(Buffalo, New York) Blue Cross & Blue Shield settled a lawsuit Monday by a married lesbian couple that the insurer previously refused to cover.

Kornowicz, a school psychologist for the Cheektowaga Central School district, applied to the school board to provide health coverage for her spouse Higgins, after a Rochester court ruled in a similar case that New York State must recognize valid out-of-state marriages of lesbian and gay couples. The state’s highest court upheld the ruling.

The school district approved, but its insurer, Blue Cross & Blue Shield of Western New York, denied the coverage.

The couple was represented by the New York Civil Liberties Union. In its court filing, the NYCLU noted both the Rochester ruling and a directive issued last month by Gov. David Paterson instructing state agencies - including those governing insurance and health care - to immediately change policies and regulations to recognize gay marriages performed in areas where they are legal.

The NYCLU also said that unlike Blue Cross & Blue Shield of Western New York, many other New York insurers, including other insurers carrying the Blue Cross & Blue Shield name, have been recognizing same-sex couples’ valid out-of-state marriages for years.

The NYCLU said that the insurer has agreed to follow the Rochester ruling.

Kornowicz and Higgins have had a committed relationship since 1998. Higgins gave birth to the couple’s daughter, Elizabeth Higgins, in July 2007, and Kornowicz’s second-parent adoption of Elizabeth was made final in January of this year.

Neither the Rochester ruling nor Paterson’s directive allowed for same-sex couples to marry in New York. Both were limited to marriages performed only in California, Massachusetts and in countries such as Canada, which have legalized gay marriage.

In 2006, the New York Court of Appeals, the state’s highest court, ruled that same-sex couples do not have an automatic constitutional right to marry in the state. It said that the issue, however, could be taken up by the legislature.

Last year the Democratically-controlled New York State Assembly passed same-sex marriage legislation, but the GOP-controlled Senate has refused to take up the bill.