LGBT Protections In Affordable Care Act Section 1557

On May 13, 2016, the U.S. Department of Health and Human Services Office for Civil Rights (HHS OCR) issued a historic new rule that codifies nationwide nondiscrimination protections for lesbian, gay, bisexual, and transgender (LGBT) people in health facilities, programs, and activities receiving federal funding. This rule confirms that Affordable Care Act Section 1557 prohibits discrimination against LGBT people in health insurance coverage and health care.

Key provisions of the final rule that relate specifically to LGBT people include:

1. Interpreting Section 1557's sex nondiscrimination protections to include explicit protections for transgender individuals on the basis of gender identity
2. Interpreting Section 1557's sex nondiscrimination protections to include explicit protections for lesbian, gay, and bisexual (LGB) individuals on the basis of sex stereotypes
3. No new religious exemption

These protections are critical because, despite advances in public acceptance of LGBT issues over the past decade, LGBT people and their families continue to encounter discrimination when seeking health coverage and care. As then-Secretary of Health and Human Services Kathleen Sebelius noted in 2012:

LGBT Americans face numerous barriers to health — from providers who just don't understand their unique health needs, to difficulty getting health insurance because they can't get coverage through a partner or a spouse. And unfortunately way too many LGBT individuals face discrimination and bigotry in the health care system.

The Affordable Care Act (ACA) is already making a difference in ensuring that LGBT Americans have access to quality, affordable coverage. As the study Moving the Needle: The Impact of the Affordable Care Act on LGBT Communities shows, for example, over the first full year of the ACA's coverage expansion uninsurance among low- and middle-income LGBT adults dropped by a quarter, from one-in-three (34 percent) uninsured in 2013 to one-in-four (26 percent) uninsured in 2014. Between 2013 and 2015, the overall uninsurance rate for lesbian, gay, bisexual (LGB) adults fell dramatically, and LGB adults also became increasingly likely to report having access to a usual source of health care.

The Section 1557 final rule is critical to addressing the remaining barriers to coverage and care that LGBT people across the country routinely experience. These barriers include discrimination such as health care providers using harsh or abusive language, blaming patients for their health status, and being physically rough or abusive. Close to 8 percent of LGB people and more than 25 percent of transgender people have been denied health care outright on the basis of who they are. In addition, there are those turned away because of an association with an LGBT individual. In Michigan in 2014, for example, Bay Contreras, the six-day-old daughter of a lesbian couple, was denied care by a pediatrician simply because she has two moms.

These encounters with discrimination have serious negative consequences for the health and well-being of LGBT individuals and exacerbate the significant health disparities that affect the LGBT population. LGBT health disparities include higher rates of mental health concerns such as depression and suicide attempts, greater risk of HIV/AIDS, more frequent use of tobacco and other substances, and higher risk of certain cancers, such as breast cancer. These disparities are magnified for LGBT people who are also members of other groups disadvantaged because of their race, ethnicity, or other aspects of their identity.

State laws do not sufficiently address these concerns: currently only 18 states and the District of Columbia protect access for LGBT people to health care facilities such as doctors' offices and hospitals. Moreover, the nondiscrimination protections offered by federal laws such as the ACA are becoming even more critical for LGBT people across the country as states enact laws, such as North Carolina's House Bill 2, Mississippi's House Bill 1523, and Tennessee's Senate Bill 1556, that condone or even encourage discrimination on the basis of gender identity and sexual orientation, including by health care providers.

Definitions

Section 1557 prohibits any health program or facility that receives federal funds from discriminating on the basis of race, color, national origin, age, disability, or sex. Covered entities under Section 1557 include any hospital and most health care providers that participate in Medicare or Medicaid, federally qualified community health centers and other programs supported by HHS, student health plans, state Basic Health Programs, state Children's Health Insurance Programs (CHIP), recipients of Meaningful Use of Electronic Health Records payments, health insurance plans that participate in the insurance marketplaces in every state, and many other programs. The final rule defines the sex protections in Section 1557 to include discrimination against LGBT people, including individuals who are transgender; lesbian, gay, and bisexual (LGB); gender-nonconforming and non-binary; or intersex.

