Nondiscrimination Rules Finalized

View All Insights »

The Office of Civil Rights (OCR) in the Department of Health and Human Services (HHS) recently issued final regulations detailing how HHS applies the standards of Section 1557 of the Affordable Care Act (ACA) to health programs and activities funded or administered by HHS.

Section 1557 of the ACA prohibits discrimination on the basis of race, color, national origin, sex, age or disability in certain health programs or activities that receive federal financial assistance from any federal agency.

The regulations apply only to Covered Entities, which include:

  1. Entities operating a health program or activity that receives federal financial assistance from HHS. Examples include but are not limited to: (a) hospitals and physician practices receiving Medicare (excluding Part B) or Medicaid payments; (b) health-related schools or educational organizations receiving grant awards to support health professional training programs, such as physician assistant programs; (c) state Medicaid and public health agencies; and (d) issuers offering coverage through the Health Insurance Marketplaces (i.e., the Exchanges).
  2. Health Insurance Marketplaces.
  3. Health programs and activities administered by HHS.

Employers primarily engaged in providing or administering health services or health coverage and receiving federal financial assistance from HHS will also be subject to Section 1557 in regards to their employee health benefit programs.  For example, a hospital 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 from HHS 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.  Protections under the final regulations include:

  • Individuals cannot be denied health care or health coverage based on their sex, including their gender identity and sex stereotyping;
  • Categorical coverage exclusions or limitation for all health care services related to gender transition are discriminatory;
  • Individuals must be treated consistent with their gender identity, including access to facilities;
  • Providers may not deny or limit treatment for any health services that are ordinarily or exclusively available to individuals of one gender based on the fact that a person seeking such services identifies as belonging to another gender;
  • Covered Entities must take reasonable steps to provide meaningful access to each individual with limited English proficiency likely to be served or encountered in its health programs and activities. Reasonable steps include providing language assistance services, such written or oral translation; and
  • Covered Entities must take appropriate steps to ensure communications with individuals with disabilities are as effective as communications with others in its health programs and activities. Appropriate steps include providing auxiliary aids and services, such as sign language interpreters.

The regulations are effective July 18, 2016 except for provisions affecting group health plan benefit design, which will not take effect until the first day of the first plan year beginning on or after January 1, 2017.