C.B. v. Blue Cross and Blue Shield: Date Argued: February 12th, 2026; Docket Number: 25-1323

Case Summary:In the case of C.B. v. Blue Cross and Blue Shield of Illinois (Docket No. 25-1323), argued before the U.S. Court of Appeals for the Seventh Circuit on February 12, 2026, the relevant facts are as follows:The litigation is a class action lawsuit brought on behalf of transgender individuals who were denied coverage for gender-affirming medical care under health insurance plans administered by Blue Cross and Blue Shield of Illinois (BCBSIL).The lead plaintiff, C.B. (represented by their parents), is a transgender minor whose employer-sponsored health plan contained a categorical exclusion for all "services or supplies for, or leading to, gender reassignment surgery" and related treatments.A central factual element of the case is BCBSIL’s role as a Third-Party Administrator (TPA), meaning it processes claims and manages benefits for self-funded insurance plans designed and owned by private employers.The plaintiffs allege that BCBSIL violated Section 1557 of the Affordable Care Act, which prohibits sex-based discrimination in any "health program or activity" that receives federal financial assistance.The factual record shows that while BCBSIL's fully insured plans typically cover gender-affirming care, the company provided "standard language" and administrative tools that allowed roughly 400 self-funded employers to opt for categorical exclusions of those same services.The defense maintains that as a TPA, it is legally and contractually obligated under ERISA (the Employee Retirement Income Security Act) to follow the specific plan terms dictated by the employer, regardless of whether those terms would be discriminatory if applied by the insurer itself.In a prior district court ruling, the judge found that BCBSIL is a covered entity under the ACA and cannot "shield itself" from non-discrimination laws by claiming it was merely following a client's instructions.During the oral arguments on February 12, 2026, the Seventh Circuit panel examined the impact of the Supreme Court's decision in United States v. Skrmetti (2025), specifically whether a plan-wide exclusion for gender-dysphoria treatment constitutes "facial" sex discrimination or is a permissible medical-based classification.The court also scrutinized whether BCBSIL's receipt of federal funds for its own insurance products triggers a "cross-program" duty to ensure that the third-party plans it administers for others also comply with federal civil rights standards.