Our April 9 blog post highlighted several issues to watch during 2024, one of which was gender-affirming care considerations.

Just over a month later, there have now been three key developments with respect to that issue:

1. On April 26, the U.S. Department of Health and Human Services (HHS) issued final rules on Section 1557 of the Affordable Care Act (ACA), which prohibits discrimination on the basis of race, color, national origin, sex, age, or disability, in any health program or activity, any part of which is receiving federal financial assistance. The final rules, in alignment with the U.S. Supreme Court decision in Bostock v. Clayton County, define discrimination to include discrimination on the basis of sex stereotypes, sex characteristics (including intersex traits), pregnancy or related conditions, sexual orientation and gender identity. Among other changes, the rules also provide that Section 1557 prohibits covered entities from applying limitations, restrictions or blanket exclusions of gender-affirming care. The final rules do not directly apply to many self-insured employer-sponsored group health plans. However, they do apply to most large insurance carriers, meaning that a self-insured employer-sponsored group health plan that contracts with an insurer carrier to provide third-party administrative services may nevertheless find itself indirectly subject to the rules.  
2. On April 29, the Fourth Circuit Court of Appeals issued a decision in Kadel v. Folwell, resolving two cases on appeal and holding that the North Carolina state employee health plan and West Virginia’s Medicaid program must cover gender-affirming surgeries. Appellees in both cases were transgender individuals who were denied coverage under these state plans for healthcare prescribed for their gender dysphoria diagnoses. Affirming the lower court decisions, the Fourth Circuit held that the plan’s coverage exclusions facially discriminated on the basis of sex and gender identity and were not substantially related to an important government interest. Therefore, these exclusions violated the Fourteenth Amendment’s Equal Protection Clause. The states in the Fourth Circuit are Maryland, North Carolina, South Carolina, Virginia, and West Virginia.
3. On May 13, the Eleventh Circuit Court of Appeals issued a decision in Lange v. Houston County, Ga, affirming the lower court and holding that a health insurance provider can be held liable under Title VII of the Civil Rights Act of 1964 “for denying gender-affirming care coverage to a transgender employee because the employee is transgender.” In this case, the plaintiff was a transgender woman denied coverage under the Houston County Sheriff’s Office health insurance plan (a self-insured plan administered by Anthem Blue Cross Blue Shield) for gender-affirming care prescribed for her gender dysphoria diagnosis. The states in the Eleventh Circuit are Alabama, Florida and Georgia.

As is evident by the flurry of activity over the last three weeks, gender-affirming care is a rapidly evolving legal issue, and we will continue to provide updates as further developments arise. If you have any questions about these issues, please reach out to one of the members of our Employee Benefits Practice Group.