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A legal case focused on transgender rights may provide further validation of the protections offered by Section 1557 of the Affordable Care Act.
The case involves Sergeant Anna Lange and her employer, the Houston County Police Department located in Perry Georgia. In her case, Lange filed a lawsuit because her health care provider did not cover her gender-affirmation surgery because of an exclusion in the health plan Lange and her attorney asserts was a choice made by her employer.
Lange is suing the Houston County Board of Commissioners to remove the exclusion, alleging unlawful discrimination.
NPR described the case this way in a recent article: “Lange’s suit argues that the county’s exclusion of transgender health care from coverage was deliberate: In documents Lewis obtained under the Freedom of Information Act, Kenner Carter, the county’s personnel director opted out of compliance with Section 1557 of the Affordable Care Act, which prohibits discrimination by health programs on the basis of gender identity.”
If Lange wins the lawsuit it could lead to counties and states requiring government agencies to remove this transgender exclusion from their health plans. According to NPR, 30 states allow health insurance plans to exclude transgender-related health care from coverage even though the federal law prohibits the discrimination.”
Section 1557 of the ACA prohibits discrimination on the basis of race, color, national origin, sex, age, and disability in certain health programs. While gender identity is not explicitly included as a protected class in Section 1557, an Obama era Health and Human Services rule from 2016 interpreted the prohibition of discrimination on the basis of sex in Section 1557 to include gender identity. In addition, around this time last year, Judge Donovan Frank, a federal judge from Minnesota, ruled that gender identity is a protected group set forth by Section 1557 and encompassed within its prohibition against sex discrimination.
Conversely, Judge Reed O’Connor, a federal judge from Texas, the same judge that ruled the entire ACA unconstitutional, recently ruled that the Obama era rule interpreting the Section 1557 prohibition of discrimination on the basis of sex to include gender identity violates the Administrative Procedure Act (APA) and the federal Religious Freedom Restoration Act (RFRA). He sent the Obama era rule back to U.S. Health and Humans Services (HHS) for further consideration. HHS has two years to review the rule for consideration, but until that review is complete, the law remains in force. This past May, the Trump administration proposed a rule that interprets sex discrimination much more narrowly effectively excluding gender identity from its discrimination protections. (More on this can be found in an article at Health Leaders.)
Government employers have a stake in this case and may want to monitor it closely. Private employers also may want to follow this case because of the impact it may eventually have on the type of health insurance coverage they offer to employees.
Under the ACA’s Employer Mandate, Applicable Large Employers (ALEs) (organizations with 50 or more full-time employees and full-time equivalent employees) are required to offer Minimum Essential Coverage (MEC) to at least 95% of their full-time workforce (and their dependents) whereby such coverage meets Minimum Value (MV) and is Affordable for the employee or be subject to Internal Revenue Code (IRC) Section 4980H penalties.
The IRS is currently issuing penalty notices to employers identified as having failed to comply with the ACA’s Employer Mandate for the 2017 tax year. Employers that have received a penalty notice from the IRS regarding ACA non-compliance should consult external services to reduce or eliminate said penalties.
