“It defies common sense and logic to argue, as BCBSIL does, that the administration of health coverage is not a health-related activity covered by the Affordable Care Act’s healthcare nondiscrimination law.”
Lambda Legal today urged the U.S. Court of Appeals for the Ninth Circuit to reject Blue Cross Blue Shield of Illinois’s (BCBSIL) argument that Section 1557 of the Affordable Care Act does not apply to its third-party administrator (TPA) activities and to affirm a district court ruling prohibiting BCBSIL from administering or enforcing coverage exclusions for gender-affirming health care contained in hundreds of health plans it administers as a TPA on behalf of employers.
“It defies common sense and logic to argue, as BCBSIL does, that the administration of health coverage is not a health-related activity covered by the Affordable Care Act’s healthcare nondiscrimination law,” said Omar Gonzalez-Pagan, Counsel and Health Care Strategist, Lambda Legal. “BCBSIL voluntarily receives federal funding. As such, it is subject to the Affordable Care Act’s nondiscrimination mandate and it cannot design, administer, or enforce discriminatory exclusion.
“In administering hundreds of these discriminatory and unlawful exclusions, BCBSIL has improperly denied coverage to thousands of transgender people across the country and violated Section 1557 of the Affordable Care Act,” Gonzalea-Pagan added. “Imagine the impact if BCBSIL’s argument was accepted. The district court rightly rejected BCBSIL’s arguments seeking to evade liability, and we are hopeful the Ninth Circuit will do so too.”
“BCBSIL cannot discriminate in its own health insurance plans, and it should not be permitted to discriminate when administering other health plans,” said Eleanor Hamburger of Sirianni Youtz Spoonemore Hamburger
In December 2023, a Federal district judge granted class-wide relief declaring BCBSIL’s administration of gender-affirming health care exclusions as a TPA violates Section 1557 of the ACA, prohibiting BCBSIL from administering such exclusions in the future, and ordering the reprocessing of claims improperly denied based on the exclusions, from November 23, 2016, to the present.
That ruling followed the district court’s November 9, 2022, order certifying a class comprised of individuals who were, are, or will be denied pre-authorization or coverage of gender-affirming care as a result of BCBSIL’s administration of categorical exclusions of such care, as well as December 19, 2022 ruling holding that the administrations of discriminatory exclusions in ERISA health plans by a TPA that receives federal funding violates Section 1557 of the Affordable Care Act.
The ruling came in a class action lawsuit filed by Lambda Legal and Sirianni Youtz Spoonemore Hamburger PLLC challenging BCBSIL’s administration of the discriminatory blanket exclusion on behalf of a then-15-year-old transgender young man, C.P., and his parents; S.L., a 13-year-old transgender girl; and Emmet Jones, a transgender man. The lawsuit, filed in the U.S. District Court for the Western District of Washington, argued that BCBSIL’s administration of the exclusions is in direct violation of the health nondiscrimination law enacted as part of the Affordable Care Act, known as Section 1557.
In its ruling, the district court concluded that BCBSIL is a “health program or activity” that receives federal funds, such that BCBSIL cannot discriminate on the basis of race, national origin, sex, age and disability in any of its operations – including BCBSIL’s administration of ERISA health plans as a third-party administrator. As such, BCBSIL cannot administer discriminatory terms of any health plans, including the employer-sponsored plans for any of the plaintiffs.
The case is C.P. v. Blue Cross Blue Shield of Illinois and is being litigated by Counsel and Health Care Strategist Omar Gonzalez-Pagan, Chief Legal Officer Jennifer C. Pizer, and Director of Constitutional Law Practice Karen Loewy for Lambda Legal, and Eleanor Hamburger and Daniel Gross of Sirianni Youtz Spoonemore Hamburger PLLC, in Seattle, Washington.
Read today’s filing here: Plaintiffs-Appellees’ Answering Brief – Lambda Legal
Read the court’s summary judgment decision here: https://www.lambdalegal.org/in-court/legal-docs/cp_wa_20221219_order
Read the court’s class certification decision here: https://www.lambdalegal.org/in-court/legal-docs/cp_wa_20221212_amended-order
Learn more about the case here: https://www.lambdalegal.org/in-court/cases/cp-v-bcbsil