On the heels of several recent court decisions concerning gender-affirming care, a federal district court in Washington concluded that the denial of benefits for gender-affirming care by a third-party administrator (“TPA”) administering a self-insured plan violated Section 1557 of the Patient Protection and Affordable Care Act (the “ACA”).  By way of background, Section 1557 sets forth the ACA’s nondiscrimination requirements applicable to any “health program or activity” which receives federal financial assistance.  There has been considerable litigation over the past few years regarding the applicability of Section 1557 to health plan service providers.

In this case, the court ruled that the TPA’s denial of benefits based on the plan’s gender-affirming care exclusion violated Section 1557 of the ACA.  The court rejected the TPA’s argument that it was not subject to Section 1557 because it was administering a self-funded plan that did not receive federal financial assistance, reasoning that the TPA was part of a larger organization operating health programs that received federal financial assistance.  Having concluded that the TPA’s activities were subject to Section 1557, the court found that the TPA’s denial of benefits for gender-affirming care violated Section 1557, noting that the denial constituted discrimination on the basis of sex under the U.S. Supreme Court’s decision in Bostock v. Clayton County, Georgia and the Ninth Circuit’s decision in Doe v. Snyder.

As for the TPA’s contention that it did not draft or control the self-funded plan’s gender-affirming care exclusion, the court responded: “tough luck.”  The court explained that the TPA had an independent duty to comply with Section 1557, and while the court recognized that the TPA was caught between ERISA’s requirement to follow the terms of a plan document and the requirements of Section 1557, the court resolved this issue by pointing to the ERISA principle that ERISA shall not be construed to impair other laws—including the ACA.

Proskauer’s Perspective

While other courts have ruled on Section 1557’s applicability to gender-affirming care exclusions in different contexts, this court’s decision is notable for holding a TPA accountable under Section 1557 for a self-insured plan’s terms.

The case is C.P. v. Blue Cross Blue Shield of Illinois, No. 20-cv-6145, 2022 WL 17788148 (W.D. Wash. Dec. 19, 2022).

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Photo of Daniel Wesson Daniel Wesson

Dan is an associate in Employee Benefits & Executive Compensation and focuses on ERISA Litigation. His litigation practice ranges from complex class actions to individual benefit claims concerning all types of plans, including 401(k) and 403(b) plans, defined benefit plans and health and…

Dan is an associate in Employee Benefits & Executive Compensation and focuses on ERISA Litigation. His litigation practice ranges from complex class actions to individual benefit claims concerning all types of plans, including 401(k) and 403(b) plans, defined benefit plans and health and welfare plans.  Dan represents large corporations, individuals, multiemployer pension plans, insurers, benefit plan committees and independent fiduciaries.  Dan also advises clients on plan administration, benefits restructuring, risk assessment and government investigations.

Dan has coauthored multiple articles in the Benefits Law Journal and is a frequent contributor to Proskauer’s Employee Benefits & Executive Compensation Blog.

Dan earned his B.A. from Northeastern University and his J.D. from Georgetown University.  He was a member of the Georgetown Journal on Poverty Law and Policy.  During his first summer at law school and the following semester, he served in the Division of Plan Benefits Security at the United States Department of Labor in Washington D.C., where he was a Gary S. Tell ERISA Litigation Fellow.

Photo of Jennifer Rigterink Jennifer Rigterink

Jennifer Rigterink is senior counsel in the Labor Department and a member of the Employee Benefits & Executive Compensation Group.

Jennifer focuses on a diverse array of tax and ERISA issues impacting employee benefits.  Her wide-ranging practice encompasses qualified retirement plans and non-qualified…

Jennifer Rigterink is senior counsel in the Labor Department and a member of the Employee Benefits & Executive Compensation Group.

Jennifer focuses on a diverse array of tax and ERISA issues impacting employee benefits.  Her wide-ranging practice encompasses qualified retirement plans and non-qualified arrangements, health and welfare benefits, and fringe benefit programs.  She counsels single-employer and multiemployer clients on matters pertaining to plan administration, design and qualification, as well as regulatory, legislative and legal compliance.

In recent years, Jennifer has advised employers and plan sponsors with fiduciary and governance matters applicable to defined benefit plans and pension de-risking activities, including lump sum window programs, annuity purchases, and pension plan terminations.

Jennifer frequently counsels clients on health and welfare arrangements, with a particular focus on all matters relating to family building and reproductive health care benefits.  Her experience also includes working with employers and plan sponsors on mental health parity compliance issues.

Prior to joining Proskauer, Jennifer clerked for Judge Jacques L. Wiener, Jr., in the United States Court of Appeals for the Fifth Circuit and Judge Yvette Kane in the United States District Court for the Middle District of Pennsylvania.