Federal Workers Sue Over Gender-Affirming Care Policy: What the Lawsuit Claims

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A group of federal workers filed a lawsuit representing a group of workers with the same complaint on January 1, 2026, the day the Trump administration’s ban on transgender medical care coverage in federal employee health plans took effect. The lawsuit alleges that the federal agency managing government employee benefits broke federal civil rights law by targeting medical treatment that only transgender people need—making it, by definition, discrimination based on sex.

The complaint was filed with the Equal Employment Opportunity Commission by the Human Rights Campaign Foundation and the law firm Correia & Puth. It represents transgender federal employees and federal workers with transgender family members covered under their health plans. While approximately 14,000 transgender people work in the federal workforce, the exact number of employees participating in this class action complaint has not been publicly specified. They are seeking to overturn the policy and get money back.

What the Policy Does

The OPM policy eliminates insurance for puberty blockers and hormone therapy and related surgeries for anyone covered under federal employee plans. That includes career civil service employees, Senior Executive Service members, and Postal Service workers—along with their spouses and children.

The policy doesn’t ban the medications themselves. Federal plans still pay for testosterone for men with low testosterone. They still pay for estrogen for menopausal women. They still pay for medications that pause puberty—the same drugs used as puberty blockers—when prescribed for endometriosis, fibroids, or fertility treatment.

The policy targets the diagnosis and the patient, not the medicine.

OPM allowed two narrow exceptions. Mental health counseling for transgender people experiencing distress about their body remains covered, including from “qualified faith-based counselors”—a phrase used nowhere else in federal benefits rules. People already receiving hormone therapy or undergoing surgical treatment can apply for continued insurance on a “case-by-case basis,” though what that means in practice remains unclear.

The Legal Theory: Sex Discrimination Under Federal Law

The complaint is based on a 2020 Supreme Court decision that ruled discrimination against transgender people is sex discrimination. The decision held that firing someone for being transgender constitutes sex discrimination under federal civil rights law. The Court’s reasoning was straightforward: if you treat someone differently based on their sex at birth, you’re discriminating based on sex.

The lawsuit argues that the OPM policy does exactly that. It denies insurance for medical care that only transgender people need. A woman born female can get estrogen covered. A transgender woman cannot—for the identical medication, prescribed by the same doctors, purchased from the same pharmacies. The only difference is the patient’s gender identity.

Health insurance counts as part of your job benefits under federal civil rights law, which means the law covers insurance decisions. The federal government cannot give worse benefits based on race, religion, or sex. The lawsuit argues that OPM is offering inferior benefits to transgender employees and employees with transgender family members.

The exceptions process creates extra red tape that only transgender enrollees must navigate. No one else has to justify why they need their medications. That separate, more burdensome process for one group is also discrimination.

The Executive Orders Behind the Policy

The OPM policy comes from two executive orders President Trump signed in January 2025.

The first order, titled “Defending Women from Gender Ideology Extremism and Restoring Biological Truth to the Federal Government,” mandates that federal agencies define gender as unchangeable and based on birth. It requires federal agencies to use “sex” instead of “gender.” It directs the Attorney General to challenge how the Supreme Court’s 2020 ruling applies to federal activities—trying to overturn the Court’s decision that anti-transgender discrimination is sex discrimination.

The second order, “Protecting Children from Chemical and Surgical Mutilation,” establishes federal policy against gender-related medical care for anyone under nineteen. It directed OPM to require insurance companies to exclude coverage for medical care for transgender youth in the 2026 plan year.

That initial directive applied only to people under nineteen. But OPM expanded it in August 2025 in a directive to insurance companies, which removed the age limit. Now the ban applies to everyone—federal employees of any age and all their dependents.

What This Costs People

Without insurance, this medical care gets expensive fast. Research on people with private insurance found that testosterone therapy costs about $121 per year, estrogen $153 per year, and puberty-blocking therapy $2,410 per year. Surgeries cost tens of thousands of dollars. A federal employee planning surgery in 2026 expected insurance to cover most costs. Now they face either paying the full amount themselves or not getting the surgery at all.

For families with transgender children, the costs add up quickly. Parents who chose federal jobs for the benefits, accepting lower pay for better insurance, now find that their child’s medical care isn’t covered anymore. Not because the care isn’t medically necessary or because doctors don’t recommend it. Because of who their child is.

The Human Rights Campaign Foundation put it bluntly: “This policy is not about cost or care—it is about driving transgender people and people with transgender spouses, children, and dependents out of the federal workforce.”

How the Lawsuit Will Proceed

Federal employee discrimination complaints go through a specific process. The January 1 filing started a required discussion period, usually lasting thirty days. During this period, OPM’s civil rights office will talk with the complainants to try to resolve the issue.

When this discussion fails, the complainants can file a formal discrimination charge with OPM’s civil rights office, which will start an investigation. After investigation, they can request a hearing before a federal employment judge or accept OPM’s final decision. If OPM finds no discrimination or if the complainants disagree, they can appeal to the federal appeals office.

If that doesn’t work, they can sue in federal court. The complaint indicates that if OPM doesn’t resolve the issue, they’ll file a class action lawsuit in federal district court—likely in Washington, D.C., since it challenges a nationwide policy.

The EEOC’s Changed Leadership

President Trump reshaped the commission by replacing Democratic appointees with commissioners who share his views. EEOC Chair Andrea Lucas has said she believes sex is determined at birth and cannot change. Former EEOC staff reported that during Trump’s first term, workers were told to remove mentions of transgender and nonbinary people from agency materials.

The complainants are filing a discrimination complaint with an agency led by people who don’t believe discrimination against transgender people is discrimination at all.

