Gender-changing treatments, including sex change operations and hormone therapy, will soon be covered by the state health plan. The treatments will be allowed starting in 2017, if they're deemed medically necessary.
State officials say they're adding the procedures to the insurance coverage for teachers and other state employees because of federal regulations that were finalized earlier this year.
The health plans are overseen by the State Treasurer's Office.
Brad Young, the office's press secretary, tells the News and Observer that if the treatments aren't included, the state could risk losing millions of dollars in federal funding and face discrimination lawsuits.
The move is being welcomed by advocates for gay and transgender rights, but the incoming state treasurer is not happy.
Republican Dale Folwell, who takes office in January, says the anticipated cost will be a burden on taxpayers.
It's estimated the additional coverage will cost the state $350,000 to $850,000 annually.