Final HHS Regulations Extend Nondiscrimination Rules to Many Plans
Earlier this year, the Department of Health and Human Services (HHS) finalized regulations implementing the Affordable Care Act’s Section 1557. The provision prohibits discrimination in certain “health programs and activities” on the basis of race, color, national origin, sex, age or disability. It applies broadly to a wide variety of federally assisted entities, though these final regulations apply only to health programs and activities funded or administered by the HHS.
Notably, however, this applicability draws in federal and state Health Insurance Marketplaces — including Small Business Health Options Programs (SHOPs) and the insurers that participate in them. The final regulations confirm that the rules generally apply to Health Insurance Marketplace insurers even with respect to the plans and services they offer outside the Marketplaces or, in some instances, as third-party administrators (TPAs) for employer group health plans.
The rules also apply to employee health benefits of certain employers that receive federal financial assistance and are principally engaged in health care. So this is particularly important news for hospitals, nursing homes and other such facilities.
The regulations prohibit Health Insurance Marketplace insurers from discriminating on any of the prohibited bases by:
- Denying, canceling, limiting or refusing to issue or renew policies,
- Using discriminatory benefit designs,
- Denying or limiting coverage of a claim, or
- Imposing additional cost-sharing or other coverage limitations.
Among other things, the final rules explain that sex discrimination includes discrimination on the basis of gender identity. They clarify that Marketplace insurers may not deny or limit coverage for health services that are ordinarily or exclusively available to individuals of one gender because an individual’s sex assigned at birth, gender identity or if recorded gender is different from the one to which the services are ordinarily or exclusively available. (For example, a covered insurer that generally provides coverage for pelvic exams may not deny coverage to an individual who identifies as a transgender man or is enrolled in the health plan as a man.) In addition, categorical coverage exclusions or limitations for health services related to gender transition are per se discriminatory.
The final regs also require Health Insurance Marketplace insurers to provide individuals with notice of their rights — in “significant publications” and “significant communications” (among other places) — with taglines alerting individuals with limited English proficiency to the availability of language-assistance services. Sample notices are available on the HHS website.
The final regulations make clear that an employer doesn’t become covered by the rules just because its self-insured health plan’s TPA is covered. However, recognizing that TPAs generally don’t control the design of the self-insured health plans they administer, the HHS explains that it will process a complaint against a TPA only where the alleged discrimination is related to the TPA’s own administration of the plan.
If the alleged discrimination relates to the benefit design of the plan, the HHS will instead proceed against the employer/decision-maker if it has jurisdiction over the employer — for example, a hospital covered under the rules. Where the HHS lacks jurisdiction, it may refer the matter to the Equal Employment Opportunity Commission.
The final regulations are generally effective July 18, 2016, but additional compliance time is allowed for required design changes to health coverage, for which the applicability date is the first day of the first plan or policy year beginning on or after January 1, 2017.
The rules may have a wide-ranging impact on group health plan design and TPA services provided to employers by Health Insurance Marketplace insurers. If you believe they may impact your organization, be sure to discuss the specifics with your insurer, TPA and benefits advisor.
If you have questions about these HHS regulations, please contact Ron Present, Partner and Health Care Industry Group Leader, at firstname.lastname@example.org or 314.983.1358.