A growing number of companies are changing their health insurance plans to include benefits for transgender employees.
Yet even though professional groups such as the American Medical Association recommend coverage of services for transgender people —who identify with a gender other than the one they were born as—many companies continue to hold back. One of their big worries is cost.
"Companies worry: Does this open the floodgates for people wanting cosmetic surgery?" says Deena Fidas, deputy director for the workplace project at the Human Rights Campaign, an advocacy group. "The answer is no."
Transgender employees may be interested in surgery to reconstruct the genitals, reduce or augment the chest or contour the face, in addition to needing access to hormone therapy, mental health counseling and short-term leave, among other things.
In practice, gender reassignment is a long process that often spans years. The first step in treatment would generally be to see a mental health counselor to receive a diagnosis of gender identity disorder, Fidas says.
Companies that cover transgender services generally require several other steps be taken as well before surgery is approved, says Helen Darling, president of the National Business Group on Health, which represents large employers.
Companies may require that someone live for a year in the preferred gender, for example, complete hormonal therapy and have multiple medical professionals affirm that surgery is recommended, she says.
"Employers are trying to make sure they're not trying to use a surgical solution for a much more complicated psychosocial issue," she says.
The federal Department of Health and Human Services recently clarified that the provisions in the health overhaul law that prohibit sex discrimination apply to transgender individuals.
That doesn't mean that companies have to offer gender reassignment surgery, the agency said in accompanying guidance. But the letter from the Office for Civil Rights notes that it's discriminatory for companies to deny coverage or benefits to employees based on "gender identity or failure to conform to stereotypical notions of masculinity or femininity."
According to a National Business Group on Health survey of its members, 14 percent covered gender reassignment surgery in 2010, and 5 percent planned to add the coverage for 2011. Thirty-two percent covered non-surgical treatments such as hormone therapy and mental health counseling for transgender employees in 2010, and 3 percent said they planned to add such services the following year.
Meanwhile, the Human Rights Campaign, which publishes an annual corporate equality index that measures how equitably Fortune 1000 and other large companies treat their lesbian, gay, bisexual and transgender employees, reported that in 2012, 207 companies offered transgender-inclusive benefits, more than double the 2011 total of 85 companies.
It's a balancing act. "The more you put in the benefit package the more it costs," says Darling. "The question becomes: Should we reduce imaging coverage, for example, in order to cover these fairly unusual procedures [for transgender employees] that are nevertheless very important to the person who needs them?"
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