HHS Proposes Rule Strengthening Section 1557 Protections Against Nondiscrimination in Health Activities

Alerts / August 5, 2022

On Aug. 4, the Department of Health and Human Services (HHS) published its proposed rule, Nondiscrimination in Health Care and Activities (Proposed Rule), to revise its regulations pertaining to Section 1557 of the Affordable Care Act (ACA). The aim of Section 1557 is to ensure access to health care and coverage in certain health programs or activities. The Proposed Rule aims to realign the scope of Section 1557 — which has been subject to several regulatory changes, interpretations and litigation throughout several presidential administrations — with the underlying statutory and regulatory intent, after the 2020 Final Rule regarding Section 1557 was limited in its reach following challenges to the regulation in litigation.


Section 1557, which was passed as part of the ACA in 2010, prohibits discrimination on the basis of race, color, national origin, sex, age or disability in certain health programs or activities that receive federal financial assistance. Section 1557 notably references its grounds for discrimination in the following federal civil rights laws: Title VI of the Civil Rights Act of 1964 (Title VI), Section 504 of the Rehabilitation Act of 1973 (Section 504), Title IX of the Education Amendments of 1972 (Title IX) and the Age Discrimination Act of 1975 (Age Act).

In 2016, HHS issued its initial 2016 Final Rule implementing Section 1557 regulations. As mentioned above, the 2020 Final Rule regarding Section 1557 significantly revised the 2016 Final Rule by removing many intended protections. Both the 2016 Final Rule and the 2020 Final Rule have been subject to litigation challenging their respective regulatory interpretations, which has left many of the protections intended by Section 1557 in some degree of limbo. In the Proposed Rule, HHS states that it seeks to revise the 2020 Final Rule by reinstating regulatory protections to reflect the underlying statutory text, congressional intent and legal developments.

Applicability of Section 1557

In this Proposed Rule, HHS states that the nondiscrimination provisions will apply to “(1) every health program or activity, any part of which receives Federal financial assistance, directly or indirectly, from the Department; (2) every health program or activity administered by the Department; and (3) every program or activity administered by a Title I entity” (hereafter referred to as “Covered Entity” or “Covered Entities”). The Proposed Rule makes several important clarifications, namely that Section 1557 applies to every health program or activity administered by HHS, not only programs or activities administered by HHS under Title I of the ACA.

HHS’ proposal expands the scope of Section 1557 by removing the restriction — imposed by the 2020 Final Rule — limiting its coverage to only those programs under Title I of the ACA. HHS notes that this Proposed Rule applies only to HHS programs and activities and not to those of all other federal executive agencies.

The Proposed Rule differs from both the 2016 and the 2020 Final Rules insofar as it states that Section 1557 does not apply to an employer’s employment practices, including the provision of employee health benefits. Under this proposal, HHS would maintain jurisdiction over discrimination complaints about covered health insurance or coverage, and it would forward complaints alleging employer discrimination under Section 1557 to the appropriate federal agency.

Removal of Title IX Exceptions

Section 1557 incorporates the grounds for discrimination (race, color, national origin, sex, age and disability) from other civil rights laws such as Title VI, Title IX, the Age Act and Section 504. The 2020 Final Rule incorporated exceptions to Title IX into Section 1557 regulations, including a religious exemption. HHS proposes to remove Title IX exceptions from Section 1557.

Medicare Part B and Federal Financial Assistance; Updated Definitions

Medicare Part B

The Proposed Rule seeks to update and adopt several definitions. As noted above, the regulation applies to recipients of federal financial assistance. HHS has proposed revising the definition of “Federal financial assistance” to include grants, loans and other types of assistance from the federal government, including credits, subsidies and contracts of insurance.

Importantly, as proposed, HHS will now consider Medicare Part B to be federal financial assistance. Previously, Medicare Part B was noticeably absent from the HHS programs considered to provide federal financial assistance, which included (but was not limited to) Medicare Parts A, C and D and HHS grant programs.

Health Program or Activity

HHS also proposes to define a “health program or activity” that is subject to Section 1557 to mean “any project, enterprise, venture or undertaking to provide or administer health-related services, health insurance coverage, or other health-related coverage; provide assistance to persons in obtaining health-related services, health insurance coverage, or other health-related coverage; provide clinical, pharmaceutical, or medical care; engage in health research; or provide health education for health care professionals or others.” HHS has suggested that “health care program or activity” would include all operations of an entity principally engaged in the provision or administration of health projects, enterprises, ventures or undertakings. Examples include, but are not limited to, “state or local health agency; hospital; health clinic; health insurance issuer; physician’s practice; pharmacy; community-based health care provider; nursing facility; residential or community based treatment facility; or other similar entity or combination thereof.” Thus, as proposed, Section 1557 would apply to health insurance issuers, which HHS believes is reinforced by the purpose of the ACA.

