Labor & Employment Law Daily Wrap Up, LITIGATION NEWS, TRENDS—Federal workers who lost gender-affirming healthcare coverage make class claims against OPM, (Jan 6, 2026)

By Brandi O. Brown, J.D.

An OPM carrier letter directed insurance providers to deny coverage for gender affirming care under the Federal Employee Health Benefits (FEHB) and Postal Service Health Benefits (PSHB) plans.

Recently, the Human Rights Campaign Foundation, along with a DC-based civil rights law firm, announced that the first step towards class action litigation against the U.S. Office of Personnel Management (OPM) has been made by and on behalf of federal employees and their families, by starting the EEO counseling process within the agency. If the matter does not resolve at this stage, HRC explains that it will pursue class claims before the EEOC and, upon exhaustion of the claims at the administrative level, will have the option to pursue a class action lawsuit in federal district court.

Carrier letter denying coverage. In the document initiating contact with the EEO counselor, the federal employees allege that the denial of care resulting from OPM’s FEHB Program Carrier Letter, Letter Number 2025-01b, is discriminatory on the basis of sex, in violation of Title VII. The letter states that for the 2026 plan year, “chemical and surgical modification of an individual's sex traits through medical interventions (to include ‘gender transition’ services) will no longer be covered under the FEHB or PSHB Programs. This exclusion expands upon Carrier Letter 2025-01a and applies regardless of age.” The policy provides only a narrow exceptions process for beneficiaries who are mid-treatment within a surgical and/or hormonal regimen for diagnosed gender dysphoria. The letter came into effect on January 1, 2026.

Class representatives include employees who have been diagnosed with gender dysphoria and whose physicians have recommended treatment, as well as at least one employee whose dependent child is in the same situation.

An impossible situation. “Starting today, untold numbers of federal employees and their families will be left out to dry at the hands of a shameless administration hell-bent on targeting the transgender community. 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,” said Human Rights Campaign Foundation President Kelley Robinson. “These federal employees will now be forced into an impossible situation that pits them between their jobs and access to the care they need. That is discrimination, plain and simple, and the HRC Foundation refuses to let it stand without a fight. Our litigation seeks to honor those federal workers and preserve the rights, respect, and dignity they deserve.”

“No Federal employee should be discriminated against in health care or otherwise. The law protects them,” said Cathy Harris of Correia and Puth.

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