The Patient Protection and Affordable Care Act (ACA) Section 1557 provides that individuals shall not be excluded from participation in, denied the benefits of, or be subjected to discrimination under any health program or activity which receives federal financial assistance from the Department of Health and Human Services (HHS), on the basis of race, color, national origin, sex, age, or disability.
On May 13, 2016, HHS issued a final rule (2016 rule) implementing Section 1557, which took effect on July 18, 2016. The 2016 rule applied to any program administered by HHS or any health program or activity administered by an entity established under Title I of the ACA. These applicable entities were “covered entities” and included a broad array of providers, employers, and facilities. State-based Marketplaces are also covered entities, as are Federally-Facilitated Marketplaces. For entities that were required to make changes to health insurance or group health plan benefit design as a result of the current rule, the current rule applied as of the first day of the first plan year beginning on or after January 1, 2017.
On October 15, 2019, the U.S. Disrict Court for the Northern District of Texas (Texas District Court) vacated portions of the 2016 rule implementing Section 1557 that prohibit discrimination on the basis of gender identity and pregnancy termination. The Texas istrict Court remanded the vacated portions of the current rule to HHS for revision. The Texas District Court’s ruling was appealed to the Fifth Circuit Court of Appeals. The Fifth Circuit granted a stay of the case until after the Supreme Court issues an opinion on whether discrimination based on sexual orientation or gender identity is prohibited under Title VII of the Civil Rights Act (CRA). On June 15, 2020, the Supreme Court issued an opinion holding that an employer that fires an individual for being gay or transgender violates Title VII of the CRA.
On June 12, 2020, HHS announced a final rule implementing Section 1557 that revises or repeals many provisions contained in the 2016 rule. The final rule will be published on June 19, 2020, and will take effect 60 days from publication.
In light of the Supreme Court’s opinion noted above, on August 17, 2020, the U.S. District Court for the Eastern District of New York (New York District Court) issued an order halting the repeal of the 2016 rule’s definition of discrimination on the basis of sex (i.e., that “on the basis of sex” includes sexual orientation, gender identity, pregnancy, false pregnancy, pregnancy termination, or recovery from childbirth or related medical conditions) that was repealed under the final rule issued on June 12, 2020. The New York District Court order also provides a preliminary injunction prohibiting enforcement of the repeal. Under the order, the 2016 rule’s definition of discrimination on the basis of sex will remain in effect. The order preventing the repeal and providing the preliminary injunction will remain in effect while the court case proceeds.
Download the full ACA Advisor to read more about how the final rules address discrimination based on sex, gender, and sexual orientation, and implications for health marketplaces and health plans.