What is Section 1557 of the ACA?

The Affordable Care Act (ACA) is a landmark piece of legislation that transformed the healthcare landscape. Among its many provisions, Section 1557 stands out as a critical component. It ensures that healthcare providers, plans, and programs that receive federal financial assistance treat individuals fairly and without discrimination. Yet, despite number of individuals and entities it applies to, many people are unaware of what this rule entails and how it affects them.

In this article, we'll explain what Section 1557 is, who's covered under its protections, and how it impacts the practices of health care providers.

In this blog post, you'll learn the following:

• How Section 1557 protects individuals from discrimination in health care.
• What groups receive federal protections under Section 1557.
• The recent updates to Section 1557 made by the Biden Administration.

What is the ACA?

Former President Barack Obama signed the ACA into law in March 2010. The ACA aims to make health insurance more accessible, improve care quality, and lower healthcare costs in the U.S.

The ACA:

• Set up health insurance marketplaces for individual and small group health insurance.
• Required people to get health insurance or pay fines (Congress has since repealed the penalties).
• Stopped health insurers from denying coverage for pre-existing conditions.
• Made Medicaid services available to more low-income people and families.
• Requires organizations with 50 or more full-time equivalent employees (FTEs) to offer health insurance to at least 95% of full-time employees. This is known as the employer mandate.

What is Section 1557 of the ACA?

Section 1557 of the ACA ensures everyone gets equal access to healthcare, working to fix gaps in healthcare services for marginalized groups. It applies to health programs with federal funding and those set up by the ACA. The law ensures protection against discrimination by insurers and providers. Section 1557 plays an important role in promoting health equity and safeguarding the rights of patients.

Section 1557 provides protections from discrimination on the:

• Basis of race
• Basis of color
• Basis of age
• Basis of sex
• Basis of disability
• Basis of national origin¹

The provision also applies similar requirements to health insurance issuers that receive federal funding and to the health insurance marketplaces.

Key dates in the development of Section 1557 of the ACA

The ACA has sparked debates on healthcare reform. So far, three presidential administrations have made modifications to it.

The chart below highlights important moments in the ACA's history².

Recent updates to Section 1557 of the ACA

On April 27, 2024, the Biden Administration finalized new rules for Section 1557 of the ACA. One of the key changes in the 2024 rule includes protections for LGBTQ+ individuals.

The earlier version of the Section 1557 rule finalized in 2020 removed protections against discrimination regarding gender identity, sex stereotyping, or sexual orientation, which court decisions had added. This made it harder for LGBTQ+ people to find relief from healthcare discrimination related to these factors.

A 2024 KFF⁶ survey found that 33% of LGBTQ+ adults who sought health care in the last three years reported experiencing unfair treatment or disrespect from a doctor or healthcare provider. This is twice the rate reported by non-LGBTQ+ adults.

The new rule prohibits those forms of discrimination and improves access to medical care for LGBTQ+ individuals.

Here's how the Biden Administration modified Section 1557⁷:

• It clarified protections.
  • The updated nondiscrimination policy enhances protections in healthcare, prohibiting discrimination based on age, race, color, national origin, and sex. The basis of sex includes sexual orientation and gender identity. It also provides additional protection to people with disabilities.
• It extended protections to more people.
  • The new rule expands Section 1557's non-discrimination protections to more people and requires more covered health programs to comply.
  • It states that discrimination based on sexual orientation or gender identity isn't allowed. It's seen as discrimination based on sex following the 2020 U.S. Supreme Court decision in Bostock v. Clayton County.
  • It also prevents discrimination regarding pregnancy-related conditions, including pregnancy termination.
• It considered new technology.
  • The 2024 final rule expands Section 1557's non-discrimination requirements to cover telehealth and decision support tools used in patient care. This includes algorithms, machine learning, and artificial intelligence (AI) that assist in clinical and coverage decisions.
• It expanded covered entities.
  • Covered entities are those that must comply with nondiscrimination policies, which include any “health program or activity” that receives federal financial assistance or is managed by the U.S. Department of Health and Human Services (HHS).
  • This covers Medicare (including Medicare Part B, which wasn't previously mandated to comply) and state Medicaid programs. It also includes most hospitals, health clinics, health agencies, and medical providers. Additionally, various health plans, including Marketplace plans and other products offered by health insurers that provide Marketplace plans are included under the new rule.

