Jared M. Bruce

HHS Proposes New Rule to Revise Section 1557 and Repeal Notice Requirements

June 4, 2019Legal Alerts

On May 24, 2019, the U.S. Department of Health and Human Services (HHS) proposed revisions to regulations issued under Section 1557 of the Affordable Care Act (ACA) (the Proposed Rule). The Proposed Rule would revise certain provisions of the current Section 1557 rule that federal courts have ruled as likely unlawful, and eliminate the requirement that covered entities publish non-discrimination notices and include taglines in foreign languages on all significant publications. According to HHS, by eliminating the tagline requirement, the Proposed Rule would save the health care industry billions in unnecessary regulatory costs over five years.

Through Section 1557 of the ACA, Congress directed HHS to apply existing civil rights laws and regulations to health care and the ACA Exchanges, including a 1972 law (Title IX) prohibiting discrimination on the basis of sex in certain federally funded programs. In 2016, HHS issued a new rule that redefined discrimination “on the basis of sex” to include termination of pregnancy and gender identity, which it defined as one’s internal sense of being “male, female, neither, or a combination of male and female” (the 2016 Rule). The 2016 Rule also required covered entities provide taglines to beneficiaries and enrollees regarding non-discrimination and the availability of free language assistance services. The 2016 Rule required taglines be written in “at least the top 15 languages” spoken by limited English proficiency (LEP) individuals in the relevant state.  The 2016 Rule requires notices of nondiscrimination and taglines be appended to all “significant” publications and communications (bigger than a postcard or brochure) sent by covered entities to beneficiaries, enrollees, applicants, or members of the public.

Subsequently, several states and health care entities filed federal lawsuits against HHS challenging the 2016 Rule. On December 31, 2016, the U.S. District Court for the Northern District of Texas issued an opinion in Franciscan Alliance, Inc. et al. v. Burwell, preliminarily enjoining HHS’s attempt to prohibit discrimination on the basis of gender identity and termination of pregnancy as sex discrimination in the Section 1557 regulation. This federal court concluded the provisions are likely contrary to applicable civil rights law, the Religious Freedom Restoration Act, and the Administrative Procedure Act. The preliminary injunction applies on a nationwide basis. A separate federal court in North Dakota agreed with the reasoning of the Franciscan Alliance decision and stayed the rule’s effect on the plaintiffs before it. HHS has taken the position that due to the preliminary injunction, HHS cannot enforce the original rule’s provision. According to HHS, the Proposed Rule would revise those provisions that have been enjoined to conform to these court decisions.

Under the Proposed Rule, HHS intends to enforce all applicable existing laws and regulations that prohibit discrimination on the basis of race, color, national origin, disability, age, and sex based on HHS’s longstanding underlying civil rights regulations. Moreover, the Proposed Rule retains protections from the 2016 Rule that ensure physical access for individuals with disabilities to health care facilities and appropriate communication technology to assist persons who are visually or hearing-impaired. HHS proposes to retain the 2016 Rule’s requirements for foreign language translators and interpreters for non-English speakers and its limitations on the use of minors and family members as translators or interpreters. HHS also proposes to include standards from longstanding LEP guidance in the regulation to ensure meaningful access to health programs and activities for LEP individuals and flexibility in meeting such obligation. Under the Proposed Rule, regulated entities would still be required to submit to HHS a binding assurance of compliance with Section 1557.

Under the Proposed Rule, HHS plans to revise the provisions enjoined in federal court such as “gender identity” and “termination of pregnancy” and use the plain meaning of the words when they were written into law by Congress.  The Proposed Rule would not create a new definition of discrimination “on the basis of sex.” Instead, HHS would enforce Section 1557 by returning to the government's longstanding interpretation of “sex” under the ordinary meaning of the word Congress used.

The Proposed Rule would completely eliminate the 2016 Rule’s requirement that regulated health companies distribute non-discrimination notices and “tagline” translation notices in at least 15 languages in “significant communications” to patients and customers.  As a result, covered entities would no longer be required to post information about Section 1557 or include taglines. According to HHS, these notices have cost the health care industry billions of dollars (HHS also claims the cost is ultimately passed on to consumers and patients) and data does not show the notices have yielded the intended benefit for individuals with limited English proficiency. HHS projections suggest that by eliminating this burden, the health care industry will save $3.6 billion over the next five years.

HHS proposes to revise the 2016 Rule’s interpretation of Section 1557 as applying to all operations of an entity, even if it is not principally engaged in health care. The Proposed Rule would, instead, apply Section 1557 to the health care activities of entities not principally engaged in health care only to the extent they are funded by HHS. For example, the Proposed Rule would generally not apply to short-term limited duration insurance, because providers of those plans are not principally engaged in the business of health care, and those specific plans do not receive federal financial assistance.

The Proposed Rule was published in the Federal Register on May 24, 2019, and public comments are due 60 days later. The Proposed Rule can be found here, and the HHS Factsheet summarizing the Proposed Rule is available here.

If you have questions regarding Section 1557 compliance or would like to submit comments regarding the Proposed Rule, please contact your Dinsmore health care attorney.