A transgender Iowa State University employee will be paid nearly $28,000 to settle a claim that the school discriminated against her because its health insurance policy failed to cover reassignment surgery and other associated care..

Elyn Fritz-Waters, 34, was assigned male at birth. She was diagnosed with gender dysphoria in 2016, legally changed her first name and was shortly thereafter denied care by her employee health insurance though ISU.

Fritz-Waters, who was hired by ISU in 2010 and worked as an assistant scientist, was granted a “right-to-sue” by the Iowa Civil Rights Commission in 2017.

ISU’s health insurance policy specifically issued a blanket prohibition against transgender care, according to a lawsuit Fritz-Waters filed last year. She argued the blanket prohibition is discriminatory because it denied her equal access to health care benefits based on her sex and gender identity, specifically because she is transgender. She resigned from ISU in February 2017.

The Iowa Appeal Board on Wednesday approved a $27,500 settlement in the case. ISU will pay $25,000 and the state's government will pick up the rest, according to the settlement.

Health care coverage for transgender Iowans has been a controversial topic in Iowa in recent months. Gov. Kim Reynolds last week signed into law legislation that says governments are not required to use public insurance dollars — including those allocated to Medicaid — to pay for transition-related surgeries.

Iowa did not admit wrongdoing or legal violation as part of the settlement with Fritz-Waters.

The Iowa Board of Regents expanded insurance coverage to include transition-related care for transgender Iowans after Fritz-Waters filed the lawsuit, said Annette Hacker, an ISU spokeswoman.

Efforts to reach Fritz-Waters and her attorney, Sarah Baumgartner, were not immediately successful Wednesday.

Wednesday’s appeal board meeting was to begin at 1:30 p.m. in the Iowa Department of Management’s Conference Room 14, in the basement of the Capitol.