The U.S. Department of Health and Human Services (HHS) has issued final regulations under Section 1557 of the Affordable Care Act (ACA) which prohibit discrimination on the basis of race, color, national origin, sex, age, or disability in certain health programs and activities. To be subject to these nondiscrimination rules, the health program or activity must receive federal financial assistance or be administered by certain governmental entities, including an administrator of the marketplace (the health insurance exchanges under the ACA). Although the guidance answers a number of questions raised by providers and health plan sponsors, it remains quite complicated in various respects.

Most of the provisions under the new rules take effect July 18, 2016. The requirement to post a nondiscrimination notice or statement, together with non-English taglines (see below) in significant publications, physical locations, and the applicable website applies 90 days after the effective date. Changes to the design of a health plan (or health insurance) that are required by the regulations need to be implemented by the first day of the plan year (or policy year) beginning on or after January 1, 2017.

In addition to a general requirement of nondiscrimination, the final regulations address a range of specific issues. For example, the regulations and preamble:

  • Clarify that, for purposes of these nondiscrimination requirements, federal financial assistance will be taken into account only if it is provided by HHS. Applications for federal financial assistance from HHS may include specific certifications as to the applicant’s nondiscriminatory status.
  • Specify that, although Medicare and Medicaid will generally be treated as a form of federal financial assistance, receipt of Medicare Part B payments alone will not by itself subject the recipient to the nondiscrimination requirements.
  • Require language assistance services for those who lack proficiency in English as part of the rules prohibiting discrimination based on national origin. These services must extend to the 15 most common non-English languages in the state or states in which the health program or activity is offered. Employers are required to post notices, publish statements, and include non-English taglines (describing the availability of language assistance in the applicable languages) about the availability of these services.
  • Extend the nondiscrimination protections for disabled individuals to both physical and technological access.
  • Require an exceedingly persuasive justification tied to an important health or scientific objective for a health program or activity to apply to a single sex.
  • Apply the protections under Section 1557 to discrimination based on sexual orientation and transgender status.
  • Clarify that the nondiscrimination requirements apply to consumers of health care programs and activities. They do not apply to employees except for protections under their employer’s group health plan (where the employees are essentially consumers). Employees continue to have protections against discrimination under other laws.
  • Determine how the nondiscrimination rules apply to health plans, based largely on whether the plan itself receives federal financial assistance, whether the employer of plan participants receives federal financial assistance, and whether such an employer is principally engaged in providing health programs and activities.
  • HHS will distinguish between discrimination caused by a third party administrator’s conduct and discrimination caused by an employer’s plan design.
  • Health care providers, health insurers, and employers that sponsor group health plans will need to consider the new rules and how they affect matters of design and operation. Prompt action should be taken to post notices appropriately and address accessibility standards for disabled individuals and non-English speakers. It will be sensible to keep track of how HHS’s enforcement policies evolve under the new rules

As the federal health care reform effort gained steam, Ballard Spahr attorneys established the Health Care Reform Initiative to monitor and analyze legislative developments. With federal health care reform now a reality, our attorneys are assisting health care entities and employers in understanding the relevant changes and planning for the future. They also have launched the Health Care Reform Dashboard, an online resource center for news and analysis on developments under the Affordable Care Act.