September 6 Update

Decision Upholding Religious Accommodation On Contraceptive Coverage Prompts Vigorous Dissent

On September 4, 2015, the Seventh Circuit federal court of appeals rejected another challenge to the accommodation offered by the federal government to religious nonprofit organizations that object to the coverage of contraceptives under the Affordable Care Act’s preventive services mandate. The two-to-one decision in Grace Schools v. Burwell reverses a district court decision which had granted the plaintiff religious organizations a preliminary injunction under the Religious Freedom Restoration Act (RFRA).

The majority opinion, written by Judge Ilana Rovner, is unexceptional. It merely follows three earlier Seventh Circuit decisions rejecting RFRA challenges to the contraceptive mandate, which are in turn in accord with decisions by the Second, Third, Fifth, Sixth, Tenth, and D.C. Circuits, as well as interim orders that the Supreme Court has entered in several cases. The court remanded the case to the district court to consider issues additional arguments raised by the plaintiffs.

The most remarkable feature of the decision is the long and vigorous dissent by Judge Daniel Manion, who contends that the majority, and all of the other courts of appeal that have decided the case, are wrong, and that in fact the government fails to meet every requirement of RFRA. RFRA prohibits the federal government from substantially burdening a person’s exercise of religion unless the requirement imposed by the government is the least restrictive means of accomplishing a compelling governmental interest.

Judge Manion argues at length that in fact the contraceptive mandate substantially burdens the plaintiffs’ free exercise of religion. The self-certification required to trigger the accommodation makes the religious organization directly responsible for causing their own insurer or third party administrator to provide the services to which they object, the judge writes. He attacks head-on the Institute of Medicine report on which the contraceptive mandate is based, claiming that it is deeply flawed and in fact does not demonstrate any compelling interest of the federal government in making birth control available without cost sharing. Finally, he claims that the government has a less restrictive means of making contraception available – setting up a federal program to provide contraceptives to employees of religious organizations.

Judge Manion’s opinion is the most extreme challenge yet to the contraceptive mandate. It leaves little doubt as to his own beliefs. He claims, for example, that the government has not shown that “increasing the use of even an effective contraceptive causes fewer unintended pregnancies.” He concludes his discussion of the Institute of Medicine study by stating “The appearance is that the government desires to use contraceptives that ‘require less action by the woman’ to prevent poor, unmarried, minority women from having babies, as if babies were a costly disease.” He misunderstands how the provision of contraceptives by insurers is to be funded, claiming that somehow insurers are compensated through the risk corridor program. But he does raise the full panoply of legal objections that can be raised to the mandate.

The Supreme Court has several certiorari petitions before it from religious organizations challenging the contraceptive mandate. It is by no means certain that the Court will hear these cases, as there is so far no division among the circuit courts of appeal on the issue. But if it does, it is very likely that some or all of Judge Manion’s arguments will appear in one of the Court’s opinions. The question is whether they will appear in the majority opinion or in a dissent.

IRS Releases Form 8965 Instructions

On August 25, 2015, the Internal Revenue Service released instructions for the 2015 form 8965. This form must be filed with a taxpayer’s income tax return if the individual claims an exemption from the individual responsibility requirement, but the instructions also include worksheets for calculating the amount of the shared responsibility payment for individuals who owe it.

The presentation of the instructions is substantially improved from 2014. The text is clearer and much less dense, and more examples are included. New to the instructions this year are a graphic at the beginning illustrating the purpose of the form and an extended flowchart type worksheet at the back for calculating the shared responsibility payment.

The text is rearranged somewhat but little changed, except where it is expanded to offer clearer explanations, such as how births, deaths, and adoptions are handled. The instructions also describe how forms 1095-B and 1095-C (reports of coverage from employers and insurers) are to be used to establish minimum essential coverage. Employers and insurers were not required to provide these forms for 2014. The new instructions also offer additional direction on how to handle gaps in coverage.

A number of transitional exemptions available for 2014 are not available for 2015 and are dropped from the instructions. These include the exemptions for gaps in insurance coverage or CHIP coverage at the beginning of 2014, non-purchase of employer coverage that began in 2013, Americorps coverage, and certain forms of TRICARE coverage. An exemption is added for months that an individual was not covered because the individual was born or adopted after those months or died before those months.

