Labor & Employment Law Daily Wrap Up, PUBLIC EMPLOYEES—Wash. App.: State employees revive discrimination claims based on exclusion of obesity drug coverage, (May 5, 2026)

By Jason Albright, J.D.

Under the Washington Law Against Discrimination, obesity is recognized as a disability.

The Washington State Health Care Authority was not entitled to dismissal of two state employees’ putative class claims alleging the agency’s exclusion of employee benefits coverage for prescription drugs to treat obesity constitutes unlawful discrimination in “benefit design... because of... present or predicted disability,” a Washington state appeals court held. The Washington Law Against Discrimination (WLAD) recognizes obesity as a disability, and a separate state regulation—which establishes minimum benefits that plans must offer and does not address whether the plan benefit design at issue is discriminatory—did not defeat as a matter of law the employees’ WLAD claims (Simonton v. Washington State Health Care Authority, No. 86988-4-I (Wash. App. May 4, 2026)).

State employees. The named plaintiffs were state employees and “enrollees” in health benefit plans provided by the Washington State Health Care Authority (HCA), specifically its uniform medical plan, (UMP).

2023 UMP and exclusion. The HCA’s “2023 UMP Classic [Public Employees Benefits Board] (PEBB) Certificate of Coverage,” lists “[e]xcluded drugs and products,” which “include, but are not limited to, prescription drugs for... [o]besity (or weight loss).” This exclusion applies “even if the services are medically necessary.” Some obesity treatments are covered in certain circumstances, such as “bariatric surgery” or “[n]utrition counseling and therapy,” but the plan excludes “[a]ny... drugs... for weight control, weight loss, or obesity treatment.”

Diagnosed with obesity. The two employees allege that they were each diagnosed with obesity by a treating physician and received a prescription for medication to treat the diagnosis.

Coverage denied. The first was informed that “‘medications used for weight loss are in a category of medications that are not covered under your prescription benefit’” and was “provided no other basis for the denial” such as a “determination that the treatment was not medical necessity or experimental/investigational.” The second similarly “submitted a request for preauthorization to [the HCA], which was denied based solely on the exclusion.”

Putative class action and “benefit-design discrimination.” The two filed a putative class action complaint against the HCA. They alleged that the obesity exclusion “is a form of benefit-design discrimination targeted at disabled individuals with obesity.” Under Wash. Rev. Code § 48.43.0128(1)(a), a health carrier may not, in its benefit design or implementation, “discriminate against individuals because of their... present or predicted disability.” And under the WLAD, obesity is recognized as a disability. They also argued that excluding coverage for prescription medication to treat obesity is prohibited discrimination on the basis of disability. They asserted claims for breach of contract and violation of the WLAD.

Dismissal and appeal. A state superior court below dismissed the breach of contract claim and later dismissed the WLAD claim as well. Interpreting Wash. Admin. Code § 284-43-5642 as “specifically authoriz[ing] health plans to exclude prescription drugs for the treatment of obesity,” the superior court reasoned that, as something that is expressly allowed, excluding treatment for obesity “is not illegal discrimination.” In addition, as to the WLAD claim, the superior court ruled that the two employees had not alleged disparate treatment because of disability because they did not allege that the plan covered prescription drugs for weight loss for some persons but not those within the protected class. To hold otherwise, the court reasoned, would require health plans “to cover every treatment for every impairment that meets [the] WLAD’s broad definition of disability.” The two timely appealed.

Wash. Rev. Code § 48.43.0128(1)(a). Reversing, the state appeals court first observed that Wash. Rev. Code § 48.43.0128, like the federal Patient Protection and Affordable Care Act (ACA), imposes an affirmative obligation to consider the needs of persons with disabilities and not design plan benefits in ways that discriminate against them. A covered health carrier may not “[i]n its benefit design or implementation of its benefit design, discriminate against individuals because of their age, expected length of life, present or predicted disability, degree of medical dependency, quality of life, or other health conditions.” Wash. Rev. Code § 48.43.0128(1)(a).

