Nondiscrimination in Health Programs and Activities

Federal RegisterMay 6, 2024

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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

42 CFR Parts 438, 440, 457, and 460

Office of the Secretary

45 CFR Parts 80, 84, 92, 147, 155, and 156

RIN 0945-AA17

Nondiscrimination in Health Programs and Activities

AGENCY:

Office for Civil Rights, Office of the Secretary, Department of Health and Human Services; Centers for Medicare & Medicaid Services, Department of Health and Human Services.

ACTION:

Final rule and interpretation.

SUMMARY:

The Department of Health and Human Services (HHS or the Department) is issuing this final rule regarding section 1557 of the Affordable Care Act (ACA) (section 1557). Section 1557 prohibits discrimination on the basis of race, color, national origin, sex, age, or disability in certain health programs and activities. Section 1557(c) of the ACA authorizes the Secretary of the Department to promulgate regulations to implement the nondiscrimination requirements of section 1557. The Department is also revising its interpretation regarding whether Medicare Part B constitutes Federal financial assistance for purposes of civil rights enforcement. Additionally, the Department is revising provisions prohibiting discrimination on the basis of sex in regulations issued by the Centers for Medicare & Medicaid Services (CMS) governing Medicaid and the Children's Health Insurance Program (CHIP); Programs of All-Inclusive Care for the Elderly (PACE); health insurance issuers and their officials, employees, agents, and representatives; States and the Exchanges carrying out Exchange requirements; agents, brokers, or web-brokers that assist with or facilitate enrollment of qualified individuals, qualified employers, or qualified employees; issuers providing essential health benefits (EHB); and qualified health plan issuers.

DATES:

Effective date:

July 5, 2024.

Applicability dates:

Unless otherwise specified, the provisions of this final rule apply on or after July 5, 2024. See the

SUPPLEMENTARY INFORMATION

section for additional information.

FOR FURTHER INFORMATION CONTACT:

Office for Civil Rights

Daniel Shieh, Associate Deputy Director, HHS Office for Civil Rights (202) 240-3110 or (800) 537-7697 (TDD), or via email at

1557@hhs.gov

, for matters related to section 1557.

Centers for Medicare & Medicaid Services

John Giles, (410) 786-5545, for matters related to Medicaid.

Meg Barry, 410-786-1536, for matters related to CHIP.

Timothy Roe, (410) 786-2006 for matters related to Programs of All-Inclusive Care for the Elderly.

Becca Bucchieri, (301) 492-4341 or Leigha Basini, (301) 492-4380, for matters related to 45 CFR 155.120, 155.220, 156.125, 156.200, and 156.1230.

Lisa Cuozzo, (410) 786-1746, for matters related to 45 CFR 147.104.

Hannah Katch, (202) 578-9581, for general questions related to CMS amendments.

Assistance to Individuals With Disabilities in Reviewing the Rulemaking Record:

Upon request, the Department will provide an accommodation or appropriate auxiliary aid or service to an individual with a disability who needs assistance to review the comments or other documents in the public rulemaking record for the final rule. To schedule an appointment for this type of accommodation or auxiliary aid, please call (202) 240-3110 or (800) 537-7697 (TDD) for assistance or email

1557@hhs.gov

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Background

A. Regulatory History

B. Overview of the Final Rule

II. Provisions of the Proposed Rule and Analysis and Responses to Public Comments

Subpart A—General Provisions

Purpose and Effective Date (§ 92.1)

Application (§ 92.2)

Treatment of the Title IX Religious Exception

Relationship to Other Laws (§ 92.3)

Definitions (§ 92.4)

Assurances Required (§ 92.5)

Remedial Action and Voluntary Action (§ 92.6)

Designation and Responsibilities of a Section 1557 Coordinator (§ 92.7)

Policies and Procedures (§ 92.8)

Training (§ 92.9)

Notice of Nondiscrimination (§ 92.10)

Notice of Availability of Language Assistance Services and Auxiliary Aids and Services (§ 92.11)

Data Collection

Subpart B—Nondiscrimination Provisions

Discrimination Prohibited (§ 92.101)

Subpart C—Specific Applications to Health Programs and Activities

Meaningful Access for Individuals With Limited English Proficiency (§ 92.201)

Effective Communication for Individuals With Disabilities (§ 92.202)

Accessibility for Buildings and Facilities (§ 92.203)

Accessibility of Information and Communication Technology for Individuals With Disabilities (§ 92.204)

Requirement To Make Reasonable Modifications (§ 92.205)

Equal Program Access on the Basis of Sex (§ 92.206)

Nondiscrimination in Health Insurance Coverage and Other Health-Related Coverage (§ 92.207)

Prohibition on Sex Discrimination Related to Marital, Parental, or Family Status (§ 92.208)

Nondiscrimination on the Basis of Association (§ 92.209)

Nondiscrimination in the Use of Patient Care Decision Support Tools (§ 92.210)

Nondiscrimination in the Delivery of Health Programs and Activities Through Telehealth Services (§ 92.211)

Subpart D—Procedures

Enforcement Mechanisms (§ 92.301)

Notification of Views Regarding Application of Federal Religious Freedom and Conscience Laws (§ 92.302)

Procedures for Health Programs and Activities Conducted by Recipients and State Exchanges (§ 92.303)

Procedures for Health Programs and Activities Administered by the Department (§ 92.304)

III. Change in Interpretation—Medicare Part B Funding Meets the Definition of Federal Financial Assistance; Responses to Public Comment

IV. CMS Amendments

A. Medicaid and Children's Health Insurance Program (CHIP)

B. Programs of All-Inclusive Care for the Elderly (PACE)

C. Insurance Exchanges and Group and Individual Health Insurance Markets

1. Comments and Responses to 45 CFR 147.104(e), 155.120(c), 155.220(j), 156.125(b), 156.200(e), and 156.1230(b)

2. Health Insurance Exchanges

a. Non-Interference With Federal Law and Nondiscrimination Standards (45 CFR 155.120)

b. Federally-Facilitated Exchange Standards of Conduct (45 CFR 155.220)

c. Essential Health Benefits Package: Prohibition on Discrimination (45 CFR 156.125)

d. QHP Issuer Participation Standards (45 CFR 156.200)

e. Direct Enrollment With the QHP Issuer in a Manner Considered To Be Through the Exchange (45 CFR 156.1230)

3. Prohibition of Discrimination—Group and Individual Health Insurance Markets Guaranteed Availability of Coverage (45 CFR 147.104)

V. Executive Order 12866 and Related Executive Orders on Regulatory Review

A. Regulatory Impact Analysis

a. Baseline Conditions

b. Costs of the Final Rule

c. Total Quantified Costs

3. Discussion of Benefits

4. Analysis of Regulatory Alternatives to the Final Rule

B. Regulatory Flexibility Act—Final Small Entity Analysis

1. Entities That Will Be Affected

a. Physicians

b. Pharmacies

c. Health Insurance Issuers

d. Local Government Entities

2. Whether the Rule Will Have a Significant Economic Impact on Covered Small Entities

C. Executive Order 12250 on Leadership and Coordination of Nondiscrimination Laws

D. Paperwork Reduction Act

1. ICRs Regarding Assurances (§ 92.5)

2. ICRs Regarding Section 1557 Coordinator (§ 92.7) and Training (§ 92.9)

3. ICRs Regarding Notice of Nondiscrimination (§ 92.10) and Notice of Availability of Language Assistance Services and Auxiliary Aids and Services (§ 92.11)

E. Assessment of Federal Regulation and Policies on Families

I. Background

Section 1557 of the Affordable Care Act (ACA) (section 1557), 42 U.S.C. 18116, prohibits discrimination on the basis of race, color, national origin, sex, age, or disability in a health program or activity, any part of which is receiving Federal financial assistance, including credits, subsidies, or contracts of insurance, except where otherwise provided in title I of the ACA. Section 1557 also prohibits discrimination on the basis of race, color, national origin, sex, age, or disability under any program or activity that is administered by an executive agency, or any entity established under title I of the ACA or its amendments. The statute cites title VI of the Civil Rights Act of 1964 (title VI), 42 U.S.C. 2000d

et seq.,

title IX of the Education Amendments of 1972 (title IX), 20 U.S.C. 1681

et seq.,

the Age Discrimination Act of 1975 (Age Act), 42 U.S.C. 6101

et seq.,

and section 504 of the Rehabilitation Act of 1973 (section 504), 29 U.S.C. 794, to identify the grounds of discrimination prohibited by section 1557. The entities to which section 1557 and this final rule apply (

i.e.,

recipients of Federal financial assistance, the Department, and title I entities) are collectively referred to as “covered entities.” The statute further specifies that the enforcement mechanisms provided for and available under title VI, title IX, the Age Act, or section 504 shall apply for purposes of violations of section 1557, 42 U.S.C. 18116(a). The statute authorizes the Secretary of the U.S. Department of Health and Human Services (HHS or the Department) to promulgate implementing regulations for section 1557, 42 U.S.C. 18116(c).

A. Regulatory History

On August 1, 2013, the HHS Office for Civil Rights (OCR) published a Request for Information in the

Federal Register

, 78 FR 46558,

followed by issuance of a notice of proposed rulemaking (NPRM) on September 8, 2015 (2015 NPRM), 80 FR 54171.

