Compliance Corner

Healthcare Reform

HHS Proposes Revisions to Nondiscrimination Regulations in Health Programs and Activities

August 02, 2022

On July 25, 2022, HHS issued a proposed rule revising regulations that implement Section 1557 of the Affordable Care Act. Section 1557 prohibits healthcare providers, health plans and insurers from discriminating on the basis of race, color, national origin, sex, age and disability. The previous administration scaled back many of these protections, despite court rulings that prevented the previous administration from implementing those changes. The proposed rule will reinstate the protections.

The proposed revisions clarify that Section 1557 generally applies to health insurance issuers that receive federal financial assistance and prohibits discrimination in health insurance and other health-related coverage (including telehealth services).

HHS states that the proposed rule will align Section 1557 regulation with legal precedent. On June 12, 2020, HHS issued a final rule that scaled back explicit protections based upon gender identity introduced by the previous administration, relying instead on broader protections against discrimination on the basis of sex provided for in the ACA. However, the Supreme Court ruled in Bostock v. Clayton County that discrimination based upon sexual orientation or sexual identity is prohibited under Title VII of the Civil Rights Act of 1964. You can find a discussion of these events in the June 23, 2020, edition of Compliance Corner. The proposed revisions delete the changes made by the previous administration and reassert that Section 1557 prohibits discrimination on the basis of sex, including gender identity and sexual orientation. The proposed rule also clarifies that discrimination on the basis of sex includes discrimination on the basis of pregnancy or related conditions, including “pregnancy termination.” The revisions will also update the related CMS regulation to reflect these changes.

In addition to reinstating these protections, the proposed rule requires health insurance issuers that receive federal financial assistance to implement Section 1557 anti-discrimination policies and procedures (with reasonable modifications to policies and procedures for people with disabilities), and to provide language assistance services for limited English proficient individuals. They will also be required to train relevant staff on these policies and procedures and provide a notice of nondiscrimination along with a notice of the availability of language assistance services and auxiliary aids and services.

In addition, the proposed rule provides a process by which health insurance issuers that receive federal financial assistance (among others subject to Section 1557) under investigation for alleged violations of Section 1557 may inform the HHS Office of Civil Rights (OCR) of their views that the application of a specific provision or provisions of this part to them would violate federal conscience or religious freedom laws. The OCR may then decide that they are exempt from, or entitled to a modification of the application of, applicable provisions of Section 1557.

Group health plan sponsors should be aware of the proposed rule, which is open for public comment for 60 days after it is published in the Federal Register. It is anticipated the rule may undergo changes by HHS and through court challenges. Employers should consult with their counsel on the proposed rule’s potential impact on their group health plans.

Notice of Proposed Rulemaking: Nondiscrimination in Health Programs and Activities »