In June 2025, the Supreme Court issued a ruling in a long-running case brought by the Catholic Benefits Association (CBA), a coalition of Catholic employers. At issue was how the U.S. Department of Health and Human Services (HHS) interprets “sex discrimination” under the Affordable Care Act, and whether that interpretation places unconstitutional burdens on Catholic institutions.
The Heart of the Dispute
CBA members—such as Catholic clinics, care homes, and social service providers—offer health and employment benefits aligned with Catholic values. This includes declining to cover or perform gender transitions, certain fertility treatments, and abortions.
In 2024, HHS issued its third rule since 2016 reaffirming that sex discrimination includes gender identity and potentially abortion-related care. To the CBA and its members, compliance would mean compromising religious convictions or facing severe penalties, including the loss of federal funding or lawsuits.
What the Court Said
The Supreme Court recognized that the CBA has standing to sue and that its members face a credible and imminent threat under the rule. The court found that the regulation substantially burdens the CBA members’ religious exercise, and that the government failed to show the rule was the least restrictive way to meet its goals.
While HHS included a case-by-case exemption process for religious organizations, the court ruled it too uncertain and inconsistent to adequately safeguard religious liberty. As a result, the court granted a permanent injunction preventing the federal government from forcing CBA members to perform or cover gender-transition procedures. This ruling applies to both Section 1557 of the ACA and the Equal Employment Opportunity Commission’s enforcement of Title VII.
What’s Next
The decision is a partial but significant win for religious organizations. While the court did not grant everything the CBA sought, it limits the government’s ability to enforce gender-transition mandates on faith-based healthcare and employment providers.