OCR finalized the first section 1557 regulation on May 18, 2016 (2016 Rule), 81 FR 31375. On June 14, 2019, the Department published a new section 1557 NPRM (2019 NPRM), 84 FR 27846, proposing to rescind and replace large portions of the 2016 Rule.

On June 12, 2020, OCR publicly posted its second section 1557 final rule (2020 Rule), which was published in the

Federal Register

on June 19, 2020, 85 FR 37160. The 2020 Rule remains in effect, save for the parts enjoined or set aside by courts, until the effective date of this final rule. In the meantime, entities that are subject to the 2020 Rule must continue to comply with the parts of the 2020 Rule that remain in effect.

Responses are available for public inspection at

https://www.regulations.gov/docket/HHS-OCR-2013-0007/comments

The 2015 NPRM received roughly 2,160 comments, which are available for public inspection at

https://www.regulations.gov/docket/HHS-OCR-2015-0006/comments

The 2019 NPRM received roughly 198,845 comments, which are available for public inspection at

https://www.regulations.gov/document/HHS-OCR-2019-0007-0001

. This count includes bundled submissions, including petitions and form letter campaigns, which were counted as individual comment submissions.

On January 5, 2022, the Department proposed to amend CMS regulations such that Exchanges, issuers, and agents and brokers would be prohibited from discriminating against consumers based on their sexual orientation or gender identity in the HHS Notice of Benefit and Payment Parameters for 2023 NPRM, 87 FR 584 (January 5, 2022). CMS did not finalize the amendments in the Notice of Benefit and Payment Parameters for the 2023 final rule, 87 FR 27208 (May 6, 2022); instead, CMS proposed to make the amendments to its regulations in forthcoming Departmental rulemaking.

On July 25, 2022, OCR publicly posted the section 1557 NPRM associated with this rulemaking (2022 NPRM or Proposed Rule), which was published in the

Federal Register

on August 4, 2022, 87 FR 47824. OCR invited comment on the Proposed Rule by all interested parties. The comment period ended on October 3, 2022. In total we received 85,280 comments on the Proposed Rule.

Comments came from a wide variety of stakeholders, including but not limited to: civil rights/advocacy groups, including language access organizations, disability rights organizations, women's advocacy organizations, and organizations serving lesbian, gay, bisexual, transgender, queer, or intersex (LGBTQI+) individuals; health care providers; consumer groups; religious organizations; academic and research institutions; reproductive health organizations; health plan organizations; health insurance issuers; State and local agencies; and tribal entities. Of the total comments, 79,126 were identified as being submitted by individuals. Of the 85,280 comments received, 70,337 (80 percent) were form letter copies associated with 30 distinct form letter campaigns.

This count includes bundled submissions, including petitions. The number of submission entries in the Federal Docket Management System is 75,254 submissions. Responses are available for public inspection at

https://www.regulations.gov/docket/HHS-OS-2022-0012

B. Overview of the Final Rule

Section 1557

This preamble is divided into multiple sections: section II describes changes to the section 1557 regulation and contains four subparts: subpart A sets forth the rule's general provisions; subpart B contains the rule's nondiscrimination provisions; subpart C describes specific applications of the prohibition on discrimination to health programs and activities; and subpart D describes the procedures that apply to enforcement of the rule. Section III provides official notice of HHS's change in interpretation that Medicare Part B meets the definition of “Federal financial assistance.” Section IV describes changes to CMS regulations.

OCR has made some changes to the Proposed Rule's provisions, based on the comments we received. Among the changes are the following:

OCR modified proposed § 92.4 (Definitions) to include new definitions for telehealth, State, relay interpretation, and patient care decision support tools.

OCR modified proposed § 92.201 (Meaningful access for individuals with limited English proficiency) to change “limited English proficient individual” to “individual with limited English proficiency” where applicable in this provision and elsewhere where the term is used. The text for proposed § 92.201(a) was updated to include “companions with limited English proficiency” for clarity and parity with the rule's effective communication

provision. OCR also modified proposed § 92.201(f) and proposed § 92.201(g) to address concerns that audio and video remote interpreting may not be appropriate to provide meaningful access in certain circumstances.

OCR modified proposed § 92.206 (Equal program access on the basis of sex) to clarify a covered entity's ability to raise legitimate and nondiscriminatory reasons for the denial of care under this provision, while stating that the basis for a denial or limitation must not be based on unlawful animus or bias, or constitute a pretext for discrimination.

OCR modified the text of proposed § 92.207 (Nondiscrimination in health insurance coverage and other health-related coverage), consistent with changes to § 92.206(c) to clarify that covered entities may raise a legitimate, nondiscriminatory reason for denials or limitations of health services in benefit design and in individual cases, while stating that the basis for a denial or limitation must not be based on unlawful animus or bias, or constitute a pretext for discrimination.

OCR revised proposed § 92.210 (Nondiscrimination in the use of clinical algorithms in decision-making) to change “clinical algorithms” and “clinical algorithms in decision-making” to “patient care decision support tools.” OCR further specified the scope of the application of this provision and the requirement that covered entities take reasonable steps to mitigate discrimination once made aware of the potential for discrimination resulting from use of these tools.

OCR modified proposed § 92.302 (Notification of views regarding application of Federal religious freedom and conscience laws) to clarify the application of religious freedom and conscience laws, and aspects of the administrative process set forth in the provision, including that a recipient may request an assurance of an exemption under such laws, the availability of a temporary exemption, and the availability of an administrative appeal process.

CMS Amendments

In response to comments, CMS is finalizing the proposed amendments to the CMS regulations with a revision to scope of sex discrimination to be consistent with section 1557's regulatory text at § 92.101(a)(2).

II. Provisions of the Proposed Rule and Analysis and Responses to Public Comments

Subpart A—General Provisions

Purpose and Effective Date (§ 92.1)

In the 2022 NPRM, proposed § 92.1(a) explained that the purpose of 45 CFR part 92 is to implement section 1557, which prohibits discrimination in certain health programs and activities on the “ground[s] prohibited” under title VI, title IX, the Age Act, or section 504. Section 1557 adopts the grounds of these statutes and prohibits discrimination based on race, color, national origin, sex, age, or disability.

See Schmitt

Kaiser Found. Health Plan of Wash.,

965 F.3d 945, 953 (9th Cir. 2020) (“Section 1557(a) incorporates only the prohibited `ground[s]' and `[t]he enforcement mechanisms provided for and available under' the four civil rights statutes. A prohibited `ground' for discrimination . . . is simply the protected classification at issue.”).

Proposed § 92.1(b) provided that the effective date of the section 1557 implementing regulation shall be 60 days after the publication of a final rule in the

Federal Register

and provided a delayed implementation date (referred to as “applicability date” in this final rule) for provisions of this part that require changes to health insurance or group health plan benefit design.

The comments and our responses regarding the purpose and effective date are set forth below.

Comment:

Several commenters noted that the regulatory purpose described in the 2022 NPRM strengthens nondiscrimination protections in health care, and appropriately aligns with section 1557's statutory text and Congressional intent.

Response:

As commenters noted, the 2022 NPRM's purpose is to prohibit discrimination in accordance with section 1557's statutory text. The Proposed Rule mirrors the statutory text and clarifies that the purpose of this rule is to regulate health programs and activities conducted and funded by the Department and those of title I entities. Thus, we maintain the regulatory language for § 92.1(a) as proposed in the 2022 NPRM.

Comment:

One commenter observed that, in addition to title IX's general prohibition of discrimination on the ground of “sex,” section 904 of title IX (20 U.S.C. 1684) also prohibits discrimination on the ground of blindness or severe vision impairment.

Response:

Both HHS's and the Department of Education's title IX regulations define title IX to exclude section 906.

See

45 CFR 86.2(a); 34 CFR 106.2(a). While 20 U.S.C. 1684 prohibits certain forms of discrimination on the ground of blindness or severe vision impairment, such conditions are disabilities and section 1557 prohibits discrimination on the basis of disability as it is the “ground” of discrimination prohibited by the statute's reference to section 504. Accordingly, we decline to revise the regulatory text at § 92.1(a).

Comment:

OCR received many comments about the proposed 60-day effective date for requirements other than those related to health insurance or group health plan coverage benefit design. Commenters identified several tasks covered entities would need to accomplish to comply with the final rule requirements within the proposed 60 days, including updating existing policies and procedures; developing and reviewing new content; developing written communications with members and distributing written documents, including preparing additional mailings; and familiarizing themselves with new requirements and OCR-provided tools and resources.

Most of these commenters expressed concern that covered entities would not be able to develop and implement the required policies and procedures (§ 92.8) and notices (§ 92.10, § 92.11), or complete the proposed training requirement (§ 92.9) within the allotted 60 days. A variety of commenters argued that the 60-day effective date for §§ 92.7 through 92.11 would be unreasonable for all covered entities, requesting that OCR consider allowing covered entities more time to come into compliance with the final rule.

Commenters' recommended compliance timeframes varied widely, from 180 days to three years following publication of the final rule in the

Federal Register

. One commenter asked that, for the first 18 to 24 months following publication of the final rule in the

Federal Register

, OCR's section 1557 enforcement efforts, including complaint investigations, primarily focus on providing covered entities technical assistance with respect to their section 1557 obligations.

