On May 24, 2019, the U.S. Department of Health & Human Services (HHS) announced that it is issuing proposed revised regulations under Section 1557 of the Affordable Care Act that remove the redefinition of “sex” and certain regulatory burdens, including language taglines. The changes substantially roll back the original Obama-era regulations.

Section 1557 prohibits discrimination on the basis of race, color, national origin, sex, age, or disability in health programs or activities. In May 2016, HHS issued final regulations defining “on the basis of sex” to include gender identity and termination of pregnancy. Many lawsuits challenged the regulation as going beyond Congress’s statute and the accepted legal definition of sex. On December 31, 2016, a federal district court issued a nation-wide injunction prohibiting the enforcement of the regulation in a case brought by several states and religious hospitals and providers. Franciscan All., Inc. v. Burwell, 227 F. Supp. 3d 660, 696 (N.D. Tex. 2016). HHS has not enforced this portion of the regulation since then.

Along with removing the definition of “sex,” HHS is proposing to repeal many other portions of the rule. In the Preamble to the proposed regulation, HHS states, “The Department believes that the Final Rule exceeded its authority under Section 1557, adopted erroneous and inconsistent interpretations of civil rights law, caused confusion, and imposed unjustified and unnecessary costs.” The proposed revisions seek to address these issues by:

  • Returning to the “ordinary” meaning of “sex.” Discrimination based on gender identity is no longer expressly prohibited under the rule and instead “on the basis of sex” will have its “plain meaning.”
  • Repealing certain language requirements. Covered entities will no longer need to mail beneficiaries, enrollees, and others, notices concerning non-discrimination and the availability of language assistance services (in 15 languages) with every “significant” publication and communication larger than a postcard or brochure.
  • Limiting the scope of who is covered by the rule. Health insurance programs administered by entities not principally engaged in providing health care will only be covered by the rule to the extent those programs receive Federal financial assistance from HHS.
  • Revising the enforcement structure. The regulations allowed for certain private rights of action. HHS proposes to return to the enforcement structure for each underlying civil right statute as provided by Congress.
  • Expressly providing a religious and conscious exemption. The regulation did not contain a religious exemption but explained that religious entities could claim existing religious exemptions under federal law (for example, the Religious Freedom and Restoration Act). The revisions add such an exemption.

The proposed revised regulations do not mean the controversy on the subject is over. Other federal district courts have found that excluding transgender services violates Section 1557 without relying on the regulation. See Boyden v. Conlin, 341 F. Supp. 3d 979, 997 (W.D. Wis. 2018). In addition, on April 22, 2019, the U.S. Supreme Court granted petitions for writs of certiorari in three cases, which raise the question whether Title VII’s prohibition on discrimination on the basis of sex also bars discrimination on the basis of gender identity or sexual orientation.