The Trump Administration’s Final Rule on Section 1557 Non-Discrimination Regulations Under the ACA and Current Status
|Table 1: Key Changes to HHS Regulations Implementing ACA § 1557|
|Topic||2016 Regulation||2020 Regulation|
|Equal program access on the basis of sex1||Defines sex discrimination to include discrimination on the basis of gender identity, sex stereotyping, pregnancy, false pregnancy, termination of pregnancy, or recovery therefrom, childbirth or related medical conditions.||Removes entire provision.|
|Abortion and religious exemptions2||Provides that compliance with § 1557’s prohibition of discrimination based on sex is not required if doing so would violate existing abortion and religious exemption laws. Does not include Title IX’s blanket abortion and religious exemptions applied to educational institutions.||Adds Title IX’s blanket abortion and religious exemptions and provide that any § 1557 regulatory requirement will not be imposed if it would violate, depart from, or contradict definitions, exemptions, affirmative rights, or protections provided by existing and future abortion and religious exemption laws.3|
|Discrimination in Health Coverage|
|Nondiscrimination in health-related insurance and other health-related coverage4||Prohibits covered entities from taking the following actions on the basis of race, color, national origin, sex, age, or disability:
Permits insurers to apply medical necessity rules when determining covered benefits.
|Removes entire provision.|
|Coverage protections for transgender individuals5||Requires that covered entities treat individuals consistent with their gender identity, except that entities are prohibited from denying or limiting health services that are ordinarily or exclusively available to individuals of one sex or gender based on the fact that the individual’s sex assigned at birth, gender identity, or gender in a medical or health insurance plan record differs from the one to which such health services are ordinarily or exclusively available.||Removes entire provision.|
|Access to gender transition services6||Prohibits an insurance plan from categorically or automatically excluding or limiting coverage for all health services related to gender transition or otherwise denying or limiting coverage or denying a claim for specific health services related to gender transition if such a policy results in discrimination against the individual seeking services.||Removes entire provision.|
|Meaningful access for individuals with limited English proficiency (LEP)7||Requires covered entities to take reasonable steps to provide meaningful access to each individual with LEP eligible to be served or likely to be encountered.
When assessing an entity’s compliance, OCR will take into account and give substantial weight to the nature and importance of the health program or activity and the communication at issue to the individual with LEP. OCR also will consider other relevant factors, including whether the entity has an effective written language access plan.
Requires covered entities to offer a qualified interpreter when oral interpretation is a reasonable step to provide meaningful access and to use a qualified translator when translating written content.
|Requires covered entities to take reasonable steps to ensure meaningful access by LEP individuals (remove reference to each individual).
When evaluating an entity’s compliance, OCR may assess how the entity balances the number or proportion of LEP individuals eligible to be served or likely to be encountered; the frequency with which LEP individuals come in contact with the entity’s health program or activity; the nature and importance of the entity’s health program or activity; and the resources available to the entity and costs.
The entity’s individualized assessment of the above factors will determine whether language assistance services are required to provide meaningful access.
|Remote interpreting services||Includes standards for video remote interpreting services.||Removes video remote interpreting standards and require only audio remote interpreting.|
|Notices, including taglines8||Requires covered entities to provide non-discrimination notices (described below) in English and include taglines in the top 15 languages spoken by individuals with LEP in the state. Notices must indicate the availability of language assistance services.||Removes entire provision.9|
|Effective communication – auxiliary aids and services10||Requires 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.||Omits “acquisition or modification of equipment and devices; and other similar services and actions” from the list of examples. Does not exempt entities with less than 15 employees but notes that ADA fundamental alternative and undue burden defenses continue to apply.|
|Building construction and architectural standards11||Adopts 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.||No change. Does not adopt additional exemptions regarding multi-story building elevators and TTY standards.|
|Reasonable modifications12||Requires 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.||No change. Does not adopt undue hardship exemption but notes that ADA fundamental alternation and undue burden defenses continue to apply.|
|Notice and Enforcement|
|Designation of responsible employee and adoption of grievance procedures13||Requires covered entities that employ at least 15 people to adopt a grievance procedure and designate at least one employee to coordinate § 1557 responsibilities.||Removes entire provision.|
|Notice requirement14||Required covered entities to provide notice of their nondiscrimination policies in significant communications (such as handbooks and outreach publications), physical locations where the entity interacts with the public, and on their website homepage.
The notice had to include the bases of discrimination prohibited under § 1557, the availability of free auxiliary aids and services and language assistance services, how to access those services, contact information for the employee responsible for § 1557 compliance, the entity’s grievance procedures, and OCR complaint procedures.
Included sample notice, tagline, and grievance procedure.
Small-sized publications could have included a shorter non-discrimination statement and taglines in the top 2 non-English languages spoken.
|Removes entire provision.15|
|Compensatory damages16||Provided that compensatory damages are available for violations of § 1557 in appropriate administrative and judicial actions brought under the regulations.||Removes entire provision. Instead, relies on enforcement provisions of Title VI, Title IX, Age Act, and Section 504.|
|Court access17||Provided that private individuals and entities can sue in federal court to challenge alleged violations of § 1557 by entities receiving federal financial assistance and state-based Marketplaces||Removes entire provision. HHS no longer takes a position on whether Section 1557 itself provides a private right of action.|
|Scope of Application|
|Covered entities18||Applies § 1557 regulations to health programs and activities that receive federal financial assistance from HHS, all health programs and activities administered by HHS, and state-based Marketplaces.
Defines health programs and activities to include all operations of an entity that is principally engaged in the provision or administration of health-related services or health-related insurance coverage.
|Applies § 1557 regulations to entities principally engaged in the business of providing health care that receive federal financial assistance, health programs and activities administered by HHS under Title I of the ACA (but not other HHS-administered health programs and activities), and state-based Marketplaces.
Applies § 1557 regulations to health insurance programs administered by entities that are not principally engaged in the business of providing health care only to the extent that those programs receive federal financial assistance. Would not apply to all operations of entities that are not principally engaged in the business of providing health care (as opposed to health insurance).
|Discrimination based on association19||Prohibits discrimination against an individual known or believed to have a relationship or association with someone else based on that person’s race, color, national origin, age, disability, or sex.||Removes entire provision.|
|Table 2: Key Changes to Other HHS Anti-Discrimination Regulations|
|Topic||2016 Regulation||2020 Regulation|
|Managed care contract requirements20||Prohibits Medicaid managed care entities from discriminating against individuals eligible to enroll or using any policy or practice that has the effect of discriminating on the basis of sexual orientation or gender identity.||Removes sexual orientation and gender identity as prohibited bases of discrimination.|
|Managed care – availability of services21||Requires state Medicaid programs to ensure that each Medicaid managed care entity participates in state efforts to promote service delivery in a culturally competent manner to all enrollees, regardless of gender, sexual orientation or gender identity.||Replaces gender, sexual orientation or gender identity with sex.|
|Access and cultural conditions for state Medicaid program services22||Requires state Medicaid programs to have methods to promote access and service delivery in a culturally competent manner to all beneficiaries, regardless of gender, sexual orientation or gender identity.||Replaces gender, sexual orientation or gender identity with sex.|
|Program of All-Inclusive Care for the Elderly (PACE)23||Prohibits PACE organizations from discriminating against any participant in the delivery of PACE services based on sexual orientation.
Provides that each PACE participant has the right to not be discriminated against in the delivery of required PACE services based on sexual orientation.
|Removes sexual orientation as prohibited basis of discrimination.|
|Group and Individual Health Insurance|
|Group and individual health insurance markets – guaranteed availability of coverage24||Prohibits health insurance issuers from employing marketing practices or benefit designs that discriminate based on gender identity and sexual orientation.||Removes sexual orientation and gender identity as prohibited bases of discrimination.|
|Marketplace establishment standards25||Prohibits states and Marketplaces from discriminating based on gender identity and sexual orientation when establishing Marketplace standards and functions, eligibility determinations, enrollment periods, SHOP functions, QHP certification, and health plan quality improvement.||Removes sexual orientation and gender identity as prohibited bases of discrimination.|
|Federally-facilitated Marketplace standards of conduct26||Prohibits agents and brokers that assist with or facilitate enrollment of individuals or applying for premium tax credits and cost sharing reductions in qualified health plans (QHPs) through a federally-facilitated Marketplace from discriminating based on gender identity and sexual orientation.||Removes sexual orientation and gender identity as prohibited bases of discrimination.|
|QHP issuer participation standards27||Prohibits QHP issuers from discriminating based on gender identity and sexual orientation.||Removes sexual orientation and gender identity as prohibited bases of discrimination.|
|Direct enrollment in a Federally-facilitated Marketplace28||Prohibits QHP issuers from marketing or conduct that discriminates based on gender identity and sexual orientation.||Removes sexual orientation and gender identity as prohibited bases of discrimination.|
|Education programs or activities receiving federal financial assistance29||Not addressed in regulation. Contained in statute.||Adds provision prohibiting covered entities from being required to perform or pay for an abortion.30|
|Education programs or activities receiving federal financial assistance31||Prohibits recipients of federal financial assistance from discriminating against any person in the application of any rules of appearance on the basis of sex when providing any aid, benefit or service to a student.||Removes provision prohibiting discrimination based on the application of rules of appearance.|
|Table 3: Lawsuits Challenging the Trump Administration’s Section 1557 Final Rule, as of 9/14/20|
|Whitman-Walker Clinic v. HHS (D.D.C.)||Health care and social service providers who serve LGBTQ people and LEP people||9/2/20 court issued nationwide preliminary injunction preventing Administration from implementing (1) provisions excluding sex stereotyping from definition of sex discrimination and (2) provisions incorporating blanket religious freedom exemption from claims of sex discrimination.