Response:

OCR appreciates comments regarding the effective date and commenters' identification of factors influencing feasibility of a single effective date for all section 1557 requirements. We are maintaining the overall 60-day effective date related to the general prohibition on discrimination on the basis of race, color, national origin, sex, age, and disability. This is consistent with the approach taken with respect to the effective date of our previous

rulemakings.

However, in light of the comments received, OCR has determined that it is reasonable to allow additional time for covered entities to comply with certain procedural requirements. The additional time will provide covered entities with the opportunity to properly designate a Section 1557 Coordinator and designee(s) (as applicable); develop and tailor to their respective organization's policies and procedures; train relevant staff; and develop their required notices. For this reason, we are adopting phased-in applicability dates for certain provisions, as reflected in the chart at the end of this section.

The 2016 Rule's effective date was 60 days after publication of the final rule, with the exception of the provisions on health insurance and benefit design, which went into effect the first day of the first plan year following the effective date. 81 FR 31375. The 2020 Rule's effective date was 60 days after publication, with no exceptions. 85 FR 37160.

Comment:

Some commenters requested that OCR allow for temporary safe harbors for covered entities' compliance with certain aspects of the final rule. Specifically, commenters suggested that the final rule allow for an 18-month good faith safe harbor for covered entities currently operating in accordance with the 2016 Rule language access requirements, particularly the notice and tagline requirements at former 45 CFR 92.8.

Response:

OCR declines to grant safe harbors for covered entities that are or have been operating in accordance with the 2016 Rule's notice and tagline requirements. Granting such a safe harbor would fail to recognize the importance of this final rule's requirement. The Notice of Availability of Language Assistance Services and Auxiliary Aids and Services (“Notice of Availability”) at § 92.11 requires notice of auxiliary aids and services in addition to language assistance services, which we have now revised to reflect a delayed applicability date of one year from the effective date. This revised applicability date reasonably allows enough time for covered entities to come into compliance with the Notice of Availability provision.

Comment:

Comments from organizational health insurance issuers generally supported the Proposed Rule's delayed applicability date for provisions that require changes to health insurance or group health plan coverage benefits or benefit design, which proposed a delayed applicability date of the first day of the first plan year beginning on or after the year following the effective date of the final rule's publication in the

Federal Register

One commenter generally requested that OCR provide flexibility for plans depending on when the rule is finalized. Another commenter specifically requested that OCR consider allowing a temporary safe harbor compliance exception for group health plans and health insurance issuers of group health insurance coverage so that plan design changes for non-calendar-year plans may be implemented the first day of the new plan year occurring on or after January 1, 2024.

The term “group health plan” is generally used to refer to a health benefit arrangement that is a distinct legal entity and can also be used to refer to the underlying health coverage or benefits. For ease of reference, this document uses the term “group health plan” when referring the plan as a distinct legal entity and uses the term “group health plan coverage” to refer to the underlying health coverage or benefits provided by the group health plan.

Response:

OCR is cognizant that health insurance issuers and group health plans develop their health insurance coverage and other health-related coverage benefit designs in advance of the plan year that the coverage is offered. Accordingly, we are including a delayed applicability date to the extent that the final rule's provisions require changes to health insurance coverage or other health-related coverage, including group health plan coverage benefit design for health insurance coverage or other health-related coverage that is newly subject to certain provisions of § 92.207 (Nondiscrimination in health insurance coverage and other health-related coverage). In such circumstances, the final rule's applicability date is the first day of the first plan year beginning on or after January 1, 2025. This delayed applicability date applies equally to health insurance issuers and group health plans that are offering calendar-year and non-calendar-year plans. For example, a newly covered group health plan eligible for the delayed applicability date that offers a non-calendar year plan effective July 1, 2024, would have until the following plan year, effective July 1, 2025, to comply with the benefit design requirements, as July 1, 2025, would be the first day of the first plan year beginning on or after January 1, 2025.

The 2020 Rule remains in effect until the effective date of this final rule. In the interim, covered entities that are subject to the 2020 Rule must continue to comply with the parts of the 2020 Rule that remain in effect. Notwithstanding the repeal of the former § 92.207 (2016 Rule), the 2020 Rule prohibits discrimination in health insurance coverage that receives Federal financial assistance. Consistent with the 2020 Rule preamble, OCR interprets and enforces section 1557 under the 2020 Rule to prohibit discrimination in benefit design in health insurance coverage and other health-related coverage that receive Federal financial assistance.

See

85 FR 37160 (stating the rule prohibits age discrimination, “including [in] health plan marketing and benefit design”);

id.

at 37177 (stating that HHS “will enforce vigorously Section 1557's prohibition on discrimination on the basis of disability against all covered entities, including when discrimination is alleged to have taken place in benefit design”);

id.

at 37201 (“OCR will examine carefully any allegations of discrimination by health insurance issuers, including through benefit design.”).

As such coverage is currently prohibited from having discriminatory benefit designs, the obligation to comply with this final rule's § 92.207(b)(1) through (5) does not require a delayed applicability date. Therefore, we have revised the delayed applicability date for § 92.207(b)(1) through (5) under § 92.1(b) to reflect that the delayed applicability date is for health insurance coverage and other health-related coverage that are not already subject to this part as of the date of publication of this final rule. Because § 92.207(b)(6) (most integrated setting) describes a category of prohibited benefit design features that OCR is not explicitly enforcing under the 2020 Rule, OCR will not enforce this provision until the delayed applicability of the first day of the first plan year beginning on or after January 1, 2025. The delayed applicability date for all provisions of § 92.207 is in effect for covered health insurance coverage and other health-related coverage that are not subject to the 2020 Rule as of the date of publication of this final rule and are therefore newly subject to this final rule.

Examples of health insurance coverage or other health-related coverage subject to the 2020 Rule (and thus the benefit design provisions under § 92.207(b)(1) through (5) as of July 5, 2024) include but are not limited to Medicare Advantage plans, Medicare Part D plans, Medicaid managed care plans, and qualified health plans.

For complaints received prior to January 1, 2025 alleging discrimination related to benefit design, OCR will examine whether the health insurance coverage or other health-related coverage is subject to the 2020 Rule. If OCR determines the coverage was subject to

the 2020 Rule, the covered entity providing the coverage is responsible for complying with the specific benefit design provisions of § 92.207(b)(1) through (5) on July 5, 2024. In its review of such complaints, OCR will consider the nature of the challenged benefit design feature and whether it would have been prohibited under the 2020 Rule. For example, a Medicare Advantage plan that imposes additional cost-sharing for health services related to a particular disease but not for other diseases would be investigated as potentially discriminatory under the 2020 Rule and under this final rule as of its general 60-day effective date. However, if a Medicare Advantage plan contains a potentially discriminatory design feature related to integration, OCR would not investigate such an allegation under this final rule unless the alleged discrimination took place after the delayed applicability date of the first day of the first plan year beginning on or after January 1, 2025.

Qualified health plans are covered by the 2020 Rule as a program or activity administered by an entity established under title I of the ACA (

i.e.,

an Exchange), pursuant to § 92.3(a)(3).

See

85 FR 37174. Qualified health plans are also subject to the 2020 Rule to the extent they receive Federal financial assistance.

Id.

Further, OCR clarifies that any covered entity offering health insurance coverage or other health-related coverage subject to the delayed applicability date for benefit design is still required to comply with all other provisions of this final rule, as of the general effective dates and specific applicability dates set forth under § 92.1(b).

Summary of Regulatory Changes

For the reasons set forth in the Proposed Rule and considering the comments received, we are finalizing the provisions in § 92.1(a) as written and amending § 92.1(b), with modifications.

In § 92.1(b), we have included a table that clearly provides the applicability date for each provision. It appears below:

Section 1557 Requirement and provision

Date by which covered entities must comply

§ 92.7 Section 1557 Coordinator

Within 120 days of effective date.

§ 92.8 Policies and Procedures

Within one year of effective date.

§ 92.9 Training

Following a covered entity's implementation of the policies and procedures required by § 92.8, and no later than one year of effective date.

§ 92.10 Notice of nondiscrimination

Within 120 days of effective date.

§ 92.11 Notice of availability of language assistance services and auxiliary aids and services

Within one year of effective date.

§ 92.207(b)(1) through (5) Nondiscrimination in health insurance coverage and other health-related coverage

For health insurance coverage or other health-related coverage that was not subject to this part as of the date of publication of this rule, by the first day of the first plan year (in the individual market, policy year) beginning on or after January 1, 2025.

§ 92.207(b)(6) Nondiscrimination in health insurance coverage and other health-related coverage

By the first day of the first plan year (in the individual market, policy year) beginning on or after January 1, 2025.

§ 92.210(b), (c) Use of patient care decision support tools

Within 300 days of effective date.

Application (§ 92.2)

Proposed § 92.2 addressed the application of this regulation. OCR proposed in § 92.2(a) to apply the final rule, except as otherwise provided in the regulation, 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. Title I entities include State Exchanges (including those on the Federal platform) and Federally-facilitated Exchanges, both of which were created under title I of the ACA.

Section 1311 of the ACA (codified at 42 U.S.C. 18031) (establishing grants and requiring those grants to be used by States to create “American Health Benefit Exchanges”) and section 1321(c) of the ACA (codified at 42 U.S.C. 18041(c)) (providing for the Secretary to establish an Exchange if a State elects not to establish an Exchange or fails to establish an Exchange under section 1311 of the ACA).

