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Dignity Health has answered a federal discrimination lawsuit filed by a transgender nurse by arguing that civil rights law does not require its self-insured employer health plan to cover gender reassignment-related care. It says Title VII of the Civil Rights Act does not cover transgender status as a protected classification.

The San Francisco-based hospital chain also argued last month in response to the closely watched suit—one of the first of its kind in the country—that HHS’ May rule barring categorical exclusion of coverage for gender transition services does not take effect until Jan. 1, 2017. Prior to that, it argues, federal law does not require an employer to provide health coverage for “sex transformation” treatment.

In addition, the new federal anti-bias rule does not bar self-insured employer health plans from excluding benefits for services that are not medically necessary, according to Dignity’s motion for dismissal. It said “the medical efficacy of sex transformation surgery remains the subject of debate.”

But lawyers for the American Civil Liberties Union who are representing nurse Josef Robinson say both Title VII and the new HHS rule interpreting Section 1557of the Affordable Care Act clearly require employers and health plans to cover treatment related to gender dysphoria. That’s the name for the condition where people feel they are not the gender they were assigned at birth.

Legal experts expect more such lawsuits following HHS’ issuance of the anti-bias rule in May.