Original Post

On September 3, 2015, the Department of Health and Human Services (HHS) issued a notice of a proposed rulemaking intended to implement section 1557 of the Affordable Care Act (ACA).  The Department also provided a summary of the rule and a set of questions and answers regarding the rule.

Section 1557 of the ACA provides that an individual shall not, on the basis of race, color, national origin, sex, age, or disability, be

  • excluded from participation in,
  • denied the benefits of,
  • or subjected to discrimination under

any health program or activity of which any part receives federal financial assistance, or any program or activity that is administered by an agency of the federal government or any entity established under Title I of the ACA (the private insurance reform and affordability title). The prohibited grounds for discrimination are specified by Title VI of the Civil Rights Act of 1964 (Title VI) (race, color, national origin), Title IX of the Education Amendments of 1972 (Title IX) (sex), the Age Discrimination Act of 1975 (Age Act) (age), and Section 504 of the Rehabilitation Act of 1973 (Section 504) (disability).

Section 1557 has been in effect since 2010 when the ACA became effective. There have already been court decisions and enforcement actions based on section 1557. The Office of Civil Rights (OCR), which is charged with enforcing section 1557, issued a request for information to assist in drafting regulations in 2013 (for which 402 comments were received). But HHS is only now, five years after the ACA was adopted, finally proposing implementing regulations. The requirements of the rule will be effective 60 days after a final rule is issued.

A Broad Proposed Rule

The regulation is sweeping in its coverage and scope. It applies to,

  • all health programs and activities that receive federal financial assistance through HHS, which would include Medicaid, Medicare, and CHIP funds; meaningful use payments; the advance premium tax credits; and many other programs;
  • health programs and activities administered by HHS, including the federally facilitated marketplace (FFM); and
  • health programs and activities administered by entities established under Title I of the ACA, such as state based marketplaces or navigator programs.

Although the proposed rule is broad, however, it is narrower in scope than section 1157, which applies to all health programs or activities receiving federal financial assistance, including programs not funded through HHS. Other federal agencies are encouraged to apply the standards set out in the proposed rule for their own enforcement activities.

Section 1557 applies to over 133,000 (virtually all) hospitals, nursing homes, home health agencies, and similar provider facilities, about 445,000 clinical laboratories, 1,200 community health centers, 171 health-related schools, state Medicaid and CHIP programs, state public health agencies, federally facilitated and state-based marketplaces, at least 180 health insurers that market policies through the FFM and state-based marketplaces, and up to 900,000 physicians. (Although the rule does not apply to physicians who only participate in Medicare Part B, it does cover all physicians who receive Medicaid or meaningful use funding).

Federal financial assistance is defined broadly to include grants, loans, credits, subsidies, and insurance contracts, and to cover not only funds but also services or transfers of real or personal property. Under this definition, health insurers that receive premium tax credits or cost-sharing reduction payments for enrollees receive federal financial assistance, but providers that they pay in turn do not thereby receive assistance (although most of these providers probably receive federal assistance in other forms, such as Medicare or Medicaid).

Health programs or activities are also broadly defined to include the provision of health-related services and insurance coverage and the provision of assistance in securing services or coverage. Federally funded medical research is subject to the antidiscrimination prohibition, but the preface recognizes that nondiscriminatory research protocols may exclude certain populations because of the nature of the research.

Sex, Gender, And Sexual Orientation

The proposed rule applies to virtually all forms of discrimination covered by federal law. It explicitly does not limit any other rights or remedies available under any other federal, state, or local antidiscrimination law. The discrimination laws listed in section 1557 do not cover discrimination based on religion, which is not covered by the proposed rule.

Section 1557 extended to health care the sex discrimination prohibition of Title IX, which previously applied to education. The proposed rule would in particular prohibit discrimination based on gender identity, a form of sex discrimination. Articulating what this prohibition means in the health care context is an important focus of the rule. Sex discrimination also includes discrimination on the basis of pregnancy, false pregnancy, termination of pregnancy or recovery from it, childbirth, or sex stereotyping (including the stereotype that an individual must identify as either male or female).