In § 92.2(b), we proposed that this regulation would not apply to an employer with regard to its employment practices, including the provision of employee health benefits. We noted that, although the 2016 and 2020 Rules applied to employment in very limited circumstances, OCR determined that the proposed approach would minimize confusion among individuals seeking relief under Federal Equal Employment Opportunity laws and would promote clarity regarding the filing and processing of employment discrimination complaints. We stated our belief that, as is the case with employment discrimination complaints generally, concerns regarding the provision of employee health benefits are best resolved by our Federal partners.

In § 92.2(c), we proposed that if any provision of this regulation is held to be invalid or unenforceable by its terms, or as applied to any person or circumstance, it shall be severable from this part and not affect the remainder thereof or the application of the provision to other persons not similarly situated or to other, dissimilar circumstances.

We invited comment on the effects of the proposed scope of application of the regulation, including the application of this part to recipients of Federal financial assistance from executive agencies other than the Department; the application to programs and activities of the Department and other executive agencies; and the application to employment.

The comments and our responses regarding § 92.2 are set forth below.

Comment:

Many commenters supported § 92.2(a), which commenters said would reinstate the scope of the section 1557 implementing regulation to that of the 2016 Rule and recognizes that section 1557 applies to Federal programs like Medicaid and Medicare, the State and Federal Marketplaces (referred to as “Exchanges” in this final rule) and the plans sold through them, as well as other commercial health plans if the issuer receives any form of Federal financial assistance. Commenters noted that ensuring section 1557 protections apply broadly to an array of entities and programs will ensure the greatest level of protection for individuals against discriminatory actions that may interfere with access to health care and health care coverage.

Many commenters noted that the Proposed Rule was consistent with congressional intent. These commenters noted that Congress was clear in extending nondiscrimination protections to a broad array of health programs and activities, and that section 1557 was intended to build and expand upon existing civil rights laws, while

providing broad protection against discrimination in health care. These commenters further noted that Congress has repeatedly expressed that it intends civil rights laws to be broadly interpreted in order to effectuate their remedial purposes. Commenters also noted that the purpose of the ACA itself is to ensure broad access to and coverage of health care.

Response:

We agree that section 1557 protections apply broadly and that this final rule is the best reading of the statute regarding the scope of applicability; as such, the 2022 NPRM properly identified those entities that are covered under section 1557.

Regarding plans sold through State and Federally-facilitated Exchanges, as discussed under the definition of “Federal financial assistance” at § 92.4, such plans are covered under this rule as a health program or activity when in receipt of Federal financial assistance, such as advance payments of the premium tax credit. This is consistent with the 2016 Rule. Further, as discussed under the definition of “health program or activity” at § 92.4, a health insurance issuer's other commercial health plans are covered under this final rule as part of the issuer's operations where the issuer is principally engaged in the provision or administration of any health projects, enterprises, ventures, or undertakings. For more information on the final rule's application to all operations of a health insurance issuer that is so principally engaged, please see the discussion below under the definition of “health program or activity” at § 92.4.

Comment:

Some commenters requested that OCR clarify the extent to which a covered entity is required to oversee the section 1557 compliance of its vendors and subcontractors. For example, a health insurance issuer commented that an issuer should not be responsible for the discriminatory actions of a provider or facility with which the issuer has contracted for the provision of medical services. Another commenter requested clarification on when health insurance agents and brokers are subject to the rule, particularly when they are working under the auspices of a covered entity, such as an Exchange or a health insurance issuer. Other commenters suggested that subcontractors should be considered recipients by virtue of contracting with a recipient of Federal financial assistance.

Response:

Health programs or activities may comprise more than one recipient of Federal financial assistance. For example, a primary recipient (or “direct” recipient) is an entity that accepts Federal financial assistance from a Federal agency. The direct recipient may then distribute the Federal financial assistance to a subrecipient (or “indirect” recipient) to carry out all or part of the health program or activity. Primary recipients and all subrecipients are covered and must comply with section 1557.

Under general civil rights principles, both the primary recipient and subrecipient are responsible for complying with applicable civil rights laws.

Therefore, if an entity receives Federal financial assistance—directly as a primary recipient or indirectly as a subrecipient—it would be a covered entity and responsible for complying with section 1557 and the part.

For further discussion of this issue,

see

U.S. Dep't of Justice, Title VI Legal Manual, sec. V.D.4.

Often, a recipient receives funds with the purpose and expectation that it will distribute the funds to one or more sub-grantees or indirect recipients. For example, in

Moreno

Consol. Rail Corp.,

99 F.3d 782 (6th Cir. 1996) (en banc), the U.S. Department of Transportation provided funds to the State of Michigan for use in upgrading railroad crossings. The state, in turn, provided these funds to Conrail. The Sixth Circuit found that Conrail was a recipient of Federal financial assistance, noting “[i]t makes no difference, in our view, that the Federal funds of which Conrail is the recipient come to it through the State of Michigan rather than being paid to it by the United States directly.”

Id.

at 787.

While both direct and indirect recipients must comply with section 1557 independently, a direct recipient may not absolve itself of its obligations by contracting with another entity to provide services or assistance for which it received Federal financial assistance or using an agent to do so.

Covered entities are responsible for the conduct of their subcontractors and cannot contract away their civil rights obligations through contractual arrangements with subcontractors. For example, section 1557 and the statutes referenced therein may cover a contractor that performs an essential function for the recipient, making the contractor itself a recipient. In

Frazier

Board of Trustees,

765 F.2d 1278, amended, 777 F.2d 329 (5th Cir. 1985), a case involving section 504, the court noted that the defendant hospital contracted out core medical functions, for which it received Federal financial assistance. The court ruled that this financial assistance to the hospital “would not have been [provided] at all were it not for [the contractor's] performance as a de facto subdivision of [the hospital],” and thus the contractor qualified as a recipient for purposes of section 504,

id.

at 1289-90.

U.S. Dep't of Justice Title VI Legal Manual, Sec. V.D.5.

But see Rose

Cahee,

727 F. Supp. 2d 728, 739 (E.D. Wis. 2010) (court declined to follow

Frazier,

limiting coverage of the funding assistance nondiscrimination cover the contractor of a recipient requirement to those entities receiving the funds directly and that “are in a position to choose whether to do so”).

The obligation of health insurance agents and brokers as subcontractors is a fact-specific analysis depending on the contractual arrangement with a covered entity. If an Exchange or recipient, such as a health insurance issuer, contracts with an agent or broker to carry out responsibilities of the covered entity's health program or activity and uses Federal financial assistance to pay the agent or broker, then the agent or broker is a subrecipient and thus independently subject to all the provisions of section 1557. If a contractor does not receive Federal financial assistance—either as a primary recipient or subrecipient—it is not a recipient of Federal financial assistance and not subject to section 1557. We note that agents and brokers under contract with an Exchange could also be covered by the final rule as a health program or activity administered by a title I entity under § 92.2(a)(3). Conversely, if the agent or broker is assisting the public with purchasing health insurance coverage without any contractual arrangement on behalf of an Exchange or recipient and is not otherwise receiving Federal financial assistance, then they would not be considered subrecipients or subcontractors subject to the rule.

Comment:

Some commenters stated that because the Federal Government now extensively subsidizes both medical care and health insurance coverage and other health-related coverage, the final rule will apply to practically all health care entities. They argued that because of this, it would be nearly impossible for medical professionals to work free of these regulations and, as a result, physicians and faith-based health care entities would effectively be barred from refusing to participate in pregnancy termination procedures.

Response:

It has long been established that when an entity receives Federal funds, conditions may be placed on the receipt of those funds.

Not all providers receive Federal financial assistance; however, when they do, they must comply with applicable law. The

rule, however, does not ban physicians and faith-based or other health care entities from refusing to participate in pregnancy termination procedures. On the contrary, the ACA itself provides that “[n]othing in this Act shall be construed to have any effect on Federal laws regarding—(i) conscience protection; (ii) willingness or refusal to provide abortion; and (iii) discrimination on the basis of the willingness or refusal to provide, pay for, cover, or refer for abortion or to provide or participate in training to provide abortion.” 42 U.S.C. 18023(c)(2)(A).

In addition, the rule has been revised at § 92.3(c) to recognize that, “[i]nsofar as the application of any requirement under this part would violate applicable Federal protections for religious freedom and conscience, such application shall not be required.” Further, in this final rule, the process regarding exemptions related to religious freedom and conscience protections has been clarified.

See

§ 92.302.

The Supreme Court has generally treated these civil rights statutes as enacted based on Congress's Spending Clause Power, which generally permits Congress to attach conditions to the receipt of Federal financial assistance.

See Barnes

Gorman,

536 U.S. 181, 189 n.3 (2002) (referring to the Rehabilitation Act as “Spending Clause legislation”);

id.

at 185-86 (“Title VI invokes Congress's power under the Spending Clause, U.S. Const., Art. 1. § 8, cl. 1, to place conditions on the grant of federal funds.”).

The application of this final rule to covered entities with conscience or religious freedom objections are discussed more fully below in §§ 92.3 (Relationship to other laws) and 92.302 (Notification of views regarding application of Federal religious freedom and conscience laws).

