On May 10, 2021, the United States Department of Health and Human Services (HHS) announced that the anti-discrimination provisions in Section 1557 of the Patient Protection and Affordable Care Act (Section 1557) cover discrimination on the bases of sexual orientation and gender identity. Learn more about what this updated guidance means for California employers below.

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Background and Enforcement

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Section 1557 prohibits discrimination on the grounds of race, color, national origin, sex, age, and disability in certain health programs and activities that receive federal funding. As of May 10, 2021, the HHS now interprets and enforces Section 1557’s ban on sex discrimination to include discrimination on the bases of gender identity and sexual orientation. The HHS’s Office for Civil Rights (OCR), which enforces Section 1557, has jurisdiction over any health program or activity that receives federal financial assistance from the HHS, or is administered by HHS or any entity established under Title I of the Affordable Care Act.

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This announcement reverses a policy enacted by the previous administration, which rolled back anti-discrimination protections in healthcare for transgender individuals, and is part of a larger federal initiative to “fully enforce Title VII and other laws that prohibit discrimination on the basis of gender identity or sexual orientation.” In January, President Biden released an Executive Order instructing federal agencies to interpret civil rights laws that prohibit sex discrimination to encompass discrimination on the bases of gender identity and sexual orientation. The Order codified and extended the 2020 verdict in Bostock v. Clayton County, in which the U.S. Supreme Court ruled that employers who terminate a worker for identifying as gay or transgender violate Title VII’s prohibition on sex discrimination. Learn more about that ruling here.

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Implications for California Employers

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Employers—particularly those who receive or whose employee health plans receive HHS funding—should review their plans to ensure that they are in compliance with the HHS’s newly interpreted anti-discrimination policies.

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Access the HHS’s Notification of Interpretation and Enforcement of Section 1557 here.

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Access a summary of Section 1557 of the Patient Protection and Affordable Care Act here.

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Learn more about President Biden’s Executive Order here.

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If you have questions regarding the application of the HHS’s updated guidance to your business, please contact one of the following attorneys in The Maloney Firm’s Employment Law Department: Patrick Maloney, Lisa Von Eschen, Samantha Botros, or Nicholas Grether.

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