Marketplace Integrity and Affordability final rule excludes "sex-trait modification" from essential health benefits

Vacated as to plan year 2026 — but the exclusion survives for 2027 onward, and the vacatur rests on a curable procedural defect. Do not read this as a durable defeat of the policy. A coalition of 21 states sued (State of California v. Kennedy / v. CMS, D. Mass. No. 1:25-cv-12019-NMG, filed July 17, 2025); a preliminary injunction was denied in October 2025; and on August 14, 2026 Judge Nathaniel Gorton granted plaintiffs summary judgment on the essential-health-benefits provision, holding it "unlawful and vacated" while upholding the open-enrollment, failure-to-reconcile, premium-adjustment-percentage, and de minimis provisions. Three qualifications matter. (1) The ground is procedural and curable. The court held only that HHS revised the EHBs without the report and CMS Chief Actuary certification that 42 U.S.C. § 18022(b)(2)(B) requires — noting the government "does not mention § 18022(b)(2)(B) at all in its pleadings." It did not hold the exclusion substantively unlawful or discriminatory. HHS can submit the certification and re-promulgate. (2) The 2027 re-promulgation was untouched. The exclusion lives at 45 CFR 156.115(d), and the "on or after January 1, 2027" sentence was added by a separate later rule — the 2027 Notice of Benefit and Payment Parameters, 91 FR 29526 (May 20, 2026), RIN 0938-AV62 — which the opinion never mentions. A second suit challenging that 2026 rule (California v. Kennedy II, N.D. Cal. No. 4:26-cv-07991, filed July 31, 2026) does not raise the EHB exclusion at all: a text search of the complaint returns zero occurrences of "sex-trait," "156.115," or "essential health benefit." (3) Scope is unstated. The order says "held unlawful and vacated" with no nationwide language and no language limiting relief to plaintiff states, so whether the vacatur runs nationwide is not established on the opinion's face; the court did expressly reject the government's argument that the APA does not permit vacatur. No notice of appeal appeared on the docket through August 14, 2026; the government's window runs to roughly October 13, 2026. Note also that eCFR still displays § 156.115(d) with the exclusion intact — a vacatur does not auto-amend the CFR. (See also section 10.)

As recorded in the data of November 3, 2026. Check the sources for anything newer.