Section 1557 of the Affordable Care Act (the "ACA") extends the reach of federal non-discrimination laws to prohibit discrimination in health care programs on the basis of race, color, national origin, sex, sex stereotypes, gender identity, age, and disability. Health insurers, hospitals, and all other entities receiving federal funds are covered under this new law. Employers that receive federal funding, including educational institutions, are also subject to these requirements. Under this provision, an individual may not "be excluded from participation in, be denied the benefits of, or be subjected to discrimination under, any health program or activity, any part of which is receiving federal financial assistance, including credits, subsidies, or contracts of insurance."

The most visible impact of this new regulation will likely be its broad prohibition on sex discrimination. The ACA's prohibitions on sex discrimination includes, but are not limited to, discrimination based on pregnancy, pregnancy-related conditions, marital or familial status, gender identity, and sex-stereotyping. Claims and litigation may also arise based on sex discrimination related to dependent coverage, particularly since the ACA extends required coverage to dependents up to the age of 26.

The Department of Health and Human Services' Office for Civil Rights ("OCR") has jurisdiction to oversee and enforce Section 1557. Individuals may also file lawsuits seeking damages for discrimination. To date, at least five complaints have been filed with the OCR alleging sex discrimination under Section 1557 based on private and public employers' exclusion of pregnancy coverage from the health insurance benefits provided to their employees' dependent children.

Insurers, hospitals, and employers subject to this new rule should take steps to ensure that their health care policies and procedures do not create exposure from discrimination claims. This includes compliance with key ACA requirements, such as including contraceptive and maternity care coverage as part of insurance plans and providing protections for female employees who are pregnant or nursing.