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CHAPEL HILL, N.C. (AP) — North Carolina’s largest insurer reversed course Wednesday and said it will offer family coverage to same-sex married couples and domestic partners.

Blue Cross and Blue Shield of North Carolina said it’s making the change for policies sold starting Monday and taking effect March 1. The announcement came after The News & Observer of Raleigh reported this weekend that the Chapel Hill-based insurer cancelled family coverage sold to 20 gay and lesbian couples on a federal insurance marketplace.

The cancellations were forced because of restrictive contract language that defines “spouse” as “opposite sex.” Blue Cross planned to change the definition next year, delaying that and other product updates this year as it focused on technology and other challenges to selling policies on a federally run marketplace for private insurance policies, CEO Brad Wilson said.

“We should have more thoughtfully considered this decision, with full appreciation of the impact it would have on same-sex married couples and domestic partners. We’re sorry we failed to do so,” Wilson said in a statement.

The change marks the first time Blue Cross has offered domestic partner or same-sex health coverage on individual and small group policies in North Carolina.
Domestic partners of either sex and same-sex married couples who enrolled in separate policies can convert them into family plans retroactive to their original effective date, the company said.

Small groups will have the option to offer coverage for same-sex married couples and domestic partners beginning with new and renewed plans effective April 1. The change affects all new Blue Cross plans whether they were bought on or outside the federal marketplace for tax-subsidized policies.

The only other insurer selling subsidized coverage on North Carolina’s federally run insurance marketplace is Coventry Health, which doesn’t bar same-sex couples from buying a family policy, spokesman Walt Cherniak said last week.