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1557 Discrimination Guidance

The final healthcare reform non-discrimination rules, which are being referred to in the industry as 1557 rules, were released by the Department of Health and Human Services (HHS) last spring. We’ve recapped these regulations below. If you’ve not already done so, please be sure to contact your Client Solutions team if you have determined these rules apply to you.

Who is impacted?
Plans must comply ONLY if they receive federal financial assistance. Financial assistance does not mean simply receiving payments from Medicare or Medicaid; federal financial assistance from HHS includes receiving premium tax credits through qualified health plans on the Public Exchange, and payments from Medicare Parts A, C and D. Please note, plans should consult their own counsel to confirm applicability.

What did the guidance say?
There are two main components with which those impacted must comply. We have summarized these in the chart below. 


Benefits for transgender individuals

The final non-discrimination rules expanded the definition of discrimination to include protection for transgender individuals. Plans cannot limit coverage of covered medically necessary benefits based on an individual’s gender at birth or "identified sex" at the time of the service/claim. For example, if an individual was born a female, but now identifies as a male, the plan cannot deny claims for women’s preventive care simply because the individual identifies as male.


Plans are permitted to impose reasonable medical necessity guidelines to determine whether a particular service is medically appropriate or not. There is no requirement to cover transgender surgeries that are not deemed medically necessary.


Plan sponsors should consult with their own legal counsel to determine if Section 1557 applies to them and if any benefit changes are required within their plan design including whether they want to opt in or opt out of covering the Gender Reassignment Surgery.


Those impacted will need to comply with this portion of the requirement as of their first plan year in 2017.

Communication assistance

Those that must comply with this guidance must also post Notices of Consumer Civil Rights advising individuals that they have communication assistance available to them if they have limited English skills. The notices must be provided in at least the top 15 non-English languages spoken within a state and must be made available on physical premises, on the web, and in significant documents (you may hear these referred to as “taglines”).


Those impacted need to comply with this portion of the requirements upon confirmation of applicability and should not wait until their next plan year to include their notice and taglines in significant plan materials.


Is any action required at this time?
There is no action required of those not directly impacted by this guidance. If you wish to voluntarily provide additional coverages to transgender individuals, you may request an amendment to your plan. There is no requirement to cover transgender surgeries.


If you have determined that you must comply, please be sure to provide your notice and taglines to your Client Solutions team so that we may place these in the plan materials that we generate on your behalf.  Please note that the regulations specify impacted plans may exhaust existing stock of any printed plan materials, but should consider enclosing an insert of the required notice and taglines with the material.


You may have heard that a preliminary injunction was filed in the State of Texas related to two provisions of these requirementsgender identity and termination of pregnancy. At this time, it is recommended that impacted plans move forward in complying as the injunction is only preliminary.


If you have any questions, please contact your Client Solutions team.


This content is being provided as an informational tool. It is believed to be accurate at the time of posting and is subject to change. It is recommended that plans consult with their own experts or counsel to review all applicable federal and state legal requirements that may apply to their group health plan. By providing this information, Meritain Health is not exercising discretionary authority or assuming a plan fiduciary role, nor is Meritain Health providing legal advice.