HHS Proposes Expanded Section 1557 Nondiscrimination Rules

The Department of Health and Human Services recently issued a proposed rule that intends to broaden the interpretation and application of the nondiscrimination rules under Section 1557 of the Affordable Care Act. While Section 1557 generally applies to covered entities, these changes may impact some employer-sponsored group health plans.

Items included:

  • Reinstatement of protections on the basis of gender identity,
  • Expanding who is subject to Section 1557, and
  • Reinstating certain notice requirements

Employer Action

Under the proposed rule, if finalized as is, employers that are covered entities will again be subject to certain HHS Section 1557 nondiscrimination rules and other requirements. Non-covered entities with employer-sponsored health plans will not be directly subject to 1557 nondiscrimination rules and other requirements. However, carriers and TPAs that administer health insurance coverage may be subject to these requirements. Further, the guidance serves as a reminder to all employers that discriminatory practices in a group health plan may raise issues under other federal laws, including Title VII of the Civil Rights Act.

Employers should review and consider removing exclusions or limitations based on a member’s sexual orientation or gender identity – for example, limiting services to only a single gender based on a participant’s gender at birth or otherwise excluding transgender services. Under the proposed rule, OCR may refer plans to the EEOC or DOJ if it finds discriminatory terms that are not enforceable under 1557 but may be under other federal employment laws. As described above, covered entities, such as hospitals, physician groups and entities providing health research and health education, should consult with their employment and/or healthcare legal counsel regarding steps for compliance, including:

  • Applicability of HHS Section 1557 regulations, particularly those receiving federal financial assistance primarily through Medicare Part B;
  • Drafting and implementation of civil rights policies and procedures;
  • Creating and providing staff training on the provision of language assistance services for LEP individuals, and effective communication and reasonable modifications to policies and procedures for people with disabilities;
  • Creating and distributing a notice of nondiscrimination along with a notice of the availability of language assistance services and auxiliary aids and services;
  • Evaluating decision-making processes in covered health programs and activities to ensure clinical algorithms are not being used; and
  • Confirming services offered via telehealth are accessible to LEP individuals and individuals with disabilities

Please take a moment to review the attached notice and let us know if you have any questions or concerns.