DHHS Issues its Final Rule on Nondiscrimination for Health Care and
Insurance Organizations
The Department of Health and Human Services recently issued its final rule on
nondiscrimination (“Final Rule”), implementing Section 1557 of the Affordable Care Act.
Compliance with the Final Rule is an important consideration for every organization subject to
its provisions in the health care and health insurance industries.
Section 1557 prohibits discrimination on the basis of race, color, national origin, sex, age,
or disability in a wide range of health programs and activities. The Final Rule provides important
guidance on the specifics of that prohibition, including provisions related to sex discrimination
and the requirements for foreign language assistance and assistance for individuals with
disabilities.
Most provisions of the Final Rule are effective as of July 18, 2016. However, some
provisions requiring changes to health insurance or group health plan benefit design become
applicable on the first day of the first plan year beginning on or after January 1, 2017. The Final
Rule is wide in scope and detail, but the following is a summary of its most notable provisions
and requirements.
Entities Subject to the Final Rule
The Final Rule applies broadly to "Covered Entities"—any entity that provides (1) any
health program or activity, any part of which is receiving Federal financial assistance (including
tax credits under the ACA) provided or made available by HHS, or (2) any health program or
activity that is administered by HHS or any entity established under Title I of the ACA. The term
"health program or activity" includes all operations of an entity principally engaged in providing
or administering health services or health insurance coverage. Effectively, the entities covered by
the Final Rule include hospitals, health clinics, nursing homes, home health care agencies,
health insurance issuers, and state Medicaid agencies, among others.
Provisions of the Final Rule
Individuals with Limited English Proficiency
Covered Entities must:
• Take reasonable steps to provide access to individuals with limited English proficiency,
including, for example, providing free language assistance services. HHS encourages
implementation of an effective written language access plan for satisfying this obligation.
• Post taglines (in at least the top 15 languages spoken by individuals with limited English
proficiency in the State) directing individuals to language assistance services. OCR has
translated sample notices and taglines in a number of different languages, which are
available on its website.
Individuals with Disabilities
Covered Entities must:
• Take appropriate steps to ensure that communications with individuals with disabilities
are as effective as communications with others.
• Provide appropriate auxiliary aids and services to individuals with disabilities.
• Ensure that all health programs or activities provided electronically are accessible to
individuals with disabilities, unless doing so would result in undue financial and
administrative burdens or a fundamental alteration in the nature of the health programs
or activities.
• Newly constructed or altered facilities must comply with federal accessibility standards.
Sex Discrimination and Gender Identity
Covered Entities:
• May only operate a sex-specific health program or activity if there is an "exceedingly
persuasive justification," meaning that the health program or activity must be
substantially related to the achievement of an important health-related or scientific
objective.
• Must provide equal access to facilities, health programs and activities without
discrimination on the basis of sex, which includes on the basis of pregnancy, gender
identity, and sex stereotyping.
• May not implement blanket exclusions or limitations on health services related to gender
transition or gender identity.
• Must treat individuals consistent with their gender identity. However, a Covered Entity
may not deny health services that are ordinarily or exclusively available to individuals of
one gender, on the basis that the individual seeking the services identifies as another
gender.
Health Insurance and Other Health-Related Coverage
Covered Entities are prohibited from discriminating on the basis of race, color, national origin,
sex, age, or disability in any of the following activities:
• Denying, cancelling, limiting, or refusing to issue or renew health insurance coverage
• Denying or limiting coverage of a claim
• Imposing cost sharing or other limitations on coverage
• Having or implementing marketing practices or benefit designs
Covered Entities must also comply with certain notice requirements, and those with 15 or more
employees must designate a compliance coordinator and have a grievance procedure in place.
The Rule contains a sample grievance procedure in Appendix C, for reference.
For additional information on how the Final Rule may impact your organization and for guidance
through its regulatory demands, please contact an experienced member of Cline Williams’ Health
Care Section:
David R. Buntain
Scott D. Kelly
John C. Hewitt
Sean D. White
Mark A. Christensen
Susan K. Sapp
Michael C. Pallesen
Jonathan J. Papik
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Andrew D. Strotman
Jill G. Jensen
Jason R. Yungtum