Unreported / Non-Citable
Background
Plaintiff Andi Cox is a transgender woman with a diagnosis of gender dysphoria who is enrolled in WSP USA Inc.’s Group Insurance Plan. Aetna administers the Plan’s health benefits. The Plan covers “medically necessary” care, which Aetna determines using its Clinical Policy Bulletins. Aetna’s Bulletin on gender-transition care designates a long list of facial procedures as not medically necessary and cosmetic, including facelifts, hair line advancement, blepharoplasty, rhinoplasty, cheek and lip procedures, lower-jaw reduction, chin reshaping, chondrolaryngoplasty (Adam’s apple reduction), and vocal cord surgery.
Cox previously sued WSP over denial of her claim for facial hair removal services as part of her treatment for gender dysphoria. After litigating before Judge Chhabria, the parties entered a settlement agreement. Cox now brings a renewed ERISA action challenging the denial of additional facial gender-affirming procedures she contends are medically necessary for her gender-dysphoria treatment under the WPATH Standards of Care and prevailing medical literature, despite the Aetna Clinical Policy Bulletin’s broad cosmetic-classification exclusion.
WSP filed a motion to seal, a motion for the court to take judicial notice and incorporate exhibits, and a motion to dismiss the complaint.
The Court’s Holding
Judge Haywood S. Gilliam, Jr. granted the motion to seal in full, granted in part and denied in part the motion to take judicial notice and incorporate by reference, and granted in part and denied in part the motion to dismiss.
On judicial notice and incorporation, the court permitted the Plan documents and Aetna Clinical Policy Bulletin to be considered without converting the motion to summary judgment, but declined to take judicial notice of disputed factual content within those documents under Khoja v. Orexigen Therapeutics.
On the motion to dismiss, the court allowed Cox’s core ERISA claims challenging the denial of facial gender-affirming procedures to proceed. Cox plausibly alleged that the procedures are medically necessary under generally accepted standards of medical practice — including the WPATH Standards of Care — even though the Aetna Bulletin classifies many of them as cosmetic. Whether the Plan’s administrator acted within its discretion in denying coverage based on the Bulletin’s categorical classification, and whether that classification is consistent with generally accepted medical standards, are fact-intensive questions requiring the administrative record.
The court dismissed certain duplicative or insufficiently pleaded claims with leave to amend, while leaving the central ERISA § 1132(a)(1)(B) and § 1132(a)(3) theories standing. The motion to seal was granted under Kamakana v. City of Honolulu standards as to specific portions of the record involving Cox’s personal medical information.
Key Takeaways
- Categorical insurance plan exclusions of facial gender-affirming surgery as “cosmetic” will face ERISA challenges and may not be sustainable when plaintiffs plead that the procedures are medically necessary under generally accepted medical standards.
- Aetna’s Clinical Policy Bulletin classifications are not dispositive at the pleading stage. Plan members can plausibly allege that the Bulletin is inconsistent with generally accepted standards of medical practice — including the WPATH Standards of Care.
- Health insurance plans’ coverage decisions for gender dysphoria treatment will increasingly be litigated under ERISA, and courts in the Northern District are willing to allow these challenges to survive motions to dismiss.
- Plan documents and clinical policy bulletins may be incorporated into ERISA pleadings without converting the motion to summary judgment, but disputed factual content within them is not subject to judicial notice.
- Personal medical information of plaintiffs in ERISA gender dysphoria cases can typically be sealed under Kamakana sealing standards even where the underlying litigation is otherwise public.
Why It Matters
Coverage of gender-affirming care under employer-sponsored ERISA plans has become a major area of insurance and civil-rights litigation. The Aetna Clinical Policy Bulletin’s categorical exclusion of facial gender-affirming procedures as “cosmetic” has been challenged repeatedly across the country, and decisions like this one allow those challenges to proceed past the pleading stage based on the WPATH Standards of Care and the broader medical-necessity inquiry under ERISA.
For transgender plan members, the case is a useful reminder that ERISA provides a meaningful pathway to challenge categorical denials of gender-affirming procedures. For employers and Plan administrators, the decision underscores that simply citing an Aetna Clinical Policy Bulletin will not insulate categorical denials from challenge — courts will look to whether the Plan’s coverage decisions are consistent with generally accepted standards of medical practice as a fact-intensive matter.