The New Nondiscrimination Provisions in Obamacare and What They Mean for You

In May, the Department of Health and Human services (HHS) published a final rule implementing a nondiscrimination provision to the Affordable Care Act. The provision is called Section 1557 and follows in the vein of nondiscriminatory provisions of other acts, such as Title VI of the Civil Rights Act of 1964, Title IX of the Education Amendments of 1972, and so forth. Section 1557 prohibits discrimination on the basis of race, color, national origin, age, sex, or disability in certain healthcare plans or activities. Discrimination is seen as denying, cancelling, limiting, or refusing health coverage to any of these protected groups.

While this provision does build on other federal acts, Section 1557 is unique. Here are some important elements of the provision that you need to know:

1. Transgender people are protected under the provision. Section 1557 is the first civil rights law to prohibit discrimination on the basis of sex for healthcare programs. Although this provision has been enforced since 2010, this final rule provides clarification on who is covered within that discrimination category and in what context. This means that transgender people under a covered plan cannot be denied sex-related healthcare no matter the gender they choose to identify with. For example, a medically necessary pelvic exam cannot be denied because the patient was born male.
2. Services relating to transitioning genders will now be covered. Employers and insurances can no longer exclude care related to transitioning. This means that employers cannot impose a higher cost-sharing premium to those undergoing treatment that may have been previously denied. Transition-related services, which include treatment for gender dysphoria, are not limited to surgical treatments and may include, but are not limited to, services such as hormone therapy and psychotherapy, which may occur over the lifetime of the individual.
3. But services can still be denied. Employers and insurance companies are not obligated to approve every request for coverage if it is not medically necessary or if there is a nonsurgical route. However, you will be expected to provide an objective reason for denial.
4. The section statute applies to most health programs and activities. Section 1557 applies to any entity that receives federal financial assistance. This includes the Medicare Part D program, health insurance marketplaces, and all plans offered by issuers that participate in those marketplaces. Covered entities may include hospitals, health clinics, health insurance issuers, state Medicaid agencies, community health centers, physicians’ practices, and home healthcare agencies.
5. Even health and wellness programs are subject to the rule. If you receive any funding or tax incentives from the federal government to provide healthcare to your employees, any program or activity your company administers is subject to the rule. Wellness programs or weight loss activities that discriminate against the groups mentioned in the rule are breaking federal law.
6. There are no exceptions for religious employers. No matter your company’s religious affiliation, if you are a covered entity, you are not exempt from the rule. This means that anyone who seeks gender transitional care cannot be denied coverage. However, this does not cancel out any previous rules meant to protect religious groups, such as the Religious Freedom Restoration Act.
7. You should start revising your health plans now. This rule comes into effect on January 1, 2017. This means that if your benefit plans or health plans include exclusions or coverage limitations related to sex, gender dysphoria, or sexual orientation, your plans will be out of compliance to federal law. Even if your particular benefit designs don’t fall under the Department of Health and Human Services’ jurisdiction, you are still subject to Title VII and the Americans with Disabilities Act.

While many employers will not be subject to Section 1557, the new provision sets a precedent for how the federal law expects healthcare to be administered. It will also impact how companies design their benefits packages in order to stay in compliance. Employer sponsors of self-insured plans should consult with their TPA to determine if the TPA is a covered entity and whether any plan design changes are recommended.