On May 24, 2019, HHS released proposed regulations, substantially revising ACA Section 1557. As background, Section 1557 took effect in 2016 and prohibits health care discrimination on the basis of race, color, national origin, sex, age, or disability. Specifically, the law mandated that individuals cannot be denied access to health care or coverage, or otherwise discriminated against, based on one of those factors. Notably, the law protects transgender individuals under the auspices of discrimination based on sex.
After various court cases challenged the law (including a partial injunction in 2016 on the Section 1557 provisions relating to gender identity and termination of pregnancy), HHS is proposing to revise the law by mainly repealing the definition of discrimination on the basis of sex to exclude gender identity and pregnancy termination. The proposed rule also eliminates the requirement to include nondiscrimination notices in at least 15 languages.
Importantly, the proposed regulations also vastly limit the application of Section 1557 to only entities that are engaged in health care activities that are funded by HHS, whereas Section 1557 originally applied to all operations of an entity, even if it was not principally engaged in health care. This distinction will mean that most group health plan insurers and self-insured health plans will not have to comply with Section 1557.
As we have seen with many other proposed changes to ACA provisions, there have already been legal challenges to this new proposed rule. So, any employer that wants to change health coverage under their plan in a way that is consistent with the finalized version of this rule will need to consult with legal counsel before doing so. We will continue to follow any developments on this issue and report them in Compliance Corner.
Source: NFP BenefitsPartners