Update to Section 1557 Nondiscrimination Final Rule

May 24, 2021

To: Hospital Chief Executive Officers, Legal Counsel and Government Affairs Staff
From: Cara Helmer, BSN, RN, JD, Policy Director, Legal Affairs
CaraH@wsha.org | (206) 577-1827
Subject: Update to Section 1557 Nondiscrimination Final Rule


The purpose of this bulletin is to inform hospitals and health systems of a change of interpretation to section 1557, the nondiscrimination provision of the Affordable Care Act (ACA). On May 10, 2021, the Office for Civil Rights (OCR) at the U.S. Department for Health and Human Services (HHS) announced that it will interpret section 1557 to prohibit discrimination on the basis of gender identity and sexual orientation.

All hospitals and health systems, as recipients of federal funds, are subject to section 1557 and other federal anti-discrimination laws.

WSHA strongly recommends that hospitals maintain robust nondiscrimination practices to meet the needs of their patients and communities. Nondiscrimination practices are crucial tools to ensure patients receive the care they need, regardless of their sexual orientation, gender identity or other background.

Consistent with the Supreme Court decision in Bostock v. Clayton County, as of May 10, 2021, OCR will interpret section 1557’s ban on sex discrimination to include discrimination on the basis of sexual orientation and discrimination on the basis of gender identity.

In 2020, the prior administration amended the federal rules implementing section 1557. This rulemaking changed the way that section 1557 was interpreted and implemented (see WSHA prior bulletin for details here). Those changes included, among other things, reduced language access requirements, a narrowed definition of sex as the basis for discrimination, and a reduced scope and applicability of section 1557.

Although the recent OCR announcement clarifies that LGBTQ persons are protected from discrimination under section 1557, it does not address or undo the other changes made in the 2020 rule. Many of those changes are still being litigated and may be the subject of future OCR rulemaking. Similarly, while the original section 1557 rules provided guidance and examples of discrimination based on gender identity and sexual orientation, this recent announcement does not include that type of detail or any definitions for what constitutes discrimination. Further rulemaking, guidance, and clarification from OCR is likely.

Section 1557 is the nondiscrimination provision of the ACA. It builds on longstanding nondiscrimination laws and prohibits discrimination based on race, color, national origin (including Limited English Proficiency), age, disability or sex. In 2016, the Obama administration issued a final rule implementing section 1557. Parts of that rule are still subject to ongoing litigation today. The Trump administration issued a revised final rule in 2020, significantly narrowing many of the protections provided by section 1557 under the 2016 rule. Unlike the 2016 rule, the 2020 rule considered sex discrimination to only be discrimination based on gender assigned at birth. The 2020 rule did not prohibit discrimination based on sexual orientation or gender identity.

On June 15, 2020, the Supreme Court issued an opinion in Bostock v. Clayton County holding that it is a violation of Title VII for an employer to fire someone for being gay or transgender because “it is impossible to discriminate against a person for being homosexual or transgender without discriminating against that individual based on sex.” This holding called the 2020 rule, and its lack of protection against discrimination for LGBTQ people, into question.

OCR’s recent announcement is that it plans to investigate and enforce section 1557 consistent with the Supreme Court’s decision in Bostock. OCR will therefore interpret “discrimination on the basis of sex” to include discrimination based on sexual orientation and discrimination based on gender identity.

In addition to OCR’s announcement regarding the interpretation of 1557, Washington State’s law against discrimination (WLAD) prohibits discrimination on the basis of gender identity and sexual orientation. Washington law also prohibits insurance companies from refusing to issue or renew, cancel or decline a contract because of an individual’s sexual orientation. Moreover, as of May 2021,Washington state law also prohibits insurers from discriminating against policyholders based on gender expression or identity. (See here for a statement from the Office of the Insurance Commissioner.)

WSHA’s 2021 New Law Implementation Guide—COMING SOON!
Please visit WSHA’s New Law Implementation Guide online. The Government Affairs team is hard at work preparing resources and information on the high-priority bills that passed in 2021 to help members implement the new laws, as well as links to resources such as this bulletin. For now, you will find resources from 2019 and 2020 laws.

WSHA Bulletin on the 2020 Trump Administration 1557 Rule Changes

Notice from the Office for Civil rights at the U.S. Department of Health and Human Services

Health Affairs Summary on HHS Announcement Regarding 1557 Interpretation

Office of the Insurance Commissioner news release on 2SSB 5313

Bostock v. Clayton County, 590 U.S. __ (2020)

RCW 49.60—Washington Law Against Discrimination


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