Dive Brief:
- A transgender woman’s lawsuit against her employer’s insurance provider group, WSP USA Inc. Group Insurance Plan, failed to state a claim to support her allegations of Employee Retirement Income Security Act violations, a judge for the U.S. District Court for the Northern District of California ruled Friday (Cox v. WSP USA Inc. Group Insurance).
- The worker alleged WSP denied her medically necessary treatment for her gender dysphoria when it refused to cover facial feminization surgery. WSP, in contrast, said the worker had “not identified a term of the plan that it allegedly violated” and that the treatment sought was “expressly excluded by the plan’s terms.”
- The judge sided with WSP, contending that while it accepted the worker’s claims about the noncosmetic benefits of such surgery, they were “ultimately beside the point” when it came to the ERISA claim at hand.
Dive Insight:
Cox provides a lesson in the applicability of ERISA when benefit claims are turned down.
“Generally, ERISA does not mandate what benefits employers must provide if they choose to have a plan,” the judge noted. “Instead, ERISA ensures that when employers offer plans, employees receive the benefits promised.”
“In other words, the relevant question here is not whether WSP should cover certain procedures, but only whether it actually did agree to cover them,” he said.
In this case, Aetna, the insurance provider determining whether to approve or deny plans based on what WSP agreed to cover, issued plan documents that explicitly outlined a list of gender transition procedures it considered “not medically necessary and cosmetic,” including the specific lower jaw surgery the worker was seeking.
Gender affirmation surgery has been a more common topic in employment lawsuits in recent years, becoming entangled with a variety of laws.
In November, for example, a Marriott hotel employee alleged her termination following several leaves for such surgery amounted to disability and gender identity discrimination under Title VII of the Civil Rights Act of 1964 and the Americans with Disabilities Act, as well as interference with her Family and Medical Leave Act rights. That case is still pending.
In contrast with Cox, a Florida judge in August 2024 found that the state’s denial of coverage for certain transgender healthcare procedures was in violation of the law — but importantly, this was a discrimination claim under Title VII rather than an ERISA claim.
The judge in that case leaned on Bostock v. Clayton County, a 2020 Supreme Court decision that protected gay, lesbian and transgender workers from employment discrimination. However, the fate of that ruling is murky as SCOTUS has seemingly been distancing itself from the logic of Bostock in recent years, a writer for SCOTUSblog noted recently.
