In a legal battle that spans nearly a decade, the Catholic Benefits Association (CBA)—a coalition of Catholic employers—had once again filed suit over a federal regulation. The CBA was in court over a federal regulation they believe forced its members to violate their faith. The issue centers on how the U.S. Department of Health and Human Services (HHS) interprets “sex discrimination” under the Affordable Care Act, and whether that interpretation imposes religious burdens on Catholic institutions. The Supreme Court issued its ruling in June 2025.

The Heart of the Dispute

CBA members, such as Catholic clinics, care homes, and social service providers, are committed to offering health and employment benefits aligned with Catholic values. For them, that means declining to perform or pay for procedures like gender transitions, certain fertility treatments, and abortions. But in 2024, HHS issued a new rule—its third attempt since 2016—that reaffirms the interpretation of sex discrimination to include gender identity and potentially abortion-related care.

To the CBA and its members, this rule is not just a bureaucratic update; it represents a moral and legal crisis. They fear that refusing to comply could lead to the loss of federal funding or lawsuits from the federal government—an impossible choice between religious conviction and institutional survival.

A Legal Journey Through the Courts

This isn’t the first time the CBA has raised this concern. In 2021, the organization won an injunction in a case known as Religious Sisters of Mercy, where the court ruled that HHS’s earlier interpretation violated the Religious Freedom Restoration Act (RFRA). But the win was partially undone when a higher court said the CBA hadn’t proven that any specific member was harmed. Essentially, the Eighth Circuit said, “You may be right, but you need to show us someone who’s actually affected.”

This time around, the CBA learned from its mistake. It filed a new lawsuit in 2024, naming specific members—health care providers, clinics, and Catholic charities—that said they would face real and immediate harm under the new rule. Leaders from these organizations submitted sworn statements describing how complying with the 2024 Rule would violate their Catholic faith.

The 2024 Rule: What’s New and What’s Not

HHS’s 2024 Rule once again interprets sex discrimination to include gender identity, meaning that health care providers and insurers can’t deny gender-transition procedures if they offer similar services to others. It also defines sex discrimination to include “pregnancy or related conditions”, and while it doesn’t explicitly require abortion coverage, it leaves the door open for future enforcement.

Importantly, HHS added a case-by-case exemption process for religious organizations. The government argued this made the rule more flexible and respectful of religious liberty. But the CBA—and the court—weren’t convinced.