Our company has heard about changes at the federal level regarding gender-affirming care (GAC) and state laws being enacted that prohibit healthcare professionals from providing GAC to minors. How do these laws — and the recent court cases challenging them — affect our self-insured group health plan’s coverage of GAC, especially for minors?
Compliance issues for self-insured employer-sponsored group health plans with regard to GAC coverage, especially for minors, are in a state of flux due to certain state and federal laws and various legal challenges to those laws. Below is a summary of some of the considerations employers should discuss with legal counsel when determining their group health plan’s GAC coverage.
Note: The impact of any local GAC-related ordinances is beyond the scope of this article.
The World Health Organization defines GAC to include a range of social, psychological, behavioral and medical services “designed to support and affirm an individual’s gender identity” when it conflicts with the gender assigned at birth. Services include counseling, medications such as hormone therapy and gender-reassignment surgery.
Affordable Care Act (ACA) Section 1557 provides that an individual shall not, on the basis of race, color, national origin, sex, age or disability, be excluded from participation in, denied the benefits of or subjected to discrimination under any health program or activity of an entity that receives federal financial assistance — which includes third-party administrators administering self-funded plans. It does this by linking to long-standing federal civil rights laws, including, with regard to sex discrimination, Title IX of the Education Amendments of 1972.
Whether Section 1557 is intended to cover gender identity in the definition of “sex” has been widely interpreted. The Department of Health and Human Services (HHS) issued a set of Section 1557 final regulations in 2024 that were initially intended to take effect January 1, 2025. These regulations defined “sex discrimination” to include discrimination on the basis of sex stereotypes; sex characteristics, including intersex traits; pregnancy or related conditions; sexual orientation; and gender identity. This final rule likely would have resulted in more group health plan coverage of GAC by prohibiting categorical exclusions for GAC; however, in July 2024 a federal court in Tennessee v. Becerra issued a nationwide injunction staying the effective date of the 2024 regulations and prohibiting HHS from enforcing provisions related to gender identity. In January 2025, HHS rescinded a piece of its guidance issued during the Biden administration that interpreted Section 1557 to protect gender identity as part of sex discrimination. So, for now, it is unlikely HHS will include gender identity as part of its interpretation of Section 1557 in any guidance issued during President Trump’s second term.
Title VII prohibits discrimination in an employee’s compensation, terms, conditions or privileges of employment, including the scope of health benefits offered to employees. It expressly prohibits discrimination based on sex. The U.S. Supreme Court, in Bostock v. Clayton County, GA, held that Title VII prohibits discrimination based on sexual orientation as well as gender identity. In 2021, the Equal Employment Opportunity Commission (EEOC) issued guidance reiterating its position that discrimination in employment, including for the provision of fringe benefits based on gender identity, is prohibited by Title VII. The decision in Texas v. EEOC vacated this EEOC guidance because it violated the Administrative Procedure Act, but at least one federal court and the U. S. Court of Appeals for the Eleventh Circuit, in Lange v. Houston County, GA, held that a health insurance provider can be liable under Title VII for denying GAC “to a transgender employee because the employee is transgender.”
President Donald Trump signed Executive Order (EO) 14168 recognizing only two sexes, male and female, and directing federal agencies to cease promoting the concept of gender transition when enforcing and interpreting federal law. Following this, EO 14187 targeted the provision of GAC to individuals under the age of 19 and directed federal agencies to take regulatory and enforcement actions to fulfill the EO’s directives and curtail providing GAC for minors. This directive potentially includes addressing the civil rights protections under ACA Section 1557 or revisions to the International Classification of Diseases diagnostic manual, as well as ending reliance on the World Professional Association for Transgender Health guidance in federal health policies.
On June 18, 2025, the U.S. Supreme Court issued an opinion in United States v. Skrmetti, a case challenging a Tennessee law banning GAC for minors, stating that the state law did not constitute sex-based discrimination under Title VII and did not violate the U.S. Constitution’s 14th Amendment Equal Protection clause. As a result, most state laws prohibiting GAC for minors will remain in effect or go into effect on any prospective date required by the law.
Note: Bans on providing GAC to minors in Montana and Arkansas currently are permanently enjoined by separate court orders.
On August 8, 2025, the U.S. District for the Northern District of Texas issued a ruling, in Dr. James Dobson Family Institute et al v. Kennedy, blocking HHS from enforcing a Biden-era HHS rule requiring employers to cover GAC in employer-sponsored group health plans under ACA Section 1557, as well as related EEOC guidance mandating that employers cover GAC. Two nonprofit Christian ministries had filed suit challenging the Section 1557 and EEOC requirements. The judge held that these rules violated the Religious Freedom Restoration Act with regard to the religious organizations bringing the suit, and the ruling does not broadly apply to non-religious-based employers.
The Mental Health Parity and Addiction Equity Act (MHPAEA) does not require group health plans to cover any mental health diagnosis, such as gender dysphoria, which is classified as a mental health condition in the Diagnostic and Statistical Manual of Mental Disorders-V (DSM-5). However, if a self-funded group health plan decides to offer GAC for a gender dysphoria diagnosis, such services must be provided in each of six classifications listed in the MHPAEA regulations. In addition, such services must be provided in parity with medical and surgical benefits provided in the same classification (e.g., inpatient in-network care, outpatient in-network care). Group health plans that do not comply with these rules likely will be out of compliance with MHPAEA.
Many states have addressed the issue of providing GAC to minors, but none of them has attempted to directly require or prohibit self-insured employer group health plans from providing such care. If a state law requiring or prohibiting coverage of GAC was enacted, it likely would be preempted by ERISA for self-insured group health plans. However, any state insurance law or criminal law of general application requiring or prohibiting GAC would not be preempted.
Generally, states can be broken into three categories regarding GAC for minors:
Note: At least one state (New Hampshire) bars physicians from referring patients out of state for gender-affirming surgery. In addition, several states (including Iowa and Mississippi) have laws that also prohibit anyone from “aiding or abetting” minors in receiving GAC. It is unclear whether this extends to employers or employer-sponsored group health plans that provide coverage for GAC received outside of the state prohibiting the provision of such services.
