August 26, 2016
What Do the New ACA Nondiscrimination Rules Mean to You?
Applies to: All Employers
On May 18, 2016, we published this Compliance Alert detailing the requirements of the new ACA Nondiscrimination Rules (Section 1557 of the ACA) and to whom the rules apply. Since then, we have received many questions regarding how these rules, specifically those surrounding discrimination based on gender identity, truly impact health plans, especially self-insured health plans. Remember, the rules apply to health care providers, health insurance issuers, employers, and health care programs/activities that receive federal funding from the Department of Health and Human Services (“HHS”), Health Insurance Marketplaces, and any health program administered by HHS (individually a “Covered Entity”).
So, the question that remains for employers is how these rules actually impact their group health plans. Based on the list of entities to whom these rules apply, it is clear that many, if not most, employers and their health plans will not be directly subject to the rules. However, that said, many employers that sponsor fully-insured group health plans, with plans purchased and underwritten by insurance carriers, will be offering plans that will be impacted by these rules. For example, gender transition services will likely be a covered service in insurers’ contracts to comply with their obligations under these rules. Additionally, although employers that sponsor self-insured health plans will not be directly subject to these rules, they still may find compliance is necessary to avoid gender discrimination claims by failing to, for example, offer certain services in their health plan that fall under the purview of this rule (e.g. gender transition services).
Neither an employer who sponsors a self-funded health plan nor the plan itself is considered a Covered Entity under the rules. However, the employer’s self-funded plan may be administered by a third party administrator (“TPA”) that is a Covered Entity and which could indirectly impact the employer’s group health plan. If HHS receives a discrimination complaint about the employer’s group health plan, HHS will determine whether the TPA or the employer is responsible for the alleged discriminatory action or decision. If the issue is the TPA’s administration of the group health plan, HHS can pursue the complaint against the TPA. However, if the alleged discriminatory action is a result of a decision by the employer (such as plan design), and HHS does not have jurisdiction over the employer (because the employer is not a Covered Entity under this Rule), HHS can refer the complaint to the EEOC for review and investigation.
Accordingly, the best course of action for an employer (especially one that sponsors a self-funded plan) is to review its plan design and determine what areas of potential liability may exist. The employer should consider any identified issues and then document decisions made in the capacity of the employer and plan sponsor. Plans can continue to use reasonable medical management techniques and use neutral standards for the benefits provided, but blanket exclusions of coverage for sexual identity issues may be a target for litigation.
This will continue to be a hot-button issue since one of the EEOC’s enforcement priorities is discrimination against LGBT individuals.
Please contact your AssuredPartners NL Benefits Team if you have questions or need assistance with this topic or other compliance matters.
As part of our services to you, AssuredPartners NL and its partner agencies strive to provide you with insurance and benefit related information that is both accurate and informative. Laws, regulations and circumstances change frequently, and similar situations or slight changes to laws and regulations can lead to entirely different results. The information contained herein is for educational and/or informational purposes only and is not, nor is it intended to be legal advice. You should always seek the advice of legal counsel for guidance regarding individual situations.Share This: