By Michael Berwanger, JD, Director, Quality Management & Compliance
On May 18, 2016, the Department of Health and Human Services (HHS) published a final rule (the “Rule”) to implement Section 1557 of the Affordable Care Act (ACA), which prohibits discrimination in health coverage and care based on race, color, national origin, age, disability, and sex.
Notably, the Rule:
- Extends protections against sex discrimination to health coverage and care for the first time, including gender identity discrimination within the definition of sex discrimination;
- Implements guidance regarding meaningful access for individuals with Limited English Proficiency, including the provision of free, accurate, and timely language assistance services;
- Incorporates existing law that requires reasonable modifications, effective communication, and readily accessible buildings and information technology to avoid disability-based discrimination; and
- Prohibits discriminatory health insurance benefit designs and includes specific coverage protections for transgender individuals.
HHS has published a useful FAQ here summarizing some of the key aspects of Section 1557. The following Q&A helps explain who the Rule applies to, how the Rule protects against discrimination, and how the Rule impacts coverage offered by self-funded health plans.
I. Who does the Rule apply to?
The Rule applies to (i) every health program or activity that receives Federal financial assistance from HHS; (ii) health programs administered by HHS, and (iii) federally-facilitated and state-based marketplaces established under the Affordable Care Act.
Some examples of types of entities that are subject to the Rule include but are not limited to: physician practices, hospitals, health clinics, health insurance programs, state Medicaid agencies, community health centers, home health care agencies, the Health Insurance Marketplaces, or employers offering employee health benefit programs (in certain circumstances).
How does this impact religious organizations?
The Rule does not include a blanket religious exemption related to Section 1557’s general prohibition against sex discrimination. However, HHS stated that “[e]xisting laws protecting religious freedom and belief, including provider conscience laws, the Religious Freedom Restoration Act, the ACA’s provisions regarding abortion services, and the ACA’s preventive health services regulations, continue to apply.”
It may be prudent to consult with your legal counsel if you think your organization may qualify for a religious exemption.
II. When does this take effect for a health plan?
Provisions of the Rule that require changes in plan benefit design take effect in the first plan year on or after January 1, 2017.
III. What does the Rule prohibit?
Under Section 1557, covered entities may not take the following actions on the basis of race, color, national origin, sex, age or disability:
- Deny, cancel, limit, or refuse to issue or renew a health insurance policy;
- Deny or limit coverage of a health insurance claim;
- Impose additional cost sharing or other limitations or restrictions on coverage; or
- Use discriminatory marketing practices or insurance benefit designs.
The Rule maintains that while health plans cannot have coverage policies that operate in a discriminatory manner, they still may apply medical necessity rules when determining covered benefits.
HHS clarified that they do not affirmatively require covered entities to cover any particular treatment, as long as the basis for exclusion is evidence based and nondiscriminatory.
What about gender transition services? Are health plans required to cover those services?
If a company is a covered entity under the Rule, not subject to an exception such as the religious exemptions, and the gender transition service is determined to be medically necessary, then it is likely that the service must be covered by the plan. Note that HHS declined to specifically require a gender transition provision.
However, covered entity plans are prevented from discriminating in the provision of benefits based on sex. As such, services such as transition-related services may be subject to medical necessity requirements, but the process for determining medical necessity must also be nondiscriminatory.
For example, HHS stated “[t]he range of transition-related services, which includes treatment for gender dysphoria, is not limited to surgical treatments and may include, but is not limited to, services such as hormone therapy and psychotherapy, which may occur over the lifetime of the individual. We believe the flexibility of the general language in the final rule best serves transgender individuals and covered entities.”
Note that, as mentioned above, the Rule does not affirmatively require covered entities to cover any particular procedure or treatment for transition-related care. The Rule also does not preclude a covered entity from applying neutral standards that govern the circumstances in which it will offer coverage to all its enrollees in a nondiscriminatory manner.
IV. What changes happened regarding sex discrimination?
Section 1557 and HHS’s final regulations, for the first time, extend protections against discrimination based on sex to health coverage and care. Now, covered entities must provide individuals equal access to health programs and activities without discrimination based on sex, including but not limited to pregnancy, false pregnancy, termination of pregnancy, recovery from childbirth or related medical conditions.
Significantly, HHS extended the term “gender identity” to include gender expression, non-binary gender identities, and transgender status.
V. How will this impact the coverage offered under a Plan?
The Rule does not affirmatively require covered entities to cover any particular procedure or treatment for transition-related care. However, the Rule includes specific protections for transgender individuals and prohibits discriminatory practices. Specifically, HHS stated that “we do not affirmatively require covered entities to cover any particular treatment, as long as the basis for exclusion is evidence based and nondiscriminatory.”
Note that HHS specified a limited exception to the requirement that covered entities treat individuals consistent with their gender identity: that a covered entity may not deny or limit health services that are ordinarily or exclusively available to individuals of one sex or gender based on the fact that the individual’s sex assigned at birth, gender identity, or gender in a medical or health insurance plan record differs from the one to which such health services are ordinarily or exclusively available. HHS provided the following example:
“[A] covered entity may not deny an individual treatment for ovarian cancer where the individual could benefit medically from the treatment, based on the individual’s identification as a transgender male. HHS notes that blanket exclusions of all gender transition services, which historically have been used by some Medicaid programs and health insurers, are now recognized as outdated and not based on current standards of care.”
VI. When must covered entities post a notice regarding their non-discrimination policies?
Covered entities must post a notice by October 16, 2016, containing certain elements as required by HHS, as described at 45 CFR 92.8. Notices must be available to beneficiaries, enrollees, applicants, and members of the public. They must be printed in a conspicuously visible font and included in significant communications (such as handbooks and outreach publications), in conspicuous physical locations where the entity interacts with the public, and in a conspicuous location on the covered entity’s website accessible from the homepage. HHS has published a sample notice and nondiscrimination statement.
VII. Will covered entities need to implement a grievance procedure specific to Section 1557, and if so, are there special considerations or guidelines?
Covered entities that employ at least 15 people must adopt a grievance procedure that incorporates appropriate due process standards and provides prompt and equitable resolution of grievances under Section 1557.
HHS and covered entities with more than 15 employees also must designate at least one employee to coordinate the entity’s efforts to carry out Section 1557 responsibilities, including the investigation of grievances. The Rule includes a sample grievance procedure.To ensure compliance with Section 1557, HHS will provide covered entities with a training curriculum on key provisions of the rule.
For more information about Section 1557, consult your broker, legal advisor or the Department of Health and Human Services.
This blog post should not be considered as legal advice.