ComplianceMINUTE | Dan Kuperstein | ERISA Penalties Increase for Form 5500 Violations!

Nationwide ACA Nondiscrimination Injunction | February 24, 2017

By | Senior Vice President, Compliance | 2.24.2017
On December 31, 2016, on the eve of the effective date for ACA Nondiscrimination rules, a federal district court enjoined the enforcement of these regulations. Currently, if your organization is a covered entity, there is now no requirement to change your insurance plan to ensure that it does not discriminate on the basis of gender identity or pregnancy.

While the government may still appeal the decision, after Jan. 20, President Donald Trump could decide to eliminate or revise the final regulation. We will keep you updated!

Resource: United States District Court for the Northern District of Texas Court Injunction Ruling

Video Transcript: 
Hi, I’m Dan Kuperstein, and welcome to ComplianceMINUTE.

In an earlier episode, we discussed final nondiscrimination regulations issued under Section 1557 of the ACA that are applicable to insurance companies, TPAs and entities that receive funding from the Department of Health and Human Services. The final rules under Section 1557 prohibit discrimination in health programs and activities on the basis of race, color, national origin, sex, age or disability.

The most notable and certainly most controversial parts of these rules were provisions prohibiting discrimination on the basis of gender identity and termination of pregnancy under the law’s prohibition of “sex discrimination.”

On December 31, 2016, on the eve of their effective date, a federal district court enjoined the enforcement of these regulations.

Specifically, after five states sued to stop the rules as not authorized by federal statutory law, and after three religious health care entities also challenged the regulation on grounds that it impinged on their religious rights, the U.S. District Court for the Northern District of Texas granted a nationwide preliminary injunction, finding that the gender identity and termination of pregnancy provisions of the regulation contradict existing law, exceed statutory authority and, as applied to religious entities, likely violate the Religious Freedom Restoration Act (or RFRA).

In deciding to enjoin enforcement of the final regulation, the district court considered the impact of the regulation on religious health care providers and noted that the Section 1557 regulations imposed a substantial burden on the plaintiffs’ religious exercise. The court further noted that the government failed to identify any compelling interest that would justify burdening religious exercise in this manner.

What are the key takeaways here for employers? Well, the preliminary injunction applies nationwide and extends to the Section 1557 regulations prohibiting discrimination on the basis of gender identity and termination of pregnancy, in the context of both insurance coverage and the provision of health care services.

Accordingly, if your organization is a covered entity, there is now no requirement to change your insurance plan to ensure that it does not discrimination on the basis of gender identity or pregnancy.

Other provisions of the law, however, do still apply to covered entities, including rules enhancing language assistance for people with limited English proficiency and other requirements of the sex discrimination prohibition.

While the government may still appeal the decision, after Jan. 20, President Donald Trump could decide to eliminate or revise the final regulation, and given his promised repeal and replacement of the ACA, this would not be an unlikely outcome. We will continue to watch this closely and keep you updated.

For more information on this and other ACA topics, visit our Knowledge Center at corpsyn.com. Thank you.

Summary
Nationwide ACA Nondiscrimination Injunction | February 24, 2017
Title
Nationwide ACA Nondiscrimination Injunction | February 24, 2017
Description

On December 31, 2016, on the eve of the effective date for ACA Nondiscrimination rules, a federal district court enjoined the enforcement of these regulations. Currently, if your organization is a covered entity, there is now no requirement to change your insurance plan to ensure that it does not discrimination on the basis of gender identity or pregnancy.