The Office of Civil Rights (OCR) has issued final regulations on Section 1557 of the Affordable Care Act (ACA), which prohibits discrimination in health programs and activities that receive federal financial assistance (FFA). The ban applies to discrimination on the basis of race, color, national origin, sex, age or disability. The regulations focus on sex, disability and limited English proficiency, and outline procedures for filing complaints and providing required notices. Generally, health programs and activities that receive FFA, insurers participating in a state or federal exchange and all health programs funded by the Department of Health and Human Services (HHS) are subject to the rules.

Eliminating some earlier confusion, the final regulations clarify that Section 1557 does not apply directly to sponsors of self-insured group health plans that do not receive FFA. Third-party administrators (TPAs) that receive FFA are subject to the rules as they relate to plan administration.

The regulations generally take effect July 18, 2016. However, to the extent the rules necessitate changes to health insurance or group health plan benefit design, they do not apply until the first day of the first plan or policy year beginning on or after January 1, 2017.

Covered entities

The Section 1557 regulations apply to the following entities:

  • Health programs and activities that receive FFA through HHS, including, among others, doctors, hospitals, skilled nursing facilities, home health agencies, physical therapy/speech pathology programs, end-stage renal disease dialysis centers, rural health clinics, outpatient rehabilitation facilities, ambulatory surgical centers, retail and mail-order pharmacies, hospices, community health centers, state Medicaid agencies, and state public health agencies that accept Medicare, Medicaid or other federal government funding, as well as student health plans, Children’s Health Insurance Program (CHIP) funds and advance premium tax credits under the ACA
  • Health programs and activities administered by HHS, including the federally facilitated marketplace (FFM) and Medicare Part D1
  • Health insurance exchanges and all plans offered by issuers that participate in those exchanges

As noted, the rules apply to services provided by TPAs that receive FFA, and the regulations set out procedures for processing complaints against TPAs. In claims of discrimination against self-insured group health plans administered by covered TPAs, the OCR will assign responsibility for the discriminatory decision or action to either the employer or the TPA and proceed accordingly.

For example, if a TPA threatened to expose an employee’s transgender or disability status to his or her employer, the OCR would act against the TPA. However, if a self-insured plan that received FFA excluded coverage for health services related to gender transition, the OCR would proceed against the employer. If the employer did not receive FFA, the OCR might refer the complaint to an agency with jurisdiction, such as the Equal Employment Opportunity Commission, which prohibits discrimination based on gender identity or sexual orientation under Title VII of the Civil Rights Act.

If a TPA that is a covered entity provides services to a self-insured group health plan that is not subject to the rules, the TPA might require the plan sponsor to sign a “hold harmless” agreement or similar release from liability if the plan design would otherwise be discriminatory.


Discrimination under Section 1557 could involve excluding someone from participation, denying or limiting benefits or claims, or subjecting someone to higher cost sharing, discriminatory marketing or benefit designs based on race, color, national origin, sex, age or disability. Specific protections include:

  1. Sex and gender discrimination. Covered plans, programs and activities must meet the following requirements:
    • Treat men and women equally in providing health care coverage and services.
    • Does not discriminate based on childbirth, sex stereotyping, pregnancy, false pregnancy, termination of pregnancy or recovery from pregnancy.
    • Does not discriminate based on gender identity, which includes identity as “male, female, neither, or a combination of male and female.” Covered entities must treat transgender individuals consistently with their gender identity. However, if a health service is ordinarily and exclusively available to one gender, the entity must provide that service to someone with a different gender identity if the service is necessary or appropriate. For example, a covered entity cannot deny treatment for ovarian cancer to a transgender male who would benefit from the treatment.

    While there is no blanket prohibition on discrimination based on sexual orientation in the final regulations, the OCR says it will evaluate allegations of sex discrimination based on sexual orientation to uncover any discriminatory stereotyping of sexual attraction or behavior.

    The final regulations do not mandate any specific coverage, such as transgender surgery. However, categorical coverage exclusions or limitations for health services related to gender transition are considered discriminatory.

  2. Disability discrimination. Covered entities must:
    • Make all programs and activities delivered using electronic and information technology as accessible to people with disabilities as to others, unless doing so would impose undue financial or administrative burdens or would fundamentally alter the program or activity.
    • Provide appropriate auxiliary aids and services where necessary for effective communication.
    • Post a notice of individuals’ rights, providing information about communications assistance, among other information.
    • Ensure the accessibility of newly constructed or altered facilities by complying with the Americans with Disabilities Act (ADA) Standards for Accessible Design (most covered entities are already required to comply under the ADA).
    • Make reasonable changes to policies, practices and procedures as necessary to offer equal access to people with disabilities, unless the entity can demonstrate that such changes would fundamentally alter the health program or activity.

    Covered entities may not adopt marketing practices or benefit designs that discriminate on the basis of disability.

  3. Language proficiency discrimination. Covered entities must:
    • Take reasonable steps to provide meaningful access to all limited English proficiency (LEP) individuals who are eligible or likely to be encountered in their programs and activities, such as using qualified oral interpreters or written translators.
    • Provide cost-free language assistance services that are timely, accurate and confidential.
    • Generally must post taglines — short statements advising consumers of their right to free language assistance services — in at least the top 15 non-English languages spoken in the state where the entity resides or does business (or the top two non-English languages for smaller communications). Those serving people in more than one state may aggregate the number of those with LEP in those states to determine the top 15 (or top two) languages.

    The OCR has provided a sample notice, nondiscrimination statement and taglines in 64 languages.

  4. Religious exemption. While there is no religious exemption, the rules do not displace existing protections for religious freedom and conscience.

Notices and publications

Under the final regulations, covered entities must file an assurance of compliance form with the OCR and take appropriate initial and continuing steps to notify beneficiaries, applicants and the public of the following:

  • Their nondiscrimination policy
  • Cost-free appropriate aids and services and how to receive them
  • LEP language assistance services and how to obtain them
  • The individual responsible for compliance with Section 1557, if applicable
  • Grievance procedures, if applicable
  • How to contact OCR to file a discrimination complaint

This information must be posted in conspicuous locations where the entity serves the public, on its website, and in significant publications and communications targeted to enrollees, applicants and the public.

The requirement to designate an employee responsible for compliance and establish grievance procedures applies to covered entities with 15 or more employees.


1. The federally facilitated marketplace operates in states that do not have their own exchanges.