The Supreme Court’s 2020 ruling still applies. Federal courts have consistently used it since 2020 to protect transgender employees. But the EEOC might not thoroughly investigate, might not rule for the complainants, and might not spend resources on the case.

The plaintiffs probably don’t mind. They’re preparing evidence for federal court, where legal rules matter more than the agency’s political views.

Coordinated Restrictions Across Federal Programs

The federal employee health insurance policy isn’t an isolated decision. It’s one piece of a coordinated effort to restrict access to this medical care across every federal program.

Federal health officials proposed rules that would prohibit hospitals that accept Medicare and Medicaid from providing this care to minors—using rules that hospitals must follow to accept Medicare and Medicaid—rules never before used to ban a specific medical procedure. Hospitals that accept Medicare and Medicaid would have to agree not to provide this care, even if doctors recommend it, parents agree, or state law allows it.

The Veterans Affairs system announced it won’t provide these services to veterans, except for those already receiving hormone therapy. The administration has moved to restrict gender-affirming care in the federal prison system, though federal courts have issued orders in ongoing litigation concerning these restrictions while cases proceed through the judicial system.

A new rule issued in June 2025 prohibits insurance plans from being required to cover this medical care in individual and small group plans. This removes the requirement for private insurance companies to cover these services.

A separate executive order removed protections for LGBTQ federal employees and employees of federal contractors. This action rescinded Biden-era guidance on how federal agencies should interpret sex discrimination protections under existing civil rights law, reversing an expansion of protections that had built upon Obama-era policies. The Trump administration has taken multiple documented actions targeting LGBTQ protections, including the sex recognition order and rescission of guidance on ACA protections.

Medical Consensus on Gender-Affirming Care

The executive orders use language like “chemical and surgical mutilation.” That’s political language designed to make this care sound harmful.

The medical consensus looks different. The American Medical Association, the American Academy of Pediatrics, and the American Psychological Association all support access to this care as proven treatment for transgender people experiencing distress about their body. The World Professional Association for Transgender Health, the leading international organization for transgender medical professionals, has issued detailed care guidelines explaining how doctors should treat transgender patients.

Research consistently shows that access to this care improves mental health for transgender people, while restricting access worsens mental health. OPM’s guidance says counseling for transgender people experiencing distress must remain covered—acknowledging that transgender people need mental health support. But eliminating the medical care that counseling often supports makes treatment less effective.

How the Government Will Defend This

OPM will likely argue that it has the authority to decide which services are covered in federal employee health insurance. Agencies have broad authority to structure benefits, and courts usually accept their decisions.

They’ll probably argue the policy serves legitimate government goals: controlling spending, clarifying sex definitions in federal programs, and protecting children from what they call harmful care. Cost control is usually accepted as a valid reason for insurance limits, though this care costs very little compared to total federal health spending.

The government might argue the policy doesn’t discriminate because it applies equally to everyone—no one gets coverage, regardless of their sex. That’s the same argument employers made before the Supreme Court’s 2020 ruling, and the Court said it was wrong. The Court said that if a policy treats people differently based on their sex, it’s discrimination even if it applies equally to everyone.

Why the Plaintiffs’ Argument Is Strong

The plaintiffs have several advantages. The Supreme Court’s 2020 ruling is clear, recent, and directly relevant. The Court said that discrimination against transgender people is sex discrimination under federal civil rights law. Lower courts have consistently used this ruling since 2020.

The policy clearly singles out transgender people. It’s not a neutral rule that affects transgender people more than others. It excludes care only transgender people need, while covering the same drugs and procedures for everyone else.

Insurance benefits are clearly part of your job compensation. Federal civil rights law applies. There’s no argument that these decisions are outside the law’s reach.

Doctors agree with the plaintiffs. When the government says this care is harmful, plaintiffs can point to every major medical organization disagreeing. Courts usually trust doctors over politicians.

Federal courts have already stopped other Trump administration restrictions on this care, suggesting plaintiffs would likely win.

Impact on Federal Employment

Federal jobs have always offered a deal: lower pay than private jobs, but better job security and benefits. Federal employee health insurance has been a major part of that deal.

Excluding specific groups undermines that deal. If you’re a transgender professional deciding between a federal job and a private job, why would you choose a federal job when your insurance won’t cover your care? If you’re a parent of a transgender child, why would you take a federal job when your child’s care won’t be covered?

The Williams Institute at UCLA estimates about 14,000 transgender people work for the federal government. That doesn’t include federal employees with transgender spouses, children, or other family members. All of them now have worse benefits because of who they are or who their family members are.

The timing matters. The Trump administration is laying off federal workers and proposing more cuts, creating uncertainty about federal jobs. In that context, cutting benefits for specific groups sends a message about who the government values.

The Human Rights Campaign Foundation says it’s an intentional strategy to push transgender people out of federal jobs. Whether that’s the goal or an accepted result, the effect is the same.

What Happens Next

The required discussion period will likely end without solving the problem. OPM deliberately implemented this policy on White House orders.

The case will go through a formal investigation, probably get rejected by OPM, be appealed to the federal appeals office, and eventually reach federal court. This will take months or years.

Meanwhile, federal employees and their families are paying themselves for care that was covered a month ago. Some are skipping care because they can’t afford it. Some are probably looking for private jobs with better insurance.

The legal question is whether federal courts will recognize this as sex discrimination or whether they’ll accept the executive branch’s authority over federal benefits. The answer will determine whether the federal government can exclude other diagnoses or groups from insurance in the future.

If courts uphold the policy, what stops the next administration from excluding insurance for any medical condition it dislikes? If courts reject it, they’ll establish that civil rights protections apply even when the government is the employer.

Federal employees filed their complaint on January 1, 2026, when the policy took effect. They’re not waiting. They’re challenging it now, while they’re still paying for care that was covered, while the harm is happening.

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