Starting on January 1st, 2016, The Kroger Company, a grocery chain and one of the largest private employers in the United States, will offer transgender health benefits “including surgery and drug therapy for gender reassignment” to employees enrolled in the company-sponsored Anthem Blue Cross Blue Shield insurance plan.
The Anthem BCBS plan will provide coverage up to a $100,000 lifetime maximum for eligible employees and dependents. The coverage will not apply to Kroger employees who elect to receive insurance through the United Food and Commercial Worker’s Union.
News of Kroger’s new policy broke Monday after a transgender employee, Britney McGannon, posted about the company’s internal announcement on her Facebook page over the weekend, as the Cincinnati Enquirer reported. Fusion confirmed the report with a Kroger spokesperson.
Kroger did not respond to The Daily Beast’s request for further comment on Monday.
The change will likely boost Kroger’s score on the Corporate Equality Index (CEI)—a benchmarking tool created by the Human Rights Campaign (HRC) that measures the strength of LGBT corporate policies—from its current 85 out of 100 to a 95 or above.
But what is a victory for transgender Kroger employees is also a major milestone for private employers in the United States as a whole. After Kroger’s score changes, all but one of the top 10 largest private employers in the country will score a 90 or above on the CEI—a near clean sweep of companies scoring an A on LGBT issues.
And thanks to Kroger, half of the top ten will offer transgender-inclusive health insurance coverage—a criterion worth 10 points on the CEI—starting in 2016. It’s a tipping point, of sorts, for trans-inclusive health insurance, which is still out of reach for many of the estimated 700,000 transgender adults in the U.S.
Since 2002, the HRC’s CEI has measured corporate climates for LGBT employees based on several metrics including anti-discrimination protections, partner benefits, employee resource groups, and community engagement. Since 2009, they have included transgender health care as a criterion. In 2015, 366 businesses—including 14 of the top 20 on the Fortune 500—achieved a perfect score.
The largest employers in the U.S., however, have not yet hit that benchmark as a group, despite being tantalizingly close to LGBT equality.
According to a 2014 tally by the Wall Street Journal, the largest private employers in the United States, measured by number of employees, are currently Wal-Mart, McDonald’s, IBM, Kroger, Target, The Home Depot, Hewlett-Packard, Yum! Brands (which owns KFC, Pizza Hut, and Taco Bell), General Electric, and UPS.
Of these, only three—IBM, Hewlett-Packard, and Target— scored a 100 on the CEI in 2015 but, on the other hand, only two—Kroger and Yum!—were rated below a 90. After Kroger’s score changes—and presuming that Yum!’s remains static as it did from 2014 to 2015—only the fast food company will be left in the B range come 2016. Yum! did not immediately respond to The Daily Beast’s request for comment about any planned changes to LGBT company policies.
By and large, a single factor is preventing the largest employers in the country from maxing out their CEI: transgender exclusions in health insurance plans.
Apart from Yum! and Kroger, four of the 10 largest companies—Wal-Mart, McDonald’s, The Home Depot, and UPS—do not offer trans-inclusive health insurance plans. All four would have a 100 percent rating if they made this single change.
Several major American health care associations including the American Medical Association, the American Psychiatric Association, and the American Psychological Association have issued statements supporting transgender health care coverage.
As The Daily Beast reported in July, private employers do not generally comment on the costs of trans-inclusive health plans but available data indicates that they do not place a significant financial strain on companies, especially large ones. In 2013, the Williams Institute at the UCLA School of Law found that 84 percent of the 26 employers who would disclose the health care costs associated with trans benefits experienced no premium increases in the first year (PDF).
The report also estimated that only between 1 out of 10,000 and 1 out of 20,000 employees utilized transgender benefits, which explains why providing transgender coverage is relatively inexpensive despite the sizable cost of surgical and hormonal treatments for those without inclusive insurance plans, or for the disproportionately large population of unemployed transgender people.
The Williams Institute report concluded that “transition-related healthcare benefits have zero or very low costs, have low utilization by employees, and yet can provide benefits for employers and employees alike.”
Among those benefits for employers, the HRC tells The Daily Beast, is a competitive edge. Deena Fidas, head of the HRC Foundation’s Workplace Equality Program, and co-author of the CEI said in a statement to The Daily Beast that the LGBT policy changes companies have made over the years prove that “the most successful businesses in the United States are LGBT-inclusive.”
“Rolling out benefits such as transgender-inclusive health care coverage makes good business sense,” Fidas said. “What company wants to lose a valued employee to a competitor—incurring turnover and other costs—simply because of a lack of inclusive health care coverage? LGBT-inclusive policies and practices are increasingly important to remaining competitive in today’s marketplace.”
This final step toward LGBT equality is proving to be one that some employers seem reluctant to take. Wal-Mart raised its CEI score from 80 to 90 from 2014 to 2015 but McDonald’s, Home Depot, and UPS all remained stable at 90 across this same time period. With Kroger poised to soar past them next year, perhaps the holdouts will take notice.