Denial Of Health Insurance Coverage For Gender Reassignment Surgeries Did Not Violate ERISA Or Title VII

Marc Mario was born in 1955 as Margo Mario, a female, and began working for P & C Food Markets, Inc. in 1992 as a supervising pharmacist. Mario suffers from gender dysphoria and transsexualism, which he describes as "a condition that exists when a physiologically normal person experiences discomfort or discontent about nature's choice of his or her particular sex and prefers to be the other sex." Beginning in the mid-1990s, Mario decided to begin the transformation process from female to male. Mario advised P & C of his decision and, with P & C's permission, began to dress and present himself as a male. P & C acknowledged plaintiff's name change from "Margo" to "Marc." Around the same time, Mario began to receive hormone therapy. In September 1996, he underwent a bilateral mastectomy, and in October 1997, a hysterectomy.

Throughout his employment, Mario was covered by P & C's self-funded health insurance plan, which is governed by ERISA. In 1996, following his hormone therapy and mastectomy, he sought reimbursement from the Plan. The Plan excludes coverage for services that are deemed not "medically necessary." After reviewing and investigating Mario's submissions, P & C denied the claims for lack of medical necessity, and indicated that any future claims for services or procedures related to Mario's gender reassignment would also be denied.

After Mario received notice from P & C that coverage for his hormone therapy and mastectomy would be denied and that any further claims related to his gender reassignment would also be denied, Mario sued P & C claiming that the denial of benefits violated ERISA and Title VII. The district court granted P & C's motion for summary judgment. The court concluded that all the information the plan administrator had received from doctors, medical institutions, and insurance carriers sufficiently supported the conclusion that the gender reassignment surgery was not medically necessary and, consequently, was not covered by the Plan. With respect to the Title VII claim, the court concluded that, assuming (but not deciding) that the denial of health benefits constituted an adverse employment action, Mario had not demonstrated that he was a member of a protected class. The court also concluded that the circumstances of the denial did not give rise to an inference of discrimination, and that P & C's reasons for the denial were not pretextual. The 2nd Circuit affirmed:

A. The ERISA Claim

On the record before us, it seems clear that the plan administrator met the burden of showing that the surgeries at issue are not generically medically necessary. The record established that the plan administrator, Bernadette Barber, conducted a meaningful investigation into whether Mario's medical claims were eligible for coverage under the Plan. Ms. Barber's investigation included research on the issue of transsexualism, inquiry into the policies of other employers and insurance carriers concerning coverage of gender reassignment procedures, consultation with medical centers having specialized knowledge of transsexualism and sexual reassignment surgeries, and consultation with medical personnel employed by NAA, including a psychiatrist retained by NAA, Dr. Ivan Fras. Dr. Fras opined that the surgical removal of healthy organs, for no purpose other than gender dysphoria, would fall into the category of cosmetic surgery, and would therefore not be "medically necessary." On the basis of her investigation, Ms. Barber concluded that there was substantial disagreement in the medical community about whether gender dysphoria was a legitimate illness and uncertainty as to the efficacy of reassignment surgery. She therefore denied Mario's claims.

The plaintiff has not, in response, come forward with evidence that his case is different from the ordinary one. Under those circumstances, the plan administrator's determination survives a de novo standard of review.

B. The Title VII Claim

Here, Mario claims that he was discriminated against not because he is transsexual, but because he failed to conform to gender stereotypes, which he claims is a form of sex discrimination actionable under Title VII. Specifically, Mario claims that his employer, having accepted him as a male, denied coverage for medical procedures that are closely identified with being female, and that his claims would have been approved had they been made by female employees. Without passing on the logic of this argument, we note that it is not clear that the denial of benefits, without more, constitutes an adverse employment action. It is also not clear that Mario, as a transsexual, is a member of a protected class.

We need not reach these questions, however, as Mario fails to make out a prima facie case because he presented no evidence to support his contention that P & C's denial of benefits occurred under circumstances giving rise to an inference of discrimination based on his transsexualism or his failure to conform to gender stereotypes. Moreover, even if Mario had established a prima facie case, P & C proffered a legitimate, nondiscriminatory reason for its actions-namely, that Mario's surgeries were not medically necessary. And Mario has not offered any proof that P & C's proffered reason was pretextual. Accordingly, his Title VII claim fails.

Mario v. P & C Food Markets

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The 2nd Circuit Court of Appeals' jurisdiction includes New York, Vermont and Connecticut.

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