Nondiscrimination Rule Expands Administrative Practices, Notice/Language Requirements and Transgender Coverage for Certain Plans
On May 18, 2016, the Office for Civil Rights (OCR) of the Department of Health and Human Services (HHS) published its final regulation on Nondiscrimination in Health Programs and Activities, which implements section 1557 of the Affordable Care Act (ACA). A copy of the regulation is at this link and OCR's summary of the regulation is at this link. On July 20, 2016, HHS has published a presenter's guide and training slides for covered entities available at this link. This Alert summarizes key provisions affecting employers and plan sponsors.
Action Needed Now: Employers and plan sponsors should determine whether they are subject to the regulation. If so, many requirements are already effective. However, they have until October 16, 2016, (90 days after the July 18, 2016, effective date) to comply with the notice requirements and until the first plan year beginning on or after January 1, 2017 to make coverage changes to health insurance or group health plan benefit design. The effective dates are discussed below.
Affected Covered Entities: From a plan sponsor perspective, the covered entities affected by the rule fall into three categories:
- Group Health Plans (including multiemployer, public sector, and single employer plans regardless of whether fully insured or self-insured) that receive Federal financial assistance from HHS. Generally this will be if they receive Medicare Retiree Drug Subsidies or directly contract with Medicare to receive Employer Group Waiver Plan (EGWP) subsidies. (Check with plan counsel regarding whether your EGWP arrangement requires your plan to comply.)
- Health Care Employers that receive Federal financial assistance; for example, a hospital system that receives payments from Medicare. Such an employer will need to comply with the rule not only for its health care services (for example, a hospital must provide language assistance for its patients), but also with regard to the health coverage offered to its employees.
- Insurers. An insurer participating in the Marketplace (Exchanges) or otherwise receiving Federal financial assistance is covered by the regulation for all of its health plans. Employers and plan sponsors can expect that, beginning in 2017, insurers will be including coverage for transgender benefits with insured products. Employers and plan sponsors should also expect that insurers (as well as third party administrators, where applicable) will be following the administrative and notice practices described below.
CHEIRON OBSERVATION: The determination of what is a covered entity can turn on a few facts. An employer that contributes to a multiemployer plan does not appear to be a covered entity merely because the plan is a covered entity. Plan counsel should be contacted for confirmation of these points or if there is a question of whether an entity is a covered entity under the regulation.
- July 18, 2016 for administrative practices (and anything not specifically subject to the two dates that follow)
- October 16, 2016 for notice requirements
- The first day of the first policy year or plan year beginning on or after January 1, 2017 for provisions that require changes to health insurance or group health plan benefit design (including covered benefits, benefits limitations or restrictions, and cost-sharing mechanisms, such as coinsurance, copayments, and deductibles)
Building upon prior Federal civil rights and nondiscrimination laws, section 1557 of the ACA prohibits discrimination on the basis of race, color, national origin, sex, age, or disability in certain health programs and activities. Section 1557 applies to covered entities that receive Federal financial assistance.
HHS broadly applies this nondiscrimination requirement to all of the coverage and services of issuers that receive Federal financial assistance in which HHS plays a role in providing, whether those issuers' coverage is offered through the Marketplace, outside the Marketplace, in the individual or group health insurance markets, or as an employee health benefit program through an employer sponsored group health plan.
Overview of Key Provisions of the Final Rule
- Affected covered entities that employ 15 or more persons are required to a) designate an employee to serve as a compliance coordinator and b) adopt a grievance procedure that affords due process standards and provides for the prompt and equitable resolution of grievances alleging actions prohibited under the final rule. HHS has stated that an existing grievance procedure for disability claims could be used under this regulation as well, and Appendix C to the final rule contains a model grievance procedure for covered entities.
- The regulation prohibits the denial of health care or health coverage based on an individual's sex (including discrimination based on pregnancy), gender identity, and sex stereotyping, color, or national origin. Examples of prohibited practices include
- Denying a transgender male a pap smear
- Denying a transgender female a prostate exam
- Not covering treatment for domestic abuse simply because a participant is male
- Affected covered entities must offer language assistance timely and free of charge, to include a qualified interpreter and written translations as appropriate to provide an individual with meaningful access to health care services and coverage.
- Sex-specific health programs or activities are not allowed unless the covered entity can demonstrate an exceedingly persuasive justification, i.e., that the sex-specific program is substantially related to the achievement of an important health-related or scientific objective. For example, HHS has indicated that a breast cancer program cannot refuse to treat men with breast cancer solely because its female patients would feel uncomfortable.
- For individuals with disabilities, covered entities are required to make all programs and activities provided through electronic and information technology accessible to the extent it does not result in undue financial and administrative burdens or a fundamental alteration in the nature of the health programs or activities. Also, covered entities must ensure the physical accessibility of newly constructed or altered facilities and provide appropriate auxiliary aids and services for individuals with disabilities. Examples include:
- Qualified sign language interpreters
- Large Print materials
- Text telephones (TTYs)
- Screen reader software
- Video remote interpreting services
- Affected covered entities must post notices for beneficiaries, enrollees, applicants, and members of the public that it does not discriminate in its health programs and activities and that it provides appropriate auxiliary aids and language assistance services free of charge and in a timely manner (including how to obtain such services). Additionally, the notice must contain contact information and inform about the entity's grievance procedure, including how to file a complaint. The regulation provides a sample notice in Appendix A, and HHS has provided translated nondiscrimination language here.
- Covered entities must post taglines (which are short statements that indicate the availability of language assistance services free of charge) in the top 15 non-English languages spoken in the state or states in which the entity is located or does business. HHS has provided sample language in Appendix B. HHS has provided a list of the top 15 languages by state here and provided the translated taglines here.
- For small-sized publications or communications, such as postcards and tri-fold brochures, taglines in at least the top two (instead of the top 15) non-English languages spoken in the state or states, along with the nondiscrimination statement.
- Notices and taglines must be posted:
- At physical locations where the covered entity interacts with the public (such as in an emergency room or physician's waiting room)
- On the entity's website
- In significant publications and communications
CHEIRON OBSERVATION: Multiemployer plans and employers who have employees in multiple states may have the added burden of producing communications that cover more than 15 languages (or more than two languages in the case of taglines) if the top 15 (or the top two) differ from state to state.
Plan Design Changes
- For affected covered entities, this regulation prohibits the blanket exclusion of medically-necessary transgender treatments.
- Other plan design changes may be required if any provisions could be deemed health care or health coverage based on an individual's sex (including discrimination based on pregnancy), gender identity, and sex stereotyping, color, national origin, or disability. An example could be a wellness program where a certain category of disabled participants do not have similar opportunities to comply as the rest of the population.
Cheiron consultants can assist with your compliance under the final rule and section 1557, as well as any related plan design changes for your 2017 plan year.
Cheiron is an actuarial consulting firm that provides actuarial and consulting advice. However, we are neither attorneys nor accountants. Accordingly, we do not provide legal services or tax advice.