Health Insurance Issuers Are Subject to Section 1557 Prohibitions

Relatedly, the Proposed Rule reinstates Section 1557’s application to health insurance issuers and third-party administrators. Specifically, the proposal extends the prohibition on discrimination on the basis of race, color, national origin, sex, age or disability to the provision of health insurance (or other health-related coverage). The proposal would make Section 1557 applicable to Covered Entities that receive federal financial assistance and to HHS in its administration of health-related coverage programs.

Requirement to Designate Section 1557 Coordinator

The Proposed Rule reinstates a provision repealed by the 2020 Final Rule, which requires Covered Entities with 15 or more employees to designate an employee to serve as Section 1557 coordinator to facilitate compliance with Section 1557. Under the proposal, Covered Entities can appoint more than one designee to coordinate compliance responsibilities, but the Section 1557 coordinator is charged with ultimate oversight of a Covered Entity’s compliance. The Section 1557 coordinator’s proposed responsibilities include:

  • Receiving, reviewing and processing grievances filed under the grievance procedure.
  • Coordinating record-keeping requirements.
  • Coordinating effective implementation of language access procedures.
  • Coordinating effective implementation of effective communication procedures.
  • Coordinating the Covered Entity’s procedures for providing reasonable modifications for individuals with disabilities.
  •  Coordinating training of relevant employees and maintaining related documentation.
Policies, Procedures and Training

Recipients of federal financial assistance are required to implement, for health care programs and activities, a nondiscrimination policy, grievance procedures (as applicable), written language access procedures to provide meaningful access to limited English proficiency (LEP) persons, auxiliary aids and services, and written procedures for effective communications with and reasonable accommodations for people with disabilities. The Proposed Rule also requires Covered Entities to train relevant employees on the required Section 1557 policies.

Notice of Nondiscrimination

The Proposed Rule requires a recipient of federal financial assistance to provide a notice of nondiscrimination in its health programs and activities to participants, beneficiaries, applicants and the public. The Proposed Rule lists several detailed content requirements for the notice, including that “the covered entity does not discriminate on the basis of race, color, national origin (including limited English proficiency and primary language), sex (including pregnancy, sexual orientation, gender identity, or sex characteristics), age, or disability in its health programs or activities.” The notice must also state that the Covered Entity provides reasonable accommodations for individuals with disabilities, including auxiliary aids and services (such as qualified interpreters), and that language assistance services, including written translated documents and oral interpretation, are provided free of charge. The notice must be given annually and, upon request, be placed conspicuously on the Covered Entity health program’s website and be prominently displayed in physical locations where it is expected that individuals seeking service will see or hear the notice.

Notice of Availability of Language Assistance Services

Similar to the “tagline” requirement in the 2016 Final Rule, which was removed by the 2020 Final Rule, the Proposed Rule reinstates the requirement that a Covered Entity provide a “notice of availability” stating that it provides language assistance services and auxiliary aids and services free of charge in its health programs and activities. The notice can be in the form of written translations or recorded audio or video clips. The notice must be provided in English and in the 15 most common languages spoken by LEP individuals of the relevant state(s). Upon request, the notice must be provided in alternative formats to individuals with disabilities to facilitate effective communication. The notice must be provided annually and upon request, be posted conspicuously on the Covered Entity’s website, and be placed in prominent physical locations. The proposal also permits Covered Entities to annually offer individuals the opportunity to opt out of the annual notice, subject to certain requirements.

Updated Regulatory Language and Protections Against Sex Discrimination

The Proposed Rule codifies that discrimination on the basis of sex prohibited under Section 1557 includes sex stereotypes, characteristics (including intersex traits), pregnancy, sexual orientation and gender identity. Based on Supreme Court precedent, it is the view of HHS that Title IX’s prohibition “on the basis of sex” and Section 1557’s prohibition “on the ground prohibited under Title IX” include discrimination based on gender identity and sexual orientation.