The court denied plaintiffs’ motion for a preliminary injunction to block the final rule’s (1) elimination of the provision prohibiting categorical coverage exclusions for gender-affirming care, (2) elimination of notice and tagline requirements, (3) restriction of the rule’s scope to apply only to HHS-administered programs and activities under ACA Title I, and not all HHS programs and activities, (4) exclusion from the rule of certain activities of health insurance issuers not principally engaged in the business of providing health care, and (5) provisions amending the appropriate legal standard to be applied to Section 1557 claims.
|Boston Alliance of Gay, Lesbian, Bisexual & Transgender Youth v. HHS (D. Mass.)
|A transgender man and health care and social service providers who serve LGBTQ people and LEP people
|Complaint filed 7/9/20.|
|Asapansa-Johnson Walker v. Azar (E.D. NY.)||2 transgender women of color||8/17/20 court issued nationwide preliminary injunction preventing Administration from implementing provisions excluding gender identity and sex stereotyping from definition of sex discrimination.
After the plaintiffs requested clarification about the scope of the preliminary injunction order, the court issued a 9/8/20 order directing plaintiffs to submit a list of provisions of the 2020 rule, beyond the definition of sex discrimination, that should be stayed in light of the Supreme Court’s Bostock decision by 9/15/20, and HHS to respond by 9/22/20.
|NY v. HHS (S.D. NY.)||23 states (NY, CA, MA, CO, CT, DE, DC, HI, IL, ME, MD, MI, MN, NV, NJ, NM, NC, OR, PA, RI, VT, VA, WI)
|Complaint filed 7/20/20.
On 9/10/20, the plaintiffs filed a motion for partial summary judgment, seeking to have the entire 2020 rule vacated.
|WA v. HHS (W.D. Wa.)||WA||8/28/20 court denied WA’s motion for preliminary injunction, finding that WA lacks standing to sue because it has not shown that it is injured by the final rule; WA ordered to show cause why case should not be dismissed.
On 9/8/20, WA filed a notice voluntarily dismissing the case without prejudice.
|SOURCE: KFF analysis of case documents, available at https://affordablecareactlitigation.com/aca-enforcement-directly-and-1557/.|
|Table 4: Section 1557 and Sex Discrimination Timeline|
|March 23, 2010||ACA signed||Provides new coverage options and protections for people in the United States, including Sec. 1557 nondiscrimination protections which incorporate sex nondiscrimination protections from Title IX of the Civil Rights Act.|
|May 18, 2016||Final 2016 Obama Administration regulations implementing Section 1557 issued.||The 2016 implementing regulations specifically included “gender identity” and “sex-stereotyping” in its definition of “sex”, extending the ACA’s sex non-discrimination protections to transgender and gender nonconforming people.|
|August 23, 2016||Franciscan Alliance v. Azar filed in federal district court in Texas (Judge Reed O’Connor) challenging parts of the final regulation.||Plaintiffs, including multiple states and religious health care entities, challenge the Obama Administration’s final rule defining discrimination “on the basis of sex” to include discrimination based on “gender identity” and “termination of pregnancy.”|
|December 31, 2016||Texas federal district court issues preliminary injunction blocking enforcement of parts of the 1557 regulation.||Texas federal district court issued a nationwide injunction enjoining HHS from enforcing the parts of the 2016 nondiscrimination regulation pertaining to discrimination on the basis of gender identity or termination of pregnancy. (The statute, Sec. 1557, stands and injured parties can still file suit in court)|
|July 10, 2017||Texas federal district court grants request to remand rule back to HHS for reconsideration and stays litigation.||Following President Trump’s election and at the request of DOJ, Texas federal district court remands the rule back to HHS for reconsideration and to comply with the court’s earlier ruling. The suit is stayed while rule is remanded to the agency and preliminary injunction remains in place.|
|December 17, 2018||Texas federal district court allows Franciscan Alliance litigation to resume per plaintiff’s requests.||Court orders litigation to move forward, despite that Trump Administration has not yet issued proposed regulations|
|May 24, 2019||Trump Administration releases proposed rules relating to Section 1557 implementation.||Proposed rules would revise the Obama Administration’s regulations implementing Section 1557 including the definition of sex and in particular the inclusion of gender identity, sex-stereotyping, and termination of pregnancy. The rule proposes to remove explicit protections based on sexual orientation and gender identity in regulations outside of Section 1557. In addition, rule proposes to allow providers and other covered entities to invoke blanket abortion and religious objection exemptions from the regulations’ general prohibition on sex discrimination.|
