United States: Nondiscrimination Protections For Transgender Care Under Section 1557 Of ACA


On May 13, 2016, the Department of Health and Human Services (HHS) issued final regulations implementing Section 1557 of the Affordable Care Act (ACA), which prohibits discrimination on the basis of race, color, national origin, sex, age or disability in health programs or activities that receive federal funds. In order to comply with these regulations, "covered entities" must satisfy a myriad of requirements, similar to existing Federal civil rights laws, that are designed to ensure that individuals have equal and nondiscriminatory access to health programs and activities. The focus of this Troutman Sanders advisory is on three of these requirements:

  • ensuring that individuals are not excluded from participation or denied the benefits of a covered entity's health program on the basis of race, color, national origin, sex, age, or disability;
  • providing transgender individuals with equal access to a covered entity's health programs; and
  • ensuring that any health insurance or health-related coverage provided or administered by the covered entity (including its employee health benefit programs) is not discriminatory.

In particular, this advisory describes the applicability of the Section 1557 regulations (including its required transgender protections) to self-insured group health plans of "covered entities" (e.g., the group health plans offered by hospitals and covered physician practices to their employees).

This advisory also describes the issues that other employers (that are not "covered entities") should address if they sponsor self-insured group health plans. This advisory does not address fully-insured group health plans because health insurance carriers will generally be responsible for Section 1557 compliance with respect to the policies they issue to fully-insured group health plans.

The HHS has also provided a Frequently Asked Questions about Section 1557 of the ACA.

Covered Entities

Generally, an employer will be a "covered entity" subject to Section 1557 if it operates a health program or activity, any part of which receives federal financial assistance from HHS. Health programs and activities include:

  • providing health-related services, health-related insurance coverage or other health-related coverage;
  • administering health-related services, health-related insurance coverage or other health-related coverage; and
  • assisting individuals in obtaining health-related services or health-related insurance coverage.

Accordingly, if an employer is engaged in, and receiving HHS funding for, any of these health programs or activities, it will be a covered entity responsible for complying with the Section 1557 nondiscrimination requirements noted above. In particular, for purposes of this advisory, the employer will be responsible for ensuring that its employee health benefit programs comply with applicable nondiscrimination requirements including certain transgender protections. Employee health benefit programs include:

  • employer sponsored group health plans;
  • employer sponsored wellness programs and health clinics; and
  • long-term care coverage provided for the benefit of an employer's employees.

An employer's Section 1557 responsibilities with respect to its group health plans, wellness programs, health clinics and long-term care coverage will vary depending upon whether or not the employer is "principally engaged" in the operation of the health programs or activities described above.

Principally engaged entities include, for example, hospitals, clinics, physician practices and nursing facilities that receive federal financial assistance in the form of grants, loans, credits subsidies, contracts or other arrangements (including Medicaid and Medicare Part A, but not including Medicare Part B). They also include insurance companies that provide health insurance coverage that receive tax credits under the ACA or that furnish coverage to individuals through Health Insurance Marketplaces for ACA exchange premium tax credits and cost sharing arrangements.

These "principally engaged" covered entities must ensure that all of their group health plans, wellness programs, health clinics and long-term care coverage is nondiscriminatory. Other covered entities (that operate, but are not principally engaged in, a health program or activity) have more limited obligations with respect to their employee health benefit programs. Specifically, these entities need only ensure that (1) any group health plan, wellness program, health clinic or long-term care coverage offered to employees who work in the entity's health program or activity is nondiscriminatory and/or (2) any group health plan, wellness program, health clinic or long-term care coverage for which the entity receives HHS funding is nondiscriminatory. An example of the latter would be an employer that receives a Medicare Part D subsidy in connection with its retiree health coverage but is not otherwise subject to Section 1557. 

Employee Health Benefit Programs Sponsored by Covered Entities

To the extent applicable, Section 1557 requires covered entities to ensure that their employee health benefit programs:

  • do not deny or limit coverage or impose additional cost sharing or restrictions based on the enrollee's race, color, national origin, sex, age, or disability;
  • do not use marketing practices or benefit designs that discriminate on the bases of these protected characteristics; and
  • provide equal access and other protections to transgender individuals.

Although health insurance carriers will bear the brunt of these responsibilities with respect to fully-insured group health plans, covered entities that offer self-insured health coverage will need to work with their TPAs and counsel to review their benefit designs and remove any discriminatory provisions. Particular attention should be paid to coverage issues for transgender individuals, such as the following:

  • Section 1557 requires health coverage offered by a covered entity to provide for medically appropriate health services on the same terms for all individuals, regardless of the sex assigned at birth, gender identity or recorded gender. Thus, a transgender individual may not be denied coverage for medically appropriate sex-specific health care services because of their gender identity or because they are enrolled in their health plans as one gender but the medical service is associated with another gender. Examples of health coverage issues for transgendered individuals where treatment is related to his or her gender identity or transgender status include:

    • When a plan covers medically appropriate pelvic exams, coverage cannot be denied for an individual for whom a pelvic exam is medically appropriate based on the fact that the individual either identifies as a transgender man or is enrolled in the health plan as a man.
    • Where an individual could benefit medically from treatment for ovarian cancer, coverage cannot be denied based on the individual's identification as a transgender male.
    • Where a covered entity provides coverage for a particular treatment or service (e.g., hormone replacement or mental health care, where it is medically necessary), the entity cannot decline to provide coverage for that same treatment to a transgender individual on the basis that it is not medically necessary simply because it relates to his or her gender identity or transgender status.
    • Where an individual could benefit medically from a mammogram (e.g., a transgender woman who has or is taking hormones), coverage should not be denied on the basis that an individual was genetically female.
  • Section 1557 prohibits categorical exclusions or limitations in coverage for all health services associated with gender dysphoria or gender transition (e.g., categorically classifying all gender reassignment surgeries as excluded cosmetic procedures). The final rule provides that such exclusions for all health care services related to gender transition are facially discriminatory because they single out services and treatments for individuals on the basis of their gender identity or transgender status. Accordingly, any such denial of coverage must be based on the nondiscriminatory application of neutral criteria, such as if a service is not medically necessary, a qualified provider is unavailable or inadequate medical documentation has been provided.

