“From health care coverage to retirement investments and more, ensuring LGBT-inclusive benefits to employees and their families is an overall low-cost, high-return proposition for businesses,” the Campaign noted in its Corporate Equality Index 2018. “Most employers report an overall increase of less than 1 percent of total benefits costs when they implement partner benefits, and marginal increases related to transgender-inclusive health care coverage.”

Although social attitudes have long been evolving, a landmark decision by the U.S. Supreme Court is driving much of the current policy.

“Supreme Court rulings have played a large role in granting access to health care for same-sex couples through spousal coverage,” Stich says. “The 2013 U.S. v. Windsor decision changed the definition of spouse. And in 2015, the case of Obergefell v. Hodges greatly expanded access to health coverage and care for LGBT individuals and their families when the court ruled to legalize same-sex marriage in all 50 states.”

This legislation has been a game-changer for employee benefits, says Teresa Renaker, partner in Renaker Hasselman Scott LLP, an employment law firm in San Francisco.

“The availability of civil marriage for same-sex couples has largely eliminated inclusion issues for LGBT employees in benefit plans,” she says. “For retirement plans, of course, federal employee benefits law mandates certain protections for all spouses. There's no option for an employer to maintain an ERISA-governed pension plan that doesn't treat all married spouses the same. For transgender employees, I think we're seeing a move away from the blanket exclusions for transition-related care that many health plans used to have.”

Employers respond

Many businesses have embraced these changes, while others are still finding their way. Lincoln Financial Group in Philadelphia identified three specific workplace trends that present opportunities for employers and brokers:

• Growth potential exists. Only 1 in 3 companies has reassessed or changed benefits. Twenty-eight percent of the LGBT community overall and 35 percent of those currently married or in a domestic partnership have reevaluated their workplace benefits, enrolled in a new benefit, or increased their contribution to a current benefit.

• New enrollments are occurring. Fourteen percent of LGBT employees who are married or in a domestic partnership have enrolled in a new non-medical insurance plan; 11 percent have enrolled in a new health insurance plan; and 7 percent have made changes to their retirement plans, either by enrolling in a new plan or increasing contributions.

• Education is essential. One-half of all LGBT employees and 38 percent of those in a domestic partnership are unaware of how the marriage equality ruling affects their workplace benefits. Perhaps most importantly for brokers, 51 percent said they would like to speak with someone about their benefits.

One challenge for employers is that despite clarity from the Supreme Court, other federal and state regulations can cause confusion.

“Currently, a patchwork of state laws and federal guidance have established mixed workplace protections for LGBT employees, causing some complexity and uncertainty,” Stich says. “Less than half the states provide workplace protections on the basis of gender identity and/or sexual orientation. At the federal level, we've seen conflicting agency guidance and appellate court decisions as to whether sexual orientation is protected under Title VII of the 1964 Civil Rights Act.”

However, proactive businesses are forging ahead with the guidance that is available.

“This is due, in part, to changing cultural norms and growing awareness,” Stich says. “Employers are telling us they want to be equitable and inclusive. They've changed policies and benefit designs to best serve the needs and priorities of their diverse workforce.”

It also just makes good business sense in today's economic environment.

“In this tight labor market, employers are competing for top talent,” Stich says. “Having a workplace that is supportive of diversity—including LGBT individuals—can be essential for attracting and retaining highly skilled and highly sought-after employees.”

Renaker agrees, noting, “When civil marriage wasn't available to same-sex couples, it was easy to exclude same-sex spouses from welfare plans, if that was what the employer wanted to do, simply by requiring that employees be married in order to receive spousal benefits. An employer could plausibly say that it was limiting benefits to married couples for administrative convenience. Now that a marriage license isn't a distinguishing characteristic, we've passed the tipping point where it's easier to include same-sex couples than exclude them, so that's what employers are doing.”

This time of rapid change creates promising opportunities for brokers who are prepared to take advantage of them. “Brokers should stay on top of legislative and regulatory changes relating to LGBT individuals in order to keep their employer clients apprised,” Renaker says. “They should also keep on top of related benefit trends.”

Paid leave is a good example. “Brokers can help employers review their policies to make sure employees with same-sex and opposite-sex spouses are treated equitably,” Stich says. “If employees with opposite-sex spouses are allowed to use paid sick leave or paid caregiving leave to care for their spouse, the same should be offered to employees with same-sex spouses. Will employees with same-sex or opposite-sex domestic partners be allowed to do the same?”

Bereavement leave is another consideration.

“According to the International Foundation's 2017 Paid Leave in the Workplace survey report, 76 percent of responding employers allow employees to use paid sick leave to take care of a spouse or domestic partner,” Stich says. “From the same report, employers allow employees four days paid bereavement leave, on average, for the death of a spouse and three days, on average, for the death of a domestic partner.”

Transgender benefits are yet another fast-changing topic.

“According to preliminary findings from the International Foundation's forthcoming 2018 Employee Benefits Survey report, we're seeing an increase in the percentage of employers offering this type of benefit,” Stich says. “More than one-quarter reported offering some type of transgender-inclusive benefit this year, up from 12 percent in 2016. This year, 22 percent of responding employers report covering gender-reassignment surgery (up from 8 percent), and 24 percent report covering prescription drug therapies (up from 9 percent).”

Inclusivity has been a groundbreaking development on the federal and state levels, and now in the workplace. One clear result is a growing opportunity for brokers to serve their clients and build their business.

“Larger employers have led the way on these efforts, but as laws and awareness evolve, more employers will likely examine their policies and benefit offerings impacting LGBT individuals,” Stich says.

As Renaker points out, a proactive approach delivers the best outcome for employers, their workers and the brokers who serve them. “An employer that is committed to trying to carve out that space is probably not going to be open to persuasion,” she says. “Between federal employee benefits law and federal antidiscrimination law, there's little, if any, wiggle room for private employers to not provide equal benefits, as far as LGBT employees are concerned.”