On May 16, 2016, the Department of Health & Human Services (“HHS”) Office of Civil Rights (“OCR”) issued final rules implementing Section 1557 of the Patient Protection and Affordable Care Act (the “ACA”). The final rules prohibit discrimination in health programs and health activities on the basis of race, color, national origin, sex, age or disability. Specifically, the final rules:

  • Require that women be treated equally with men in the healthcare services that they receive, including that women cannot be charged more for healthcare coverage or services than men.
  • Prohibit denying healthcare or coverage based on an individual’s sex, including gender identity.
  • Prohibit a covered entity from denying or limiting coverage or benefits for a claim, or impose additional cost-sharing or other limits on coverage, for sex-specific services provided to a transgender individual just because the individual requesting such services identifies as belonging to another gender
  • Prohibit any categorical exclusion of coverage for all health services related to gender transition, as well as limiting coverage or imposing additional cost-sharing or other limits or restrictions on such coverage if they result in discrimination against a transgender individual.
  • Require reasonable steps to provide meaningful access to individuals with limited English proficiency and disabilities, including notice requirements.
  • Provide a private right of action and damages for violations.

For purposes of these rules, a “covered entity” is any health program or activity that receives funding from HHS, such as hospitals or providers that accept Medicare or Medicaid payments, the health insurance marketplaces and the issuers that participate in the marketplace, and any health program that the HHS administers. This definition sweeps in almost every healthcare provider and health insurance company, including those that may serve as a third-party administrator (“TPA”). While the OCR recognizes that a TPA providing services to an employer’s self-funded group health plan is not responsible for the plan’s design, the OCR can review any claims of discrimination brought against the health plan. Issues of plan administration may be the responsibility of the TPA, but issues of plan design will be reviewed to determine whether the issue should be referred to the Equal Employment Opportunity Commission to pursue a discrimination claim against the employer.

Although portions of ACA Section 1557 have been effective since 2010, the final nondiscrimination rules regarding benefit plans are effective on the first day of the plan year beginning on or after January 1, 2017. Now is a good time to review your benefit plan designs and consult with your insurance providers or TPAs to make sure that your plan will be ready to comply.