The final rule follows a 2012 HHS OCR opinion letter in defining "discrimination on the basis of sex" to include discrimination on the basis of gender identity and sex stereotypes:

Gender identity means an individual's internal sense of gender, which may be male, female, neither, or a combination of male and female, and which may be different from an individual's sex assigned at birth. The way an individual expresses gender identity is frequently called "gender expression," and may or may not conform to social stereotypes associated with a particular gender. A transgender individual is an individual whose gender identity is different from the sex assigned to that person at birth.

Sex stereotypes means stereotypical notions of masculinity or femininity, including expectations of how individuals represent or communicate their gender to others, such as behavior, clothing, hairstyles, activities, voice, mannerisms, or body characteristics. These stereotypes can include the expectation that individuals will consistently identify with only one gender and that they will act in conformity with the gender-related expressions stereotypically associated with that gender.

The rule notes that OCR understands these protections on the basis of sex stereotyping to prohibit discrimination against lesbian, gay, and bisexual individuals.

The definition of sex stereotypes also specifically protects non-binary individuals from discrimination. According to the rule:

sex stereotypes can include the expectation that individuals consistently identify with only one of two genders (male or female), and that they act in conformity with the gender-related expressions stereotypically associated with that gender. Sex stereotypes can also include a belief that gender can only be binary and thus that individuals cannot have a gender identity other than male or female. OCR recognizes that an individual's gender identity involves the interrelationship between an individual's biology, gender, internal sense of self and gender expression related to that perception; thus, the gender identity spectrum includes an array of possible gender identities beyond male and female.

The rule also protects people with "atypical sex characteristics and intersex traits," which the rule describes as including "people born with variations in sex characteristics, including in chromosomal, reproductive, or anatomical sex characteristics that do not fit the typical characteristics of binary females or males."

Protections on the Basis of Gender Identity

According to recent estimates, transgender people comprise approximately 0.3 percent of the U.S. population, or just fewer than one million people in 2016. Transgender people are individuals whose gender identity, meaning their internal knowledge of their own gender, is different from the sex they were assigned at birth, meaning the sex that is recorded on their original birth certificate.

Discrimination in the health system against transgender people on the basis of their gender identity is pervasive and severe. A 2011 study found, for instance, that one-quarter of the more than 6,400 transgender and gender-nonconforming respondents reported experiencing discrimination that included being denied needed medical treatment, being harassed in health care settings, or postponing needed medical care because of mistreatment from providers. These experiences of discrimination correlate with disparities such as a rate of suicide attempts among transgender people that is almost nine times higher than among the general population.

Equal Access to Health Care Facilities

The final rule on Section 1557 codifies substantial protections for transgender individuals in access to health care, facilities, and programs. The rule clarifies that a provider or other staff person persistently and intentionally refusing to use a transgender individual's correct name and gender pronoun constitutes prohibited harassment on the basis of sex. It also requires health care providers to provide medically necessary health care services to transgender individuals, as long as those services are within the provider's scope of practice. For instance, a gynecologist cannot refuse to perform a cervical Pap test for a transgender man.

In a particularly important move given the current battle between the government of North Carolina and the federal Department of Justice regarding House Bill 2—the state's so-called "bathroom law" that requires transgender individuals to use only the restroom corresponding to the sex assigned to them at birth, regardless of their current gender on identity documents such as a driver's license, their appearance, or their physical safety—the rule also confirms that individuals must have access to health facilities and programs consistent with their gender identity.

HHS OCR has already been enforcing this requirement: the first voluntary resolution agreement that the department entered into under Section 1557 was on behalf of a transgender woman who was assigned to a male ward by a hospital in Brooklyn. According to the terms of the July 2015 agreement, the hospital will implement staff training on transgender patient needs and develop a room assignment policy that complies with Section 1557's requirements by housing patients according to their gender identity.

