Gender-affirming care has become a hot topic in recent news with shifting federal policies and conflicting court decisions creating a complex and sometimes contradictory legal environment. For employers sponsoring group health plans, this evolving landscape presents significant compliance challenges especially as state laws, federal statutes and constitutional interpretations increasingly deviate. Recent litigation surrounding exclusions for gender-affirming care highlight the complexity of coverage decisions in employer group health plans. While states may have broader authority to restrict access under state constitutional law, federal nondiscrimination statutes can impose obligations that directly affect plan design and administration.
Understanding Gender-Affirming Care and Legal Protections
Gender-affirming care encompasses a range of medical services including counseling, hormone therapy, and surgical procedures designed to support individuals whose gender identity differs from the sex assigned at birth. In recent years, federal agencies and courts have increasingly recognized blanket exclusions of such care as a form of sex discrimination under the Affordable Care Act (ACA) and Title VII of the Civil Rights Act. At the same time, several states have passed laws restricting access to gender-affirming treatments, particularly for minors. This has created a direct conflict between state level restrictions and federal nondiscrimination protections.
The transition between presidential administrations has further complicated the regulatory environment. Under President Biden, the Department of Health and Human Services issued a final rule interpreting ACA Section 1557 to prohibit discrimination based on gender identity. In contrast, the Trump administration rescinded prior guidance and issued policies limiting coverage for pediatric gender-affirming care in federal programs.
These shifts in agency interpretation affect how laws are enforced, what compliance looks like, and the likelihood of audits or investigations. While courts ultimately determine the scope of statutory protections, agency actions will affect how those protections are applied in practice.
Recent Court Case Summaries
Three recent court cases demonstrate the legal complexities employers must navigate through:
United States v. Skrmetti (U.S. Supreme Court, 2025)
Tennessee enacted a law prohibiting health care providers from providing care that alter a minor’s hormonal balance, removes sex organs, or otherwise changes a minor’s physical appearance to allow “a minor to identify with, or live as, a purported identity inconsistent with the minor’s sex.” Plaintiffs challenged the law under the Equal Protection Clause of the Fourteenth Amendment, arguing that it discriminated against transgender individuals and warranted heightened scrutiny. The Supreme Court disagreed, applying the more deferential “rational basis” review. It upheld the law, finding that the state had legitimate interest in regulating medical treatments for minors. The Court declined to treat transgender status as a suspect or quasi suspect classification, thereby limiting the reach of constitutional protections in this context. However, the Court did not decide whether such laws might conflict with federal statutory nondiscrimination protections like ACA Section 1557.
L.B. v. Premera Blue Cross (W.D. Wash., 2025
This case involved two transgender minors in Washington State who sought insurance coverage for medically necessary chest reconstruction surgery. Premera Blue Cross categorically excluded coverage for mastectomies, breast reduction surgeries, and chest/top surgery for “female to male” or “female to non-binary/gender neutral” individuals under age 18. However, the policy provided that a mastectomy to treat gynecomastia (breast tissue swelling in boys or men) could be covered as medically necessary in certain circumstances. The plaintiffs sued under ACA Section 1557, which prohibits sex-based discrimination in federally funded health plans. In 2023, the district court ruled the exclusion violated the ACA because it singled out transgender minors for denial of necessary treatment, which is a form of sex-based discrimination. When Premera sought reconsideration in 2025 following the Skrmetti decision, the court reaffirmed its ruling. It emphasized that statutory protections under the ACA are broader than constitutional standards, reinforcing that Section 1557 can impose more expansive nondiscrimination obligations.
Lange v. Houston County (11th Cir. En banc, 2025)
Ann Lange, a sheriff’s deputy in Georgia, was denied coverage for gender-affirming surgery under her employer’s health plan, which excluded “sex change surgery.” She sued under Title VII, alleging sex discrimination in employment benefits. Initially, Lange prevailed, with the district court and a panel of the Eleventh Circuit finding the exclusion discriminatory because it disproportionately affected transgender employees. However, in 2025, the full Eleventh Circuit reversed the decision. The majority held that the exclusion was not facially discriminatory since it applied to all employees, regardless of sex or gender identity. Citing Skrmetti, the court held that uniform exclusions do not violate Title VII, even if they disproportionately impact certain groups.
Employer Takeaways
These cases highlight the legal uncertainty employers face when designing and administering their group health plans. It is apparent that while constitutional law sets a baseline, federal statutes like ACA Section 1557 and Title VII can impose broader obligations. Currently, there is no federal mandate requiring all group health plans to cover gender-affirming care, unless the plan is subject to Section 1557 of the ACA. Therefore, fully insured plans must provide coverage compliant with the coverage mandates of the state in which the insurance policy is issued. It is important to note that employers that sponsor self-insured group health plans are preempted from state insurance coverage mandates. It is recommended that all plan administrators closely monitor legal developments and agency guidance in this area to make informed decisions about coverage for gender-affirming care.
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