On May 24, 2019, the Department of Health and Human Services (“HHS”) announced its proposed changes to the regulations issued under Section 1557 of the Affordable Act Care (“ACA”).¹ Section 1557 is the primary anti-discrimination provision in the ACA and prohibits health programs from discriminating against patients on the basis of race, color, national origin, sex, age or disability. Health care entities should understand how the proposed regulation will affect them, where the proposed regulation overlaps, where it differs from the current one and whether they should submit comments during the current comment period. 

To Whom Would the Proposed Regulation Apply?

The proposed regulation would expand the entities to which the Section 1557 requirements would apply. The current regulation applies to any health program or activity, any part of which receives funding from HHS; any health program that the HHS itself administers; and Health Insurance Marketplaces and issuers that participate in those Marketplaces. The proposed regulation would expand the scope of entities covered by Section 1557 to include any health program or activity, any part of which is receiving federal financial assistance provided by HHS; any program or activity administered by HHS under Title I of the ACA; and any program or activity administered by any entity established under that Title. The Department also mentioned entities covered by Title IX.

History of the Regulation

On May 18, 2016, the HHS issued regulations regarding Section 1557, which went into effect on July 28, 2016.² While the regulation includes many provisions to prohibit discrimination, one of the key provisions defined sex discrimination as including discrimination based on sex stereotyping, gender identity and termination of pregnancy.

Five states and three private health care providers challenged this provision in the District Court for the Northern District of Texas, and the court issued a nationwide preliminary injunction that barred the HHS from enforcing Section 1557’s prohibition against discrimination on the basis of pregnancy termination and gender identity.³ In 2019, the DOJ, in a brief in response to the plaintiff’s motion for summary judgment, stated that the current position of the government is that sex discrimination does not include discrimination on the basis of gender identity and termination of pregnancy.

Because of the nation-wide injunction and the government’s new position, the proposed regulation would revise the 2016 version’s definition of sex discrimination. Specifically, the proposed regulation does not include a definition of sex, but rather would follow the will of Congress by not expanding the definition of sex to include anything other than biological sex. In the proposed rule, HHS states that it is not defining sex partially because the Supreme Court will hear three petitions in the fall of 2019 regarding whether employers violate Title VII when they discriminate against employees on the basis of sexual orientation or transgender status, and the Court may define sex discrimination in its opinions.

Changes in the Proposed Regulations

In addition to repealing the current definition of sex discrimination, HHS proposes other important changes that would impact the scope of the regulation. 

Health Program or Activity

 The 2016 regulation defines “health program or activity” as covering all operations of entities that provide health insurance coverage or other health coverage, regardless of whether they provide any health care or not. HHS proposes to narrow this definition and to implement the Civil Rights Restoration Act of 1987’s (CRRA) definition of “program or activity,” which covers all operations of regulated entities only when they are principally engaged in the business of providing education, health care, housing, social services, or parks and recreation. The proposed definition would clarify that health insurance programs administered by entities not principally engaged in providing health care will only be covered by the regulation to the extent that those programs, not the entities, receive federal funding from HHS. Under the CRRA definition, as proposed, an entity principally or otherwise engaged in the business of providing health insurance would not be considered to be principally engaged in the business of providing health care.

Enforcement Mechanisms

HHS states that the 2016 regulation “improperly” blended substantive requirements and enforcement mechanisms of the underlying statutes. Certain individualized requirements, prohibitions, or enforcement mechanisms were improperly applied to all protected classes without sufficient statutory or regulatory support. For example, the statutes underlying Section 1557 do not permit private rights of action for disparate impact claims of discrimination on the basis of race or sex, yet the current regulation states that an individual or entity could bring a civil action to challenge a violation of Section 1557 or the corresponding regulation in federal court. Likewise, the 2016 regulation states that compensatory damages are available, yet the DOJ Title VI Manual states that compensatory damages are generally unavailable for claims based solely on an agency’s disparate impact regulations. Thus, the proposed regulation would ensure that the enforcement mechanisms provided for and available under the underlying civil rights statutes shall apply for purposes of enforcement to Section 1557. The proposed regulation also designates the Director of the Office for Civil Rights to receive complaints, conduct compliance reviews and otherwise investigate and take enforcement actions in respect to claims of discrimination.

