DEI in 2021: Gender Affirmation Benefits Find More Support Among Employers

The movement towards diversity, equity and inclusion (DEI) was one of the biggest stories in benefits in 2020, and it’s likely to continue to be a focus of employers and brokers in 2021.

Even before last summer’s protests over racial inequities in the US, DEI had become a hot topic, and now employers are on the front lines of change, sometimes because they are taking the initiative, sometimes because employees are demanding a new approach.

This series will look at severtabll aspects of DEI and how employers and brokers are responding to calls for change in areas from racial justice to sexual orientation. As the DEI movement has grown, insurers, brokers, and vendors have collaborated to bring new, innovative products and policies to businesses and their employees. This installment of the series will look at one of the pioneering areas of DEI: gender affirmation benefits.

Gender affirmation benefits cover a range of medical and behavioral health benefits that can include gender reassignment surgery, hormone replacement therapy, and counseling services. For the individual, there also may be necessary changes to personal and legal documents, along with changes to relationships and everyday living. Employers have undergone a long evolution on offering benefits in this area, and that evolution is continuing.

The area of gender affirmation is still politically contentious, which can create significant barriers for trans individuals. For example, some states still ban transgender surgery for those on state health plans. And although the Affordable Care Act (ACA) extended health insurance protections for trans individuals, the Trump administration passed a rule last year that could limit those protections. That rule is currently being challenged in the courts, and it seems likely the Biden Administration will move to reestablish the ACA protections.

A Decades-Long Process

The growth of affirmation benefits has been steady but slow, according to Darren Baker, senior VP with Alliant Employee Benefits, based in Newport Beach, Calif.

“Back in 2001, the city and county of San Francisco became the first major government-sponsored plan to adopt and cover these gender-affirming procedures,” Baker said. “And because of that, our commercial employers started inquiring about how they should be thinking about these benefits.”

Baker noted San Francisco has a history of being one of the most progressive areas of the country, and of leading on LGBTQ rights. In 2001, “medical necessity” of gender-affirmation procedures was still hotly debated. “At the time, medical necessity wasn’t as widely embraced as it is today in the benefits community,” he said. “I think we’ve come a long way since then.”

Still, Baker said, progress has been slow. At first, employers feared that gender-affirmation policies that covered medical procedures would be expensive. “There was a lot of hand-wringing about the potential costs about these benefits,” he said. “The city and county of San Francisco implemented a surcharge to cover the anticipated costs of these benefits. But after three years they determined that basically, the costs were inconsequential to the overall plan; they were less than a rounding error. So they had grossly overestimated how much this would cost.”

“A company can say, ‘yes we’re covering gender-affirming surgery,’ but there is still a whole swath of procedures that are still deemed to be cosmetic in nature, and so still elective.

Another big player in the movement was the Human Rights Campaign, whose corporate equality index is considered a benchmark for how corporations. The group also offers resources for employers who have trans employees. “They’ve been a tremendous partner in understanding what’s possible in insured plans, self-funded plans, and in working with employer groups to develop strategies and push for change,” Baker said.

Baker noted that a lack of consistency among employers and insurers on what is covered continues to be a problem for gender affirmation benefits. “There still is not uniform treatment,” he said. “A company can say, ‘yes we’re covering gender-affirming surgery,’ but there is still a whole swath of procedures that are still deemed to be cosmetic in nature, and so still elective. There’s an unfortunate array of things that are considered a grey area.”

In addition to medical treatment, trans workers are part of a re-examination of family-centered benefits such as adoption, surrogacy, and similar policies and programs. “Family-forming is going to continue to be an issue for non-traditional families,” Baker said. “For the LGBTQ community, coverage of adoption benefits and other services, will probably be the next phase of evolution for employers of choice.”

Gender-Affirmation Benefits by the Numbers

According to a benefits research group, gender affirmation benefits are offered by a minority of employers. The International Foundation of Employee Benefit Plans’ (IFEBP) 2020 Employee Benefits Survey found that among employers, “Transgender-inclusive benefits” are offered by an average of 20.9% of companies.

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The survey found that 20.9% of corporations said they offered such benefits, 27% of public employers offered them, and multi-employer plans offered transgender-inclusive benefits at 17.7%.

Julie Stich, VP of content with IFEB, said the number of employers offering gender affirmation benefits is on the rise. “We’ve definitely seen an increase in the number of organizations and employers that are offering this kind of benefit to their employees,” Stich said, noting that the numbers had increased since the last survey in 2016. “Among our corporate respondents, 15% offered these benefits in 2016, and that increased to 21 percent in 2020. In all areas, we’ve seen an increase—not dramatically, but an increase all the same.”

Employers Expand Benefits

Julie Law, head of human resources at John Hancock and global head of talent management at Manulife, the parent company of John Hancock, said her company’s goal is to make all employees feel welcome. “We really want to create an environment where, whoever you want to be, you are welcome—that people can bring their authentic selves to work,” she said.

As part of an initiative from its parent company Manulife, John Hancock expanded its gender affirmation benefits in 2020. The new approach, announced in November, took effect on Jan. 1, and will expand maternity, adoption, surrogacy, and parental leave coverage, as well as enhancing gender-affirmation coverage.

Law noted that it’s too early to gauge the impact of the changes but added that employees have supported more emphasis on DEI at John Hancock. “We get feedback from our people that they really do appreciate our benefit offerings,” she said. “We feel we need to continue to be flexible and look at the evolving needs of our people.”

Inclusion as a Value

“Employers want to create a culture where employees feel no one is being treated differently.”

According to Jeff Griffin, president of JP Griffin Group, based in Scottsdale, Arizona, gender-affirming benefits are not always a top issue for clients, but he’s seen employers increasingly seek a more inclusive approach to benefit offerings. “What I do hear the clients talk about is how to engage their workforce and be inclusive,” he said. “Employers want to create a culture where employees feel no one is being treated differently.”

The move towards a more inclusive corporate culture is a way to attract and retain employees, Baker said. “Employee expectations absolutely influence the adoption of these benefits,” he said. “Employees often ask about your policy position before they even become employees. While being recruited, they look for employers that embrace these policies—they just want to work for an employer that treats everyone equally.”

Baker added that with many employees, what matters is the overall approach to inclusion. “I might not be part of that class, but I want to know that everyone is pulling in the same direction, and that everyone is treated equally, whether or not that benefits me individually,” he said.

Increasingly, Baker added, employers are partners in that effort. “I do believe it’s noble that companies are embracing this, and are agents of change,” he said.