Dignity Health has answered a federal discrimination lawsuit filed by a transgender nurse by arguing that civil rights law does not require its self-insured employer health plan to cover gender reassignment-related care. It says Title VII of the Civil Rights Act does not cover transgender status as a protected classification.
The San Francisco-based hospital chain also argued last month in response to the closely watched suit—one of the first of its kind in the country—that HHS' May rule barring categorical exclusion of coverage for gender transition services does not take effect until Jan. 1, 2017. Prior to that, it argues, federal law does not require an employer to provide health coverage for “sex transformation” treatment.
In addition, the new federal anti-bias rule does not bar self-insured employer health plans from excluding benefits for services that are not medically necessary, according to Dignity's motion for dismissal. It said “the medical efficacy of sex transformation surgery remains the subject of debate.”
But lawyers for the American Civil Liberties Union who are representing nurse Josef Robinson say both Title VII and the new HHS rule interpreting Section 1557 of the Affordable Care Act clearly require employers and health plans to cover treatment related to gender dysphoria. That's the name for the condition where people feel they are not the gender they were assigned at birth.
Legal experts expect more such lawsuits following HHS' issuance of the anti-bias rule in May.
Lisa deFilippis, an attorney at Jackson Lewis in Cleveland who counsels employers on benefits, predicted that Catholic and other religious groups will turn to the courts seeking a religious freedom exemption from the federal prohibition against discrimination relating to gender reassignment-related care. It will be similar to legal challenges against the Affordable Care Act mandate to provide contraceptive coverage. “I would not be the least surprised to see people waving the Hobby Lobby and Zubik cases, saying this is the same thing and we shouldn't have to provide these services,” she said.
Robinson was assigned the gender of female at birth but identifies as a man. He claims the self-insured health plan operated by Chandler (Ariz.) Regional Medical Center, the Dignity-owned hospital where Robinson works, denied him coverage for double mastectomy and phalloplasty operations, and he had to pay thousands of dollars for the mastectomy and hasn't been able to afford the phalloplasty.
The Phoenix office of the federal Equal Employment Opportunity Commission found that the denial of coverage by Chandler Regional's plan was a Title VII violation and granted Robinson a notice of right to sue.
Dignity “is making an argument that's been rejected over and over and is flatly inconsistent with controlling law in the 9th Circuit,” said Josh Block, a senior staff attorney at the ACLU's LGBT Project in New York City.
The lead attorney for Dignity Health, Barry Landsberg, of Manatt Phelps & Phillips in Los Angeles, said he could not comment on pending litigation.
Dignity Health issued a written statement saying it is "committed to an inclusive, respectful, and nondiscriminatory workplace" and that Robinson "continues to be a valued member of our staff."