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Appellate Court Blocks HHS From Enforcing Certain Section 1557 Nondiscrimination Provisions Against Group of Faith-Based Providers

EBIA  

EBIA  

Franciscan Alliance, Inc. v. Becerra, 2022 WL 3700044 (5th Cir. 2022)

Available at https://www.ca5.uscourts.gov/opinions/pub/21/21-11174-CV0.pdf

In a long-running dispute between HHS and a group of faith-based health care providers over the reach of Affordable Care Act (ACA) Section 1557, the Fifth Circuit has upheld a permanent injunction prohibiting HHS from requiring the providers to perform or provide insurance coverage for gender-transition procedures or abortions. The providers’ original lawsuit challenged portions of the 2016 Section 1557 regulations that prohibited discrimination in health programs and activities based on gender identity or termination of pregnancy. The trial court vacated those provisions (see our Checkpoint article). It later concluded that the Religious Freedom Restoration Act (RFRA) had been violated and permanently enjoined HHS from interpreting or enforcing Section 1557 or any implementing regulations against the providers with respect to gender-transition procedures or abortions. HHS appealed.

The Fifth Circuit affirmed the trial court’s vacatur of the challenged portions of the 2016 regulations and upheld the injunction, reasoning that both actions were necessary to protect the providers against future agency action. The court cited recent HHS actions—including August 2022 proposed regulations (see our Checkpoint article) and a March 2022 Notice on gender affirming care (see our Checkpoint article)—as evidence of the agency’s intent to continue to enforce Section 1557 using an approach similar to the 2016 regulations. Absent further litigation, such enforcement will be blocked as to these providers.

EBIA Comment: Agency interpretation of Section 1557 remains in flux. The 2020 regulations are still in effect even as comments are sought on the 2022 proposals. Despite legal challenges, HHS remains steadfast in its determination that Section 1557 protects individuals’ rights to health care regardless of gender identity or if they are seeking termination of pregnancy. For more information, see EBIA’s Health Care Reform manual at Section XXXIV.A (“Section 1557 Nondiscrimination: Grounds Prohibited Under Federal Laws”), EBIA’s Group Health Plan Mandates manual at Section XXI.M.1 (“Interaction of Title VII and Section 1557”), and EBIA’s Self-Insured Health Plans manual at Section XIII.D.5 (“Section 1557 Nondiscrimination: Nondiscrimination in Health Programs and Activities”).

Contributing Editors: EBIA Staff.

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