The U.S. Department of Health and Human Services (HHS) has completed nondiscrimination regulations that might have a major effect on insurers that sell public exchange plans but might not have much of an effect on others.
The HHS Office for Civil Rights (OCR) and the HHS Office of the Secretary posted a 362-page preview version of the final regulations today. The official version of the final rule, which is based on a draft released in September, is set to appear Wednesday in the Federal Register.
HHS officials developed the rule to implement Section 1557 of the Patient Protection and Affordable Care Act of 2010 (PPACA). Section 1557 prohibits “covered entities” from discriminating based on race, color, national origin, age or disability. HHS is interpeting the ban on sex discrimination to include a ban on discrimination based on gender identity.
A covered entity cannot use benefits limits, deductibles, marketing practices or any other means to discriminate against the protected classes of people, with just a few exceptions, officials say in the preamble to the regulations.
A covered entity may be able to make age-based distinctions, when a state, federal or local government body allows that, officials say. A covered entity may also be able to set up sex-specific programs, such as a sex-specific research study, if it can provide “exceedingly persusasive justification” that the program is “substantially related” to achieving an important health-related or scientific goal, officials say.
With regards to gender identity concerns, for instance, a covered entity insurer or benefit plan could limit access to hysterectomies for all enrollees without violating the nondiscrimination regulations. But it could not use restrictions on hysterectomies to discriminate against transgender people, officials say.
In the regulation and the preamble, HHS does not appear to give a clear explanation of whether or how these guidelines apply to efforts to set insurance premiums.
Most requirements in the regulations are set to take effect 60 days after the official publication date. The rules affecting insurance benefits are supposed to take effect Jan. 1, 2017.
HHS gives several complicated descriptions of how the regulations apply to insurers.
HHS officials say, specifically, that the requirements apply to the “federally facilitated marketplaces,” or PPACA public exchanges operated by HHS, and to state-based exchanges.
The requirements also apply to group health insurance arrangements provided by health insurers that receive federal financial assistance for at least part of their operations. The requirements apply directly to benefit plans sponsored by health care providers, health insurers, companies that operate federally supported health programs, and employers that receive federal financial assistance for their plans.
When the rules apply to employer-sponsored health benefits, they apply to all types of health-related benefits, officials say. Officials make a point of saying the rules apply to the kinds of ”excepted benefits” usually freed from PPACA and Health Insurance Portability and Accountability Act (HIPAA) rules.
“Excepted benefits include, but are not limited to: limited scope dental and vision plans; coverage only for a specified disease or illness; and Medicare supplement health insurance,” officials say. “We are not exempting benefits excepted from [PPACA] market reforms and HIPAA portability requirements from the final rule. If an issuer providing these benefits receives federal financial assistance and is principally engaged in providing health benefits, all of its operations will be covered by the rule; if it is not principally engaged, we will apply the rule to its federally funded health programs and activities.”
Elsewhere, HHS officials note that the Section 1557 requirements do not apply to the Medicare Part B program. The Medicare Part B program pays for physician services and outpatient care for people who have traditional Medicare coverage.
In a regulatory impact analysis, HHS officials include PPACA exchange plan issuers in their calculations. Officials do not include issuers of Medicare Advantage plans, issuers of Medicare supplement plans, or the administrators of the traditional Medicare program in the calculations.
When the nondiscrimination rules apply to an employer with a self-insured plan, the third-party administrator (TPA) that runs the plan may share responsibility for nondiscrimination compliance, officials say.
Employers, insurers and benefit plan compliance lawyers usually want agencies to set clear compliance rules, to minimize the amount of time and money employers have to spend to find out what they’re allowed to do. The benefits community also prefers to see agencies let employers and insurers use efforts to comply with other, older federal standards to count as successful efforts to comply with new rules.
HHS declined to harmonize the new rules with other state or federal rules, or give employers or insurers clear explanations of how the rules will apply. TPA will have to find out whether they are responsible for nondiscrimination compliance for a plan on a case-by-case basis, and an affected employer or other affected entity that offers a wellness program will have to verify whether that’s discriminatory or not through a case-by-case process, officials say.
HHS talks about how people who think they have suffered from discrimination can use administrative processes to solve the problems, but officials note that people can also use all of the provisions in other statutes, such as the Age Discrimination Act of 1975 and Section 504 of the Rehabilitation Act of 1973, that let people fight discrimination by filing lawsuits.
HHS OCR “interprets Section 1557 as authorizing a private right of action for claims of disparate impact discrimination on the basis of any of the criteria enumerated in the legislation,” officials say.
When HHS OCR describes other approaches people could take to resolve problems, “this approach is not intended to limit the availability of judicial enforcement mechanisms,” officials say.
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