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Important Self-Insured Employer Update on PPACA Section 1557

We want to make all self-insured businesses aware of Section 1557 of the Patient Protection and Affordable Care Act (ACA) Final Rule, which was published on May 18, 2016 by the U.S. Department of Health and Human Services Office for Civil Rights (OCR). Specifically, we encourage all self-insured businesses to consult with their legal counsel on benefit designs that could potentially be viewed as discriminatory.

Section 1557 of the ACA prohibits "covered entities" from discriminating on the basis of race, color, national origin, age, disability, and sex in certain health programs and activities. The Final Rule states that any categorical exclusions of coverage for health care services related to gender transition are discriminatory. Self-insured businesses that currently exclude gender reassignment surgery have until their 2017 anniversary date to comply with this requirement. The Final Rule outlines that in investigating any complaints, where a self-insured health plan categorically excludes gender reassignment coverage, OCR will refer the matter to the Equal Employment Opportunity Commission for investigation when the self-insured health plan is not a "covered entity."

It is important to note that benefit changes resulting from Massachusetts mandates are put in place as a core benefit within all of our health plans for both fully insured and self-insured businesses. Self-insured businesses have the ability to opt-out of these Massachusetts mandates. An example of a Massachusetts mandate that imposes an age limitation on a benefit would be the requirement to cover hearing aids for all members age 21 and younger. Self-insured businesses that have reviewed their benefit and plan designs and wish to remove any limitations or opt-out of a specific mandate should contact their Account Executive to discuss modifications to their benefit design.

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