Comment:

Some commenters supported the restoration of section 1557's application to all health programs or activities administered by the Department under § 92.2(a)(2). These commenters noted that the 2020 Rule exempts from section 1557 most of the Department's programs and activities by limiting the application to only those programs and activities established under title I of the ACA. These commenters opined that such an interpretation is contrary to the statutory text, design, and intent of section 1557 and the ACA generally. Other commenters noted that consistently applying section 1557 requirements throughout various programs, including the Department's programs, creates continuity in the interpretation and implementation of nondiscrimination standards. However, some commenters stated that OCR did not provide adequate explanation as to why this change in application is necessary or appropriate.

Response:

For the reasons discussed in the 2022 NPRM, 87 FR 47838, applying this rule to all health programs and activities administered by the Department, not just those programs and activities established under title I of the Act, is the best reading of the statutory text of section 1557. The statutory language provides that section 1557's discrimination prohibitions apply to “any program and activity that is administered by an executive agency or any entity established under this title.” 42 U.S.C. 18116(a). As discussed in the 2022 NPRM, the operative word, “or,” distinguishes programs and activities operated by an executive agency from those operated by a title I entity. 87 FR 47829. To the extent there is ambiguity in the interpretation, finalizing the rule as proposed better reflects the statutory language as well as Congress's intent.

The application of section 1557 to every health program or activity administered by the Department ensures that nondiscrimination standards are interpreted and applied as consistently and as broadly as possible and provides for application of nondiscrimination standards to the Department consistent with the entities to which it provides Federal financial assistance.

See, e.g., Griffin

Breckenridge,

403 U.S. 88, 97 (1971) (civil rights statutes should be construed broadly);

U.S.

Price,

383 U.S. 787, 801 (1966) (same);

see also Jeldness

Pearce,

30 F.3d 1220, 1224-25 (9th Cir. 1994);

Klinger

Dep't of Corrs.,

107 F.3d 609, 613-16 & n.5 (8th Cir. 1997);

Roubideaux

North Dakota Dep't of Corrs. & Rehab.,

570 F.3d 966, 976-79 (8th Cir. 2009).

Nondiscrimination on the Basis of Sex in Education Programs or Activities Receiving Federal Financial Assistance,

65 FR 52858, 52868 (Aug. 30, 2000).

OCR disagrees with the

Franciscan Alliance

decision vacating portions of the 2016 Rule, and in any event, that decision does not prohibit OCR from not importing the title IX religious exception in this final rule. The promulgation of this final rule constitutes new rulemaking, and OCR has provided a detailed explanation for the decision to not import the title IX religious exception and has taken important steps to address religious freedom and conscience protections beyond those in the 2016 Rule. These steps include revisions at § 92.3(c) to recognizes that, “[i]nsofar as the application of any requirement under this part would violate applicable Federal protections for religious freedom and conscience, such application shall not be required,” adoption of a voluntary assurance of exemption process based on these protections at § 92.302, and the Department's issuance of a final rule entitled

Safeguarding the Rights of Conscience as Protected by Federal Statutes,

89 FR 2078 (Jan. 11, 2024).

OCR notes that this final rule does not alter or eliminate a recipient's ability to maintain, seek, claim, or assert a title IX religious exception under title IX if it meets the applicable criteria.

And to the extent the recipient is entitled to a religious exception under title IX, OCR's analysis will consider the entire statute, including title IX's specific limitation to the context of educational programs and activities.

20 U.S.C. 1681(a)(3); 45 CFR 86.12.

Comment:

Many commenters supported OCR's proposal not to import the title IX religious exception, highlighting what they characterized as the dangers of doing so in the context of health care and the potential consequences on people's access to health care it might have. For example, many commenters expressed concerns that providers would be able to deny essential health care services based on disapproval of a particular group, thereby putting at risk the health and well-being of already vulnerable individuals. Many commenters asserted that entities have invoked religious beliefs to deny individuals access to health care and coverage for a broad range of health care services. Commenters said that in urgent or emergency care situations, individuals may be unable to identify or use the services of an alternate provider when an institution withholds care based on religious tenets, even when the

individual is aware of such objections by an institution.

Many commenters highlighted the difference between education and health care. Multiple commenters stated that unlike certain health care settings, many parents have the choice to send their children to religious schools, whereas individuals often lack meaningful choices when seeking a health care provider, particularly for time-sensitive care. For example, numerous commenters stated that choice is especially limited in rural areas, and some patients may only have local access to religiously affiliated providers. Commenters worried that importing the title IX religious exception into this rule could have dire implications for health outcomes.

Response:

As previously noted, this rule's application to the health care context is central to OCR's interpretation of section 1557. OCR appreciates that religiously affiliated hospitals and health care facilities play an important role in the health care system and recognizes the critical patient care needs they provide, including in underserved communities and areas which otherwise lack access to quality health care. At the same time, OCR believes that Congress chose not to import the title IX religious exception into section 1557 due to concerns about the impact such an action could have on access to health care. The importation of the title IX religious exception would raise unique concerns in the health care context that are not typically present in education programs and activities. As OCR discussed in the 2022 NPRM, health care settings differ from educational settings with respect to both the ability of affected parties to choose (or avoid) certain religiously affiliated health care institutions and the urgency of the need for services provided by the covered entities. 87 FR 47840. While students and families normally make a deliberate choice to attend a religious educational institution, in many cases specifically due to its religious character, individuals seeking health care are far more likely to be driven by other considerations such as availability, urgency, geography, insurance coverage, and other factors unrelated to whether the provider is controlled by or affiliated with a religious organization.

See id.

Rather than importing the title IX religious exception into section 1557, where Congress referenced only the “ground prohibited under” and the “enforcement mechanisms provided” for in title IX, the process set forth in § 92.302 respects religious freedom and conscience protections. As this final rule makes clear at § 92.3(c), insofar as the application of any requirement under this rule would violate applicable Federal protections for religious freedom and conscience, such application shall not be required. Under § 92.302, recipients may rely on these protections or seek assurance of these protections from OCR, if they wish. In this process, OCR will comply with the applicable legal standards of the governing statutes, which include the protections in the ACA itself, 42 U.S.C. 18023; the Church, 42 U.S.C. 300a-7, Coats-Snowe, 42 U.S.C. 238n, and Weldon Amendments,

e.g.,

Consolidated Appropriations Act, 2024, Public Law 118-47, div. H, tit. V, sec. 507(d)(1), 138 Stat. 460, 703 (Mar. 23, 2024); the generally applicable requirements of RFRA, 42 U.S.C. 2000bb-1; and other applicable Federal laws.

Comment:

Many commenters who supported OCR's proposal not to import the title IX religious exception raised concerns that its importation could discourage individuals from seeking necessary medical care. Many commenters also discussed various State laws recently enacted to further expand religious exemptions from health care requirements and how such laws have specifically affected communities with limited access to care. These commenters argued that the effects of these laws further support OCR's goal of ensuring patients have broad access to nondiscrimination protections.

Response:

OCR appreciates commenters' concerns regarding the potential harms to individuals with limited or restricted access to health care. OCR appreciates that many religiously affiliated hospitals and providers are providing vital services in areas where people are in the most need and are often motivated by their faith to provide this important care. However, OCR maintains that Congress did not choose to import the title IX religious exception into section 1557. Importing the title IX exception would be inconsistent with the text, structure, and purpose of both title IX and section 1557. Rather, Congress has enacted protections for conscience in the ACA itself; the Church, Coats-Snowe, and Weldon Amendments, among others; the generally applicable requirements of RFRA, and other applicable Federal laws as the means to protect religious freedom and conscience in this context. We are committed to affording full effect to Congress's protections of conscience and religion, as detailed in § 92.302 and the Department's issuance of its final rule, Safeguarding the Rights of Conscience as Protected by Federal Statutes. 89 FR 2078.

Comment:

Multiple commenters opposed OCR's proposal not to import the title IX religious exception, stating that doing so would harm providers and hospital systems by compelling covered entities to provide abortion or other care that is contrary to their religious beliefs or that they believe will be harmful to their patients. Various commenters said that compelling such actions would turn many individuals and institutions of faith away from the medical profession.

Several commenters expressed confusion about available religious exceptions and how certain rule requirements would apply to religiously affiliated covered entities. These commenters said that including the title IX religious exception would clarify protections for religious entities.

Some commenters expressed concern that this regulation demonstrated OCR's intent to use section 1557 to force religious hospitals to dispense medication and perform procedures that are prohibited by their faith. Several commenters objected to the inclusion of cites in the 2022 NPRM that explain the increased prevalence of religiously affiliated health care systems and opined that this demonstrated hostility toward faith-based providers. According to these commenters, including these cites prejudices OCR's review of providers' religious exemption requests. Instead, these commenters urged OCR to make clear that providers will not be compelled to perform, cover, or promote procedures or medical interventions to which they have moral or religious objections.

Response:

OCR appreciates commenters' concerns and respects their opposition to the proposal not to import the title IX religious exception. OCR reiterates, consistent with the 2022 NPRM, that this final rule does not promote any particular medical treatment, require provision of particular procedures, mandate coverage of any particular care, or set any standard of care; rather, the final rule implements the nondiscrimination requirements of section 1557.

See

87 FR 47867-68. The full protections of all Federal religious freedom and conscience laws continue to apply.

Additionally, OCR makes clear that the decision not to import the title IX religious exception does not compel any individual provider or covered entity with religious or conscience-based objections to provide abortion or any other care to the extent doing so would conflict with a sincerely-held belief. The ACA itself provides that “[n]othing in this Act shall be construed to have any

effect on Federal laws regarding—(i) conscience protection; (ii) willingness or refusal to provide abortion; and (iii) discrimination on the basis of the willingness or refusal to provide, pay for, cover, or refer for abortion or to provide or participate in training to provide abortion.” 42 U.S.C. 18023(c)(2)(A). As discussed further below, section 1557 prohibits discrimination on the basis of race, color, national origin, sex, age, or disability in covered health programs or activities. A covered entity does not engage in discrimination prohibited by section 1557 if it declines to provide abortions based on religious or conscience objections to performing the procedure. In addition, any recipient that believes that it is exempt from certain provisions of this rule due to the application of a Federal conscience or religious freedom law may rely on those provisions, as referenced in § 92.3(c), or choose to seek assurance of the applications of those provisions pursuant to the process provided in § 92.302.

In light of § 92.302 and 42 U.S.C. 18023(c)(2)(A) (section 1303 of the ACA), OCR maintains that although some recipient providers and hospitals may decline to participate in federally funded health programs as a result of this rule, most will choose to continue to participate. To avoid confusion, we have further clarified the process for seeking assurance of an exemption based on religious freedom and conscience laws at § 92.302 and are committed to making available trainings and other resources to assist covered entities in understanding their obligations under section 1557 and the process by which they may seek assurance of an exemption under § 92.302.

Again, OCR appreciates that religiously affiliated hospitals and health care facilities play an important role in the health care system and recognizes the critical patient care needs they provide, including in underserved communities and areas which otherwise lack access to quality health care. Any discussion relating to the prevalence of religiously affiliated care is relevant for OCR to evaluate access issues that patients seeking certain procedures or care could potentially face, although OCR does not assume that all religiously affiliated entities' refusals to provide certain forms of care would result in such access issues. As previously stated, the 2022 NPRM provided factual findings with respect to health care accessibility in the United States based upon health care capacity of providers, population demands, and geographic limitations. 87 FR 47840. A detailed discussion of these considerations can be found in the Regulatory Impact Analysis (RIA).

Summary of Regulatory Changes

For the reasons set forth in the Proposed Rule and considering the comments received, OCR is finalizing the rule as proposed, without importing the title IX religious exception.

Relationship to Other Laws (§ 92.3)

In § 92.3, we provided an explanation of the relationship of the proposed regulation to existing laws. Proposed § 92.3(a) provided that neither section 1557 nor this part shall be interpreted to apply lesser standards for the protection of individuals from discrimination than the standards under title VI, title IX, section 504, the Age Act, or the regulations issued pursuant to those laws.

In § 92.3(b), we proposed that nothing in this part shall be interpreted to invalidate or limit the existing rights, remedies, procedures, or legal standards available under the Federal civil rights laws cited in 42 U.S.C. 18116(b) (title VI, title VII, title IX, section 504, and the Age Act), consistent with 42 U.S.C. 18116(b).

In § 92.3(c), we proposed that nothing in this part shall be interpreted to invalidate or limit the existing rights, remedies, procedures, or legal standards available under Federal religious freedom and conscience laws. Though not specifically referenced in the Proposed Rule, these include the protections in the ACA itself; the Church, Coats-Snowe, and Weldon Amendments; the generally applicable requirements of RFRA; and other applicable Federal laws.

The comments and our responses to this provision are set forth below.

Comment:

Commenters expressed a mix of viewpoints regarding the “lesser standard” language included in proposed § 92.3(a), concerning civil rights statutes referenced in section 1557. Some commenters recommended removing the “lesser standard” language because it is not included in the section 1557 statute. Commenters stated that this language ignores Congress's decision to employ a particular standard to each of the civil rights laws incorporated, such that it would allow OCR to redefine bases for discrimination and improperly preempt State law affecting such categories.

Response:

In this final rule, OCR seeks to give all laws their fullest possible effect. OCR appreciates these comments but declines to remove the “lesser standard” language included in § 92.3(a). As the 2016 Rule recognized, 81 FR 31381, this interpretation is consistent with a natural reading of section 1557's statutory text that explicitly states that section 1557 shall not be construed to “invalidate or limit the rights, remedies, procedures, or legal standards” of the referenced statutes (and title VII) “or to supersede State laws that provide additional protections against discrimination,” 42 U.S.C. 18116(b). OCR accordingly reaffirms that the civil rights laws referenced in section 1557 establish the grounds of prohibited discrimination, and nothing in this final rule is intended to provide lesser protections than those found under title VI, title IX, section 504, or the Age Act, or their implementing regulations.

Comment:

Several commenters supported the inclusion of the “lesser standard” language in § 92.3(a) but suggested that § 92.3(c), concerning Federal religious freedom and conscience laws, is unnecessary and, if included without any limitations, undermines this “lesser standard” language of § 92.3(a) and could encourage discrimination.

Response:

We decline to remove § 92.3(c), concerning Federal religious freedom and conscience laws. These laws remain applicable and removing the language runs contrary to the Department and OCR's stated commitment to protect the rights of individuals and entities under Federal conscience or religion freedom laws. Indeed, the ACA itself contains a similar provision at 42 U.S.C. 18023(c)(2)(A)(i), which provides that “[n]othing in this Act shall be construed to have any effect on Federal laws regarding—conscience protection[.]” As discussed later in this section, we have revised § 92.3(c) to provide additional specificity regarding the application of Federal religious freedom and conscience protections.

Comment:

Some commenters suggested that OCR clarify that section 1557 does not limit the rights of individuals to any of the protections afforded under title VI, title IX, section 504, or the Age Act. These commenters suggested that section 1557 is a distinct law and, while it is intended to work in tandem with other civil rights laws, section 1557 stands on its own. Several other commenters requested that the final rule include language that clarifies that administrative exhaustion is not required to bring any claim under section 1557 in Federal court, where for example a claim may involve age as one basis of discrimination among several (

e.g.,

alleging discrimination on the bases of age, sex, and disability at the same time) but the Age Act has a

statutory requirement that claimants first exhaust their administrative remedies.

Response:

Section 92.3(b) clearly states that this part does not limit or invalidate the rights, remedies, procedures, or legal standards under the statutes referenced (

i.e.,

title VI, title VII, title IX, section 504, and the Age Act), consistent with the statutory text of section 1557 at 42 U.S.C. 18116(b). In addition to incorporating the “ground[s] prohibited” by these other statutes, section 1557 incorporates the “enforcement mechanisms” of the statutes. 42 U.S.C. 18116(a). Though the section 1557 rule is informed by the title VI, title IX, Age Act, and section 504 implementing regulations, section 1557 provides an independent basis for regulation of discrimination in covered health programs and activities that is distinct from these statutes. Section 1557's nondiscrimination requirements do not in any way limit or impact the interpretation of those statutes.

See id.

at 18116(b). Section 1557 is a distinct civil rights authority.

Courts have long recognized that section 1557 authorizes a private right of action under any of the bases for discrimination. While we appreciate concerns raised by commenters regarding the heightened risks associated with unnecessary delays in the context of health care, we decline to revise regulatory text to adopt a stance on the appropriate standards that apply to private litigants. This is an issue appropriately addressed by the Federal judicial branch and not via agency rulemaking. Comments and responses regarding OCR procedures for conducting its own administrative enforcement are provided in §§ 92.303 (Procedures for health programs and activities conducted by recipients and State Exchanges) and 92.304 (Procedures for health programs and activities administered by the Department).

Comment:

Many commenters raised concerns about the potential conflicts of State and Federal laws. Some commenters expressed that any conflict between State and Federal law or policy would be inconsistent with the principles of federalism. Some commenters had specific concerns regarding the final rule's application to State laws that prohibit transgender patients from receiving certain medically necessary gender-affirming care or those that protect religious freedom and conscience. Other commenters suggested that OCR should include a subsection in the final rule that addresses the interaction between section 1557 and State or local laws, making explicit that a State may set more rigorous standards for nondiscrimination in the provision of health care but not lesser protections than those of section 1557. To the extent State or local law offers lesser protections these commenters recommended OCR make explicit that such laws are preempted by Federal law, consistent with the general preemption standard for title I of the ACA, codified at 42 U.S.C. 18041(d).

Response:

OCR appreciates these comments regarding the rule's interaction with State and other Federal laws. We agree with commenters who observed that Federal laws, as a general matter, preempt conflicting State laws.

See

U.S. Const. art. 6, cl. 2. We also note that title I of the ACA itself contains a preemption provision, which courts have interpreted to preempt State laws that serve as an obstacle to or frustrate the purpose of the ACA.

See

42 U.S.C. 18041(d). Accordingly, we decline to alter the regulation to include any additional language under this provision addressing preemption. OCR recognizes that some States may have laws impacting health programs and activities that are contrary to the final rule's nondiscrimination protections, and as discussed later regarding § 92.206 (Equal program access on the basis of sex), section 1557 preempts those laws, though OCR will consider the specific facts of each case and any other relevant factors in determining whether the recipient has a legitimate, nondiscriminatory reason for taking actions that conflict with section 1557. OCR is adding § 92.3(d) regarding State and local laws to provide: “Nothing in this part shall be construed to supersede State or local laws that provide additional protections against discrimination on any basis described in § 92.1.”

