Labor & Employment Law Daily ACA non-discrimination rule revisions finalized; how will SCOTUS ‘because of sex’ interpretation play out?
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Thursday, June 18, 2020

ACA non-discrimination rule revisions finalized; how will SCOTUS ‘because of sex’ interpretation play out?

By Cathleen Calhoun, J.D. and Pamela Wolf, J.D.

While the HHS final rule limits non-discrimination on the basis of “sex” to protect only biological sex, the Supreme Court just interpreted similar language in Title VII to include protection extending to gay and transgender individuals.

HHS has finalized a number of revisions that update the current regulations on non-discrimination under Section 1557 of the Affordable Care Act (ACA). In an advance release of a final rule scheduled to publish June 19, 2020, HHS removed provisions issued under Sec. 1557 of the ACA that it says are “inconsistent or redundant” with pre-existing civil rights statutes prohibiting discrimination on the basis of race, color, national origin, sex, age, and disability. Language redundancies are also eliminated, as well as burdensome and costly paperwork requirements, according to HHS.

But HHS’ interpretation of discrimination on the basis of sex is at odds with a new Supreme Court opinion interpreting similar language more broadly in the employment context.

ACA and Title IX. Under Sec. 1557 of the ACA, covered health programs are not allowed to discriminate on any of the grounds protected by federal civil rights statutes. One of those federal statutes is Title IX of the Education Amendments of 1972 (Title IX) prohibiting discrimination on the basis of sex in certain federally funded programs. In 2016, a regulation implementing Sec. 1557 redefined sex discrimination to include termination of pregnancy and gender identity, which was defined as “one’s internal sense of gender, which may be male, female, neither, or a combination of male and female.”

The provisions have not been able to be enforced since federal courts have preliminarily enjoined, on a nationwide basis, the redefinition of sex discrimination in the 2016 rule, finding that the provisions were likely contrary to applicable civil rights law, or the Religious Freedom Restoration Act, or the Administrative Procedure Act.

Revisions. The rule goes back to the prior government interpretation of sex discrimination as male or female or as determined by biology. The rule keeps protections from the 2016 rule that ensure physical access for individuals with disabilities to healthcare facilities and appropriate communication technology to assist persons who are visually or hearing-impaired.

The final rule also retains certain protections from 2016 rule for non-English speakers. The requirement that regulated entities must send patients and customers “notice and taglines” inserts in 15 or more foreign languages in almost every health care mailing is eliminated. Those removed requirements are projected to save billions in costs to providers, according to HHS.

Supreme Court and Title VII. Notably, on June 15, after HHS released its advance notice of the final rule revising its Section 1557 regulations, the Supreme Court interpreted similar language in Title VII that prohibits discrimination in employment because of sex, to extend to gay and transgender individuals (see Firing an employee merely for being gay or transgender violates Title VII, June 15, 2020). As a result, the High Court’s ruling in Bostock v. Clayton County, Georgia, appears to be at odds with the HHS final rule.

Whether, or the extent to which, the Trump Administration will try to harmonize these differing interpretations is unknown at this time. The final rule is effective 60 days after its publication in the Federal Register.

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