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Home Affordable Care Act ACA Discrimination Suit Sheds Light On Transgender Child Rights

ACA Discrimination Suit Sheds Light On Transgender Child Rights

2 minute read
by Robert Sheen
New ACA Discrimination Suit on Transgender Child Rights Focuses on Actions of Third-Party Administrators

Over the last few years, the rights of transgender workers within organizations have continued to fall under the microscope. From anti-discrimination rules surrounding hiring to adequately reporting the gender of employees as identified versus assigned at birth, there is a lot to discuss and consider. Now we are seeing how decisions on transgender rights might affect the healthcare rights of employees and their families, as well as employers and the third-party entities that administer these self-funded health plans.

In the case of Tovar v. Essentia Health, et al, No. 16-3186, the employee in question, a nurse in Minnesota, had a company health plan that included a blanket exclusion of transgender services. This didn’t affect the employee directly, but did affect her transgender child. The child was denied coverage for a gender reassignment surgery after being diagnosed with gender dysphoria, a medical condition in which a person’s gender identity is determined to be different from the one assigned at birth. The mom filed legal challenges based on a claim of sexual discrimination against her employer and a claim of discrimination in violation of the ACA filed against the company health plan’s third-party administrator (TPA).

Many employers which have self-funded healthcare insurance plans contract with independent TPAs to handle the administrative tasks of processing insurance claims and other parts of employee benefit plans. TPAs can also provide input into the development of self-funded insurance plans and how best to comply with healthcare regulations. The employer acts as the insurance company and underwrites the risk. The Society of Professional Benefits Administrators say that nearly 66 percent of all U.S. workers are now covered by self-funded health plans. The majority of these self-funded plans are managed by TPAs.

A U.S. District Court Judge initially dismissed the legal challenges ruling the mom did not have standing to pursue such legal actions. A decision by the U.S. Court of Appeals for the Eighth Circuit, however, left room for proceeding with a portion of the case, saying that the mom could pursue legal action against the TPA in District court, specifying a violation under Section 1557 of the ACA. The court ruled that the TPA could be held responsible for the details of the health plan offered by the employer.

The court ruling received a mixed reception from transgender advocates. Some were critical of the ruling because it supported an interpretation of Title VII of the Civil Rights Act of 1964 that would deny parents legal standing to undertake legal action on grounds of discrimination against their children. Title VII is a federal law that prohibits employers from discriminating against employees on the basis of sex, race, color, national origin, and religion. Other advocates were more positive. Christy Hall, an attorney with Gender Justice who represented the mom, stated in Law360: “This court has issued a decision that protects 50 million Americans who receive their health insurance through employer self-insured plans. The court recognized that the anti-discrimination provisions of the ACA can prevent third-party administrators from issuing and managing discriminatory plans.”

Moral of the story for employers?  Be sure as an employer that you are clear on what services are mandated to be covered by the ACA, as it looks more and more like it will remain the law of the land in one shape or another.  And be sure that those services are being provided in the employee healthcare plan being administered by a TPA.   In this instance, the employer had the lawsuit dismissed, but only after months of press coverage on the legal proceedings and leaving open a lawsuit against the TPA.

Summary
ACA Discrimination Suit Sheds Light On Transgender Child Rights
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ACA Discrimination Suit Sheds Light On Transgender Child Rights
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A recent case involving the transgender child of an employee is proceeding. What will this mean going forward, as ACA discrimination cases continue to arise?
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The ACA Times
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