Tagline and Language Access Provisions

The 2016 regulation includes notice, tagline and language access provisions that are not required by the ACA. These provisions require that covered entities must notify patients, beneficiaries, applicants and the public of certain key information and require that taglines be in the top-15, non-English languages spoken in the entity’s state. HHS claims that these requirements are inconsistent with other tagline requirements of HHS and would cost health care entities millions of dollars while providing minimal benefits to limited English-proficiency individuals (“LEP individuals”). The proposed regulation would repeal this provision and no longer require taglines.

Duplicative, Inconsistent with, or Confusing Provisions

The proposed regulation would revise provisions that the HHS believes are duplicative of, inconsistent with or confusing in relation to coordinating regulations. Two major provisions that the proposed regulation would revise for such reasons are the provision that prohibits discrimination in health insurance issuance coverage, cost-sharing, marketing and benefit design and the provision that provides nondiscrimination notice and grievance procedure requirements.

Other Changes

Other notable revisions that the proposed regulation includes are: (i) repealing the definition section and defining terms in the section they are used; (ii) amending provisions that include sexual orientation or gender identity as prohibited bases of discrimination; (iii) amending coverage to apply only to programs administered by the HHS, instead of any program in which it “plays a role” in administering (for example, issuers of Exchange plans would no longer be covered solely on the basis that the HHS plays a role in administering tax credits); and (iv) explicitly incorporating religious and abortion exemptions and protections from specific religious freedom, conscience, and nondiscrimination statutes.

Additionally, the proposed regulation amends provisions regarding LEP individuals. Such provisions would include (i) requiring covered entities to take reasonable steps to provide meaningful access to “LEP Individuals” as opposed to “each individual with LEP eligible”; (ii) specifying that any entity, as opposed to recipient, operating or administering a health program or activity subject to this regulation shall take reasonable steps to ensure meaningful access to such programs or activities by LEP individuals; (iii) repealing the provisions on video standards for languages services while retaining the audio standards; and (iv) proposing four factors that the Director of the Office for Civil Rights will use to assess how an entity is complying with LEP provisions. The four factors are:

• The number or proportion of LEP individuals eligible to be served or likely to be encountered in the eligible service population.

• The frequency with which LEP individuals come in contact with the entity’s health program, activity, or service.

• The nature and importance of the entity’s health program, activity or service.

• The resources available to the entity and costs.

What Remains the Same?

The proposed regulation would continue to allow the HHS to maintain vigorous civil rights enforcement of all existing, applicable laws and regulations that prohibit discrimination on the basis of race, color, national origin, sex, disability and age. Multiple provisions in the current regulation will be left as is. For example, the obligation of covered entities to submit assurances of compliance, protections that insure physical access for individuals with disabilities to facilities and appropriate communication technology to assist those with visual or hearing impairments, requirements for foreign language translators and interpreters for non-English speakers, and limitations on the use of minors and family members as translators or interpreters would all remain the same.

How to Submit Comments

HHS seeks comments about its proposed revisions to the Section 1557 Regulation. While HHS requested comments on over 45 issues, in general, it seeks comments on its provisions regarding LEP individuals, persons with disabilities, statutory exemptions for religion and abortion, current sex discrimination policies, how the revised regulation would cause entities to change sex discrimination policies, information regarding patients who benefit from policies that prevent discrimination on the basis of gender identity, and the overall financial impact the revisions would have on the health care industry. The proposed regulation in the Federal register contains a complete list of requested comments and can be found here.

Comments can be submitted through the Federal eRulemaking portal, by hand delivery courier or by regular, express or overnight mail. HHS requests that electronic comments be either in a Microsoft Word Document, which is the preferred format, or Excel Spreadsheet. Comments submitted by fax or email or after the comment period will not be accepted. Comments must be submitted on or before August 13, 2019.

¹  “HHS Proposes to Revise ACA Section 1557 Rule to Enforce Civil Rights in Healthcare, Conform to Law, and Eliminate Billions in Unnecessary Costs,” U.S. Department of Health & Human Services (May 24, 2019)

²  HHS Nondiscrimination in Health Programs and Activities Final Rule, 45 C.F.R. pt. 92 (2016)

³  Franciscan Alliance, Inc., et al. v. Burwell, et al., 227 F.Supp.3d 660 (N.D. Tex. 2016)