The Wagner Law Group, Est. 1996

Sophisticated Legal Solutions And Boutique-Style Service

  1. Home
  2.  » 
  3. Content Type
  4.  » 
  5. Articles
  6.  » HHS Reaffirms That Discrimination on Basis of Sex Under ACA Section 1557 Includes Discrimination Based on Sexual Orientation and Gender Identity

HHS Reaffirms That Discrimination on Basis of Sex Under ACA Section 1557 Includes Discrimination Based on Sexual Orientation and Gender Identity

by | Jan 10, 2022 |

By Roberta Casper Watson, Dannae Delano and Barry Salkin

New guidance from the Department of Health and Human Services (“HHS”) affirms that Section 1557 of the Affordable Care Act (the “ACA”), by referencing statutes that prohibit discrimination on the basis of race, color, national origin, sex, age, or disability, applies those nondiscrimination programs to “any health program or activity, any part of which is receiving Federal financial assistance.”

Among other things, it is clear from the preamble to the new rule that it prohibits discrimination in “benefit design based on sexual orientation and gender identity.”  HHS makes clear that it disapproves of policies that make gender-affirming care unavailable to transgender individuals in need of such care.  HHS intends that, when finalized, the rule will require that essential benefit determinations not discriminate based on sexual orientation or gender identity.

Indeed, the proposed rule specifically provides that a prohibition on gender-affirming care determined to be medically necessary by clinical evidence will be presumed discriminatory.  The preamble gives an example of an exclusion of hormone therapy when determined to be medically necessary for gender dysphoria, which would be presumed to be discriminatory in a plan that otherwise covers hormone therapy.

In May 2016, HHS published a final rule interpreting Section 1557 to include nondiscrimination protections based on sexual orientation and gender identity.  In June 2020, in a revised final rule, HHS removed nondiscrimination protections on the basis of gender identity and sexual orientation from various HHS regulations.  Both the 2016 final rule and the 2020 final rule have been the subject of several lawsuits and court orders.

After HHS had posted its 2020 final rule interpreting Section 1557, the Supreme Court held, in Bostock v. Clayton County, that discrimination on the basis of sex under Title VII of the Civil Rights Act of 1964 includes discrimination on the basis of sexual orientation and gender identity.  In January 2021, President Biden issued an Executive Order concluding that, under Bostock’s reasoning, laws that prohibit sex discrimination should be interpreted to also prohibit discrimination on the basis of gender identity and sexual orientation, so long as the laws do not contain sufficient indications to the contrary.  That Executive Order also instructed agency heads, such as the Secretary of HHS, to review all existing regulations and guidance documents to determine whether they were consistent with the policy expressed in the Executive Order, and determine whether it was necessary to suspend, revise, or rescind regulations that were contrary to that policy.

Pursuant to the Executive Order, on May 10, 2021, HHS announced that it would interpret and enforce Section 1557’s prohibition on discrimination on the basis of sex to include both discrimination on the basis of sexual orientation and discrimination on the basis of gender identity.  On December 28, 2021, HHS issued proposed regulations reflecting its May 10, 2021, Notice, with respect to which it solicits public comment.

While the revised rule, in light of Bostock, will be more difficult to challenge than the 2016 final rule, HHS anticipates legal challenges, and has provided a standard severability clause in the proposed regulation in the event that a successful challenge is made to these regulations when finalized.  HHS also stated that, in enforcing these nondiscrimination provisions, it would comply with laws protecting the exercise of conscience and religion, including the Religious Freedom Restoration Act.

Health plans that continue to follow the 2020 final rule even after Bostock should reconsider their position, and make plans to provide coverage of medical care for transgender individuals in a nondiscriminatory manner or face increased litigation risk.

 

Archives