Do the ACA's Transgender and
Civil Rights Protections Apply to You?
If you are an employer who sponsors a health plan, you may have been recently contacted about the possibility that your health plan needs to take immediate steps to comply with ACA rules protecting transgender individuals and other civil rights. If you are a hospital, health insurance issuer, physician practices, nursing facility, or residential health care facility, you are clearly subject to the rule. But if you're not in the health care business, do you really need to comply? This brief will walk you through the requirements.
Section 1557 of the Affordable Care Act (ACA) generally prohibits "covered entities" (as defined below) from discriminating on the basis of race, color, national origin, sex, age or disability and provides certain specific protections for transgender individuals. Section 1557 requires that certain notices be posted or provided, that a nondiscrimination statement and taglines in different languages be included in significant publications and communications, and that translation services be provided in certain cases. The final regulations interpreting Section 1557 generally took effect July 18, 2016, although any changes to health plan design were delayed until the first plan year beginning on or after January 1, 2017, and any notice and tagline requirements did not take effect until October 16, 2016.
Note that the rules enacted under Section 1557 are often referred to as the "ACA nondiscrimination rules," but should not be confused with the group health plan nondiscrimination rules under Section 105(h) of the Internal Revenue Code, which were expanded by the ACA to cover insured group health plans (but are currently suspended pending issuance of regulations).
Are You or Is Your Plan a "Covered Entity"?
Only the following entities are "covered entities" subject to Section 1557:
- An entity operating a health program or activity, any part of which receives funding from HHS. A health program or activity means the provision or administration of health-related services, health-related insurance coverage, or other health-related coverage, and the provision of assistance to individuals in obtaining health-related services or health-related insurance coverage. If an organization is "principally engaged" in providing these services or coverage, the law applies to the entire organization, not just the program or activity receiving HHS funding. The rules specifically provide that this includes hospitals, health clinics, group health plans, health insurance issuers, physician's practices, community health centers, nursing facilities, residential or community-based treatment facilities, or other similar entities. Thus, for example, a hospital employer's group health plans would be covered.
- Federal and State Health Insurance Marketplaces, and
- Employee Health Benefit Programs (e.g., medical plans, wellness programs, on-site health clinics, and long-term care coverage) that receive HHS funding. Thus, if your plan receives the Medicare Part D subsidy (the HHS subsidy provided to plans covering Medicare-equivalent prescription drug coverage), it would be a covered entity.
No exemption is available for benefits excepted from the HIPAA portability rules or the ACA rules.
If your plan is self-funded, your third-party administrator (TPA) may be subject to Section 1557. This means that your TPA may have its own notice requirements, separate from you. It also means that your TPA can not discriminate in how it processes claims under, or otherwise administers, your plan.
What Do You Need To Do To Comply?
If you or your health plan qualify as a covered entity, you need to make sure you or your plan (or both) comply with all of the requirements of Section 1557, which may include:
- Making sure you or your plan does not:
- discriminate in eligibility, design or administration of health coverage on the basis of race, color, national origin, sex, age or disability,
- deny or limit coverage for specific health services provided to a transgender individual or related to gender transition in a way that results in discrimination against the transgender individual, or
- discriminate based on disability (this includes accommodating persons with disability and making electronically-provided services or systems accessible to persons with disabilities).
- Reviewing your plan design and any exclusions, and revising as needed. Many plans have historically excluded services relating to gender dysphoria or gender reassignment. The rules do not mandate coverage for gender transition-related surgery, but if your plan intends to cover these types of procedures for other reasons (e.g., hysterectomy for cancer treatment), then you may have difficulty excluding coverage for such a service for a transgender individual with gender dysphoria. Changes to health plan design should be implemented to take effect with the first plan year beginning on or after January 1, 2017.
- Taking steps to provide persons with limited English proficiency (LEP) meaningful access to health programs, including providing an interpreter or written translations free of charge and publishing taglines (short statements in non-English languages) informing LEP persons of the availability of language services.
- Posting certain notices and including a nondiscrimination statement (and the above taglines) in certain significant publications and communications, in locations where you interact with the public, on your Web site, and in small communications (such as post-cards and tri-fold brochures). These requirements took effect October 16, 2016 (except that a special rule allows you to exhaust your current stock of hard copy publications).
- If you have 15 or more employees, adopting grievance procedures and designating a responsible employee to coordinate grievances.
Sample notices and taglines can be found here.
What Is the Penalty?
Enforcement may include informal correction with the OCR, termination of HHS funding, referral to the Department of Justice, and compensatory damages.
*Also note that Federal contractors may be subject to separate but similar requirements to those described above under the OFCCP rules.
Nelson Mullins Executive Compensation and Employee Benefits attorneys are ready to assist with your compensation and benefits related matters in a cost-effective and responsive manner. Please contact one of our Executive Compensation and Employee Benefits partners or the Nelson Mullins attorney with whom you work.
This Brief should not be construed as legal advice or legal opinion on any specific facts or circumstances. The contents are intended for general information purposes only, and you are urged to consult a lawyer concerning your own situation and any specific legal questions you may have.
© 2016 Nelson Mullins Riley & Scarborough LLP. All Rights Reserved.
The articles published in this newsletter are intended only to provide general information on the subjects covered. The contents should not be construed as legal advice or a legal opinion. Readers should consult with legal counsel to obtain specific legal advice based on particular situations.