Withdrawal Of Guidance On Bathroom Access Raises Questions For Gender Identity Protections Under ACA

On February 22, 2017, the Departments of Education and Justice issued a statement withdrawing the Obama administration's guidance that required schools to permit access to sex-segregated facilities (bathrooms and locker rooms) based on gender identity. The Trump administration statement said that the Obama Administration guidance had not contained extensive legal analysis explaining how it was consistent with Title IX, which prohibits sex discrimination, and that the Trump administration intends to offer "due regard for the primary role of the States and local school districts in establishing educational policy."

The statement obviously calls into question the Trump administration's position on the Affordable Care Act section 1557 nondiscrimination regulations released in the spring of 2016, which prohibit discrimination based on gender identity. The February 22 statement itself has no immediate and direct effect, however, on the 1557 rule. The Trump administration statement withdraws and rescinds a Department of Education guidance document. Guidance is promulgated without notice and comment rulemaking and can be withdrawn by subsequent guidance, but the 1557 rule was promulgated through rulemaking and can only be withdrawn by subsequent rulemaking, with notice and comment.

Moreover, section 1557 can be enforced by private litigation independent of the regulation. Separate regulations, which have not been enjoined, prohibit discrimination based on gender identity by qualified health plan insurers, by insurers in the individual and small group markets, and in the marketing of coverage in the individual and small group markets. Moreover, at least 18 state insurance departments have issued bulletins prohibiting insurer discrimination based on gender identity or insurer refusal to cover gender transition services.

Nevertheless, a Texas district court entered a nationwide injunction against the section 1557 rule gender identity discrimination prohibition at the end of December. In late January, that court set a briefing schedule on a motion by civil liberties groups to intervene and ordered the United States to answer the complaint by March 1. The HHS Office of Civil Rights has announced that it will not be enforcing the gender identity discrimination prohibition while the injunction remains in effect. The February 22, 2017 guidance suggests that HHS files may not defend the 1557 rule prohibition and that the government will not appeal the preliminary injunction.

ACA section 1557 incorporates Title IX's sex discrimination prohibition. The HHS regulation was based on judicial decisions holding that sex discrimination includes discrimination based on gender identity. The Supreme Court is currently reviewing a Fourth Circuit decision upholding and applying the Obama administration's earlier guidance in a Title IX school bathroom access case in Gloucester County School Board v. G.G. At least two federal district courts have stayed section 1557 litigation claiming gender identity discrimination by hospitals pending the Supreme Court's decision.

Also on February 22, the Department of Justice informed the Supreme Court of its decision to withdraw the school bathroom access guidance. As the Fourth Circuit relied at least in part on the earlier guidance in deciding the case, the Supreme Court could send the case back to the lower court for further consideration given the administration's change in position. It could also, however, decide whether in fact the earlier guidance was correct, and whether Title IX does in fact prohibit gender identity discrimination. That decision would likely finally determine the fate of the gender identity discrimination prohibition in the section 1557 rule.

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