Jane Doe is the pseudonym of a Philadelphia, Pennsylvania firefighter, who was employed by the City for over 30 years. Doe came out as a transgender woman late in her career and sought pre-authorization for facial feminization surgery from her City-provided health insurance. She had earlier been diagnosed with gender dysphoria, which is a medical condition recognized in the Diagnostic and Statistical Manual of Mental Disorders. Facial feminization surgery is a generally accepted treatment for gender dysphoria in transgender women.
Doe was denied pre-authorization by Independence Blue Cross, her insurance carrier. The insurer specifically noted that it excludes coverage for procedures which are “potentially cosmetic,” unless the participant can prove that the procedure addresses a “functional impairment.” The insurer rejected Doe’s claim that her gender dysphoria was a functional impairment because it interfered with her social or occupational life, explaining that a functional impairment requires proof of a physical disfigurement or disability. Doe sued the City, the insurer, and her union for discriminating against her based on her gender identity in violation of Title VII, and the Affordable Care Act (ACA). Independence Blue Cross moved to dismiss the complaint.
The Court granted the motion in part and denied in part. First, in considering Doe’s Title VII claims, the Court noted that “in order to state a Title VII claim, a plaintiff must allege an employment relationship with the defendant.” Doe argued that the insurer is liable because Blue Cross had full control over her employer-provided health insurance. She compared another case involving the Pennsylvania Employees Benefit Trust Fund, which administers health insurance benefits to employees of the state of Pennsylvania and has some of its trustees appointed by the governor. The Court rejected this analogy, finding that while the trust fund was so intertwined with the state as an employer, Blue Cross was not similarly intertwined with the City. Since Doe’s complaint did not sufficiently allege that the insurer was her employer, the Court granted Blue Cross’s motion to dismiss on this count.
The Court considered Doe’s claims under the ACA. Section 1557 of that law prohibits health insurance plans from discriminating against individuals based on sex under Title IX. It was not persuaded by Blue Cross’s argument that its standards for functional impairment are not facially discriminatory against transgender participants. The Court noted that while this is true, the insurer could still have violated the ACA by applying its standards in such a way as to discriminate against transgender individuals. Doe specifically alleged that she was distressed by the insurer’s requirement that she “state a physical deformity, disfigurement, abnormality, or impairment to demonstrate a recognized ‘functional impairment.’” As presented in the complaint, this was sufficient for Doe to state a claim of gender identity-based discrimination under the ACA. Doe’s ACA discrimination claims were allowed to proceed against Independence Blue Cross.
Doe v. City of Philadelphia, CIVIL ACTION NO. 24-0468, 2024 WL 3634221 (E.D. Pa., 2024).