Section 1557 of the Affordable Care Act aims to advance healthcare equity. This statutory provision provides that current non-discrimination laws, such as the Civil Rights Act of 1964, will now apply to individuals and entities participating in any (1) healthcare program or activity that is paid for in part or administered by the Department of Health and Human Services (“HHS”) and (2) federally facilitated and state-based health insurance marketplaces (collectively “Covered Entities”).

For the first time, Section 1557 prohibits discrimination on the basis of sex and requires treatment of individuals consistent with their gender identity in federally funded healthcare programs. The law also reaffirms the previous prohibitions on discrimination based on race, color, national origin, disability and age within federally funded healthcare programs. Additionally, Section 1557 extends these nondiscrimination protections to individuals who purchase health insurance through the health insurance marketplaces.

On May 18, 2016, the HHS Office for Civil Rights (“OCR’) issued a final rule implementing Section 1557 that educates (1) patients about their rights and (2) Covered Entities about their legal duties. The final rule became effective on July 18, 2016. Although the final rule was issued recently, Section 1557 has been in effect since the Affordable Care Act’s passage in 2010. During this time, OCR has been investigating discrimination claims and enforcing Section 1557.

Courts and administrative bodies may award compensatory damages for violations of Section 1557. However, this statutory provision will be primarily enforced under pre-existing federal-non-discrimination laws such as the Civil Rights Act of 1964.

Sherman & Howard is happy to assist Covered Entities to come into compliance with Section 1557.

Actions Steps:

• Immediately:
  • If your Covered Entity has 15 or more employees:
    • Draft a Section 1557 grievance procedure
    • Designate an employee to coordinate compliance with Section 1557
  • If your Covered Entity has fewer than 15 employees, your Covered Entity is not required to have a Section 1557 grievance policy or coordinator
  • Take reasonable steps to provide meaningful access to patients with limited English proficiency and patients with disabilities who require auxiliary aids
  • Ensure that your Covered Entity provides electronic and information technology in a manner accessible to patients with disabilities
• By October 16, 2016:
  • Draft (1) a notice of patients’ rights under Section 1557 and (2) taglines about language assistance services in the top 15 languages spoken in the state in which your Covered Entity is located
    • HHS has created sample notices and taglines that may be used and are available here.
  • Post the notice and taglines in conspicuous locations in your Covered Entity’s office, website, and significant publications and communications
• By the first-plan year beginning on January 1, 2017, ensure applicable health insurance and group benefit designs comply with Section 1557
• Ensure that new construction or alterations performed at your Covered Entity’s facilities comply with the American with Disabilities Act 2010 standards

Sherman & Howard L.L.C. has prepared this advisory to provide general information on recent legal developments that may be of interest. This advisory does not provide legal advice for any specific situation and does not create an attorney-client relationship between any reader and the Firm.

©2016 Sherman & Howard L.L.C.                                                                                       August 18, 2016