Nurse’s Obamacare Suit Over Transgender Care Exclusion Proceeds

A St. Louis hospital is facing suit over a nurse’s claim that her employee insurance plan’s blanket exclusion of coverage for transgender care violates the Affordable Care Act, after a ruling from a federal court in Missouri.

Angelia Scott sufficiently alleged that the St. Louis University Hospital plan’s refusal to pay for her transgender son’s care deprived her of a plan benefit and constituted discrimination on the basis of sex in violation of Section 1557 of the ACA, the U.S. District Court for the Eastern District of Missouri said.

But Scott can’t proceed on a claim that the exclusion violates Title VII, the federal law prohibiting sex discrimination in the workplace, the court said. Title VII protects employees from discrimination based on their own protected characteristics, not the characteristics of another person, it said.

Scott works for the hospital and receives health insurance coverage benefits through a privately funded plan administered by Cigna Healthcare, the court said. The plan categorically excludes payment for all care related to gender dysphoria and gender reassignment, it said.

The plan refused to pay for gender dysphoria treatment for Scott’s son, citing the exclusion. As a result, Scott’s son was forced to delay treatment, leading to financial hardship and out of pocket damages for Scott.

As an initial matter, the court denied the hospital’s motion to dismiss on the ground that the Employee Retirement Income Security Act preempted the case. ERISA preempts laws related to employee benefit plans, but it excludes federal laws—including Title VII and the ACA—from its preemption provision, the court said.

Scott’s Title VII claim was dismissed, as she can’t sue for discrimination based on her son’s protected characteristics, the court said.

But Scott’s ACA claim can go forward, the court said. Section 1557 incorporates Title IX’s sex discrimination provision, the court said. Thus, a healthcare program or provider that receives federal money can’t exclude or deny benefits to any person based on a reason prohibited by Title IX, including sex, it said.

The out of pocket costs Scott expended to pay for her son’s treatment constitute a denial of benefits, the court said. And Title IX provides a broad prohibition on sex discrimination that extends to third parties who complain about such discrimination against others, Judge Audrey G. Fleissig said Monday.

Law Office of Madeline Johnson represents Scott. Greensfelder Hemker PC represents the hospital.

The case is Scott v. St. Louis Univ. Hosp., E.D. Mo., No. 21-cv-1270, 4/25/22.