11 October 2016

New ACA Nondiscrimination Requirements Don’t Discriminate in Their Applicability: Are You Covered?

The Office of Civil Rights (OCR) within the Department of Health and Human Services recently issued final regulations under Section 1557 of the Affordable Care Act (ACA). Among other things, these final regulations prohibit discrimination on the basis of race, color, national origin, sex, age or disability.

Who is Subject to Section 1557?

Health programs or activities that receive federal financial assistance are subject to Section 1557 (covered entities) with respect to patients and members of the public. Generally, Section 1557 applies to health care providers that accept federal financial assistance, such as payments from Medicare or Medicaid. The following are examples of covered entities: hospitals, physicians, dentists and nursing homes.

Employer group health plans will not typically be subject to Section 1557 with respect to plan participants (unless the group health plan is fully insured). Self-funded group health plans maintained by the following types of entities are, however, subject to Section 1557:

  • Entities in the business of providing health services or administering health coverage (e.g., health care providers, insurers, or third-party administrators).
  • Entities in any industry that receive federal financial assistance of which the primary objective is to fund the group health plan (e.g., a group health plan sponsored by an entity that receives a retiree drug subsidy).
  • Entities in any industry that operate a health program or activity that receives federal financial assistance (e.g., a retailer that operates a pharmacy that accepts payments from Medicare Part D). However, group health plans covered in this situation are only covered by Section 1557 with respect to employees of the health program or activity.

Substantive Requirements Under Section 1557

The primary purpose of Section 1557 is to prohibit discrimination. This may seem trivial because other laws already prohibit discrimination based on these classifications. But, Section 1557 has some unique requirements:

  • The final regulations clarify that discrimination based on sex includes discrimination based on gender identity. Most notably, this means sex-specific services cannot be denied because an individual identifies as belonging to another gender and categorical exclusions on health services related to gender transition are prohibited.
  • As explained below, the final regulations add a number of administrative requirements.

Administrative Requirements Under Section 1557 of the ACA

  • Notice Requirements: Beginning on October 17, 2016, covered entities must include in significant publications and communications; conspicuous public locations; and a conspicuous location on their websites, the following:
    • A nondiscrimination statement.
    • A short statement written in the top 15 non-English languages spoken by individuals with limited English proficiency in the state (“taglines”).

      For significant publications and communications that are small-sized (e.g., postcards and tri-fold brochures), the regulations permit a shorter nondiscrimination statement and only require taglines in the top 2 non-English languages.

  • Compliance Officer and Grievance Procedures: Covered entities with 15 or more employees must:
    • Designate an employee to coordinate compliance efforts with and carry out responsibilities under Section 1557.
    • Adopt grievance procedures that provide for the prompt and equitable resolution to grievances that allege violations of Section 1557.

Next Steps

  • Health Care Providers: By October 17, 2016, health care providers that are subject to Section 1557 should:
    • Update significant publications and communications (including patient handbooks, outreach publications, etc.) to include the applicable nondiscrimination statement and taglines. (Covered entities may use up their current stock of hard copy publications.)
    • Post the nondiscrimination statement and taglines in conspicuous locations (lobbies, waiting rooms, etc.) where the covered entity interacts with the public.
    • Post the nondiscrimination statement and taglines in a conspicuous location on the covered entity’s website that is accessible from the home page.
  • Self-Funded Group Health Plans: Sponsors of self-funded group health plans should determine whether their group health plan is subject to Section 1557 and, if so:
    • By the first plan year beginning on or after January 1, 2017, remove categorical exclusions of gender transition-related services and binary indicators that may limit the provision of sex-specific services to individuals who identify as a different gender.
    • Review group health plan disclosures, including electronic enrollment and employee intranet sites as well as written materials, to determine which constitute significant publications and communications and must be updated to include the nondiscrimination statement and taglines.

Miller Johnson is Here to Help

If you have any questions regarding the final regulations under Section 1557, please contact the authors or any member of the Health Care Reform practice group. Miller Johnson will also be conducting a webinar addressing the Section 1557 regulations on October 27, 2016.