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Many employers are taking action to increase diversity and inclusion efforts within their organizations. The first step is updating policies to provide protections for sexual orientation and gender identity. Employee resource groups or affinity networks are becoming increasingly popular among large employers in order to build a community and highlight diverse populations within a business. Another step in a positive direction is to provide new hire and manager trainings that review nondiscrimination policies.
The LGBTQ population now represent around 4.5% of adults in the U.S. and LGBTQ identification is more common among younger populations, representing 8.1% of millenials.1 Investing in making your company’s benefits more inclusive of LGBTQ individuals directly translates into making your company more attractive when recruiting and retaining top talent, as well as fostering a culture of diversity and inclusion.
Marriage equality was a major milestone for the LGBTQ community in 2015; however, the fight for equal rights doesn’t stop there. Believe it or not, courts continue to disagree on whether Title VII of the Civil Rights Act of 1964 covers sexual orientation and/or gender identity. Furthermore, less than half of all U.S. states provide protections on the basis of sexual orientation and/or gender identity.
Title VII prohibits employers from discriminating on the basis of race, color, religion, sex and national origin. The debate as to whether “sex” encompasses gender identity and sexual orientation leaves LGBTQ workers in a gray area where an employer’s policies and benefit packages may or may not support their unique needs.
In the fall of 2019, two cases are anticipated to be brought to the Supreme Court to address these very issues:
If the Supreme Court decides that Title VII extends to LGBTQ individuals, the decision would unequivocally extend equal protection to all individuals irrespective of gender identity or sexual orientation. However, if the opinion goes in the opposite direction, it would represent a major setback for LGBTQ rights, leaving it to employers to decide whether their nondiscrimination policies include sexual orientation and gender identity.
A common misconception is that inclusive benefits will dramatically drive up healthcare costs; however, many employers reported an overall increase of only 3.5% from implementing partner benefits and minimal increases related to transgender-inclusive benefits. In 2019, 62% of Fortune 500 companies offer some level of transgender-inclusive benefits—up from 0% in 2002.
These benefits include:
Nationally, 21% of same-sex couples are raising an adopted child in comparison to 3% of opposite-sex couples.3 Employers are adding a variety of benefits to aid growing families which may be made available to all employees:
Unmarried same-sex couples will have a number of planning items to consider to ensure their partner isn’t unnecessarily burdened during an already difficult time. Employers can help provide peace of mind by:
Gender and medical history are part of the life insurance underwriting process, but shouldn’t prevent transgender individuals from being able to apply for, or obtain coverage, if eligible.
It’s important for employers to understand and communicate to employees how their insurance provider defines gender and sex for underwriting purposes to ensure employees’ applications are filled out correctly and to avoid potential denial of claims down the road.
Whether the underwriting process considers assigned gender at birth versus current legal gender marker can vary from carrier to carrier.
LGBTQ individuals face unique obstacles to financial success and studies have shown that they want to work with financial experts to help plan for their future financial health at a much higher rate than non-LGBTQ. According to a Prudential survey, 27% of LGBTQ respondents have an employer-sponsored retirement savings account and only 21% have an individual retirement account (IRA). Furthermore, 62% of respondents say they’re currently not saving for retirement at all.8
LGBTQ investors have unique needs in respect to trust and estate planning and want to work with professionals who are familiar with their financial challenges.
1In U.S., Estimate of LGBT Population Rises to 4.5%, Frank Newport, May 22, 2018, Gallup, https://news.gallup.com/poll/234863/estimate-lgbt-population-rises.aspx
2Corporate Equality Index 2019: Criteria Updates, 2019, Human Rights Campaign, https://www.hrc.org/resources/corporate-equality-index-2019-criteria-updates
3How many same-sex couples in the U.S. are raising children?, Shoshana K. Goldberg and Kerith J. Conron, July 2018, The Williams Institute UCLA School of Law, https://williamsinstitute.law.ucla.edu/research/parenting/how-many-same-sex-parents-in-us/
4Adoption-Friendly Workplace Employer Toolkit, 2019, Dave Thomas Foundation for Adoption, https://www.davethomasfoundation.org/library/adoption-friendly-workplace-employer-toolkit-2/
5Fertility benefits: Going above and beyond, Kate Ryder, April 12, 2019, Employee Benefit News, https://www.benefitnews.com/opinion/how-companies-can-go-above-and-beyond-with-fertility-benefits
6Is your fertility benefit excluding some employees?, Kayla Webster, April 29, 2019, Employee benefit Advisor, https://www.employeebenefitadviser.com/news/is-your-fertility-benefit-excluding-some-employees?brief=00000152-1443-d1cc-a5fa-7cfba3c60000
7Paid Leave in the Workplace 2017 Survey Results, Justin Held, CEBS & Teri Dougherty, 2017, International Foundation of employee Benefit Plans, Inc.
82018 Financial Wellness Census™ The Cut exploring financial wellness within diverse populations, 2018, the Prudential Insurance Company of America, http://news.prudential.com/content/1209/files/PrudentialTheCutExploringFinancialWellnessWithinDiversePopulations.pdf#page=12
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By Brandon Ross
Insights from Ayco InnerCircle 2021