However, the law “may [not] be construed to prevent a carrier from appropriately utilizing reasonable medical management techniques,” and it may not be construed to “mandate coverage of a service that is not medically necessary.” Wash. Rev. Code § 48.43.0128(2), (5). Finally, the law grants rule-making authority to the Office of the Insurance Commissioner.

Wash. Admin. Code § 284-43-5642. The HCA argued, however, that Wash. Admin. Code § 284-43-5642 expressly authorizes excluding services to treat obesity. Section 5642(1)(b) states, “A health benefit plan may, but is not required to, include... as part of the EHB-benchmark package... [o]besity or weight reduction or control,” and says the same of “[w]eight loss drugs.” The HCA, in turn, interpreted the regulation as expressly authorizing the exclusion of services for obesity or weight reduction. The agency argued that the rule was an implementation of Wash. Rev. Code § 48.43.0128(1)(a) and amounted to a rulemaking enunciating that excluding these services is not a violation of the nondiscrimination statute.

The state employees, on another hand, argued that Section 5642 does not determine compliance with the nondiscrimination requirement, which is a separate requirement with which plans must independently comply. They urged that Section 5642 serves a narrower purpose of establishing only benefit minima.

The ACA. The court found that the background of the ACA supported the argument of the employees. Under the ACA, a covered health insurance issuer “shall ensure” that its coverage “includes the essential health benefits package” required under 42 U.S.C. § 18022(a). 42 U.S.C. § 300gg-6(a). The ACA required the Secretary of Health and Human Services (HHS) to define “essential health benefits” in 10 categories. 42 U.S.C. § 18022(b)(1)(A)-(J). And in defining essential health benefits, HHS was to, among other things, “not... design benefits in ways that discriminate against individuals because of their age, disability, or expected length of life,” and “take into account the health care needs of diverse segments of the population, including women, children, persons with disabilities, and other groups.” 42 U.S.C. § 18022(b)(4)(B)-(C). And the ACA relied on the “actuarial value” of the benefits to recognize four “levels of coverage.” 42 U.S.C. § 18022(d)(1), (2)(A).

Independent determinations. The court found that Section 5642, in turn, accomplishes two things clearly, both of which relate to the actuarial value of a plan. First, it requires plans to cover essential health benefits, and second, it prevents certain other benefits from counting towards the plan’s actuarial value. By preventing coverage for obesity treatment from adding to the actuarial value for ambulatory patient services, Section 5642 ensures that coverage cannot be reduced for essential health benefits without reducing the actuarial value of the plan and its categorization under the ACA.

However, these background purposes, according to the court, do not support that Section 5642 also means that a plan providing minimum benefits is not discriminatory. “The nondiscrimination requirement of RCW 48.43.0128 must be met independently of compliance with the essential health benefits mandates of section 5642.”

Inference permissible. Taking the allegations in the complaint as true, concluded the appeals court, the plan arbitrarily barred coverage for certain kinds of treatment for a particular disability, for no reason more than that they were to treat that disability. “This does not mandate a conclusion of discrimination because of that disability, but it permits that inference.”

For those with obesity, said the court, the potential discrimination lay in the plan’s allegedly arbitrary limitation on coverage for their disability, as opposed to others having different health needs. The plan, of course, covers some services to treat obesity, which runs counter to a conclusion of discrimination. Yet according to the allegations of the plaintiffs, the exclusion for prescription drugs to treat obesity is nevertheless categorically based on nothing more than the drugs’ treatment of that disability. This, the court found, supports an inference of discrimination “because of” the presence of a disability in violation of Wash. Rev. Code § 48.43.0128(1)(a).

The state appeals court accordingly reversed and remanded the judgment below.

The case is No. 86988-4-I.

Judge: Birk, I.

Attorneys: Eleanor Hamburger (Sirianni Youtz Spoonemore Hamburger) for Jeannette Simonton and Ryan Kelso. Katy Anne Hatfield, Office of the State Attorney General, for Washington State Health Care Authority and Sue Birch.

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