In a recent Letter of Determination, the U.S. Equal Employment Opportunity Commission (“EEOC”) found probable cause to believe an employer violated the Title VII rights of a transgender employee when it excluded coverage for “transgender treatment/sex therapy” services from its medical benefit plans. Specifically, the EEOC determined that denying coverage for transition-related services constituted sex discrimination under Title VII.

The extent of protections for LGBTQ employees under federal non-discrimination laws continues to be an area of intense debate, with many Circuit Courts of Appeal split over whether sexual orientation is a form of sex discrimination under Title VII. With respect to transgender status, however, every Circuit Court to consider the matter has found that discrimination on the basis of transgender status is a form of sex discrimination.

Transition-related health care coverage is a relatively recent area of coverage offered by insurers, and litigation regarding the provision of transition-related coverage is even newer. Many employers have been awaiting implementing regulations under the Affordable Care Act’s (“ACA) Section 1557, regarding non-discrimination, to purchase transition-related coverage. Under the current administration, however, the fates of Section 1557 and the ACA as a whole are uncertain.

Regardless of the ACA, the EEOC reaffirmed its commitment to pursuing protections for transgender employees, including with respect to employment benefits, with this recent Determination. For that reason, employers should take the EEOC’s position into account when selecting coverage options for employees. In addition to deciding whether to provide transition-related coverage, employers need to understand which transition-related services should be included in such a policy.