Gender-Affirming Care Coverage in Employer Health Plans
Whether and how a health plan covers gender-affirming care is a plan design decision set against a legal picture that has shifted repeatedly. This guide lays out the framework and the questions to settle with counsel.
The Laws That Bear on This Decision
No single federal statute tells employers whether to cover or exclude this care. Several laws apply in different ways, and court rulings in 2025 changed the picture again. Treat what follows as a map, not advice.
Title VII
In Bostock v. Clayton County the Supreme Court held that Title VII covers discrimination because of sexual orientation and gender identity. How that applies to plan exclusions is the contested question. Courts have continued to address related questions, and outcomes can turn on the specific facts and the plan’s design. Employers should review their own situation with employment and benefits counsel rather than rely on this summary.
The Lange Decision
In Lange v. Houston County the full Eleventh Circuit held on September 9, 2025 that a plan exclusion for gender transition surgery did not violate Title VII, relying on the Supreme Court’s Skrmetti decision. That ruling binds only courts in that circuit.
Skrmetti
In United States v. Skrmetti, decided June 18, 2025, the Supreme Court held that Tennessee’s ban on certain care for minors did not violate the Equal Protection Clause. The case did not decide how employer plans are treated. Employers should avoid treating a single ruling as settled guidance for their own plan, and ask counsel how it interacts with other laws.
Section 1557
HHS’s 2024 rule read sex discrimination to include gender identity. A federal court in Mississippi vacated those gender identity provisions in October 2025, and HHS has published notice that it will not enforce them while the vacatur stands. The rest of the rule remains in effect. Confirm the current status, including any appeal, with counsel.
Parity Law
The federal mental health parity law does not require coverage of any particular diagnosis. If a plan does cover care for gender dysphoria, it must apply parity rules to the mental health and substance use benefits it provides. Whether your plan covers any particular service is a plan design decision. Ask counsel and your carrier or administrator how parity testing would be handled for your plan.
Different Circuits
Federal appeals courts have not all reached the same result, and Michigan sits in a different circuit than Georgia, Alabama, and Florida. Ask counsel how courts in your circuit have ruled. The same plan can face different risk depending on where the employer is located, since courts in a circuit are bound by that circuit’s decisions. This is a point for employment counsel who knows your area.
How Funding and State Law Change the Analysis
The same plan design can carry different obligations depending on how the plan is funded and where the employees work.
Insured Plans
Fully insured plans are subject to state insurance law, including any state rules about covered services and carrier filings. The carrier’s approved plan design limits what an employer can change. Because the carrier’s filed design controls, asking for an exclusion to be changed may not be possible mid-year. Raise questions before renewal, and get the carrier’s answer in writing so the plan file shows what was decided.
Self-Funded Plans
Self-funded ERISA plans are generally not subject to state insurance mandates, which gives the employer more design control and more responsibility for the decision. Greater control also means greater exposure if a decision is challenged. Self-funded employers should have counsel review any exclusion, and confirm how the third-party administrator will apply the written plan terms.
State Civil Rights Law
Michigan’s Elliott-Larsen Civil Rights Act was amended by Public Act 6 of 2023 to cover sexual orientation and gender identity or expression. How it applies to benefit design is a question for counsel. Check whether any state law or civil rights rule applies to your workforce where employees live, not only where the company is located. Counsel can help you map the differences if you have workers across several states.
Multi-State Employers
Employers with workers in several states should check each state’s insurance and civil rights rules. Our guides on remote and multi-state coverage explain how location affects coverage. Make a list of the states where employees live and work, then ask counsel which rules might apply. The answer can differ for insured plans and self-funded plans, so keep the plan type in mind.
Carrier and Stop-Loss Terms
Review how the carrier, third-party administrator, and stop-loss carrier treat these claims. A self-funded exclusion that the stop-loss policy does not mirror can leave gaps. Ask for the stop-loss policy language alongside the plan document, and have counsel compare the two. The goal is to know before a claim arrives whether the employer or the stop-loss carrier would pay.
Tax Treatment
The tax treatment of related medical expenses is a question for a tax advisor. Employers should not give individual employees tax advice. Employees with questions about deductions, accounts, or filing should be directed to their own tax advisor. Keep HR communications to describing the plan’s coverage and not to how an expense might be treated on a return.
Decisions Employers Make and Document
Whatever the choice, the plan document, the summary plan description, and the communications should say the same thing.
What Is Covered
Define covered services in the plan document, including any prior authorization or medical necessity criteria, so claims are decided under written rules. Written criteria help the plan treat similar claims the same way and make appeals easier to resolve. Ask counsel and your administrator to review the language against how claims are actually being processed.
Written Exclusions
If the plan excludes any category, the exclusion language should be specific and consistent across the plan document, the SPD, and carrier materials. Mismatched wording is a common cause of disputes, so compare each document side by side. Counsel should review exclusion language before it is finalized, particularly where the legal landscape is still unsettled.
Claims and Appeals
Denials follow the same internal and external review rules as other claims. Make sure the appeals process and notices are in place before the first claim. Check that denial notices explain the reasons clearly, tell employees how to appeal, and name the deadlines. Test the process with a sample claim so you are not learning its gaps for the first time on a live one.
Employee Communications
Describe coverage plainly and point to the plan documents. Avoid statements that overpromise coverage or characterize individuals. Train HR and managers on what they can and cannot say, and send employees with detailed coverage questions to the carrier or administrator. Consistent, neutral language protects both the employee and the employer.
Privacy
Claims in this area are sensitive health information. Limit access to the people who need it and follow HIPAA privacy practices. Claims data can reveal a lot about a person. Keep reports de-identified where possible, restrict who can see detailed information, and review HIPAA training with anyone who handles claims issues.
Review Annually
Court rulings and agency positions have changed several times. Put this on the annual compliance review with your broker and counsel. Add a calendar date each year, and assign someone to collect updates before it. Bring your broker, counsel, and plan administrator into the same conversation so changes reach the plan documents on time.
Gender-Affirming Care Coverage Questions
Does federal law require employer plans to cover gender-affirming care?
There is no single federal rule that settles it. Title VII, Section 1557, and parity laws apply in different ways, and recent court decisions have changed the analysis. Ask counsel.
What did the Lange decision decide?
The Eleventh Circuit, en banc, held in September 2025 that a plan exclusion for gender transition surgery did not violate Title VII. It applies in that circuit.
What did Skrmetti decide?
The Supreme Court held in June 2025 that Tennessee’s ban on certain care for minors did not violate the Equal Protection Clause. It was not an employer plan case.
Where does Section 1557 stand?
Reports say the gender identity provisions of the 2024 HHS rule were vacated in October 2025. Confirm the current status with counsel.
Does the parity law require coverage?
No. But if a plan covers care for gender dysphoria, parity rules apply to the mental health and substance use benefits it provides.
Do self-funded and insured plans differ?
Yes. Insured plans follow state insurance law and the carrier’s filings. Self-funded ERISA plans are generally outside state insurance mandates.
Does Michigan law address this?
Michigan’s Elliott-Larsen Civil Rights Act covers gender identity or expression after a 2023 amendment. Its effect on benefit design is a question for counsel.
Should we change our plan?
That is a decision for the employer with its attorney and broker. We can help you compare what carriers cover and how plan documents should read.
Is this legal advice?
No. This page is general information, not legal advice. Rules change and facts differ, so confirm your situation with your attorney or tax advisor.
Related Guides
Related reading: Section 1557 Nondiscrimination · Michigan Civil Rights Act and Benefits · Mental Health Parity · ERISA Preemption: Insured and Self-Funded · Internal Appeals and External Review
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Laws and rules referenced
42 U.S.C. § 18116 and 45 C.F.R. § 92.207 — ACA section 1557: nondiscrimination in health coverage.
This page is general information, not legal or tax advice. Rules change and facts matter, so confirm your situation with counsel or a qualified advisor.
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