|October 15, 2019||Texas federal district court vacates the parts of the 2016 rule prohibiting discrimination based on gender identity and termination of pregnancy, citing violations of the Administrative Procedure Act (APA) and the Religious Freedom Restoration Act (RFRA).||The order sets aside these sex-based protections in the 2016 rule. Injured parties are still able to address claims of discrimination based on gender identity and termination of pregnancy through litigation, relying on the statue itself.|
|January 21, 2020||Plaintiffs appeal the Texas federal district court decision to 5th Circuit.||Despite succeeding in having gender identity and termination of pregnancy provisions of the 2016 rule vacated, plaintiffs appealed the lower court’s decision, seeking to have the entire Obama Administration rule vacated.|
|June 2, 2020||5th Circuit grants appellants a stay in the Franciscan Alliance case.||Appellants requested and were granted a stay in proceedings until 21 days after the Supreme Court issues its decision in Bostock v. Clayton County, GA which could impact their case.|
|June 12, 2020||Trump Administration releases final rules relating to Section 1557 implementation.||Final Section 1557 implementing rules are essentially unchanged from the proposed rules as described above.|
|June 15, 2020||The Supreme Court issues a decision in Bostock v. Clayton County, GA finding that sex nondiscrimination protections under Title VII of the Civil Rights Act extend to gender identity and sexual orientation in the employment context.||Because Section 1557 incorporates sex discrimination protections under Title IX of the Civil Rights Act, and courts traditionally look to Title VII when interpreting Title IX, the Bostock decision raises questions about the validity and survivability of the Trump Administration’s Section 1557 rules.|
|June 22, 2020 – July, 20, 2020||5 lawsuits filed challenging the Trump Administration final rule:
Whitman-Walker Clinic v. HHS, No. 1:20-cv-1630 (E.D.NY)
Boston Alliance of Gay, Lesbian, Bisexual & Transgender Youth v. HHS, No. 1:20-cv-11297 (D. Mass.)
Walker v. Azar, No. 1:20-cv-2834 (D.D.C.)
NY v. HHS, No. 1:20-cv-5583 (S.D.NY)
Washington v. HHS, No. 2:20-cv-01105-JLR (W.D.Wa.)
|The suits challenge the final rule on a number of grounds, including that it is contrary to the Bostock ruling.|
|August 17, 2020||In Walker v. Azar, citing the Bostock decision, the federal court for the Eastern District of New York, issues a preliminary injunction setting aside the changes the Trump Administration final rule made to the 2016 Obama Administration rule on the definition of “sex” and in particular protections based on “gender identity” and “sex stereotyping.”||The ruling reinstates the 2016 rule’s definition of sex but cannot undo the vacatur of the “gender identity” provisions in the Franciscan Alliance case. Therefore the ruling largely revives the 2016 rule’s sex nondiscrimination protections as they apply to “sex-stereotyping” which the court suggests, in the order, can offer gender identity protections as transgender people are “inherently gender non-conforming.”|
|August 11, 2020||Fifth Circuit resumes proceedings in the Franciscan Alliance appeal following the ruling in Bostock.||Given that the appellants were waiting for a Bostock decision to resume litigation, watching how litigation in this case plays out will provide critical insight into how lower courts apply the Supreme Court’s Title VII ruling to Title IX.|
|September 3, 2020||In Whitman-Walker Clinic v. HHS, the D.C. District Court issued a preliminary injunction||As was the case in Walker, the injunction enjoins HHS from repealing the 2016 rule’s definition of sex discrimination insofar as it includes sex stereotyping. It also enjoins HHS from enforcing its incorporation of the religious exemption contained in Title IX, including as they relate to termination of pregnancy or treatment of a transgender or gender nonconforming person.|
|September 8, 2020||After the plaintiffs requested clarification about the scope of the preliminary injunction order, the Walker v. Azar court directed the plaintiffs to submit a list of provisions of the 2020 rule, beyond the definition of sex discrimination, that should be stayed in light of the Supreme Court’s Bostock decision for the court’s consideration. Plaintiffs’ list is due on September 15th, and HHS’s response is due on September 22nd.||The NY court’s preliminary injunction could be expanded to encompass additional provisions of the final 2020 rule.|