Two federal agencies cannot punish Catholic employers and health care providers if they refuse for religious reasons to provide gender-affirming care to transgender patients or won’t provide health insurance coverage for such care to their workers, a federal judge ruled Thursday.
The ruling from U.S. District Judge Peter Welte, the chief federal judge in North Dakota, bars the U.S. Department of Health and Human Services from enforcing a health care rule it imposed in 2024 under Democratic President Joe Biden. The rule said that existing policies against sex discrimination covered discrimination based on gender identity, so that health care providers risked losing federal funds if they refused to provide gender-affirming care.
Welte also barred the U.S. Equal Employment Opportunity Commission from telling employers that a failure to have health plans cover gender-affirming care for their workers would represent discrimination based on sex that could lead to a lawsuit against them and penalties.
The judge rejected a request from an order of nuns, two Catholic homes and the Catholic Benefits Association, which represents employers, to impose similar bans on each agency covering abortion and fertility treatments Catholic organizations consider immoral. He said those claims were “underdeveloped” and not ready for court review.
But he concluded that allowing the two agencies to enforce policies on gender-affirming care or health coverage for it would restrict employers’ and health care providers’ ability to live out their religious beliefs, violating a 1992 federal law meant to provide broad protections for religious freedoms. The HHS rule had a provision allowing the agency to make case-by-case exceptions based on religious beliefs, but Welte said that would be insufficient.
“The case-by-case exemption procedure leaves religious organizations unable to predict their legal exposure without furthering any compelling antidiscrimination interests,” wrote Welte, who is based in Fargo.
The two agencies did not immediately respond to email messages seeking comment Thursday.
The Catholic Benefits Association serves more than 9,000 employers and about 164,000 employees enrolled in member health plans, according to its website.
The group, founded in 2013, says it “advocates for and litigates in defense of our members’ First Amendment rights to provide employee benefits and a work environment that is consistent with the Catholic faith.” The First Amendment to the U.S. Constitution protects religious freedoms.
Association General Counsel Martin Nussbaum welcomed the ruling, saying the organization’s members “want to do the right thing in their health plan and in their medical services that they provide for those medical providers, and this gives them protection to doing that.”
And he said the judge’s ruling suggests there are no mandates from the federal government on abortion or fertility treatments, so there is “no need to provide protection.”
The U.S. Supreme Court ruled in 2020 that the Civil Rights Act’s protections against discrimination based on sex also cover anti-LGBTQ+ bias in employment. The landmark 1964 act doesn’t have specific provisions dealing with bias based on sexual orientation or gender identity.
But courts also have intervened to limit how far the federal government can go in combating anti-LGBTQ+ discrimination when religious organizations or employers with religious beliefs against LGBTQ+ rights are involved.
Both the HHS rule and the EEOC’s policy on sex discrimination have their roots in efforts by President Barack Obama to protect LGBTQ+ rights in 2016, in his last year in office.
When President Donald Trump began his second term in January, he issued an order saying the federal government would not recognize transgender people’s gender identities. In April, two employees said the EEOC was classifying all new gender identity-related discrimination cases as its lowest priority, essentially putting them on indefinite hold.
The 2024 HHS rule also covered bias based on ”pregnancy or related conditions,” and the Catholic health care providers argued that they might face losing federal funds if they refused to perform abortions, in line with Catholic opposition to abortion. But HHS said the rule wouldn’t have forced them to perform abortions or provide health coverage for abortions — only that it couldn’t refuse to care for someone because they’d had one, according to Welte.
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Hanna reported from Topeka, Kansas.