The effective date for the final rule was July 5, 2024. Some parts of the rule, like changes to health plan benefits, came later. However, recent legal actions have kept some parts of the new rules from taking effect.

Recent court challenges to Section 1557

According to HHS, there have been three court cases that have prevented or blocked certain aspects of the final rules from going into effect.

Here are the recent legal challenges⁸ to Section 1557:

• In the Texas v. Becerra⁹ case, the court issued a nationwide stay on various Section 1557 regulations. As a result, Texas temporarily stopped healthcare providers that receive federal funding from being obligated to follow these non-discrimination rules related to gender identity and sexual orientation.
• In the case of Tennessee v. Becerra¹⁰, the court blocked certain regulations that discriminate based on gender identity and halted enforcement of the 2024 Final Rule regarding sex discrimination.
• In Florida v. HHS¹¹, the court paused several regulations related to discrimination based on sex and won’t enforce them in the state.

Health insurance coverage and gender-affirming care

There are no federal rules, including Section 1557, that require health plans to cover gender transition services for transgender people.

Gender-affirming care for a transgender person encompasses a wide range of medical services, such as:

• Gender affirmation surgery
• Hormone therapy
• Counseling and psychotherapy
• Speech therapy
• Hair removal

Section 1557 of the ACA doesn't require health insurance to cover these services. It only stops a health plan from denying or excluding coverage in a discriminatory manner. Under the 2024 final rule, health plans can't deny coverage for gender-affirming healthcare services or exclude it based on sex if the same medical treatment is offered for other reasons.

Have you experienced discrimination under Section 1557?

If you feel as though you've experienced discrimination based on the factors listed above, you can file a civil rights complaint¹². The Office of Civil Rights (OCR) will look into the complaint or pass the complaint to an agency that shares jurisdiction. The OCR will work with the recipient to achieve compliance with the law. If compliance isn't met, OCR can send a formal findings letter, refer the case to the U.S. Department of Justice (DOJ), or start proceedings to revoke federal funds.

Employers and Section 1557

If you’re an employer, you may be wondering how Section 1557 of the ACA applies to you. While the ACA requires employers with 50 or more FTEs to offer health coverage, Section 1557 doesn't apply¹³ to employment practices, including the provision of employee health benefits.

But if you want to offer a health benefit that's tailored to the unique needs of your team, a health reimbursement arrangement (HRA) is an excellent way to do just that. With an HRA, you can reimburse your employees for their individual health insurance premiums instead of purchasing a group plan for them. They can choose the health plans that suit them best instead of being stuck with a one-size-fits-all group plan.

Conclusion

Section 1557 is essential for ensuring fair access to healthcare services for everyone in the U.S. This provision prohibits discrimination on the basis of race, color, national origin, sex, age, or disability in health programs and activities. It also empowers patients to stand up for their civil rights.

1. Section 1557 of the ACA
2. The Biden Administration’s Final Rule on Section 1557
3. Federal Register
4. Bostock v. Clayton County
5. Notification of Interpretation and Enforcement of Section 1557
6. LGBT Adults’ Experiences with Discrimination and Health Care Disparities
7. How Section 1557 of the Affordable Care Act protects LGBTQI+ individuals
8. Section 1557 of the Patient Protection and Affordable Care Act
9. Texas v. Becerra
10. Tennessee v. Becerra
11. Florida v. HHS
12. How to File a Civil Rights Complaint
13. Section 1557 Final Rule: Frequently Asked Questions