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A New Benefits Trend

Society's growing awareness and acceptance of transgendered people -- along with employee affinity groups petitioning their companies to offer them health benefits -- is helping to drive a new trend in benefits offerings.

Monday, October 8, 2012
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Benefits for same-sex couples are far from an anomaly these days. A recently released report from the Kaiser Family Foundation and the Health Research & Educational Trust finds that 31 percent of employers offer health benefits to employees with a same-sex partner or spouse this year, compared to 21 percent in 2009. And, according to the Washington-based Human Rights Campaign, 85 percent of Fortune 100 companies provide this coverage.

Now, a new form of benefit is finding its way to employers' radar screens: transgender health benefits. In many cases, these benefits include coverage for sex-reassignment surgery (when deemed "medically necessary" by a doctor); in other cases, the surgery itself may not be covered but post-surgery treatment and medication is.

According to the Human Rights Campaign's 2012 Corporate Equality Index, 207 U.S. companies offer transgender health benefits to their employees, compared to 85 last year and 49 in 2009.

In June of this year, the Depository Trust & Clearing Corp. became one of the latest companies to offer these benefits, including coverage for sex-reassignment surgery and follow-up care.

"The decision to offer transgender health benefits helps ensure that all our employees are given equal rights," Michael Bodson, the New York-based company's president and CEO, said in a statement. "It illustrates our commitment to an open and non-discriminatory environment."

Thirty-two percent of the 37 large companies polled by the National Business Group on Health in 2010 offered transgender health benefits, says Helen Darling, the organization's CEO -- up from 27 percent in a similar survey conducted in 2007, she adds. Of the companies that offered the benefits in 2010, 14 percent included coverage for sex-reassignment surgery and 5 percent said they planned to cover it in the following year, she says.

Companies that offer transgender benefits include American Express, Wells Fargo & Co., Bank of America, JPMorgan Chase and Goldman Sachs.

Financial-services firms and technology companies based on the East and West Coasts are pioneers in this area, says Darling, just as they were when domestic partner benefits were still a new concept.

"Coverages that are kind of unusual tend to start out in places like California and New York City and then spread out from there," says Darling.

What's driving this trend? Darling says it's a combination of society's growing awareness and acceptance of transgendered people coupled with employee affinity groups that are petitioning their companies to offer these benefits. Outside groups such as the HRC are also drawing attention to the issue, she says.

However, the trend does face roadblocks -- one of them being cost, says Darling.

"Sex-reassignment surgery can cost upwards of $200,000, not to mention the prescription drugs that will be needed and the recovery time and absence from work," she says.

Employers are also fielding demands from other groups -- such as parents with autistic children -- that are seeking enhanced benefits amidst rising healthcare costs and an uncertain economy, says Darling.

"There's a constant demand for more of everything," she says.

To try and limit costs and ensure that procedures such as sex-reassignment surgery are indeed medically necessary, some companies impose conditions -- such as requiring a claimant to have lived as the opposite gender for a certain period of time and have the approval of more than one doctor -- before agreeing to cover reassignment surgery, she says. "This is really complicated stuff, with no easy answers," says Darling.

Darling, who in her previous career oversaw benefits for a global technology company, says in one instance a married employee at a company facility in Texas switched genders, prompting a discussion at headquarters as to whether the employee was still eligible for family medical coverage.

"They were no longer man and wife, so the question was, were they still married and eligible, under the existing rules, for dependent coverage?" she says. "Ultimately, we determined that since the State of Texas probably wouldn't officially recognize the person's gender change, then they were still married and, therefore, still covered."

Deena Fidas, the HRC's deputy director of corporate programs, says her organization's Corporate Equality Index has helped the cause of transgender benefits by encouraging companies to compete with one another in making themselves more LGBT-friendly.

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"When we started the CEI in 2002, only 13 companies got top scores for workplace equality," says Fidas, who helps oversee the CEI. "This year, 190 companies scored 100 percent, with many others scoring in the high 90s. The report helps fuel the momentum among companies to do better."

The HRC's latest initiative involves working with insurance carriers to "bring greater equality" to insurance products, thereby making it easier for fully insured companies to offer transgender benefits, says Fidas.

"It's easier for companies that are self-insured to offer transgender benefits than it is for their fully insured counterparts, because many insurance products still have transgender exclusions," she says. "Not only will they deny coverage for sex-reassignment surgery but, if it could be interpreted that someone is suffering from a condition that could be connected in some way to having undergone this surgery, they'll be denied coverage for that as well."

Offering transgender benefits may actually save companies money in the long run, says Andre Wilson, a senior partner at Jamison Green & Associates, a Union City, Calif.-based firm that provides training and consulting on transgender issues.

"For companies that offer these benefits, utilization and cost have been very low, but the impact on individuals can be very high," says Wilson. "People who need these services but don't have access to them can end up costing their companies a lot in terms of being treated for depression and stress-related illnesses."

Wilson, who underwent reassignment surgery from a woman to a man eight years ago, says he used to suffer from severe migraines and chronic depression. But after his operation, his mental and physical health greatly improved, and so did his productivity.

"My costs related to migraine treatment and the prescription drugs I needed dropped dramatically," he says. "My healthcare costs went from being well-above average for my plan to well-below average in the first full year after my transition.

"For me, it wasn't about transitioning from one sex to another, but going to a place where I was no longer plagued with depression and thoughts of suicide. I learned what it was like to live in the moment."  

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