Update on the Status of the Section 1557 Health Care Non-discrimination Regulations
by: Karen Owens, Coppersmith Brockelman PLC[1]
Section 1557 of the Affordable Care Act,[2] the first health care-specific anti-discrimination provision in federal law, has been in the news again recently. The law and its regulations have had a complicated history, and the situation is still dynamic.
The Affordable Care Act passed in 2010, and an initial regulation set was promulgated in 2016.[3] That set established 1557’s broad coverage, including requirements that health care entities provide signage and documents in various languages and a declaration that the term “sex discrimination” in the law extended to protect transgender individuals and pregnancy-related health care. For the Trump Administration, rewriting the Section 1557 regulations was a priority, and 2020 saw the publication of an entirely new regulation set. The 2020 regulations made big changes, including narrowing the entities subject to Section 1557’s anti-discrimination provisions, limiting the language and signage requirements, and removing transgender and pregnancy-related protections.
Since then, the courts, including the U.S. Supreme Court, have weighed in on aspects of 1557 and related laws. Now the Biden Administration is actively addressing the scope of the regulations through enforcement positions and proposed revision to the regulations themselves.
Here is a summary of the status of the key regulatory provisions under Section 1557 and prospects for future changes.
Scope of Regulatory Coverage
The 2016 regulations had covered essentially all health insurers, prohibiting discriminatory denials, cancellations, limitations, refusals to issue or renew policies, denials and limitation of claims, imposition of discriminatory limitations/restrictions on coverage, and discriminatory marketing practices or benefit design.
The 2020 regulations, which are still in place, removed the blanket application of 1557 to virtually all health insurers. Currently, only the portions of an insurer’s business that receive federal funding are subject to regulation, and the only applicable federal funding is funding under title 1 of the Affordable Care Act. The practical effect is that insurers for the most part are no longer subject to Section 1557 regulations.
To date, we do not know whether the Biden Administration will address the scope of coverage through new regulations.
Scope of Sex Discrimination
1. Transgender Discrimination
The 2016 regulations defined sex discrimination to include discrimination based on gender identity and sex stereotyping (but not sexual orientation). The gender identity definition explicitly included gender expression/transgender status. This led to an explicit prohibition on denial of gender transition health care coverage and services, as well as a prohibition on the denial or limitation of services ordinarily available to only one sex/gender when a person of another sex/gender needed those services.
A federal district court in Texas issued a nationwide injunction on this part of the 2016 regulations before it went into effect.[4]
The 2020 regulations removed the definition of sex discrimination altogether and instructed health care entities to look to the “plain meaning in the statute,” which the Department of Health and Human Services (HHS) said was a biological binary of male/female based on birth. The 2020 regulations also removed the definition of “gender identity”; removed the requirement that individuals be treated consistent with their gender identity; removed the prohibition on refusing care ordinarily limited to one gender; and removed coverage requirements regarding gender transition services.
Then, in a game-changing opinion, in Bostock v. Clayton County, the U.S. Supreme Court held that Title VII protects employees from discrimination based on gender identity and sexual orientation.[5] In a 6-3 decision, Justice Gorsuch stated: “it is impossible to discriminate against a person for being homosexual or transgender without discriminating against that individual based on sex.” Id. At 1741. After Bostock, two federal district courts issue nationwide injunctions against enforcement of 2020 regs re gender identity and sexual orientation.[6]
The Biden Administration wasted no time in following up on Bostock. One of the President’s first-day Executive Orders stated: “All persons should receive equal treatment under the law, no matter their gender identity or sexual orientation” and ordered agency review of all regulations, policies, guidance, etc., inconsistent with this policy. On May 10, 2021, HHS said that the Office for Civil Rights would include gender identification and sexual orientation in its interpretation and enforcement of the Section 1557 sex discrimination prohibition. Notably, gender orientation was not in the 2016 regulations, but was approved in Bostock.
While we do not have a new set of regulations from the Biden Administration, there can be no doubt that any new regulations will renew protections for transgender individuals. Those protections may be broader than the 2016 provisions afforded, as they will incorporate protections based on sexual orientation in accordance with Bostock.
2. Pregnancy-Related Discrimination
The 2016 regulations also included pregnancy-related discrimination, including discrimination related to abortion, as part of 1557’s protections against “sex discrimination.” While the regulation allowed for a religious exemption, it was considered narrow. This part of the 1557 regulations also was the subject of a nationwide injunction before it went into effect.[7]
Unsurprisingly, the 2020 regulations eliminated the prohibition on discrimination based on pregnancy and pregnancy termination and created a blanket abortion and religious objection exemption.
The 2020 version remains in place. The injunction against enforcement of the regulations with respect to pregnancy is still the law, and the Biden Administration stated that it will abide by the injunction.
Limited English Proficiency (LEP) Discrimination
The 2016 regulationsstated that a covered entity must take reasonable steps to provide meaningful access to each LEPindividual eligible to be served or likely to be encountered in a health care entity. The entity had to evaluate and give substantial weight to the nature and importance of the health program/activity and the particular communication at issue. The regulations also required covered entities to offer a qualified interpreter when oral interpretation as a reasonable step to provide meaningful access, use a qualified translator when translating written content, and if no live interpreter was available, offer real-time video for foreign language interpreters, using a “sharply delineated image that is large enough to display the interpreter’s face. . . .”
