Tag: employee health insurance

As an employer, you are likely subject to Title VII of the Civil Rights Act.  But did you know that your group health plan may also be subject to similar nondiscrimination rules?  Employers should carefully analyze whether and to what extent they must comply with Section 1557, which is the nondiscrimination section of the Affordable Care Act.  Similar to Title VII, it prohibits discrimination on the basis of race, color, national origin, sex, age, or disability; however, this law specifically regulates health programs and activities.

If you or your health plan are deemed a covered entity under Section 1557, you have some additional compliance measures to undertake, which include:

-Ensuring your group health plan offers compliant coverage (changes must be made by January 1, 2017)

-Posting appropriate notices within significant publications, on the premises, and on your website

-Ensuring proper grievance procedures are adopted and followed (if applicable)

Here are the questions you should be asking:

• Does a covered entity exist?
• If yes, will the employer be liable?
• Does the employer’s group health plan offer compliant coverage?
• Are the employer’s physical facilities compliant?
• Are the proper notices included in significant publications and posted on the premises and websites?
• Are the appropriate grievance procedures being followed?
• If Section 1557 in not applicable, why should I care?

Covered Entities

While this is not a comprehensive review, please be aware that health programs or activities receiving federal funds must carefully scrutinize their responsibilities under Section 1557.  A “covered entity” is an entity that operates a health program or activity, any part of which receives Federal financial assistance.  The definitions of “health program or activity” and “federal financial assistance” are:

“Health program or activity means the provision or administration of health related services, health-related insurance coverage, or other health related coverage, and the provision of assistance to individuals in obtaining health-related services or health-related insurance coverage. For an entity principally engaged in providing or administering health services or health insurance coverage or other health coverage, all of its operations are considered part of the health program or activity, except as specifically set forth otherwise in this part. Such entities include a hospital, health clinic, group health plan, health insurance issuer, physician’s practice, community health center, nursing facility, residential or community-based treatment facility, or other similar entity. A health program or activity also includes all of the operations of a State Medicaid program, a Children’s Health Insurance Program, and the Basic Health Program.”

“Federal financial assistance. (1) Federal financial assistance means any grant, loan, credit, subsidy, contract (other than a procurement contract but including a contract of insurance), or any other arrangement by which the Federal government provides or otherwise makes available assistance in the form of: (i) Funds; (ii) Services of Federal personnel; or (iii) Real and personal property or any interest in or use of such property, including: (A) Transfers or leases of such property for less than fair market value or for reduced consideration; and (B) Proceeds from a subsequent transfer or lease of such property if the Federal share of its fair market value is not returned to the Federal government. (2) Federal financial assistance the Department provides or otherwise makes available includes Federal financial assistance that the Department plays a role in providing or administering, including all tax credits under Title I of the ACA, as well as payments, subsidies, or other funds extended by the Department to any entity providing health-related insurance coverage for payment to or on behalf of an individual obtaining health related insurance coverage from that entity or extended by the Department directly to such individual for payment to any entity providing health-related insurance coverage.”

If the employer operates a health program or activity and receives federal financial assistance, the employer must next determine if it can be held responsible for violations of Section 1557.

Employer Liability

Providing a health plan for employees and receiving federal financial assistance in some other capacity will not necessarily mean that the employer can be liable under Section 1557.  Instead, there are only three instances where employer liability is at issue for discrimination in employee health benefit programs.

A covered entity that provides an employee health benefit program to its employees and/or their dependents shall be liable for violations of this part in that employee health benefit program only when:

• The entity is principally engaged in providing or administering health services, health insurance coverage, or other health coverage (such as hospitals, carriers, TPAs, etc);

• The entity receives Federal financial assistance a primary objective of which is to fund the entity’s employee health benefit program (such as by receiving Retiree drug subsidies); or

• The entity is not principally engaged in providing or administering health services, health insurance coverage, or other health coverage, but operates a health program or activity, which is not an employee health benefit program, that receives Federal financial assistance; except that the entity is liable under this part with regard to the provision or administration of employee health benefits only with respect to the employees in that health program or activity.

