After Military Ban, Are Transgender Health Protections Next?

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

New tweets from the president announcing a ban on transgender people serving in the military is adding to speculation that a health care regulation benefiting transgender people may be on the chopping block.

President Donald Trump on July 26 used his Twitter account to announce the reinstatement of the ban on transgender people serving in the military in any capacity, reversing an Obama administration policy that would have allowed them to serve. Trump cited the “tremendous medical costs” associated with transgender service members as a reason for the reversal.

These tweets could “portend a curtailing of rights for transgender individuals” under Section 1557 of the Affordable Care Act, Lisa M. Gomez, an employee benefits attorney and partner with Cohen Weiss & Simon LLP in New York, told Bloomberg BNA. Section 1557 and its regulations prohibit health plans and other entities in the health-care industry from discriminating against transgender people—such as a transgender man seeking coverage for ovarian cancer treatments.

This policy shift on military service may provide a clue to the Trump administration’s plans for the Obama-era health rule, which the administration is currently defending in court. A federal judge put that case on hold on July 10, partly fulfilling the request by the Department of Health and Human Services, which tried to get the lawsuit sent back to the agency so it could reconsider the rule. Instead, the judge paused the litigation and required the HHS to submit periodic updates on its progress toward a re-evaluation of the rule.

In asking for an “opportunity to initiate rulemaking proceedings” to reconsider the health-care discrimination rule, the HHS said in court filings that it has concerns as to the “need for, reasonableness, and burden” imposed by the rule. The HHS hasn’t formally announced a new rulemaking proceeding with respect to health-care discrimination against transgender people.

Although the president’s tweets may provide additional insight into the administration’s thinking on transgender rights, the HHS regulation—which includes “gender identity” in the definition of gender discrimination prohibited by the ACA—appeared to be in jeopardy shortly after Trump took office.

“I think that it is very likely that HHS is going to try to unwind the Section 1557 regulations that address transgender protections,” Sam Schwartz-Fenwick, a partner in Seyfarth Shaw’s Chicago office who focuses on employee benefits and LGBT issues, told Bloomberg BNA in a July 26 email. “I am not sure if this morning’s tweet makes that unwinding any more likely. The move to unwind the regulations by HHS seemed to be on the agenda as early as this February.”

Schwartz-Fenwick said the basis for extending protection from health-care discrimination to transgender people rested on the Obama administration’s interpretation of sex discrimination under Title IX of the 1972 Education Amendments to include discrimination against transgender individuals. The Department of Education withdrew this interpretation in February, declining to extend federal protections that would allow transgender students in public schools to use their preferred bathrooms, among other things.

Nothing Will Change Overnight

Whatever the Trump administration decides to do with the HHS rule, it’s unlikely that anything will change overnight, Kirsten Scott, a plaintiff-side employee benefits attorney and partner with Renaker Hasselman Scott LLP in San Francisco, said.

“It remains to be seen what steps HHS takes with respect to revisions to section 1557, but any revisions would be subject to lengthy federal rulemaking procedures, including notice and public comment requirements,” Scott told Bloomberg BNA in an email.

Scott called both the president’s tweets and the HHS’s statements on the nondiscrimination rules “deeply concerning” signals of the administration’s efforts to “roll back civil rights protections for transgender individuals.”

Gomez echoed this concern, asking whether the administration was signaling a pattern to “at best narrow and at worst eliminate” protections for transgender people.

Luke Goodrich, deputy general counsel for the Becket Fund and one of the attorneys challenging the HHS rule in court, said the change in military policy isn’t related to and won’t have an effect on the health regulation, which Goodrich says forces doctors to perform gender transition procedures on young children even when the procedures may be physically or emotionally harmful or violate the doctor’s medical judgment.

Goodrich added that federal courts in Texas and North Dakota have rejected the health regulation.

“The handwriting has been on the wall for these regulations ever since they were issued,” Goodrich told Bloomberg BNA July 26. “Both courts to have looked at them said they were illegal. It’s no surprise that the agency is going to take a second look, but there’s not really any way to predict what they’re going to come out with.”

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

Try Pension & Benefits Daily