In a new provision not included in either the 2016 Final Rule or the 2020 Final Rule, HHS proposes a prohibition on discriminating on the basis of sex with respect to an individual’s marital, parental or family status. HHS is also seeking comment on whether it should include protections against discrimination on the basis of pregnancy-related conditions as a form of sex discrimination.

Meaningful Access for LEP Individuals and Machine Translation

HHS is proposing a revision to its prohibition on national origin discrimination as applied to LEP individuals by requiring meaningful access for “each limited English proficient individual eligible to be served or likely to be directly affected by its health programs and activities,” which differs from the Final 2020 Rule. In addition to proposing specific interpreter and translation requirements, the Proposed Rule addresses the use of machine translation in the health care setting, and provides that a qualified human translator review materials translated via machine translation in certain circumstances. The Proposed Rule also contains restrictions on who may provide language assistance services and addresses standards for the provision of video remote interpreting.

Nondiscrimination in Use of Clinical Algorithms

In a new provision, HHS prohibits discrimination against any individual on the basis of race, color, national origin, sex, age or disability through the use of clinical algorithms in decision-making. HHS acknowledges the prevalence of clinical algorithms and the risk of discrimination based on decisions made in reliance on them. HHS describes clinical algorithms as tools used for making health care decisions that can be in the form of “flowcharts and clinical guidelines to complex computer algorithms, decision support interventions, and models.” According to HHS, clinical algorithms can be used by hospitals, providers and payers to assist in decision-making, including “screening, risk prediction, diagnosis, prognosis, clinical decision-making, treatment planning, health care operations, and allocation of resources.”

While HHS has stated that it does not intend to curb the use of clinical algorithms, it instead puts Covered Entities on notice that discrimination that stems from the use of clinical algorithms is prohibited. HHS stresses that although Covered Entities are not liable for clinical algorithms they did not develop, they may be held liable for decisions made in reliance on them. According to HHS, “[b]y over-relying on a clinical algorithm in their decision-making, such as by replacing or substituting their own clinical judgment with a clinical algorithm, a covered entity may risk violating Section 1557 if their decision rests upon or results in discrimination.”

Nondiscrimination in Telehealth Services

In the first instance of telehealth being mentioned within the Section 1557 context, the Proposed Rule prohibits a Covered Entity from discriminating on the basis of race, color, national origin, sex, age or disability in the provision of telehealth services for its health programs and activities. HHS defines telehealth as “the use of electronic information and telecommunications technologies to support long-distance clinical health care, patient and professional health-related education, public health, and health administration.” HHS acknowledges the increased use of telehealth during the coronavirus pandemic (COVID-19) and notes that, despite the benefits of telehealth, it is also subject to accessibility challenges and barriers to communication. This provision aligns with steps taken by both HHS and the Department of Justice to ensure telehealth accessibility, as summarized in our prior alert, HHS and DOJ Issue Joint Guidance on Nondiscriminatory Telehealth Practices.

Examples of challenges presented are the inability of a platform to incorporate third-party services, a lack of compatibility with assistive technology, remote patient monitoring devices not being accessible for people with physical disabilities, and inaccessible mobile health applications. Under the rule as proposed, Covered Entities must provide telehealth in a nondiscriminatory manner on a protected basis and must provide effective communication, including language assistance services for LEP persons, and auxiliary aids and services.

Notification Regarding Views on Federal Religious Freedom Laws

In a new provision, recipients of federal financial assistance can notify HHS of their belief that a specific application of Section 1557 regulations would violate federal conscience or religious freedom laws. As proposed, upon receipt of notification, the Office for Civil Rights would promptly consider the views expressed when responding to any complaints or determining whether to investigate or engage in enforcement against the Covered Entity.

CMS Regulations Reinstated for Consistency

As part of its wide-ranging scope, the Proposed Rule aims to identify prohibited discrimination on the basis of sexual orientation and gender identity in certain Centers for Medicare & Medicaid Services (CMS) programs, such as the Children’s Health Insurance Program (CHIP) and the Program of All-Inclusive Care for the Elderly (PACE), by amending and reinstating 10 CMS regulations that were deleted by the 2020 Final Rule. CMS has also proposed to apply these protections to its Medicaid fee-for-service programs and managed care delivery systems.


If finalized as proposed, this rule will greatly expand protections for applicable individuals, extend the applicability of Section 1557 and increase the compliance obligations of Covered Entities. We will continue to monitor and report significant rulemaking related to the Proposed Rule.

Authorship Credit: Justin Chavez and Vimala Devassy

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