If the employer can be liable, it must ensure it offers compliant coverage, has disability accessible premises, posts the required notices, and follows grievance procedures (for employers with 15 or more employees).

Compliant Coverage, Notices & Grievance Procedures, and Physical Location Accessibility

If subject to Section 1557, the employer must ensure nondiscriminatory plan coverage is in effect by January 1, 2017.  Again, coverage cannot discriminate on the basis of race, color, national origin, sex, age, or disability; however, the law also specific requirements with regard to gender identity and transition exclusions and limitations.

Notices describing Section 1557 must be posted and must include taglines for at least the top 15 languages spoken in in the applicable state by individuals with limited English proficiency.

In a conspicuously-visible font size, the Notices must be posted:

• In significant publications and significant communications targeted to beneficiaries, enrollees, applicants, and members of the public, (except for significant publications and significant communications that are small-sized, such as postcards and tri-fold brochures, which instead use a shorter notice with only 2 taglines);
• In conspicuous physical locations where the entity interacts with the public (i.e., where other legal notices are posted for employees); and
• In a conspicuous location on the covered entity’s Web site accessible from the home page of the covered entity’s Web site.

With respect to the Web site requirement, the Preamble provides the following additional information:

We stated that covered entities may satisfy the requirement to post the notice on the covered entity’s home page by including a link in a conspicuous location on the covered entity’s home page that immediately directs the individual to the content of the notice elsewhere on the Web site. Similarly, we stated with regard to the requirement to post taglines that covered entities can comply by posting ‘‘in language’’ Web links, which are links written in each of the 15 non-English languages posted conspicuously on the home page that direct the individual to the full text of the tagline indicating how the individual may obtain language assistance services. For instance, a tagline directing an individual to a Web site with the full text of a tagline written in Haitian Creole should appear as ‘‘Kreyo`l Ayisien’’ rather than ‘‘Haitian Creole.’’

Sample notices and procedures can be found within the regulations and on the government website:

For the final regulations click here: https://www.gpo.gov/fdsys/pkg/FR-2016-05-18/pdf/2016-11458.pdf

The notices and translated taglines are here: http://www.hhs.gov/civil-rights/for-individuals/section-1557/translated-resources/

FAQs can be found here: https://www.hhs.gov/sites/default/files/2016-05-13-section-1557-final-rule-external-faqs-508.pdf

The following link provides information on taglines: http://www.hhs.gov/civil-rights/for-individuals/section-1557/1557faqs/top15-languages/index.html

Finally, HHS has since listed the top 15 languages by state: https://www.hhs.gov/sites/default/files/resources-for-covered-entities-top-15-languages-list.pdf

Additionally, Section 1557 requires that physical locations be disability compliant, and the employer must adopt grievance procedures to handle Section 1557 complaints consistently.

Nondiscrimination Compliance with Health Plan Coverage Even if Section 1557 if Inapplicable

Please note that even if an employer is not subject to Section 1557, the Office for Civil Rights of the Department of Health and Human Services (OFR) may refer a discriminatory design to the EEOC for investigation.  Please see the Preamble to the regulations at https://www.gpo.gov/fdsys/pkg/FR-2016-05-18/pdf/2016-11458.pdf :

Where … the alleged discrimination relates to the benefit design of a self-insured plan—for example, where a plan excludes coverage for all health services related to gender transition—and where OCR has jurisdiction over a claim against an employer under Section 1557 because the employer falls under one of the categories in § 92.208, OCR will typically address the complaint against that employer.

As part of its enforcement authority, OCR may refer matters to other Federal agencies with jurisdiction over the entity. Where, for example, OCR lacks jurisdiction over an employer responsible for benefit design, OCR typically will refer or transfer the matter to the EEOC and allow that agency to address the matter.

Therefore, careful attention to Section 1557’s requirements is important for plan design regardless of direct employer liability under the law.

This correspondence is intended to provide general information only, does not constitute legal advice, and cannot be used or substituted for legal or tax advice.

Questions? Contact us to learn more.