See St. Louis Effort for AIDS

Huff,

782 F.3d 1016, 1021, 1024 (8th Cir. 2015) (partially affirming lower court preliminary injunction because Missouri law “frustrates Congress' purpose” and “pose[s] an obstacle to the accomplishment and execution of the full purposes and objectives of Congress”);

Coons

Lew,

762 F.3d 891 (9th Cir. 2014),

as amended,

(Sept. 2, 2014) (“The Affordable Care Act presents a classic case of preemption by implication because the Arizona Act `stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress.' ”),

quoting Gade

Nat'l Solid Wastes Mgmt. Ass'n,

505 U.S. 88, 98 (1992).

Comment:

Commenters recommended that OCR include in the final rule clarification that the Emergency Medical Treatment and Labor Act (EMTALA) protects emergency care for pregnancy and related conditions, including termination of pregnancy.

Response:

This rule concerns section 1557 and does not purport to interpret or enforce EMTALA—indeed, OCR does not enforce EMTALA, nor does EMTALA limit or expand the civil rights protections found in section 1557.

Summary of Regulatory Changes

For the reasons set forth in the Proposed Rule and considering the comments received, we are finalizing the provisions as proposed in § 92.3, with modifications. We are revising § 92.3(c) to provide that, insofar as the application of any requirement under the part would violate applicable Federal protections for religious freedom and conscience, such application shall not be required. For example, 42 U.S.C. 18023 provides (among other things) that, nothing in section 1557 shall be construed to have any effect on Federal laws regarding conscience protection; willingness or refusal to provide abortion; and discrimination on the basis of the willingness or refusal to provide, pay for, cover, or refer for abortion or to provide or participate in training to provide abortion. We are also adding a new § 92.3(d) to provide that nothing in the part shall be construed to supersede State or local laws that provide additional protections against discrimination on any basis described in § 92.1.

Definitions (§ 92.4)

In § 92.4 of the Proposed Rule, we set out proposed definitions of various terms. The comments and our responses regarding § 92.4 are set forth below.

Auxiliary aids and services.

The term auxiliary aids and services was defined in the 2016 Rule and has not been changed substantively. The proposed definition is consistent with the Americans with Disabilities Act (ADA) regulations at 28 CFR 35.104 and 36.303(b) and provides examples of auxiliary aids and services.

Comment:

Commenters generally supported the definition of “auxiliary aids and services.” Some commenters recommended that the final rule clarify that “similar services and actions” are available for all individuals with disabilities, not just for individuals who are deaf or hard of hearing and individuals who are blind or have low vision.

Response:

OCR appreciates this comment; however, effective communication requirements are addressed in § 92.202(a). As § 92.4 is simply providing a definition for the term auxiliary aids and services, which is used in § 92.202(b), we do not believe

it is appropriate to adopt language suggested by the commenters.

Summary of Regulatory Changes

For the reasons set forth in the Proposed Rule and considering the comments received, we are finalizing the definition of “auxiliary aids and services” as proposed in § 92.4, with one technical correction in paragraph (1) to provide the correct cite for the title II definition of “qualified interpreter” by striking “36.303(b)” and replacing it with “36.104.”

Companion.

We proposed to define the “companion” to mean “family member, friend, or associate of an individual seeking access to a service, program, or activity of a covered entity, who along with such individual, is an appropriate person with whom a covered entity should communicate.” This term appeared in the 2016 Rule and has not been changed substantively.

Comment:

Many commenters support the inclusion of the term “companion” in the definitions section of the regulation, and some highlighted that companions for persons with certain disabilities, such as brain injuries and other conditions with cognitive effects, as well as individuals with sensory disabilities, are critical to effective communication of very sensitive and important medical information. Some commenters suggested that OCR clarify that such companions should be selected by the patient and not the provider.

Response:

OCR appreciates the commenters' support for inclusion of this definition. OCR declines to add additional language, as the definition of “companion” in this rule is consistent with the definition from 28 CFR 35.160(a)(2) under title II of the ADA, and with the proposed definition in OCR's notice of proposed rulemaking for section 504 at proposed 45 CFR 84.10.

We agree that the individual with a disability should be the one to determine who shall serve as their companion absent any concerns of conflict of interest or suspected abuse.

See

88 FR 63392, 63465 (Sept. 14, 2023) (proposing to define “companion” consistent with ADA title II regulations).

Summary of Regulatory Changes

For the reasons set forth in the Proposed Rule and considering the comments received, we are finalizing the definition of “companion” as proposed in § 92.4, without modification.

Federal financial assistance.

We proposed to define the term “Federal financial assistance” to include grants, loans, and other types of assistance from the Federal Government, consistent with the definition of the term in the section 504 and the Age Act implementing regulations at 45 CFR 84.3(h) and 91.4, respectively. We also proposed to specifically include credits, subsidies, and contracts of insurance, in accordance with the statutory language of section 1557. 42 U.S.C. 18116(a). Consistent with the 2016 Rule, we proposed including a clause to clarify that Federal financial assistance includes Federal financial assistance that the Department plays a role in providing or administering.

Comment:

Many commenters supported the inclusion of credits, subsidies, contracts of insurance, and grants and loans in this definition. Some commenters recommended expanding the definition of “Federal financial assistance” to include Federal disaster relief loans and pandemic relief grants and loans.

Response:

The definition of “Federal financial assistance” includes funds provided by the Federal Government, including grants and loans, along with Federal financial assistance that the Department plays a role in providing or administering. Because the types of funds raised by the commenters already fall under the longstanding definition of “Federal financial assistance,” and the inclusion of specific types of Federal financial assistance would cause unnecessary confusion and may be read as unintentionally limiting the scope of what constitutes Federal financial assistance, we decline to revise the definition.

Comment:

Some commenters requested that OCR clarify whether tax-exempt status is considered Federal financial assistance.

Response:

OCR appreciates commenters' request for clarity. Generally, tax benefits, tax exemptions, tax deductions, and most tax credits are not included in the statutory or regulatory definitions of Federal financial assistance.

See, e.g.,

42 U.S.C. 2000d-1 (title VI); 28 CFR. 42.102(c) (Department of Justice Title VI Regulation). Most courts that have considered the issue have concluded that typical tax benefits are not Federal financial assistance because they are not contractual in nature.

See, e.g., Paralyzed Veterans of Am.

Civil Aeronautics Bd.,

752 F.2d 694, 708-09 (D.C. Cir. 1985);

Johnny's Icehouse, Inca

Amateur Hockey Ass'n of Ill., Inc.,

134 F. Supp. 2d 965, 971-7297172 (N.D. Ill. 2001);

Chaplin

Consol. Edison Co.,

628 F. Supp. 143, 145-46 (S.D.N.Y. 1986).

Comment:

Many commenters supported the definition's inclusion of Federal financial assistance that “the Department plays a role in providing or administering, including advance payments of the premium tax credit and cost-sharing reduction payments.”

A commenter expressed support for this definition's application to funds extended via programs operated by States under section 1332 State Innovation Waivers, 42 U.S.C. 18052, which could include funds extended to issuers receiving reimbursement through reinsurance programs and entities participating in programs intended to modify or replace Exchanges that would otherwise be within the scope of section 1557.

See

section 1412 of the ACA, codified at 42 U.S.C. 18082 (Advance determination and payment of premium tax credits and cost-sharing reductions).

Response:

OCR appreciates these comments and believes it is important to explicitly state in regulatory text that funds that the Department plays a role in providing or administering constitute Federal financial assistance. As explained in the Proposed Rule, 87 FR 47843, this includes funds the Department administers with the Department of the Treasury under the ACA, including advance payments of the premium tax credit, cost-sharing reductions,

and pass-through funding available to States with approved section 1332 waivers. Thus, an issuer participating in any Exchange that receives advance payments of the premium tax credit or cost-sharing reductions on behalf of any of its enrollees is receiving Federal financial assistance from the Department.

The Department is not currently making cost-sharing reduction payments to issuers.

See

Memo. from Eric Hargan, Acting Sec'y, U.S. Dep't of Health & Hum. Servs., to Seema Verma, Admin'r, Ctrs. for Medicare & Medicaid Servs. (enclosing Attorney General Jeff Sessions' legal opinion, dated October 11, 2017, regarding cost-sharing reduction payments) (Oct. 12, 2017),

https://www.hhs.gov/sites/default/files/csr-payment-memo.pdf

. If the Department begins making cost-sharing reduction payments in the future, such payments would be considered Federal financial assistance.

Section 1332 of the ACA permits a State to apply for a section 1332 waiver to pursue innovative strategies for providing residents with access to high quality, affordable health insurance while retaining the basic protections of the ACA. Section 1332 waiver funds constitute Federal financial assistance and States receiving such funds are recipients. As discussed in the 2022 NPRM, section 1332 allows States to apply to HHS and the Department of the Treasury to waive certain ACA requirements in the individual and small group markets if the waiver satisfies certain statutory

requirements.

