Aetna Beats ERISA Lawsuit Over Transgender Breast Surgery

Employee Benefits News examines legal developments that impact the employee benefits and executive compensation employers provide, including federal and state legislation, rules from federal...

By Jacklyn Wille

A transgender woman who sought disability benefits following a breast augmentation surgery lost her lawsuit against Aetna Life Insurance Co. ( Baker v. Aetna Life Ins. Co. , 2017 BL 154737, N.D. Tex., No. 3:15-cv-03679-D, 5/9/17 ).

Aetna properly denied the woman disability benefits for her post-surgery recovery because it reasonably concluded that the surgery was for cosmetic purposes and not a medically necessary procedure aimed at treating an illness, a federal judge ruled May 9. According to Aetna, the surgery wasn’t medically necessary because the woman’s hormone-replacement therapy had already caused her to develop “average-size female breasts,” rendering further augmentation cosmetic.

This case against Aetna and the woman’s employer, L-3 Communications Integrated Systems LP, is one of the first cases to question the extent to which the Employee Retirement Income Security Act protects individuals who receive medical services related to their transgender status. In January, the judge rejected the woman’s attempt to state an ERISA claim for gender identity-based discrimination after finding that the statute didn’t provide for such a claim. The woman’s attempt to advance this claim under the Affordable Care Act was similarly unsuccessful.

“This is the kind of case that might come out differently 10 years from now,” Daniel R. Salemi, a partner with Franczek Radelet PC in Chicago and co-chair of its employee benefits group, told Bloomberg BNA. “In a number of years, the medical community may change its views on this topic, and I would actually expect that it will.”

Salemi added that gender dysphoria has been recognized by the medical community for a relatively short period of time. The community’s views on the medical necessity of treatments related to gender dysphoria are likely to evolve further, he said. If they do, a transgender woman seeking coverage for breast augmentation and related benefits could have a stronger claim in the future, Salemi said.

Sam Schwartz-Fenwick, a partner in Seyfarth Shaw’s Chicago office who focuses on employee benefits and LGBTQ issues, said the decision was most interesting for what it didn’t consider.

“Until a few years ago, it was almost universal that benefit plans had an exclusion for transgender-related services. It was an express exclusion in nearly every plan document,” Schwartz-Fenwick told Bloomberg BNA. “If a decision like this is occurring where both sides agree that some transgender care is medically necessary, that’s a real sea change from where the law was just a few years ago.”

No Uniform Construction

Here, the woman said that Aetna “lacks a uniform construction” for when to cover breast surgeries, because it covers such surgeries following mastectomies, lumpectomies or traumas but not for treatment of gender dysphoria. Further, Aetna covers breast reduction surgeries for transgender people who are transitioning from female to male, the woman said.

Aetna said that it has no categorical rule about gender dysphoria or male-to-female transitions. Rather, coverage was denied in this case because the woman didn’t establish that her surgery was medically necessary, given that she had developed “size B-C breasts” from her hormone treatments.

The judge agreed with Aetna, noting that the insurer’s medical necessity determination was based in part on the woman’s own description of the surgery as a “cosmetic procedure.”

Darrell VanDeusen, an employment-side labor lawyer and president of Kollman & Saucier PA in Timonium, Md., said that this decision turned on the specific facts of the woman’s case—in particular, the fact that she was able to develop breasts through nonsurgical means and that her doctor didn’t describe the surgery as medically necessary.

“If an individual transitioning from male to female was not having success with hormone therapy and wasn’t able to develop breasts that way, I could see a doctor saying that breast enhancement surgery is medically necessary and thus it’s covered under a plan,” VanDeusen told Bloomberg BNA. “If the hormone therapy works sufficiently, it may be that you don’t have as much an argument for coverage if you want more than the therapy provides.”

The decision was issued by Judge Sidney A. Fitzwater of the U.S. District Court for the Northern District of Texas.

Hindman/Bynum represented the woman. Baker Botts represented Aetna. Polsinelli represented L-3.

To contact the reporter on this story: Jacklyn Wille in Washington at

To contact the editor responsible for this story: Jo-el J. Meyer at

Copyright © 2017 The Bureau of National Affairs, Inc. All Rights Reserved.

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