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Another Court Blocks Enforcement of Portions of Section 1557 Nondiscrimination Regulations; Issues Broader Preliminary Injunction



Whitman-Walker Clinic, Inc. v. HHS, 2020 WL 5232076 (D.D.C. 2020)

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Another federal trial court has blocked HHS from enforcing certain provisions of its 2020 final regulations under Affordable Care Act (ACA) Section 1557, which prohibits discrimination in certain health programs and activities on the basis of race, color, national origin, sex, age, or disability. The 2020 regulations, which were to take effect August 18, 2020 (see our Checkpoint article), narrowed the agency’s previous interpretation of Section 1557 by repealing previous regulatory provisions that HHS considered duplicative of or inconsistent with regulations implementing Titles VI and IX of the Civil Rights Act of 1964 and other federal nondiscrimination rules. However, a federal trial court in another case blocked portions of the 2020 regulations that removed nondiscrimination protections for gender identity and sex stereotyping (see our Checkpoint article), leaving in effect the prior regulations’ more expansive definitions of “on the basis of sex,” “gender identity,” and “sex stereotyping” while litigation in that case continues (see our Checkpoint article).

The court in this case has issued a separate nationwide preliminary injunction blocking HHS from enforcing its repeal of the regulatory definition of discrimination “on the basis of sex” insofar as it includes discrimination on the basis of sex stereotyping. In addition, the court blocked enforcement of the religious exemption in Title IX, which was added in the 2020 regulations. (The exemption excuses certain religious organizations from Title IX’s nondiscrimination mandate if the mandate’s application would be inconsistent with the organization’s religious tenets.) However, the court denied requests to block other portions of the 2020 regulations, including provisions narrowing the scope of covered entities and eliminating the notice and tagline requirements.

EBIA Comment: As challenges to the Section 1557 nondiscrimination regulations continue through the courts, employers should be aware that other nondiscrimination requirements may apply. For instance, Title VII of the Civil Rights Act of 1964 prohibits gender-based discrimination in connection with the employment relationship, so plan sponsors are potentially subject to Title VII challenges over plan provisions that allegedly discriminate on the basis of gender. In light of the U.S. Supreme Court’s Bostock decision (see our Checkpoint article), such challenges could potentially include claims that a plan provision discriminates based on sexual orientation (e.g., by limiting eligibility to opposite-sex spouses) or transgender status (e.g., a blanket exclusion of coverage for gender dysphoria). For more information, see EBIA’s Health Care Reform manual at Section XXXIV.A (“Section 1557 Nondiscrimination Provisions: Grounds Prohibited Under Federal Laws”) and EBIA’s Group Health Plan Mandates manual at Sections XXI.D (“Court Decisions Applying Title VII to Health Coverage”) and XXI.M.1 (“Interaction of Title VII and Section 1557”). See also EBIA’s Self-Insured Health Plans manual at Section XIII.D.5 (“Section 1557 Nondiscrimination: Nondiscrimination in Health Programs and Activities”) and EBIA’s Consumer-Driven Health Care manual at Section XXV.G.5.e (“Section 1557 Requirements”).

Contributing Editors: EBIA Staff.

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