Dignity Health Wins Stay in Transgender Treatment Coverage Suit

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

Dec. 7 — Dignity Health got a court-ordered stay on a lawsuit that accuses the hospital of discriminating against transgender employees by excluding coverage for “sex transformation” treatment from the hospital’s health plan ( Robinson v. Dignity Health , N.D. Cal., No. 4:16-cv-03035, 12/6/16 ).

Judge Yvonne Gonzalez Rogers granted Dec. 6 the stay until there is a decision by the U.S. Supreme Court over transgender rights in Gloucester County School Board v. G.G. In Gloucester County, as in this case, the central issue is whether “sex” means gender identity for purposes of anti-discrimination protection under a civil rights law. Thus, there is a “high likelihood” that the decision in Gloucester County would affect the decision in this case, Rogers wrote.

Dignity Health’s decision to change its policy to no longer exclude from coverage treatment, drugs, services and supplies for sex transformation surgeries “minimizes, if not completely eliminates,” any harm that may result from granting a stay while awaiting the high court’s decision, the judge said. The new policy will go into effect in January 2017.

Josef Robinson, a transgender nurse who works at Dignity Health’s Chandler Regional Medical Center in Arizona, commenced the case after being denied coverage for gender reassignment.

The lawsuit was the first to challenge a private health plan’s exclusion of coverage for treatment of gender dysphoria since the Department of Health and Human Services issued its final nondiscrimination rule, which included a ban on denial of health-care coverage based on an individual’s sex.

Dignity Health, the fifth largest hospital in the nation, asked the court to toss out the lawsuit, alleging that neither the Affordable Care Act’s nondiscrimination provision nor the HHS rule makes the coverage exclusion unlawful. The hospital’s request pushed the Equal Employment Opportunity Commission to file a brief supporting Robinson’s position and urging the court not to dismiss the lawsuit.

The American Civil Liberties Union and Covington & Burling LLP represent Robinson. Manatt Phelps & Phillips LLP represents Dignity Health.

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

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