Proposed Revisions to ACA Nondiscrimination Provision

The U.S. Department of Health and Human Services (HHS) is proposing changes to Section 1557 regulations. Section 1557 of the Affordable Care Act (ACA) prohibits discrimination on the basis of race, color, national origin, sex, age or disability under any health program or activity receiving federal financial assistance. In current Section 1557 regulations, HHS defined discrimination “on the basis of sex” to include sex stereotyping, gender identity and termination of pregnancy. The regulations apply to health plans, insurers, hospitals, doctors and other medical providers that receive HHS funding.

The HHS proposed regulations would:

  • eliminate the requirement to issue an anti-discrimination notice and taglines; and
  • no longer prohibit excluding coverage of gender transition services in group health benefit plans.

Notice and taglines requirements: The proposed regulations would remove the requirement that group health benefit plans include notice of their nondiscrimination policies and taglines (including foreign language taglines) in significant publications informing individuals that language assistance services are available. This change would allow plans to remove nondiscrimination notices and taglines from plan communications, including summary plan descriptions, enrollment materials, summaries of material modifications, summaries of benefits and coverage, COBRA notices, benefit claim forms, EOBs and claim denial letters.

Nondiscrimination requirements: The proposed regulations would remove pregnancy termination, sexual orientation and gender identity from the definition of sex discrimination under Section 1557 regulations. In effect, the regulations would not prohibit plans that receive HHS funding from excluding coverage for gender transition services, including both prescription drugs and medical procedures. In addition, the proposed regulations narrow their scope to clarify that health insurance programs administered by entities not principally engaged in providing healthcare will only be covered by the regulations to the extent those programs receive federal financial assistance from the department.

Currently, Section 1557 regulations apply to:

  • health plans, insurers, hospitals, doctors and other medical providers that receive federal funding from HHS, including Medicaid and Medicare Parts A, C and D payments (prescription-drug subsidies) but not Medicare Part B;
  • qualified health plans offered on either state or federal Health Insurance Marketplaces, also known as exchanges; and
  • all of a health insurance issuer’s operations, including the issuer’s third-party administrator services or ASO services, if an issuer receives federal financial assistance from HHS.

Proposed effective date: Under the proposal, the changes would become effective 60 days after publication of the final regulations, which is expected later this year.

Anti-discrimination regulations