Loyola University Chicago School of Law, JD 2021
The Department of Health and Human Services (“HHS”) finalized revised regulations that implemented Section 1557 of the Affordable Care Act (“ACA”) in June of 2020. This section prohibits discrimination within health programs and activities receiving federal financial assistance based on race, color, sex, age, disability, and national origin. In comparison to the Obama-era regulations issued in 2016, the new final rule does away with gender identity and sexual orientation nondiscrimination protections not only under Section 1557, but under ten other federal regulations as well. This also includes a roll back of certain health insurance coverage protections for transgender individuals.
Notices of nondiscrimination and grievance procedure requirements have been removed from Section 1557. Covered entities need not provide a notice of nondiscrimination policies at their physical locations, in significant communications, and on their website homepage. The 2016 requirement that taglines be provided with all significant communications has also been eliminated.
The defense for revisions
HHS under the Trump Administration has defended its revisions by arguing that they will lower associated costs and the regulatory burden placed upon entities by reducing confusion and inconsistencies with other civil rights legislation. In support of its argument, HHS has cited a 2016 case Franciscan Alliance v. Azar which vacated provisions of the 2016 ACA which stated that the definition of sex discrimination included termination of pregnancy and gender identity. However, some have argued that the 2020 HHS revisions to Section 1557 and other related regulations go beyond the issues raised in the Franciscan case.
HHS has stated in reply to commenters of the 2019 draft of the Rule that, “all people should be treated with dignity and respect, regardless of their characteristics including their gender identity, and they should be given every protection afforded by the Constitution and the laws passed by Congress.”
Changes to note in the final rule
Previously under the 2016 rule, the definition of sex discrimination according to Section 1557 that included sex stereotyping and gender identity has been eliminated. Provisions requiring covered entities to treat individuals in accordance with their gender identity have been removed. Covered entities are no longer expressly prohibited by the final rule to limit or deny services ordinarily available to one gender or sex if such services are requested by an individual of the opposite sex or gender. Commenters of the 2019 draft of the rule expressed concerns that such changes, “would allow or encourage providers to deny basic healthcare to individuals who identify as transgender.” Critics of the final rule argue that these changes would result in less protections against transgender individuals.
A delay in implementation
The implementation of the new revisions has been delayed from taking effect later than the intended date of August 18, 2020. Between June and July of 2020, five suits were filed challenging the regulations. The delay is mainly due to blocks resulting from two federal court cases. In Bostock v. Clayton County, Georgia, the Supreme Court held that discrimination based on sex includes gender identity and sexual orientation when it comes to employment. This decision sparked two preliminary injunctions from federal courts in New York and DC. In August, the New York court prevented the implementation of certain provisions that excluded sex stereotyping from the definition of sex discrimination in Walker v. Azar. In September, the court in DC also moved to block provisions excluding sex stereotyping from the definition of sex discrimination along with provisions that incorporated a religious freedom exemption from claims dealing with sex discrimination in Whitman-Walker Clinic v. HHS.
What to watch For
The preliminary injunctions from the two federal court decisions prevent the final rule from removing sex stereotyping from the definition of sex discrimination. The New York court is now deciding whether or not to expand its injunction to block other provisions of the rule based on the ruling in Bostock. The injunction originating from the DC court prevents implementation of a provision that would allow for religious exemptions concerning sex discrimination claims. Another federal court in New York is also considering the possibility of vacating the 2020 rule as a whole. The decisions in these and further cases will decide the shape of Section 1557 and carry great implications for what this regulatory space will look like moving forward. However, it is important to note that the 2020 final rule does not change the foundational protections within Section 1557 as enacted by Congress. Courts may continue to recognize claims and award relief based on the statute itself, irrespective of regulatory changes. Lastly, the final rule does not inhibit the ability of states to outlaw healthcare discrimination as several have done.