Discrimination Prohibited Based on Gender Identity or Sexual Orientation

On June 15, 2020, the Department of Insurance released Company Bulletin 2020-16 in light of CMS filing a final rule that rescinds existing protections against discrimination. The bulletin reiterates that Illinois law remains unchanged despite the recently finalized federal rule regarding Section 1557 of the ACA. As background, this federal rule removes certain federal protections against discrimination based on gender identity or sexual orientation in the provision of health insurance coverage (expected to take effect August 18, 2020).

The bulletin serves as a reminder for insurers to comply with existing state laws that prohibit discrimination based on actual or perceived gender identity or sexual orientation. More specifically, the Illinois Human Rights Act prohibits unlawful discrimination on the basis of sex and sexual orientation, which includes “actual or perceived heterosexuality, homosexuality, bisexuality, or gender-related identity, whether or not traditionally associated with the person’s designated sex at birth.” Further, the Illinois Insurance Code (Code) requires insurance policies that provide coverage for the treatment of mental conditions ensure that limitations applicable to mental or emotional conditions (e.g., gender dysphoria) are no more restrictive than limitations applied to medical benefits covered by the policy (and that there are no separate limitations applicable only to mental benefits).

Part 2603 of the Code clarifies that the Illinois nondiscrimination laws apply to matters relating to gender identity and sexual orientation in health insurance coverage. Importantly, no company shall refuse to issue insurance (or decline to renew) based on sex, sexual orientation or marital status of the insured or prospective insured. In addition, no group health insurance plans may discriminate on the basis of an insured’s actual or perceived gender identity or on the basis that the insured is a transgender person. For specific prohibitions required by the regulations, see Company Bulletin 2020-16.

While the bulletin applies to Illinois-licensed health insurance issuers, employers should be aware of these developments and reminders.

Company Bulletin 2020-16 »