Compliance Alert-ACA Section 1557 (Action Required for “Covered Entities” on October 17th)

In May, the Department of Health and Human Services (HHS) published a final rule implementing Section 1557 of the Affordable Care Act (ACA) which prohibits discrimination on the basis of race, color, national origin, sex, age, or disability in certain health programs or activities. The rule is effective for plan years beginning on or after January 1, 2017.

Who is Subject to Section 1557?

Section 1557 prohibits discrimination in health programs and activities offered by covered entities.  Section 1557 extends nondiscrimination protections to individuals participating in:

  • Any health program or activity any part of which received funding from HHS;
  • Any health program or activity that HHS itself administers; and
  • Health Insurance Marketplaces and all plans offered by issuers that participate in those Marketplaces.

Examples of “covered entities” include: nursing homes, physicians, hospitals and dentists.

Does Section 1557 Impact My Group Health Plan?

Fully Insured Plans: Many employers and their health plans will not be directly subject to the rules. However, employers that sponsor fully-insured group health plans, with plans purchased and underwritten by insurance carriers, will be offering plans that will be impacted by these rules.

Self-Insured Plans: Neither an employer who sponsors a self-funded health plan nor the plan itself is considered a covered entity under the rules. However, the employer’s self-funded plan may be administered by a third party administrator (“TPA”) that is a covered entity and which could indirectly impact the employer’s group health plan.

Action Items:

Beginning on October 17, 2016, covered entities must post:

  • A nondiscrimination statement
  • A short statement (“tagline”) in at least the top 15 non-English languages spoken in the State in which the entity is located or does business.  Those requirements are modified for small sized significant communications such as postcards; for these, the final rule requires entities to post a nondiscrimination statement and taglines in at least the top two non-English languages spoken by individuals with limited English proficiency in the State.
  • Covered entities with 15 or more employees must designate an employee to coordinate compliance efforts with and carry out responsibilities under Section 1557.

For copies of sample notices in a variety of languages: