Sacramento, CA. — The Ninth Circuit Court of Appeals has vacated a lower court’s ruling against Blue Cross Blue Shield of Illinois (BCBSIL) in a class-action lawsuit involving the denial of gender-affirming care under employer-sponsored health plans. The case now returns to the district court for reconsideration under new Supreme Court guidance.
Plaintiffs, participants in self-funded ERISA health plans administered by BCBSIL, argue the insurer violated Section 1557 of the Affordable Care Act by enforcing categorical exclusions on gender-affirming treatment. The district court previously ruled in their favor, finding BCBSIL liable for sex-based discrimination and rejecting its defenses.
The Ninth Circuit upheld several of those determinations, concluding that BCBSIL is subject to Section 1557 because it operates a health program receiving federal financial assistance. The panel also reaffirmed that ERISA does not permit third-party administrators to implement unlawful plan terms, and rejected BCBSIL’s attempt to invoke the Religious Freedom Restoration Act.
However, the court ruled that the district court’s discrimination analysis “ran afoul” of the Supreme Court’s recent decision in United States v. Skrmetti, which tightened the legal framework for evaluating transgender-related exclusions. Because that ruling could affect the outcome, the Ninth Circuit vacated the summary judgment and sent the case back for additional proceedings.
The panel noted that the case may differ from Skrmetti because some plaintiffs sought treatment for non–gender dysphoria diagnoses and because BCBSIL’s stated justifications could be challenged as pretextual. The district court will decide how those issues apply under the updated standard.
The case may now return to the lower court for reconsideration.
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