currently with a blanket exclusion, they should seek legal advice. These exclusions are likely to now be challenged under this new Supreme Court precedent. The Supreme Court has unequivocally stated that under Title VII, sex does include sexual orientation or gender identity and discrimination on the basis of sex under employment law is not permissible. That includes benefits because they are a term & condition of employment.  

 

This article was last reviewed and up to date as of 7/5/2020.

Disclaimer: This blog was written by Michelle Turner, MBA, Compliance Consultant, Alera Group Central Region. This blog post intends to provide general information regarding the status of, and/or potential concerns related to, current employer HR & benefits issues. This blog should not be construed as, nor is it intended to provide, legal advice. The opinions expressed herein are based upon the author’s experience as a Compliance Consultant and may not reflect the opinions of your counsel. 

The information contained herein should be understood to be general insurance brokerage information only and does not constitute advice for any particular situation or fact pattern and cannot be relied upon as such.  Statements concerning financial, regulatory or legal matters are based on general observations as an insurance broker and may not be relied upon as financial, regulatory or legal advice.  This document is owned by Alera Group, Inc., and its contents may not be reproduced, in whole or in part, without the written permission of Alera Group, Inc.

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