Importantly, the 2016 regulations required health care entities to insert taglines on all “significant” documents and notices in top 15 languages in the state where the document would be received. Further, employers with at least 15 employees had to provide notices about nondiscrimination policies, designate at least one employee to carry out 1557 responsibilities, adopt grievance procedures with appropriate due process standards to resolve actions prohibited under Section 1557.
The 2020 regulations made huge changes. First, they changed the regulatory focus from individual patients to the overall handling of the LEP population. They stated that when language services are required, they must be free, accurate and timely, and preserve the privacy and independence of the LEP individuals. To determine whether language services would be required, the 2020 regulations adapted guidance from 2003 to call for a 4 factor test that deemphasized nature of the communication and focused on the number/proportion of LEP eligible/likely to be served; frequency of contact; nature/importance of program/activity; and resources & costs.
The 2020 regulations replaced the requirement that language interpreters be “qualified” with directives that interpreters must translates effectively, accurately, and impartially, both receptively and expressively, using any necessary specialized vocabulary, and must demonstrate proficiency in speaking or understanding, both spoken English and at least one other language.
The 2020 regulations replaced the real-time video requirement with real-time audio over a dedicated high-speed, wide bandwidth video connection or wireless connection that delivers high-quality audio without lags or irregular pauses in communication.
The 2020 regulations deleted the tagline and notice requirements entirely.
In the LEP area, all of the 2020 revisions to the Obama-era 1557 requirements remain in place. It remains to be seen whether the Biden Administration will re-impose any of the 2016 provisions; we can speculate that some of the 2020 streamlining may remain. For example, the tagline and multiple language provisions were widely seen as overly burdensome and may not be reimposed.
Disability Discrimination
In contrast to the LEP discrimination changes, there have been relatively few revisions regarding disability discrimination.
The 2016 regulations required covered entities to provide appropriate auxiliary aids and services to people with impaired sensory, manual, or speaking skills, where necessary to afford an equal opportunity to benefit from the health program or activity. They adopted the 2010 ADA Standards for Accessible Design for new construction or alternation of facilities of covered entities that receive federal funding and state-based Marketplaces. And they required covered entities to make reasonable modifications in policies, practices, and procedures to avoid disability-based discrimination, unless doing so would fundamentally alter the nature of the health program or activity.
The 2020 regulation set omitted “acquisition or modification of equipment and devices; and other similar services and actions” from the list of examples of appropriate auxiliary aids and services. The 2020 regulations left in place the 2010 ADA Standards for Accessible Design, and did not adopt additional exemptions for multi-story building elevators and TTY standards. And the 2020 regulation set maintained the 2016 “reasonable modification” standards.
There has not been a great deal of attention to the more modest 2020 revisions in this area. Again, it remains to be seen whether any regulations promulgated in the current HHS will address this area at all.
Grievances/Enforcement
The 2020 regulations made important changes to grievances and enforcement. First, they deleted the 2016 requirement of a grievance policy and a 1557 coordinator. Second, they removed the right to sue based on 1557 regulations. But HHS did acknowledge that a right to sue under the statute itself remains in place.
Again, we do not know whether HHS will pay attention to this area if and when new regulations are issued.
What’s Next?
- It seems likely that there will be further litigation around sex discrimination, probably addressing not only 1557 but Title VI, Title VII and Title IX.
- The Biden HHS has promised new regulations, but if they follow the timing pattern set by both the Obama and Trump Administrations, we should not expect them until 2024.
- We just don’t know whether/to what extent new regulations will restore or expand Section 1557 provisions unrelated to the definition of sex discrimination (e.g., discrimination in health insurance benefit design, language access, notices, grievance procedures, enforcement, covered entities, pregnancy termination).
- At present, virtually all of the 2020 regulations remain in place. The extent of enforcement (outside of transgender protections) is unknown. It may well be that the next iteration of 1557 standards will continue to be narrower than the initial version.
[1] With thanks to Trent Stechschulte, General Counsel and Compliance Officer, Equitas Health, Columbus, Ohio, whose slides on LEP and disability discrimination are the source of those parts of this blog.
[2] 42 U.S.C. § 18116.
[3] 42 C.F.R. §§ 92.1 et seq.
[4] Franciscan Alliance v. Burwell, 227 F.Supp.3d 660 (N.D. Tx 2016). On August 9, 2021, the court made the injunction permanent. Franciscan Alliance v. Becerra, 2021 WL 3492338, N.D.Tex., Aug. 09, 2021. See https://www.healthaffairs.org/do/10.1377/hblog20210811.110777/full/ for a discussion of the complicated history of this case.
[5] Bostock v. Clayton County, 140 S. Ct. 1731 (2020).
[6] Whitman-Walker Clinic v. Azar, 485 F. Supp. 3d 1 (D.D.C. 2020); Asapansa-Johnson-Walker v. Azar, 2020 WL 6363970 (E.D.N.Y.)
[7]See note 1.