Chemical and Surgical Modification of Sex Traits (Gender Affirming Care) Now Excluded
On August 15, 2025, the Office of Personnel Management (OPM) issued its annual Carrier Letter for the 2026 plan year. OPM’s annual carrier letter for the Federal Employees Health Benefits Program (FEHB) is a call for benefit and rate proposals from FEHB carriers, outlining OPM’s policy goals and initiatives for the upcoming year.
The Letter details requirements, updates guidance on key priorities like health equity and plan performance, and provides specific instructions for benefit and rate negotiations to ensure carriers offer competitive and compliant health insurance for federal employees, annuitants, and their families.
The subject of the new Carrier Letter is “Chemical and Surgical Sex-Trait Modification Services for Plan Year 2026 Proposals”.
Under the terms of the Carrier Letter, the FEHB and Postal Service Health Benefits (PSHB) programs will no longer cover chemical or surgical modification of sex traits. These are often referred to as “gender transition” services. Under the terms of the Carrier Letter, this medical service will no longer be available for any enrollees in the FEHB, regardless of age.
The OPM notice also requires carriers to update their online provider directories “…to not list or otherwise recognize providers for the purpose of providing chemical and surgical modifications of an individual’s sex traits.”
Earlier guidance from OPM had already eliminated gender-affirming care for children under 19. The exclusion of this type of care being covered by FEHB insurance now extends to adults as well, and removes discretion from the medical insurance providers on this issue.
Trump Executive Orders and Changes to FEHB
Two Executive Orders of President Trump have prompted this change.
First, on January 20, 2025, he issued Defending Women from Gender Ideology Extremism and Restoring Biological Truth to the Federal Government. Second, on January 28, 2025, he issued Protecting Children from Chemical and Surgical Mutilation.
In addition, as noted in OPM notices, the President has made clear that delivering quality, affordable health care is a top priority of the administration.
Exceptions to the FEHB Exclusion
There are several exceptions to the new exclusion.
Health insurance companies in the FEHB will be required to establish an exceptions process for coverage of excluded services for enrollees who are mid-treatment within a surgical and/or hormonal regimen for diagnosed gender dysphoria. The exception process
should be applied on a case-by-case basis.
Counseling services for those covered by the FEHB with possible or diagnosed gender dysphoria a still covered. These services must be provided by a licensed mental health professional and may include faith-based counseling. Carriers must provide details of this process in their plan brochures, and decisions will be made individually on a case-by-case basis.
Coverage for hormone therapies unrelated to gender transition will still be permitted and are not to be excluded because similar medications may be used in gender-affirming care.
For example, according to the Carrier Letter, GnRH agonists may be prescribed during IVF, for reducing endometriosis or fibroids, and for cancer treatment or prostate cancer/tumor growth prevention. Gonadotropin-Releasing Hormone agonists are synthetic drugs mimicking the action of natural GnRH, a hormone that stimulates the pituitary gland.
Litigation Looming
As might be expected, a topic as close to the political objectives of various organizations as “gender-affirming care” or “gender transition” will lead to legal challenges and disputes.
For example, Lambda Legal describes itself as “a national organization working to achieve full recognition of the civil rights of lesbians, gay men, bisexuals, transgender people and everyone living with HIV, through impact litigation, education and public policy work.”
This organization quickly “condemned the U.S. Office of Personnel Management’s announcement that it will exclude coverage for gender-affirming care for adults from the Federal Employee Health Benefits (FEHB) and Postal Service Health Benefits (PSHB) programs beginning in 2026.”
According to Lambda Legal Counsel and Health Care Strategist Omar Gonzalez-Pagan, “The federal government cannot simply strip away essential healthcare coverage from transgender employees while providing comprehensive medical care to all other federal workers.”
In short, while the policy is going into effect, there will be challenges to the new policy, excluding insurance coverage for this type of medical service in the coming months.