Equal Access to Health Insurance Coverage

In another critical move, the rule prohibits health insurance plans from excluding the health care needs of transgender people. Currently, the majority of public and private health insurance coverage in the U.S. contains exclusions that deny transgender people coverage for medically necessary care related to gender transition—including hormone therapy, mental health counseling, and surgeries—even though the same services and procedures are routinely covered for non-transgender individuals for indications such as endocrine disorders, cancer treatment or prevention, or reconstruction following an injury. These exclusions also obstruct access to preventive services that are commonly associated with only one gender, such as Pap tests and mammograms, and sometimes prevent transgender people from getting coverage for any care at all.

Under the final rule, private plans and state Medicaid programs can no longer categorically exclude all services related to gender transition, and they cannot make coverage decisions in a manner that results in discrimination against a transgender individual — such as denying coverage for mental health services related to gender transition while covering them for depression. Previously, only 17 states and the District of Columbia prohibited private insurance plans from discriminating against transgender individuals on the basis of gender identity by employing transgender-specific exclusions (these states are CA, CO, CT, DE, IL, MA, MD, MI, MN, MT, NV, NY, OR, PA, RI, VT, and WA), and only 10 Medicaid programs had similar requirements (these states are CA, CT, IL, MA, MD, NY, OR, VT, and WA, in addition to the District of Columbia).

The Section 1557 final rule extends these protections to Medicaid and private plans nationwide. The rule also clarifies that plans cannot limit access to sex-specific services, such as cervical Pap tests, mammograms, and prostate exams, based on a transgender person's sex assigned at birth, gender identity, or recorded gender. For example, a covered entity cannot deny access to treatment for prostate cancer to a transgender woman.

Unfortunately, though the final rule notes that the World Professional Association for Transgender Health (WPATH) maintains expert scientific standards outlining services that may be medically necessary for the treatment of gender dysphoria, it declines to clarify the full scope of services that falls under the prohibition on discrimination on the basis of gender identity in benefit design and coverage determinations. It also does not require plans to include language affirming the availability of coverage for services related to gender transition.

HHS OCR states it will deal with complaints of discrimination from transgender individuals by first inquiring about the degree to which coverage is available for the same service when it is not related to gender transition. This test is intended to investigate whether the plan is appropriately applying the same neutral, nondiscriminatory criteria that it uses for other conditions. It will be important for the department to utilize active enforcement and potentially future guidance to more firmly establish expectations regarding nondiscriminatory criteria in determining what services are considered medically necessary for transgender individuals.

Protections on the Basis of Sex Stereotypes

Though the final rule does not define "sex" to include sexual orientation, its protections on the basis of sex stereotypes offer significant protections to lesbian, gay, and bisexual individuals and address much of the discrimination they face in health care settings.

Numerous federal courts and the Equal Employment Opportunity Commission (EEOC) have previously ruled that protections on the basis of sex stereotypes extend to an individual's identity as lesbian, gay, or bisexual. These protections are based on the understanding that sex stereotypes include stereotypical gender roles and the belief that women should only date or marry men, while men should only date or marry women.

For instance, in Terveer v. Billington, a federal court ruled that a gay man experienced sex discrimination because his "sexual orientation is not consistent with [his supervisor's] perception of acceptable gender roles" and because his "orientation as homosexual had removed him from [his supervisor's] preconceived definition of male." In a health care setting, for example, the rule's sex discrimination protections prohibit health care providers from treating individuals poorly because they are in a same-sex relationship or do not identify as heterosexual.

As the final rule's preamble notes, legal theories of the extent of Section 1557's sex protections with regard to sexual orientation will continue to evolve. Over the last several years, several courts have indicated the growing trend toward the recognition that discrimination on the basis of sexual orientation is always a form of sex discrimination:

• The Seventh Circuit amended an opinion to omit language stating that sexual orientation discrimination is not proscribed by Title VII (Muhammad v. Caterpillar, 2014)
• Several district courts concluded that, as the court in the Central District of California put it, "[T]he line between sex discrimination and sexual orientation discrimination is 'difficult to draw' because that line does not exist, save as a lingering and faulty judicial construct" (Videckis v. Pepperdine University, 2015)
• The Second Circuit stated, "In light of the EEOC's recent decision on Title VII's scope, and the demonstrated impracticability of considering sexual orientation discrimination as categorically different from sexual stereotyping, one might reasonably ask—and, lest there be any doubt, this Court is asking—whether that line should be erased" (Christiansen v. Omnicom Group, Inc., 2016)

Federal circuit courts with sexual orientation discrimination cases currently pending include the Second, Seventh, and Eleventh Circuits. As of March 2016, the EEOC has also filed two cases in federal district court (EEOC v. Scott Medical Health Center and EEOC v. Pallet Companies d/b/a IFCO Systems NA, Inc.) that challenge sexual orientation discrimination as sex discrimination under Title VII of the Civil Rights Act.

As these cases are decided, future guidance that follows the lead of the EEOC in expressly clarifying that all forms of discrimination based on sexual orientation are inherently sex-based and unlawful will be helpful in fully addressing the severe and ongoing problem of anti-LGBT discrimination in health care settings. In the meantime, HHS OCR states in the final rule that it is actively accepting and investigating complaints of discrimination from LGB individuals.

No New Religious Exemption

The final rule does not include a new religious exemption for covered entities. It does reference, however, the fact that covered entities can claim other religious exemptions that already exist in federal laws such as the Religious Freedom Restoration Act (RFRA), and implies that some employers may believe they have a valid religious reason to refuse to cover health care services such as treatments related to gender transition for transgender people. Other areas of particular concern for LGBT people in an environment of broad religious exemptions in health care include coverage for HIV pre-exposure prophylaxis (PrEP) for gay or bisexual men and IVF for lesbian women.

Enforcement

HHS OCR noted in the final rule that it received more than 24,000 comments on the proposed rule, including more than 23,000 from individuals emphasizing the importance of nondiscrimination protections for LGBT individuals. Already in the six years since the ACA's enactment, the preponderance of complaints HHS OCR has received under Section 1557 relate to sex — and the majority of these sex discrimination complaints are from transgender individuals. It is thus fitting that the final rule cites a case involving a transgender individual, Rumble v. Fairview Health Services, to underscore that Section 1557 offers the possibility not only of redress through administrative complaints but also relief in federal court.

A significant enforcement question for transgender individuals relates to employer-sponsored coverage and the actions of third-party administrators (TPAs) in regard to transgender-specific exclusions in employer-sponsored coverage. The final rule attempts to provide clarity on this point: if a consumer faces discrimination by a self-insured employer plan and files a complaint with HHS OCR, OCR will investigate whether the discrimination was caused by the employer or the TPA. If the discrimination was caused by the TPA, OCR will take action against it. However, the rule notes that complaints against TPAs cannot include issues related to the content of coverage, because t he Employee Retirement Income Security Act (ERISA) requires TPAs to administer the coverage according to the dictates of the employer. Thus, TPAs can only be held liable under Section 1557 for actions unrelated to benefit design, such as refusing to process a claim for a transgender individual in a timely manner or threatening to disclose an employee's transgender status to the employer.

If the discrimination relates to benefit design—and thus is the employer's responsibility—HHS OCR will take action only if the employer is a covered entity under Section 1557, such as a hospital or state Medicaid agency. Otherwise, OCR will refer the matter to the EEOC or the Office of Personnel Management for investigation and resolution.

In the arena of administrative action, a key aspect of enforcement will include adequate data collection on the demographics of individuals filing complaints—including gender identity and sexual orientation—in order to track trends and identify patterns in complaints of discrimination. HHS OCR will also need to cooperate with other operating divisions across the department, such as the Health Services and Resources Administration, which operates the federally qualified community health center program and the Ryan White program; the Substance Abuse and Mental Health Services Administration; the Centers for Medicare and Medicaid Services; the Administration for Community Living; and the Administration for Children and Families, in order to ensure that all division leadership, staff, and grantees understand their obligations under Section 1557.

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