Federal District Court Rules Exclusion of Gender Affirming Care Violates Title VII

A federal district court in North Carolina recently ruled that the state employees’ health plan must no longer deny coverage for medically necessary gender affirming care for transgender beneficiaries. The plan categorically excluded treatments “leading to or in connection with sex changes or modifications.” The plaintiffs argued that this exclusion was discrimination on the basis of sex and transgender status.

The decision heavily relied on Bostock v. Clayton County, the Supreme Court case which found that prohibition on discrimination “because of sex” found in Title VII of the Civil Rights Act of 1964 forbids discrimination on both sex and transgender status. Relying on Bostock, the North Carolina court explained that an exclusion on gender affirming care necessarily treats beneficiaries differently based on their sex or transgender status, and thus violates Title VII.

The plaintiffs also alleged that the exclusion violated Section 1557 of the Affordable Care Act, which also prohibits certain health plans from discriminating against a participant on the basis of sex. At its inception, the provision was broadly interpreted to include discrimination on the basis of sexual orientation and gender identity, but was then limited under the Trump administration. The court declined to consider this claim, as the Biden administration intends to propose new Section 15557 regulations later this year.