By: David Ostrowsky

Samantha and Brian Williams of Nashville are no different from any other parents in that they want what’s best for their 15-year-old daughter. The Williams’ situation, however, is different from that of many parents as their child identifies as transgender while residing in a state that restricts access to puberty blockers, hormone therapies, and surgeries for minors undergoing gender transitioning. Per the American Civil Liberties Union, the Williams’ daughter is one of approximately 3,000 transgender adolescents in Tennessee where, by law, medical providers cannot perform procedures that “enable a minor to identify with, or live as, a purported identity inconsistent with the minor’s sex” or “treat purported discomfort or distress from a discordance between the minor’s sex and asserted identity.”

But, as of this past Monday, it appears that the legal landscape in Tennessee – as well as in the two dozen other states with similar bans in place – may be undergoing a sea change in the coming months. Earlier this week, the U.S. Supreme Court agreed to hear the Biden administration’s challenge to Tennessee’s transgender care ban, thus wading into one of the most politically fraught, multilayered issues of modern-day America.

Half of the states have enacted stringent restrictions on related healthcare for transgender youths, contending that individual state legislatures should be at liberty to make their own decisions on medical procedures for individuals who have not reached adulthood. Opponents to such bans opine that such laws deprive trans youths of their civil rights under the Equal Protection Clause of the 14th Amendment and violate their parents’ rights to make life-altering decisions about their children’s medical care. Often times, parents facing this predicament feel compelled to move to states where their children will have access to gender-affirming care, which involves an entire spectrum of medical and mental health services to treat gender dysphoria, otherwise known as the anguish stemming from the misalignment between one’s assigned gender and gender identity. 

Regardless of one’s stance on this matter, that the highest court in America will soon hear arguments on the constitutionality of a state ban on gender-affirming care for transgender minors is a major development. Just this past April, the Court in part permitted Idaho to enforce a very stringent ban on gender-affirming care for children and teens (currently under Idaho state law it is a felony to provide medical treatment to transgender youths). Still, it is far too early to tell what implications the Supreme Court’s recent decision to take up this case will have on the legal framework in other states – the Biden administration has also challenged a similar ban in Kentucky, but the Supreme Court refused to hear that challenge. Ultimately, this evolving situation bears close watching both for transgender minors who are barred from obtaining treatments and for those benefit plans that may be impacted as well.

Indeed, as if this dynamic weren’t complicated enough, those administering self-funded health plans need to bear in mind what they can and can’t do, as well as risks associated with each approach.  For instance, how an exclusion for gender-affirming care within their plan documents could trigger a potential discrimination issue – regardless of how the Supreme Court proceeds in the coming months. More specifically, even if a health plan is administered in a state that has a strict ban on gender-affirming medical care for minors, if it is self-funded, it would be governed by Employee Retirement Income Security Act (ERISA) and therefore be exempt from state laws. Although ERISA plans are not currently required by federal law to cover gender-affirming care -- meaning the plan participant residing in a state without a ban would have to pay out-of-pocket for the services and treatment – those plans that are subject to Section 1557 of the Affordable Care Act (ACA), which protects against discrimination based on gender identity among other matters, could grapple with a significant compliance problem. Meanwhile, an exclusion for gender-affirming care could also lead to a disparity in coverage for plan participants . . . and a potential violation of protection against discrimination based on gender identity under Title VII of the Civil Rights Act of 1964.

Put another way, from a legal compliance perspective, there is more to consider than what services are mandated or banned by a given state – and how the Supreme Court does, or does not, intervene in the case of the latter.