Another Appellate Court Blocks HHS From Enforcing Certain ACA Section 1557 Nondiscrimination Provisions Against a Catholic Coalition

Agreeing with a recent decision by the Fifth Circuit on the reach of Affordable Care Act Section 1557 (see our Checkpoint article), the Eighth Circuit has upheld a permanent injunction prohibiting HHS from requiring a coalition of entities affiliated with the Catholic Church to perform or provide insurance coverage for gender-transition procedures. The coalition originally challenged portions of the 2016 Section 1557 regulations that prohibited discrimination in health programs and activities based on gender identity. The trial court stayed enforcement of the challenged provisions against the coalition, citing the applicability of the Religious Freedom Restoration Act (RFRA), but the action was put on hold while HHS considered and ultimately finalized the 2020 Section 1557 regulations, which repealed the 2016 regulations’ definition of discrimination “on the basis of sex” as including discrimination on the basis of gender identity (see our Checkpoint article).

Following the release of the 2020 regulations—and the U.S. Supreme Court’s Bostock ruling (see our Checkpoint article)—the trial court lifted the stay and held that the challenged interpretation of Section 1557 (and similar interpretations of Title VII following Bostock) violated the RFRA as a substantial burden on the entities’ exercise of religion. The trial court permanently enjoined HHS and the EEOC from interpreting Section 1557 or Title VII in a way that required the entities in the coalition to perform or provide coverage for gender-transition procedures. The Eighth Circuit has now affirmed that decision.

EBIA Comment: As evidenced by its August 2022 proposed regulations (see our Checkpoint article), HHS remains steadfast in its determination that Section 1557 protects individuals’ rights to health care regardless of gender identity. And although at least two appellate courts have now weighed in on the application of the RFRA, other courts, particularly with respect to secular entities, have supported HHS’ interpretation (see, for example, our Checkpoint article). For more information, see EBIA’s Group Health Plan Mandates manual at Section XXI.M.1 (“Interaction of Title VII and Section 1557”) and EBIA’s Health Care Reform manual at Section XXXIV.A (“Section 1557 Nondiscrimination: Grounds Prohibited Under Federal Laws”).

Contributing Editors: EBIA Staff.