The covered entity must provide a general notice to plan beneficiaries and enrollees that satisfies the content, posting and related requirements of the final regulations. Within 90 days of the effective date of the regulation (i.e., the first day of the first plan year that begins on or after January 1, 2017), the covered entity must post notices and include language in small sized communications that contains a non-discrimination statement, among other information about translation services if applicable. Model language for such communications is set forth in the appendices to the final regulations.

Considerations for Other Employers that Sponsor Self-insured Group Health Plans

Section 1557 does not apply to an employer that is not engaged in a health program or activity for which it receives HHS funding. However, the preamble to the final rule reiterates the extensive application of the rule, and specifically states that third-party administrators ("TPAs") for employer group health plans, including self-insured health plans, may be subject to Section 1557 because TPA services involve the administration of health services, making them a health program or activity. Therefore, to the extent that the TPA receives HHS funds, it will be a covered entity – regardless of whether or not the HHS funding supports the covered entity's TPA function. For example, if a health insurance carrier that functions as both an insurer and TPA receives HHS funding, all of the insurance carrier's operations (including its TPA business) will generally be subject to Section 1557 even if the HHS funding pertains only to its insurance business.

The final regulations specifically clarify the relationship between TPAs and the employers whose self-insured group health plans they administer, explaining that an employer is not subject to Section 1557 liability simply because the TPA administering its self-insured health plan is covered. Similarly, the final rule acknowledges that TPAs generally are not subject to Section 1557 liability simply because an employer has adopted a discriminatory design feature with respect to a self-insured health plan that the TPA is administering (since employers control the design of their self-insured health plans and the Employee Retirement Income Security Act [and in most cases the TPA's service agreement with the employer] requires plans to be administered consistent with their terms). Accordingly, for purposes of evaluating liability for discrimination in a self-insured health plan, HHS will engage in a case-by-case analysis to determine whether responsibility for a decision or other action alleged to be discriminatory rests with the employer or with the TPA.

Under Section 1557, the HHS Office for Civil Rights ("OCR") will only process a complaint against a TPA involving alleged discrimination if the TPA is directly responsible for the decision or other action being challenged in the complaint. On the other hand, where the alleged discrimination is in benefit design, OCR will process the complaint against the employer or plan sponsor, assuming the employer is a covered entity over which OCR has jurisdiction (e.g., a federally funded hospital that is covered under the rules as discussed above). Where an employer is not a covered entity over which OCR has jurisdiction, OCR will refer the alleged discriminatory plan benefit design matter to the Equal Employment Opportunity Commission ("EEOC") and allow the agency to address the matter.

Examples of circumstances where a TPA or an employer may be held responsible for discriminatory action in administration or plan benefit design, respectively, include:

  • OCR will proceed against the TPA as the decision making entity under the Section 1557 nondiscrimination regulations if it denies a claim because an individual's last name suggests that she is of a certain national origin or threatens to expose an employee's transgender or disability status to the employer.
  • OCR will proceed against the employer as the decision maker if it has jurisdiction over the employer where the alleged discrimination relates to the benefit design of a self-insured health plan—for example, where a plan excludes coverage for all health services related to gender transition. Where OCR lacks jurisdiction over the employer, it may refer the matter to the EEOC and allow that agency to address the matter.

As a result of this stated aggressive enforcement stance, employers that might not otherwise be subject to the specific provisions of Section 1557 should consider the design of their self-insured group health plans and the implications under other federal anti-discrimination laws such as:

  • Title VI of the Civil Rights Act of 1964 (race, color, national origin),
  • Title IX of the Education Amendments of 1972 (sex),
  • The Age Discrimination Act of 1975 (age), and
  • Section 504 of the Rehabilitation Act of 1973 (disability).


Employers that receive HHS funding with respect to their health programs or activities will need to take steps to ensure compliance with the final regulations. To the extent that any changes are required to an employer's group health plan benefit design, such changes will need to be made by the first day of the first plan year beginning on or after January 1, 2017 and the required notices must be provided within 90 days thereafter.

Other employers that are not directly impacted by the regulations may nevertheless need to take steps in response to the regulations, as follows:

  • Employers with fully insured health plans should be prepared to field questions from employees regarding changes that health insurers will likely be making to the administration and coverage provisions of the employer's group insurance policy (in order for the carrier to comply with the regulations).
  • Employers with self-insured health plans should consult with TPAs providing administrative services as well as counsel to understand the impact of the final rules on their group health plan design and implementation, especially to verify issues related to coverage of transgender care – keeping in mind that although the regulation only applies to employers that are Section 1557 covered entities, the HHS has made clear that it will typically refer matters involving alleged discriminatory benefit designs in employer sponsored health plans of non-covered entities to the EEOC. The EEOC, in turn, is charged with Title VII enforcement and views any employment discrimination based upon gender identity as a Title VII violation.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
Ogletree, Deakins, Nash, Smoak & Stewart
Fisher Phillips LLP
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Ogletree, Deakins, Nash, Smoak & Stewart
Fisher Phillips LLP
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions