CMS Narrows ACA Nondiscrimination Rules

On June 19, 2020, the U.S. Department of Health and Human Service’s (HHS) Centers for Medicare and Medicaid Services (CMS) published proposed final rules in the Federal Register that narrow or eliminate a number of nondiscrimination requirements under Section 1557 of the Affordable Care Act (ACA).

Under Section 1557, certain healthcare insurers, providers, and benefit plans are prohibited from discriminating against individuals because of race, color, national origin, sex, age, or disability. The CMS first issued proposed regulations to reduce some of the most significant nondiscrimination requirements in prior regulations in June 2019 and the proposed final rules make no significant changes to those proposed by CMS one year ago.

Under the finalized rules, Section 1557 regulations will:

  • No longer include prohibitions on discrimination based on sexual orientation or gender identity, or define “discrimination on the basis of sex” to include such categories;
  • Eliminate the requirement for certain health insurers and plans to cover gender reassignment surgery;
  • Eliminate specific grievance procedures for complaints of discrimination under Section 1557;
  • Eliminate the 2016 Rule’s mandate that required health companies to distribute nondiscrimination notices and “taglines” translation notices in at least 15 languages within all “significant communications” to patients and customers; 
  • Return to the longstanding enforcement structure for each civil rights statute identified in Section 1557 (Title VI, Title IX, Section 504 of the Rehabilitation Act of 1973, and the Age Discrimination Act of 1975), and remove portions of the 2016 Rule that are duplicative of, or inconsistent with, longstanding civil rights regulations;
  • Eliminate provisions recognizing the right of individuals or entities to file federal lawsuits challenging alleged violations of Section 1557; and
  • Eliminate the requirement that covered entities appoint a compliance director.

In addition, the final rules state that Section 1557 nondiscrimination requirements will only apply to (1) health insurers whose programs or activities receive financial assistance from HHS and (2) to HHS programs and activities only if they are provided under Title I of the ACA.

The final rules took effect on August 18, 2020.

Having the Hall Benefits Law team of ERISA attorneys on your side means having someone you can depend on for clarification of newly enacted rules and regulations. Call our team today at 678-439-6236.

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Hall Benefits Law, LLC

HBL offers employers comprehensive legal guidance on benefits in mergers and acquisitions, Employee Stock Ownership Plans (ESOPs), executive compensation, health and welfare benefits, healthcare reform, and retirement plans. We counsel a wide spectrum of clients including small, mid-sized, and large companies, 401(k) investment advisors, health insurance brokers, accountants, attorneys, and HR consultants, just to name a few. HBL is passionate about advising clients, and we are dedicated to our mission: to provide comprehensive, personalized, and practical ERISA and benefits legal solutions that exceed client expectations.

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