Trump EOs Cast Doubt on Benefits for Transgender Federal Workers

President Donald Trump’s rescission of executive orders protecting LGBTQ+ individuals in the federal workforce jeopardizes future coverage of gender-affirming care in federal health plans and sets up potential antidiscrimination legal battles.

Trump revoked a series of former President Joe Biden’s executive orders on his first day in office, including two 2021 directives that led the Office of Personnel Management to expand gender-affirming care in the Federal Employees Health Benefits Program. A separate order Trump signed effectively erases the recognition of transgender individuals at the federal level, saying the administration will only acknowledge the existence of two sexes.

Trump signed another order Jan.28 directing OPM to remove “pediatric transgender surgeries or hormone treatments” from FEHB plans next year.

The moves don’t immediately impact adults’ coverage under federal health plans, but the administration’s position on transgender people—coupled with promises to slash trillions in government spending—signals that more is likely on the horizon. Attempts to curtail gender-affirming care for adults would likely trigger another legal battle over Title VII of the 1964 Civil Rights Act, which the US Supreme Court’s 2020 decision in Bostock v. Clayton County said encompasses gender identity protections. The ruling’s scope, however, has been debated.

“It really is because of executive order that the health insurance carriers have been covering these types of care,” said Debra D’Agostino, a partner with Federal Practice Group LLP. “Taking these executive orders away—and obviously issuing an affirmative one saying that sex does not encompass gender identity—is certainly going to likely mean a change in health insurance coverage.”

An OPM spokesperson referred Bloomberg Law to the White House, which did not respond to a request for comment.

The FEHB program is the nation’s largest employer-sponsored health insurance program, covering an estimated 8.3 million federal civil service employees and their families through 180 plans. In 2023, 72% of enrollees and dependents who sought gender-affirming care could access it, according to the Federal Employee Benefits Survey.

House Republicans are floating a proposal to convert the FEHB Program to a voucher system, which a leaked policy document estimates could reduce spending between $16 billion and $18 billion over 10 years.

Trump’s ‘two sexes’ order doesn’t reference the FEHB Program, but the broader intentions are there, said Michael Fallings, a partner with Tully Rinckey PLLC.

“From how I read it, it’s really directing all federal agencies to end any benefit or expansion,” he said.

“OPM would rely on this executive order as far as instituting new rules and procedures,” he added.

The order does explicitly target care in federal prisons, and on Jan. 27 Trump signed another order aimed at ousting transgender troops from the military.

FEHB Plans

Coverage varies among FEHB plans because OPM negotiates the terms jointly with participating carriers, and because coverage levels vary for different types of employees. Policies are outlined annually.

In 2016, OPM prohibited FEHB plans from a “general exclusion of services, drugs, or supplies related to the treatment of gender dysphoria.” In 2024, OPM further said that insurers cannot “categorically exclude” gender-affirming services like “hormone therapy, genital surgeries, breast surgeries, and facial gender affirming surgeries.”

Federal workers’ route to reverse FEHB denials through the Equal Employment Opportunity Commission appears at risk under Trump. Employees must file discrimination complaints before an EEOC judge before challenging coverage decisions in court.

EEOC judges issued several decisions supporting coverage of these treatments in recent years. The agency affirmed in a 2024 federal sector appeal that Title VII protects gender identity, finding that OPM violated the statute when it denied hormone therapy to a retired government worker in 2013.

“Treatment of gender dysphoria or other gender-affirming care is, by definition, sought by individuals whose gender identity does not match their sex assigned at birth,” the commission wrote in its decision. “Accordingly, it is sex discrimination under Title VII for an employee health benefits plan to deny coverage for medical care simply because it is needed by transgender individuals.”

But the EEOC’s new acting chair, Andrea Lucas, said Jan. 28 that she will focus on implementing the Trump EO by scrubbing “gender ideology” from the commission. An EEOC webpage listing federal sector worker wins on gender identity-related bias claims has been removed.

Trump’s order also called on the Justice Department to issue guidance correcting Bostock’s “misapplication” to gender identity and for the EEOC to prioritize relevant litigation.

Ongoing Fight

Title VII claims over benefits denials will likely lean on Bostock, as lawsuits continue in the Eleventh Circuit and other courts over whether the ruling covers only LGBTQ+ status, or related conduct like receiving health-care benefits. The first Trump administration argued pre-Bostock that Title VII doesn’t protect transgender workers.

A Texas federal court in 2022 vacated EEOC guidance allowing LGBTQ+ workers exceptions from certain employer policies on bathrooms and dress codes. The judge said Bostock did not cover conduct “correlated” to gender identity.

Texas and others are using similar arguments to sue over the EEOC’s 2024 attempt at related guidance.

But Lambda Legal Senior Counsel Omar Gonzalez-Pagan said there is precedent indicating potential limitations on gender-affirming care would be illegal.

“Those are decisions that have occurred in multiple cases around the country, but certainly also even conservative courts in Texas,” he said.

He pointed to a 2021 Texas federal court opinion that said religious organizations can enact certain limitations on LGBTQ+ workplace rights through exemptions to workplace law, but maintained Bostock prevents employers from banning employees from using gender-affirming care.

Any action would certainly be challenged in court, since Trump is already facing lawsuits over several new executive orders.

“We saw time and time again that many of the actions by the Trump administration in the first time that Trump was president were found to be unlawful,” Gonzalez-Pagan said. “And any attempts to roll back the rights of transgender people, LGBTQ people and other vulnerable populations will similarly be fought against.”