HHS supports banning discrimination based on sexual orientation, recognized by a recent Equal Employment Opportunity Commission ruling as sex discrimination. The law is not clear as to whether the prohibition against sex discrimination includes discrimination on the basis of sexual orientation, however, and HHS asks for comments on whether it should be prohibited by the rule.

The proposed rule incorporates an exception under the Age Act for age distinctions provided for by benefit or assistance programs created by federal, state, or local governments targeted at particular age groups. HHS asks for comments on whether it should also adopt into the 1557 rule the exceptions found in the Title IX sex discrimination law and regulation for single sex educational institutions or social or youth organizations, which seem to exist because of the education focus of Title IX. HHS further requests comments on whether it should recognize exceptions to discrimination prohibitions to accommodate religious beliefs, beyond the exceptions already included in federal law, such as conscience exceptions to requirements relating to providing abortions and contraceptive services found in the ACA and implementing regulations. The preface notes that most responses to the request for comments urged that HHS recognize no exceptions other than those recognized by Title I of the ACA.

Compliance

Entities subject to section 1557 will under the proposed rule be required to provide assurances that they are complying with the law. HHS is revising it Assurance of Compliance form to include all civil rights laws, including section 1557. The Director of OCR may also require private or state government entities subject to the rule to take remedial action to overcome the effects of discrimination. Entities may take voluntary action to remediate discrimination as well.

Each covered entity with fifteen or more employees must designate an employee responsible for ensuring compliance with section 1557 and adopt procedures to resolve grievances alleging discrimination. Covered entities are not required to train their employees in compliance, but HHS estimates that almost 280,000 entities will train 7.6 million employees at a cost of nearly $400 million.

Covered entities must post notices stating, among other things, that they do not discriminate on the grounds prohibited by 1557. The notices must state that the entity will provide free and in a timely manner appropriate aids and services to persons with disabilities and language assistance services to persons with limited English proficiency, and include information on how to access those services. The notice must identify the responsible employee and describe the availability of grievance services and how to file a complaint with OCR.

Nondiscrimination notices must be posted in conspicuous physical locations where an entity interacts with the public, in its significant public-facing publications and communications, and on its website home page or on a page accessible from a conspicuous location on its homepage. (Entities will be allowed to use up their current stock of hard-copy publications or communications and need only add the notice when they reprint them). The notice must be in English with taglines in the top fifteen languages spoken by limited English proficiency individuals nationally (which includes ninety percent of the limited English proficiency individuals in the United States). Links identifying each of the fifteen non-English languages must appear on the homepage link directing individuals to the full-taglines on the notice page.

OCR will make available the content of a simple notice in each of those fifteen languages, as well as the taglines. HHS encourages entities to post non-English notices in prevalent languages in its service area and asks for comments on whether it should require such posting. HHS also asks for comments on whether entities should be allowed to combine this notice with other notices they are required to offer or to modify it for communication vehicles that may be limited in space like postcards or social media communications. Finally, HHS requests comments on whether the notice should be available in the top fifteen languages in a state or other service area rather than in the entire country.

The proposed regulation includes a general prohibition against discrimination on a prohibited basis—race, color, national origin, sex, age, and disability—followed by a prohibition against specific forms of discrimination, and finally followed by a list of specific exceptions to the prohibition. The specific prohibitions require that covered entities comply with the particular regulations governing each of the specific forms of discrimination covered by the proposed rule. The preface states that HHS considered harmonizing all these requirements, but concluded that this would be confusing, where, for example, disability discrimination rules permit separate or different treatment to benefit persons with disabilities while separate or different treatment is prohibited with respect to race discrimination.

The proposed rule’s discrimination prohibition does not apply to discrimination by a covered entity against its employees except insofar as the prohibition addresses employee health benefit programs (see below). Section 1557 is not a general prohibition against discrimination, but prohibits discrimination in health programs and activities. It also does not apply to distinctions permitted by federal law, such as the 3:1 age rating permitted by the ACA. The proposed regulation does not prohibit singe-sex toilet, locker rooms, or shower facilities as long as comparable facilities are provided regardless of sex, but HHS continues to seek comments as to whether other single sex programs should be permitted, such as women’s health clinics.

In addition to the proposed rule’s general prohibition against discrimination and specific prohibitions based on specific categories of discrimination, it also includes prohibitions against specific areas of discrimination where significant issues have arisen in health programs and activities.

