Although many companies have included "gender identity" as a protected category, the relationship between such a policy change and health benefits are poorly understood. Most benefit plans contain an exclusion for "transsexualism." This means that mental health counseling, hormone replacement therapies and surgical procedures will not be covered if they are associated with transsexualism. Since employers negotiate insurance benefits for their employees, the inclusion of "gender identity" as a protected category may make it appropriate to revisit this issue with the insurer. For example, Microsoft not only recently added "gender identity" to its EEO policy, but also announced increased coverage of transgender-specific health benefits.
This issue is of increased relevance for all companies because the Human Rights Campaign, which issues the Corporate Equality Index (CEI), a measure of corporate diversity, is reviewing health benefits for transgender employees for the 2006 rankings. A company cannot get 100% on the CEI unless there is "parity in at least one transgender wellness benefit."
The exclusion for "transsexualism" began appearing in insurance contracts in the 1960s, after media publicity about new treatments for transsexuality. There were generally three reasons for the blanket exclusion for transsexualism: the experimental nature of medical treatments, the lack of evidence of medical necessity, and the onerous costs. This reasoning may no longer be as persuasive. Most physicians no longer consider them experimental, there have been medical studies demonstrating medical necessity, and the cost per insured is low. This is not to say that health benefits should in every case be changed to cover any and all treatments for transgender employees, but rather that health benefits should be reviewed to determine whether the organization considers its current coverage appropriate.
Bottom line: Communication between the CDO and the benefits department may be useful, especially when there is a policy change to include "gender identity" in the EEO statement.
