Agencies Issue Nondiscrimination Guidance

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On September 3, 2015, the Department of Health and Human Services (HHS), along with the Office for Civil Rights (OCR), issued proposed regulations implementing section 1557 of the Affordable Care Act (ACA).  Section 1557 of the ACA prohibits discrimination on the basis of race, color, national origin, sex, age or disability.  This is different from section 10101 of the ACA that extends to fully-insured group health plans the nondiscrimination rules governing self-insured group health plans under Internal Revenue Code section 105(h).

The reach of section 1557 is quite broad.  It applies to all health programs and activities that receive federal financial assistance from HHS, such as Medicaid and Medicare.  It also applies to health programs and activities administered by HHS, such as the federally facilitated Exchanges, or administered by entities established under Title 1 of the ACA, such as the state based Exchanges.

Employers primarily engaged in providing or administering health services or health coverage and receiving federal financial assistance will also be subject to Section 1557 in regards to their employee health benefit programs.  For example, if a hospital provides health benefits to its employees, it will be covered by Section 1557 not only for the services it offers to its patients but also for the health benefits it provides to its employees.

Section 1557 even applies to employers not primarily engaged in health care services or coverage if they receive federal financial assistance to fund their employee benefit programs.  For example, if an employer receives federal money specifically designated to support its employee wellness program, then the nondiscrimination requirements will apply to the administration of that wellness program.

The nondiscrimination provisions of section 1557 mostly extend protections of other Acts, such as the Civil Rights Act and the Age Discrimination Act, but there are some notable additions.  Under the proposed guidance, medical providers and insurers will be barred from discriminating based on sex and gender identity.  For example, insurers will not be able to categorically deny or restrict medically necessary treatment for transgender individuals that would be covered for other participants.  Additionally, insurers and providers will be obligated to provide meaningful access to language assistance.  For example, the failure to provide language assistance to those with limited English proficiency could be considered national origin discrimination under the ACA.

The regulations will not be finalized until after the public comment period closes on November 6, 2015.