October 6, 2015
Authored by: Serena Yee and Chris Rylands
Last month, the U.S. Department of Health and Human Services (“HHS”) issued a proposed rule implementing section 1557 of the Affordable Care Act (“ACA”), which essentially prohibits discrimination on the basis of race, color, national origin, sex, age or disability in certain health programs and activities. While the rule does not apply directly to most employer-sponsored plans, it may potentially apply indirectly.
Under the proposed rule the nondiscrimination requirements would apply to:
- all health programs or activities of a covered entity if any part receives Federal financial assistance administered by HHS (including subsidies provided by the Federal government to individuals through the Marketplace for remittance to the covered entity);
- all health programs or activities administered by HHS, including the Federally-facilitated Marketplace; and
- all health programs or activities administered by any entity established until Title I of the ACA, including a state-based Marketplace.
A health program or activity includes:
- the provision or administration of health-related services or health-related insurance coverage;
- the provision of assistance in obtaining health-related services or health-related insurance coverage; and
- all of the operations of an entity principally engaged in providing or administering health services or health insurance coverage.
Impact on Employer-Sponsored Group Health Plans
Since the proposed rule would extend to all the operations of a covered entity, it appears that a health insurance issuer participating in the Marketplace would be required to comply with the nondiscrimination provisions with respect to (1) its own employer-sponsored group health