On Aug. 17, 2020, a federal district court granted an injunction blocking a Department of Health and Human Services (HHS) regulation that would have allowed health care and insurance discrimination based on sex stereotyping, gender identity and pregnancy-related conditions.

ACA Section 1557 Regulations
A 2016 HHS regulation defined the term “sex” to include sex stereotypes and gender identity, along with pregnancy termination and other pregnancy-related conditions.Under Section 1557 of the Affordable Care Act (ACA), discrimination on the “basis of sex” is prohibited in “any health program or activity” that receives federal funds or is administered by a federal agency.

In 2020, HHS issued new regulations that changed the 2016 definition of “sex” to allow for distinctions based on “the biological binary of male and female.” The 2020 rule was set to go into effect on Aug. 18, 2020.

Conflict with Supreme Court’s Bostock Decision
In the August 17 case, Walker v. Azar, the U.S. District Court for the Eastern District of New York held that the 2020 HHS regulation conflicts with the U.S. Supreme Court’s recent decision in Bostock v. Clayton County. In that case, the Supreme Court ruled that employment discrimination based on sexual orientation or gender identity violates Title VII of the Civil Rights Act. The Walker court noted that HHS had finalized the 2020 regulation without considering the Bostock ruling.

In addition to granting the injunction that blocks HHS from enforcing the 2020 version of the rule, the Walker court held that the 2016 regulation remains in effect pending further court action.

Legal Update: Supreme Court Rules Sexual Orientation and Gender Identity Discrimination Violates Title VII
Compliance Update: Health Plan Coverage for Same-sex Spouses

This Legal Update is not intended to be exhaustive nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel for legal advice. ©2020 Zywave, Inc. All rights reserved.