The U.S. Department of Health and Human Services (“HHS”) Office for Civil Rights (“OCR”) and the Centers for Medicare & Medicaid Services (“CMS”) issued a final rule on April 26, 2024 (the “Final Rule”) under Section 1557 of the Affordable Care Act (“ACA”) after reviewing more than 85,000 comments from the public following the Proposed Rule.

Section 1557 of the ACA prohibits discrimination on the basis of race, color, national origin, sex, age, or disability in a health program or activity, any part of which is receiving Federal financial assistance, including credits, subsidies, or contracts of insurance, except where otherwise provided in Title I of the ACA. The scope of the Final Rule, therefore, covers any “covered entity” that has health programs or activities that receive Federal financial assistance.

The Final Rule clarifies the “covered entities” subject to the nondiscrimination rules of Section 1557. Specifically, the preamble to the Final Rule clarifies that the provisions would not apply to employers as it relates to the provision of employee health benefits. Further, OCR declined including “group health plans” within the enumeration of possible “health programs or activities” that are subject to Section 1557 because many group health plans do not receive Federal financial assistance. In addition, the preamble to the Final Rule clarifies that even if a plan sponsor or a third-party administrator of a group health plan receives Federal financial assistance, such assistance does not make the group health plan a “covered entity”.

The Final Rule provides protections against discrimination on the bases described above. It requires, for example, covered entities to treat women equally to men in the health care they receive. The Final Rule also prohibits discrimination on the basis of an individual’s disability and requires covered entities to make accommodations for such individuals to have access to the covered entity’s health programs and activities. Covered entities must also provide meaningful access to language assistance services to those individuals with limited English proficiency at no cost.

The Final Rule outlines prohibited forms of discrimination on the basis of race, color, national origin, sex, age, disability; or any combination thereof. The Final Rule specifies that discrimination on the basis of sex includes sex characteristics, including intersex traits, pregnancy and related conditions, sexual orientation, gender identity, and sex stereotypes. Notably, the OCR declined including specific protections for “transgender status” instead noting in the preamble that gender identity sufficiently protects against discrimination on the basis of a person’s transgender status.

Additionally, the Final Rule requires covered entities with 15 or more employees to designate a “Section 1557 Coordinator” and implement grievance procedures. The Section 1557 Coordinator is required to coordinate the covered entity’s compliance with its responsibilities under Section 1557 in its health programs and activities, including the investigation of any grievances for noncompliance with Section 1557.

It also requires all covered entities provide a notice of nondiscrimination and a notice of language assistance that must be available in the 15 most common languages spoken in the State in which the entity is located or does business.

Finally, the Final Rule indicates OCR will enforce the requirements of the final rule according to the mechanisms provided under Title VI, Title IX, Section 504 and the Age Act. These enforcement mechanisms include: requiring covered entities to keep records and submit compliance reports to OCR, conducting compliance reviews and complaint investigations, and providing technical assistance and guidance.

Notably, OCR declined to include a religious exemption from the Final Rule. However, covered entities claiming an exemption from the Final Rule based on a Federal protection may seek assurances of such exemption from OCR.

The Final Rule will be effective July 5, 2024 (60 days following publication in the Federal Register, which was May 6, 2024). However, the OCR acknowledged that covered entities may need additional time to come into compliance with the requirements of the Final Rule and provided a delayed applicability date of no later than 300 days following the effective date of the rule.