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August 4, 2020
The recent Supreme Court decision in Bostock v. Clayton County (6/15/2020) may require employers to reconsider who is eligible for, and what coverage is available under, employer-sponsored benefits. The Court held that Title VII protection against employment discrimination based on sex should extend to discrimination based on an individual’s sexual orientation or gender identity.
Title VII makes it “unlawful . . . for an employer to fail or refuse to hire or to discharge any individual, or otherwise to discriminate against any individual . . . because of such individual’s race, color, religion, sex, or national origin.” Employer-sponsored health and welfare benefits are part of the employment package and therefore fall under the broad protection of Title VII.
The recent Supreme Court ruling indicates that Title VII of the Civil Rights Act of 1964 protects employees against discrimination because of their sexual orientation or gender identity, because “homosexuality and transgender status are inextricably bound up with sex.” The Supreme Court case considered several situations in which termination of employment based on both homosexuality and gender identity occurred, but the interpretation of “sex” is applicable for any employment discrimination that may be subject to Title VII, including an employer’s benefit offering.
Employers should be careful that their benefits do not discriminate based on sex, which has now been interpreted to include sexual orientation and gender identity. There is no specific list of items or categories that must be covered, so there is no easy way to ensure there is no risk of discrimination under Title VII. However, a good starting point is for employers to consider whether their benefit plans provide the following:
As employers are going through their next renewal, they should review their plan eligibility rules to ensure they aren’t discriminatory. For example, consider the definition of eligible dependents. Then actual coverage should also be considered.
There has been debate over the definition of “sex” for purposes of applying federal nondiscrimination rules for at least the last couple decades, including under ACA §1557 nondiscrimination rules, which the Trump administration recently interpreted as not necessarily including sexual orientation or gender identity. However, with this Supreme Court decision, employers who choose to discriminate in employment, including via benefit offerings, based on sexual orientation or gender identity, risk a violation under Title VII.
Supreme Court Opinion – opens in a new windowwww.supremecourt.gov/opinions/19pdf/17-1618_hfci.pdf.
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