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Federal Court Blocks ACA Transgender Prohibition

In early 2020, the U.S. Department of Health and Human Services narrowed the Affordable Care Act’s definition of sex. In particular, the HHS determined that expanding ACA regulations in 2016 to include explicit protections for LGBTQ individuals and gender identity exceeded statutory authority. In the 2016 rule, “sex” was defined as “an individual’s internal sense of gender, which may be male, female, neither, or a combination of male and female, and which may be different from an individual’s sex assigned at birth.” Health providers were required to treat individuals in accordance with their gender identity. That part of the regulation was removed by the 2020 changes.

Two transgender women with serious medical conditions filed a lawsuit against their health care providers. They claimed that the health insurers discriminated against them based on their transgender status. A New York federal district court ruled that the 2020 rule conflicted with the U.S. Supreme Court’s recent decision in Bostock v. Clayton County, Georgia (2020). In Bostock, the Supreme Court held that Title VII’s prohibition on sex discrimination included both sexual orientation and gender identity. The district court ordered that HHS leave the 2016 rule in place and enjoined the HHS from enforcing the 2020 rule. HHS’s new rule was published four days after the Supreme Court’s decision with the agency seemingly declining to modify the rule in light of the decision. The court’s injunction is preliminary.