In a notable development, the U.S. Court of Appeals for the 4th Circuit has reinstated a benefit exclusion for transition-related treatments under the State Health Plan, according to information disclosed by North Carolina's Treasurer's Office. This decision reverses a previous district court ruling and affects participants of the Plan who are seeking gender transition medical services.
The exclusion, originally established in the 1990s, had been inactive during ongoing litigation but continually listed as part of the annual exclusions. Despite the reversal, the Plan's exclusion does not apply to treatments for conditions caused or worsened by gender transition procedures. This is part of the unfolding Kadel v. Folwell case, which has now been referred back to the district court for additional consideration.
Moreover, the exclusion does not impact psychological assessments and psychotherapy treatments for individuals diagnosed with or connected to gender dysphoria. These services, as affirmed by the Plan's Board of Trustees in 2021, continue to be covered.
Following the Court's latest decision, Plan staff are coordinating with their third-party administrator and healthcare providers. The goal is to fully communicate the changes to all Plan members who are impacted by the reinstated exclusion. Furthermore, under S.L. 2023-111 § 5, the Plan must also follow the guidelines set forth in N.C. Gen. Stat. § 143C-6-5.6 prohibiting certain types of coverage.
