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As awareness for transgender issues increases, more employers are including coverage for transition-related health care as a way to foster an inclusive workplace environment while attracting and retaining workers.
These benefits, meant for individuals transitioning to the opposite sex, may include mental health counseling, hormone replacement therapy and gender reassignment surgery. Some employers may even include coverage for facial feminization or reducing the Adam's apple, though most procedures considered cosmetic are not offered.
Some employers who offer transgender-related benefits may provide coverage for surgical procedures of the genitalia and chest, but not hormone replacement therapy. Others may cover hormone therapy, but not surgical gender reassignment.
There is no legal requirement for employers in the private sector to cover transition-related procedures, and few do so, but high-profile examples, such as Bruce Jenner's transition to Caitlyn, and a federal push for equal transgender rights may spur further adoption, experts say.
A Mercer L.L.C. 2014 survey found that 8% of employers with 500 or more employees provided coverage for gender reassignment surgery in 2014, up from 5% in 2013. And 23% of employers with 10,000 or more employees offered coverage, flat from the previous year, according to the survey.
Because of a lack of comprehensive data, it's difficult to pinpoint how many individuals in the United States identify as transgender. One regularly cited 2011 study by researchers at the University of California Los Angeles School of Law's Williams Institute estimates 700,000 individuals are transgender, not all of whom seek gender reassignment.
A National Business Group on Health 2013 survey of large members, who NBGH said are typically at the forefront of benefits offerings, found that 60% planned to offer non-surgical transgender-related benefits in 2014, compared with 26% offering those benefits in 2007. Fifty percent of employers planned to offer transgender-related surgical benefits in 2014, up from 5% in 2007, according to the survey.
More insurers, such as Aetna Inc. and Cigna Corp., are offering coverage for transgender-related procedures as well.
In the public sector, transgender health coverage is now widely available. The Office of Personnel Management on June 23 prohibited Federal Employee Benefit Plan providers from excluding transition-related care in their federal employee health plans, citing an “evolving professional consensus that treatment may be medically necessary” for individuals diagnosed with gender dysphoria, that is distress caused by differences in a person's genetic sex and gender identity.
That decision comes on the heels of the federal government's May 2014 decision to lift its ban on covering sex reassignment surgery under Medicare.
“The federal employee health insurance programs set a tone and standard that will undoubtedly impact workers outside of the federal government,” a spokeswoman for the Human Rights Campaign said in an email.
“Although this will not reach every private insurance provider, requiring those that participate in the federal program to provide complete, inclusive coverage will definitely change the way the insurance companies do business nationwide,” the spokeswoman for the Washington-based lesbian, bisexual, gay and transgender rights advocacy group said.
Dr. Michael Cryer, Houston-based medical director for Aon Hewitt, said he's seen more interest among employers in offering transgender health benefits this year than in the past, though adoption among his clients is still minimal.
Most clients who offer transition-related health coverage believe it will give them an advantage when hiring employees, he said.
“If they feel like they are in a marketplace where the other employers like themselves” offer transgender health benefits, “then they tend to offer it,” he said.
For employers that don't offer transition-related coverage, “it's not specifically the procedure or the content of the benefit” influencing the decision, but the prospect that it could increase health care costs, he said.
But experts say the cost to an employer is negligible compared with more common procedures, such as heart bypass surgery, partly because transgender incidence rates are very low.
According to the NBGH survey, some employers report costs ranging from $14,000 to $500,000 yearly for the employee population, depending on the procedures. Others reported costs of gender reassignment benefits at 0.1-0.5% of total health care costs, NBGH said. The average employer responding to the survey had 35,000 employees, an NBGH spokesman said.
“Many people are taking $100,000 dollar drugs now, so in comparison” the cost for offering transgender health benefits is “very small,” said Shari Davidson, Washington-based vice president with NBGH. Cost does not generally factor into the decision to offer the benefit even though some costs are ongoing, she said.
Instead, those decisions are commonly rooted in science, and insurers and employers will cover treatments that are “medically necessary or no longer experimental,” Ms. Davidson said.
Today, the American Medical Association, American Psychological Association and other professional organizations say transition-related procedures are appropriate treatments for gender dysphoria. A psychiatrist will decide whether it is medically necessary for an individual to receive such treatment, according to Dr. Cryer.
For TD Bank N.A., offering transgender health benefits “was part of our business case in having an inclusive environment,” said Cyndi DiCastelnuovo, Mount Laurel, New Jersey-based vice president of diversity and inclusion.
“When employees feel their needs are met, and in this case from a benefits perspective, they perform at a higher level,” she said.
TD Bank covers hormone therapy, 80% of transgender reassignment surgery expenses and general mental health services pre- and post-surgery, Ms. DiCastelnuovo said. The company does not cover cosmetic surgery.
Ms. DiCastelnuovo said offering such benefits has helped attract and retain workers and create a “total value package for our LGBT employees.”
For a private employer, especially those under a self-insured health plan, the risks involved in declining to offer transgender health coverage are small, but more attention on the issue has “increased potential for discrimination claims,” said Todd Solomon, a Chicago-based partner with law firm McDermott Will & Emery.
And the number of employers offering transgender health coverage is expected to keep growing.
“With or without (the Office of Personnel Management decision), a lot of private companies are looking to cover this. In fact, we've seen tremendous growth,” said Brenna Shebel, Washington-based vice president of NBGH. “We will see more of our members covering both nonsurgical and surgical gender reassignment benefits.”