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The Centers for Medicare & Medicaid Services and its parent, the U.S. Department of Health and Human Services, today published a notice vacating CMS regulations that seek to protect transgender people against discrimination in health care.
The Patient Protection and Affordable Care Act is one of the two federal laws in the Affordable Care Act package. PPACA section 1557 prohibits many different kinds of discrimination in health care. In May 2024, HHS issued a final rule stating that the section 1557 ban on discrimination based on sex includes discrimination based on gender identity, as well as on biological sex.
Some federal courts have issued rulings in favor of transgender workers who wanted employers to cover gender-related health care,
In October 2025, the U.S. District Court for the Southern District of Mississippi ruled that HHS had exceeded its statutory authority when it said the ban on discrimination related to sex included discrimination related to gender identity.
While the Mississippi court ruling remains in effect, the HHS Office for Civil Rights "cannot and will not investigate or enforce compliance with the provisions of the 2024 rule that were vacated," CMS officials say in the new notice.
Provisions in the May 2024 final rule unrelated to gender identity remain in effect, officials say.
What it means: Benefits managers and benefits advisors who would like to maintain consistent benefits rules now face another example of federal policymakers reversing course on previously adopted policies rather than trying to pursue a middle course.
Other examples have included efforts by former President Barack Obama and former President Joe Biden to stamp out short-term health insurance and the effort by the administration of President Donald Trump to keep states with state-based ACA public exchange programs starting or ending their annual enrollment periods on dates other than the dates HealthCare.gov uses for its annual enrollment period.
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