trans-inclusive health coveragePost submitted by André Wilson, Senior Associate at Jamison Green & Associates

After more than a decade of persistent advocacy by union members and advocacy groups, the Board of CalPERS, which oversees the health plans of California’s state employees, voted on June 19 to include transgender transition-related care in all of their health plans as of January 1, 2014.  

CalPERS provides retirement and health benefits to more than 1.6 million public employees, retirees and their families, including employees of the state of California and over 3,000 other California employers, including municipalities and non-profits.  CalPERS health plans cover more than 1.3 million individuals.  The board’s historic vote means that the 2014 HMO and PPO plans managed by CalPERS will include coverage of “Sex Reassignment Surgery and Related Services for Gender Identity Disorder.”  CalPERS is the nation’s largest public health benefits fund, making California the largest employer to offer explicitly transgender-inclusive coverage.

The vote of the CalPERS board reflects trends in the private sector, where transgender-inclusive health plans are increasingly common, with strong encouragement from HRC’s Corporate Equality Index (CEI).  The CEI, which evaluates Fortune 1000 and other large employers vis-a-vis LGBT workplace policies, has called for transgender inclusion in employer health plans since 2009. Employers have heeded the CEI’s call: in the  2013 CEI survey, 287 major employers reported coverage of basic medical services related to sex reassignment, including surgical services. Numerous other public and private employers, including many universities and colleges, have also removed exclusions in their employee health plans and provided trans-inclusive coverage.  

Efforts to ensure that all California state employees be able to receive medically necessary care regardless of their gender identity or expression began over a decade ago. In 2002, activists in the union representing many California state employees, Service Employees International Union (SEIU) Local 1000, achieved passage of an SEIU resolution to remove all transgender exclusions from the CalPERS health plans. Over the next decade, the union’s Lavender Committee advocated for transgender health coverage as part of a coalition of activists, including members of other state employee unions, the Transgender Law Center, Equality California and other experts. While the extent and structure of the benefit to be offered in the 2014 CalPERS plans is not yet known, SEIU 1000’s resolution and the coalition have called for coverage consistent with the Standards of Care of the World Professional Association for Transgender Health (WPATH).

The CalPERS board decision also follows regulatory decisions by California’s Department of Insurance and Department of Managed Health Care (DMHC) that transgender-specific exclusions in health plans violate California law.  In March 2013, the DMHC directed health plans to ensure that “individuals are not denied access to medically necessary care because of gender, gender identity, or gender expression” and to “remove benefit and coverage exclusions and limitations related to gender transition services.”  While the DMHC directive did not mandate coverage, plans are prohibited from implementing blanket exclusions of services related to sex reassignment.  Thus, when services are shown to be medically necessary and clinically appropriate for an individual, California-regulated health plans may be obligated to provide coverage.

Similar directives have come from insurance regulators in Colorado, Oregon, Vermont, and the District of Columbia. In addition, numerous associations of health professionals have called for an end to transgender-specific exclusions in health plans and for coverage of medically necessary services related to sex reassignment, including the American Medical Association, American Psychological Association, National Association of Social WorkersAmerican College of Obstetricians and Gynecologists, American Psychiatric Association, American Academy of Family Physicians, American College of Nurse Midwives and the WPATH.

Rates for CalPERS plans increased this year, averaging 3.7% overall, but much less than last year’s hike of 9.6%.  Most employers with trans-inclusive coverage have reported little or no increase to premiums, and extremely low utilization.  A report by Jamison Green & Associates cited in a 2012 California Department of Insurance “Economic Impact Assessment” showed that utilization costs at employers covering sex reassignment have been low, and infinitesimal for larger employers (from 0.07 claimants per thousand employees per year for smaller employers, to 0.0002 claims per thousand employees per year for employers with over 50,000 employees).  As the largest public health fund in the country, claims costs for the CalPERS plans are likely to be even lower, bringing the cost of equal health care down to near-zero.

For HRC’s extensive resource pages on transgender-inclusive benefits, click here. For a complete resource guide for employers on inclusive coverage, click here.

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