ACA Section 1557 Final Regulations

Section 1557 of the Affordable Care Act (ACA) prohibits discrimination on the basis of race, color, national origin, sex, age, or disability, or any combination thereof, in a health care program or activity of which any part receives federal financial assistance.

On May 6, 2024, the U.S. Department of Health and Human Services Office for Civil Rights (OCR) and the Centers for Medicare and Medicaid Services published final regulations (final regulations) implementing Section 1557 (our summary and overview of the final regulations is available here.) Entities Subject to Section 1557 (covered entities) include hospitals, health clinics, health insurance issuers, state Medicaid agencies, and community health centers. Although group health plans are not themselves covered entities unless they receive federal financial assistance (e.g.some Medicare Part D programs and employer group layoff plans), carriers that provide administrative services to group health plans may themselves be covered entities if they receive federal financial assistance (e.g.selling Medicare Advantage products).

Reversing existing law, the final regulations expressly prohibit categorical exclusions or limitations on the scope of health services related to gender reassignment or other gender-affirming care. OCR finds support for this change in a 2013 U.S. Supreme Court ruling Bostock v. Clayton County, which stated that Title VII of the Equal Employment Opportunity Act prohibits an employer from discriminating against a person on the basis of sexual orientation. However, prohibiting categorical exclusions from coverage is not the same as requiring covered entities to provide access to gender-affirming care in all circumstances. There are limitations; Covered entities are prohibited from:

(D) deny or limit services based on gender identity or sex assigned at birth, or adopt any policy of disparate treatment of persons on the basis of sex, including to the extent it prevents an individual from participating in a health program or activity consistent with his or her gender identity or deny or limit services sought for gender reassignment or other gender-affirming care based on sex assigned at birth or gender identity.

This provision would outright ban both gender-affirming care itself and specific gender-affirming procedures (such as facial feminization surgery). However, it would also prohibit plans or carriers that qualify as covered entities from covering breast reconstruction to treat cancer or the use of hormones to treat postmenopausal symptoms without also covering those procedures to treat gender dysphoria.

The final regulations do not interfere with individualized clinical assessment regarding the proper course of patient care. (The preamble goes on to state that OCR has a general practice of deferring to a clinician’s judgment as to whether a service is medically appropriate for an individual or whether the clinician has the appropriate expertise to provide care.) A provider’s belief that gender reassignment or other gender-affirming care can never be beneficial, or its compliance with state or local law that reflects a similar assessment, is not a sufficient basis for a determination that the health service is inappropriate Never however, clinically appropriate.

Final provisions of Art. 1557 of 2016 were successfully challenged Franciscan Alliance v. Burwell (ND Tex. 2016), which stated that contained in Art. 1557, the reference to Title IX includes the religious exemption contained in that Act. While OCR disagrees with this finding, the final regulations provide an exception for any part of the rule that would “violate applicable federal protections of religious freedom and conscience.” There is also an administrative procedure under which recipients can obtain written assurance of exemption from the application of the provisions of Art. 1557 under this exception.

It is less clear how the final regulation will interact with two dozen state laws that, among other things, limit access to gender-affirming care for children and adolescents. The preamble to the final rule acknowledges that “some States may have laws ( ) that are contrary to the protections against discrimination contained in the final rule.” OCR believes that the ACA repeals these provisions. (The ACA states that “nothing in this title shall be construed to preclude a state law that does not prevent the application of the provisions of this title,” meaning that states may adopt protections that go beyond the requirements of the ACA but may not prevent implementation federal law.) One or more challenges to the provisions of the final regulations governing gender-affirming care are almost certain.