Section 1557 Nondiscrimination Requirements

Nondiscrimination Requirements

Section 1557 of the Affordable Care Act.

Under Section 1557 of the Affordable Care Act (ACA), individuals may not be denied, cancelled, limited, or refused health coverage on the basis of race, color, national origin, sex, age, or disability. On June 19, 2020, the Department of Health and Human Services’ (HHS’) Office for Civil Rights (OCR) published a final rule (the 2020 Rule) on nondiscrimination in health programs and activities under Section 1557. This 2020 Rule replaces the original final rule from 2016, repealing or revising many key provisions.

The 2020 Rule applies to the part(s) of health programs or activities that receive federal financial assistance, and any program or activity under Title I of the ACA (i.e., Exchanges) or entities established under that Title. Under the new rule, Section 1557 generally does not apply to self-funded group health plans under ERISA or short-term limited duration plans because the entities offering the plans are typically not principally engaged in the business of providing health care, nor do they receive federal financial assistance.

On Aug. 18, 2020, the U.S. District Court for the Eastern District of New York (EDNY) stayed the Section 1557 final 2020 rule’s repeal of the 2016 definition of discrimination on the basis of sex, posted by the Office for Civil Rights in the Department of Health and Human Services on June 19. The final 2020 rule removes protections for gender identity, sexual orientation and pregnancy status that were previously included in the 2016 rule. The 2020 rule was to become effective Aug 18, 2020, but the District Court decision ensures that the 2016 definitions of “on the basis of sex,” “gender identity,” and “sex stereotyping” will remain in effect pending further court or administrative action. However, these same 2016 definitions were the subject of a separate legal challenge, in which a stay was previously granted, preventing those definitions from taking effect. The EDNY did not address specifically whether the injunction would be national. And, because there are active cases pending in several other U.S. District Courts, further developments are expected.

The EDNY’s ruling focuses exclusively on the definition of “sex” and do not address other aspects of the rule, such as requirements related to physical and meaningful access for individuals with applicable disabilities and limited-English proficiency. Thus, the other requirements in the 2020 rule remain in effect as of Aug. 18, 2020.

Key requirements affecting health plans and services include:

  • Ensure physical access and/or appropriate communication technology to assist people with applicable disabilities
  • Ensure meaningful access for people with limited-English proficiency (LEP) based on a “four-factor analysis” test that includes an assessment of the proportion of LEP individuals in the population being served, and the frequency with which they come in contact with the entity’s health program activity or service.
  • Accessible grievance procedures for individuals who believe they have been subjected to discrimination in their health care or health care coverage

Repealed provisions from the original final rule, which are no longer required effective Aug. 18, 2020 include:

  • Inclusion of notices and taglines in at least fifteen languages with all “significant communications” to patients and customers