Companies that seek state contracts in California would be unable to do so if they do not offer their transgender employees the same benefits other employees receive under legislation pending in the Statehouse.
The bill would primarily impact those businesses in other states that do not require companies to offer transgender health care benefits. Companies based in California have been required to provide such coverage since 2006, with eight other states and the District of Columbia following suit.
Gay state Senator Mark Leno (D-San Francisco) introduced the bill, SB 703, last Friday a day ahead of the deadline for lawmakers to submit legislation for this session. The legislation, which Leno's office will officially announce Thursday, is co-sponsored by Equality California, the National Center for Lesbian Rights, and the Transgender Law Center.
"Given that health coverage for transgender people is already state law in California, why would we want taxpayer dollars from our state going to contractors that don't provide the same benefits?" asked Leno in an interview with the Bay Area Reporter.
The legislation, added Leno, levels the playing field in state contracting between in-state and out-of-state companies.
"If I am an in-state contractor and bidding on government jobs, I could be potentially under bid by out-of-state contractors in a state that doesn't require, as ours does, health coverage for transgender people," said Leno.
SB 703 is modeled after legislation passed in 2003 that prohibited state agencies from doing business with companies that did not offer the same benefits to employees with domestic partners as those received by employees with spouses.
Since then state leaders have enacted several bills that require health care insurers in California not to discriminate against transgender policyholders. More than 25 percent of Fortune 500 companies now offer equal health care benefits to transgender employees, and last year, the federal Medicare system removed its discriminatory transgender exclusion.
"The cost is immaterial for transgender-related healthcare benefits," noted Sasha Buchert, a TLC staff attorney.
Leno's bill would apply to state contracts of $100,000 or more. It would also require the Department of General Services to create an online database listing all contracts subject to the provision, and to establish a method for receiving, investigating, and resolving complaints of non-compliance.
It is not known how many companies already awarded contracts by state agencies do not provide health care to their transgender employees, said Buchert.
"That information is really challenging to obtain. We weren't able to attain it," said Buchert.
It is also unknown how much it will cost the state to implement Leno's legislation, though the expense should be minimal. It will first head to the Senate's governance and finance committee for a hearing later this month or in early April.
"I am confident we will be able to get it passed," said Leno.