Discrimination Against Persons With Limited English Proficiency

The first of these is discrimination against persons with limited English proficiency. An individual with limited English proficiency is an individual whose primary language for communication is not English and who has limited ability to read, speak, write, or understand English. Twenty-five million individuals in the United States, 8.5 percent of the population, have limited English proficiency. Failing to take reasonable steps to provide meaningful access to language assistance services is a form of national origin discrimination.

HHS has applied and will continue to apply a flexible standard in requiring language access in consideration of the particular facts of a situation. This standard is based on two principles. The first is recognition that safety and quality in health care requires clear communication between patients and providers. Clear provider-patient communication is essential for patient centeredness. The second principle, however, is that the level, type, and manner of language assistance is dependent on the relevant facts, which may include the operations and capacity of the covered entity. Relevant factors to determining the obligation of a provider include the length, complexity, and context of the communication; the prevalence of the language in which an individual communicates among those served by the health program or activity, and the resources available to the covered entity and the cost of language assistance. Under some situations, for example, the entity may satisfy its obligation by providing an oral interpretation of a brochure rather than translating it into another language.

Language assistance must be accurate, timely, and free of charge and protect the privacy and independence of a limited English proficiency individual. Language assistance services can include communication through oral language assistance (including the use of interpreters or multilingual staff) or written translation or taglines, and it includes the use of in-house staff or commercial services. A qualified interpreter must meet competency requirements recognized under the ACA for interpreting for an individual with disability or the HHS LEP guidance for interpreting for individuals with limited English proficiency. Limited English proficiency individuals cannot be required to provide their own interpreters, and the use of accompanying adults to translate except in an emergency or when requested by the patient, or of children except in a life-threatening emergency, is prohibited. Limited English proficiency individuals may also not be required to accept language assistance services.

HHS requests comments on whether it should go beyond its current balancing approach and require qualified interpreter services available by telephone in 150 languages. HHS speculates that most covered entities now have access to remote interpreter services. Marketplaces and qualified health plan insurers are subject to the 150 language requirement.

HHS also considered requiring the provision of free language assistance services unless it would result in an undue burden on or a fundamental alteration in a health program and activity, in which case it could require access through a less burdensome approach. Other alternatives HHS considered included requiring entities to provide a predetermined range of language assistance services that would vary based on the type of provider, or requiring provision of language assistance services to non-English languages spoken by state-wide populations of non-English speakers that met certain threshold numbers, which might vary based on the type of service provided.

Finally, HHS encourages, and is considering requiring, covered entities to engage in advance planning to ensure the availability of language access services when necessary.

Discrimination Against Persons With Disabilities

The proposed regulation also requires effective communications with individuals with disabilities, incorporating longstanding Department of Justice interpretations of the requirements of federal law. The proposed rule incorporates standards under Title II of the Americans with Disabilities Act, which apply to state and local government, rather than the lower standards of Title III, which govern public accommodations.

The proposed rule requires facilities in which health activities are conducted to conform to ADA accessible design standards  if they are constructed or altered by or on behalf of covered entities and construction is commenced on or after eighteen months after the effective date of the final rule. Once access standards are promulgated for medical diagnostic equipment, those will also apply.

Under the proposed rule, covered entities must ensure that their health programs and activities provided through electronic or information technology are accessible to individuals with disabilities unless doing so would impose undue financial or administrative burdens and would result in a fundamental alteration in the nature of the program or activity. Marketplaces, including the FFM, must, for example, ensure that disabled individuals have an equal opportunity to benefit from their websites’ shopping and eligibility determination tools. The requirement applies to all electronic and information technology — including for example kiosks and office equipment — and not just an entity’s website.

HHS is considering the adoption of more specific access standards. Covered entities must also make reasonable modifications in their policies, practices, and procedures when necessary to avoid discrimination on the basis of disability.

Discrimination Against Transgender Persons

As noted above, while most covered entities have been long prohibited from discriminating on the basis of race, disability, or national origin, section 1557 extended to many covered entities for the first time an obligation not to discriminate on the basis of sex, including discrimination on the basis of gender identity. Individuals must treat transgender individuals consistently with their own gender identity. An individual has a transgender identity if the individual’s identity is different from the sex assigned to the individual at birth.

The only exception to the gender identity nondiscrimination requirement is that if a health service is ordinarily and exclusively available to an individual of a particular gender, that service must be provided to an individual with a different gender identity if the service is necessary or appropriate. For example, a covered entity cannot deny treatment for ovarian cancer for a transgender male who would benefit from the treatment.

Discrimination By Insurers

A specific section of the proposed rule applies to discrimination in the provision of health insurance and related coverage. Under this provision, an insurer that participates in a marketplace by offering a qualified health plan cannot discriminate in its marketplace business, in its individual market business outside the marketplace, in the group market, or even when it serves as a third-party administrator for a self-insured group plan. Although the proposed rule does not say so, the same rule should apply to insurers that offer Medicare Advantage, Medicaid managed care, or CHIP plans.

The prohibition extends to denying, cancelling, limiting, or refusing to issue or renew health-related coverage because an enrollee belongs to a protected category, or the use of marketing or benefit designs that discriminate on these bases. Surprisingly, the proposed rule does not directly address one of the most salient current discrimination questions: whether insurers can impose high cost sharing or otherwise limit access to expensive drugs needed by certain disabled populations, like persons with AIDS.

The proposed rule does not require the coverage of any particular services, but a covered entity cannot have a discriminatory coverage policy. As noted above, insurers are specifically prohibited from denying coverage for services that are medically appropriate on the basis of the gender identity of a transgender individual — for example, denying a pelvic exam to a transgender man. Covered entities are not required to provide any particular services, but may not have blanket exclusions against gender transition-related services. Insurers are also prohibited from denying coverage for a service related to gender transition where the service would be available for other indications — such as a hysterectomy where medically necessary to treat gender dysphoria. HHS estimates that the cost of extending coverage for transgender services will be negligible.

Discrimination In Employee Health Benefit Programs

Under the proposed rule, covered entities that are principally or primarily engaged in providing or administering health services or health insurance coverage may not discriminate in the operation of their employee health benefit programs. The nondiscrimination provision also applies to employers that receive federal financial assistance to fund their employee health benefit programs and health service or coverage operations of employers that are not primarily engaged in health care. An employer that otherwise receives federal financial assistance does not become subject to the rule simply because it offers employee health benefits if it is not otherwise involved in providing health services or insurance.

Employee health benefit programs include insured and self-insured plans, employer provided or sponsored wellness programs, employer-provided health clinics, and long-term care coverage provided or administered by an employer, group health plan, third party administrator, or health insurer. The reference to wellness programs may add fuel to the simmering debate over when wellness programs are impermissibly discriminatory.

Finally, the proposed rule prohibits discrimination based on association with a person in a protected class. A physician may not, for example, refuse to see a patient because of the race or sexual identity of the individual’s family member or because the patient is accompanied by a family member who requires sign-language interpretation.

Enforcement

Under the proposed rule, section 1557 would be enforced under the enforcement provisions provided under each of the laws it incorporates. Existing enforcement mechanisms include requiring covered entities to keep records and submit compliance reports to OCR, and they empower OCR to conduct compliance reviews and complaint investigations and provide technical assistance and guidance. Where noncompliance cannot be corrected by informal means, the enforcement mechanisms available include suspension of, termination of, or refusal to grant or continue federal financial assistance and referral to the Department of Justice with a recommendation to bring proceedings. Title VI procedures would apply for enforcement actions concerning discrimination based on race, color national origin, sex, and disability, and the Age Act procedures would provide for age discrimination.

Individuals may sue directly under section 1557 in federal court. One issue not squarely addressed by the regulation is whether section 1557 in such cases applies uniform standards of evidence, burden of proof, or causation regardless of the cause of discrimination, or whether section 1557 lawsuits incorporate the particular standards applicable under the bodies of law governing each of the forms of discrimination it prohibits. Does an aggrieved individual, for example, have to prove intentional discrimination on the basis of race? The issue of whether section 1557 applies uniform standards or not has divided the courts and should be addressed more clearly by the rule.

Finally, the proposed rule authorizes provides for enforcement within HHS, authorizing OCR to access information to investigate complaints regarding HHS activity and prohibiting retaliation against individuals who complain or participate in an investigation under section 1557.