Aetna Dodges ERISA Bias Claim by L-3 Transgender Worker

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 Carmen Castro-Pagan

Aetna Life Insurance Co. dodged a claim by a transgender L-3 Communications Integrated Systems LP worker who alleged the insurer’s denial of her disability benefits was gender-identity discrimination in violation of ERISA ( Baker v. Aetna Life Ins. Co. , 2017 BL 11575, N.D. Tex., No. 3:15-cv-03679-D, 1/13/17 ).

The Employee Retirement Income Security Act doesn’t recognize such a bias claim, Judge Sidney A. Fitzwater of the U.S. District Court for the Northern District of Texas held Jan. 13. “It is for the Congress, not this court, to decide whether to create in ERISA a protection that the statute does not already provide,” Fitzwater said. However, the judge said the participant could move forward with her ERISA claim to recover benefits against the insurer giant.

Transgender issues involving employer-sponsored plans have been finding their way to court lately. In May 2016, a federal judge in Minnesota dismissed claims of discrimination under the Affordable Care Act by a nurse seeking coverage for her teenage son’s gender reassignment. The case is pending in the U.S. Court of Appeals for the Eighth Circuit. A month later, the American Civil Liberties Union filed a lawsuit against Dignity Health on behalf of a nurse who was denied coverage for gender reassignment treatment.

Transgender Treatment and ERISA

Fitzwater’s ruling is noteworthy for being one of the first decisions addressing the scope of ERISA when a transgender employee alleges being denied disability benefits for post-surgery recovery based on a discriminatory act.

Charlize Marie Baker, who had started her gender transition from male to female in 2011, also sued Aetna and L-3 under the Affordable Care Act and Title VII of the Civil Rights Act of 1964 alleging both companies discriminated against her by denying her coverage for her breast-implant surgery based on her gender identity. She also alleged that she was denied short-term disability benefits on the basis that the breast surgery to treat her gender dysphoria didn’t qualify as an illness.

The ACA doesn’t recognize a claim for discrimination based on gender identity, the court said in dismissing the claims against L-3 and Aetna.

In dismissing Baker’s ERISA discrimination claim, the court further said that it appeared that she based her claim on protections she alleged were found in Section 1557 of the ACA. Because Section 1557 doesn’t provide a cause of action for discrimination based on gender identity, Baker can’t rely on that section to support conferring such a right of action under ERISA, the court said.

As to Baker’s Title VII claims, the court dismissed the one against Aetna because the insurer wasn’t her employer. However, Baker sufficiently alleged that she was denied employment benefits based on her sex and as such the court declined to dismiss her Title VII claim against L-3.

Hindman/Bynum PC represents Baker. Polsinelli PC represents L-3. Baker Botts represents Aetna.

To contact the reporter on this story: Carmen Castro-Pagan in Washington at ccastro-pagan@bna.com

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

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

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