87 FR 47843. For example, under this provision, several States have utilized section 1332 waivers to introduce new or expanded plan options to consumers that lower premiums and/or expand access to coverage, or implemented reinsurance programs to lower premiums and stabilize the individual or small group market by compensating issuers for eligible high-cost claims for enrollees with significant medical costs. These State reinsurance programs use section 1332 pass-through funding to reimburse eligible issuers for high-cost enrollees. These States establish reimbursement eligibility criteria for issuers under the State's reinsurance program, which may include payments to issuers offering coverage both on and off the Exchange. Health insurance issuers receiving payments through a State's section 1332 waiver reinsurance program are subrecipients and therefore subject to section 1557. To the extent a State's waiver utilizes pass-through funding for provider reimbursement those providers would also be subrecipients and subject to section 1557; however pass-through funding received by individual consumers would not be subject to section 1557.

Sections 1332(a)-(b) of the ACA, codified at 42 U.S.C. 18052(a)-(b). States with approved waivers have specific terms and conditions (STCs) pursuant to which the state must also comply with all applicable Federal statutes relating to nondiscrimination, including section 1557.

See, e.g.,

Ctrs. for Medicare & Medicaid Servs., approval of New Jersey's extension application for a section 1332 State Innovation Waiver, STC 4 (Aug. 15, 2023),

https://www.cms.gov/files/document/1332-nj-extension-approval-letter-stcs-final.pdf

Summary of Regulatory Changes

For the reasons set forth in the Proposed Rule and considering the comments received, we are finalizing the definition of “Federal financial assistance” as proposed in § 92.4, without modification.

Health program or activity.

OCR proposed to adopt a definition of “health program or activity.” In paragraph (1), we proposed defining health program or activity 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.

In paragraph (2), we proposed further defining “health program or activity” to include all of the operations of any entity principally engaged in the provision or administration of health projects, enterprises, ventures, or undertakings described in paragraph (1) (“principally engaged”). We proposed that whether such entities are administered by a government or a private entity, all of their operations would be covered under this part.

We also invited comment on the circumstances under which a group health plan might receive funds that could be considered Federal financial assistance from the Department, including the type and prevalence of funds received that could be considered Federal financial assistance under this part.

See, e.g., Fain

Crouch,

545 F. Supp. 3d 338, 343 (S.D.W. Va. 2021),

rehearing en banc granted,

No. 22-1927 (4th Cir. Apr. 12, 2023) (oral argument held Sept. 21, 2023) (argued with

Kadel

Folwell,

No. 22-1721) (holding that defendant health plan was, “by virtue of its acceptance of Federal assistance under its Medicare Advantage program,” required to comply with section 1557 “under its entire portfolio”).

Comment:

Commenters expressed a variety of views regarding the application of the rule to health insurance issuers as health programs or activities and the rule's application to all their operations when principally engaged in any project, enterprise, venture, or undertaking to provide or administer health-related services, health insurance coverage, or other health-related coverage, as set forth under paragraph (2) of the definition of “health program or activity.”

Many commenters supported the inclusion of health insurance issuers and coverage of all their operations when so principally engaged. These commenters argued the 2020 Rule's approach, which applies to health insurance issuers only to the extent a specific plan receives Federal financial assistance, is contrary to the text of section 1557, the CRRA, and the broad remedial intent of Congress in enacting the ACA to ensure access to health insurance. Specifically, commenters argued the 2020 Rule is arbitrary and contrary to the plain language of section 1557, which applies to “any health program or activity,

any part of which is receiving Federal financial assistance

” (emphasis added) and specifically includes three examples of Federal financial assistance that refer to health insurance (“credits, subsidies, or contracts of insurance”). 42 U.S.C. 18116(a). This statutory language, commenters argued, affirms that Congress intended section 1557 to apply to the entire health program or activity, not just the parts that directly receive Federal financial assistance. Commenters noted that the statutory text should be construed broadly and stated that the Proposed Rule's application to health insurance will align with the application to all operations of other covered entities.

Many commenters raised objections to the 2020 Rule's provision at § 92.3(b) that covers all operations of an entity only when principally engaged “in the business of providing

healthcare

” (emphasis added), in combination with § 92.3(c) that specified a health insurance issuer was not considered to be principally engaged in the business of providing health care merely by virtue of providing health insurance, which resulted in the 2020 Rule not covering all operations of a recipient health insurance issuer. Commenters stated this approach was inconsistent with Congress's approach in the CRRA, which supports an expansive interpretation of section 1557's application to cover all operations of a recipient if any part of it receives Federal financial assistance. Specifically, one commenter asserted that the section 1557 statute's use of the CRRA language “program or activity” and “any part of which,” coupled with the statute's reference to title VI, title IX, section 504, and the Age Act, demonstrate Congress's intent to adopt the same broad application for section 1557. Commenters also argued the 2020 Rule's approach is inconsistent with the text of section 1557, which broadly applies to health programs or activities and is not limited to the delivery of health care. Commenters challenged the 2020 Rule's contention that health insurance is not health care, arguing that health insurance issuers are in fact engaged in the business of health care and that other parts of the ACA support this position. For example, “health care entity” is defined to include “a health insurance plan” under 42 U.S.C. 18113(b) and 42 U.S.C. 300gg-91(b)(1) defines “health insurance coverage” to mean benefits consisting of medical care.” Among other things, commenters cited to section 1551 of the ACA, 42 U.S.C. 18111, which specifies that, unless otherwise indicated, the definitions in 42 U.S.C. 300gg-91 apply to title I of the ACA.

Conversely, other commenters urged the Department to retain the 2020 Rule's approach, asserting that the CRRA limits the scope of section 1557 with regard to all operations of a program or activity to only those that are “principally engaged in the business of providing . . .

healthcare

” (emphasis added).

Others argued that the Proposed Rule's application to health insurance is

too broad and should not apply to all operations of a health insurance issuer, particularly its lines of business that do not receive Federal financial assistance. Specifically, commenters noted that because health insurance issuers participate in some types of health insurance that receive Federal financial assistance and other types that do not, the Proposed Rule would require compliance even in activities that do not benefit from Federal financial assistance. Commenters opined that this interpretation goes beyond the scope of Congressional intent, where Congress did not apply the protections to

any

entity engaging in health programs and activities, but only to those health programs and activities that specifically receive Federal financial assistance. One organization asserted that the Proposed Rule could result in health insurance issuers incurring substantial costs and declining to participate in or withdrawing from the Exchanges, the Medicaid managed care market, or the Medicare Advantage market, resulting in reduced coverage options in those markets.

Response:

In re-evaluating the 2020 Rule's interpretation of “health program or activity” as it relates to health insurance and in deciding to add a definition of “health program or activity,” OCR considered a number of factors, including the plain language of section 1557, the context of its placement within the ACA, long-standing civil rights principles, and relevant case law.

The 2020 Rule does not include a definition of “health program or activity,” but rather addresses the term under § 92.3, the scope of application section. The 2020 Rule provides that “health program or activity” encompasses “all of the operations of entities principally engaged in the business of providing

healthcare

” (emphasis added) and specifies that a health insurance issuer is not considered to be principally engaged in the business of providing health care merely by virtue of providing health insurance. 45 CFR 92.3. The 2020 Rule further provides that for entities not principally engaged in the business of providing health care, their operations are only covered under the rule to the extent such operation is a health program or activity that receives Federal financial assistance. 45 CFR 92.3(b). Thus, the 2020 Rule limits OCR's jurisdiction over health insurance issuers to only their plans that directly receive Federal financial assistance. This is in contrast to the 2016 Rule, which defined “health program or activity” to include all the operations of entities principally engaged in health services, health insurance coverage, or other health-related coverage, including health insurance issuers, at former 45 CFR 92.4.

OCR agrees with commenters' assessment that the Proposed Rule's approach to the inclusion of health insurance coverage and other health-related coverage in the definition of “health program or activity” is most consistent with section 1557's statutory text and Congressional intent. The statutory text demonstrates Congress's clear intent to apply section 1557 to health insurance coverage and other health-related coverage. This statutory text does not support the 2020 Rule's limiting “health program or activity” to encompass all of the operations of only those entities principally engaged in the business of providing “healthcare.” Under the plain language of the statute, section 1557 applies to any “health” program or activity not “healthcare” program or activity. And the provision of health insurance coverage and other health-related coverage is plainly classified under the term “health.” Private health insurance issuers exercise significant control over enrollees' access to health care and play a critical role in the business of health care, as insurance is an essential component of ensuring that people receive care in the current health care system. For example, a district court opinion on this issue held that a health insurance issuer, by virtue of being the “gatekeeper” to the plaintiff's health services, qualified as a “ `health program' that Congress intended to rid of discrimination.”

Fain

Crouch,

545 F. Supp. 3d 338, 342-43 (S.D.W. Va. 2021) (finding “ `health program or activity' under Section 1557 necessarily includes health insurance issuers” and holding that defendant health plan was, “by virtue of its acceptance of federal assistance under its Medicare Advantage program,” required to comply with section 1557 “under its entire portfolio”),

rehearing en banc granted,

No. 22-1927 (4th Cir. Apr. 12, 2023) (oral argument held Sept. 21, 2023) (argued with

Kadel

Folwell,

No. 22-1721).

Further, as we discussed in the Proposed Rule, 87 FR 47845, the fact that Congress placed section 1557 in title I of the ACA, a title that predominantly regulates health insurance coverage and other health-related coverage with the purpose of increasing access to care and reducing discriminatory insurance practices, demonstrates Congress's intent for section 1557 to protect individuals from discrimination in health insurance coverage and other health-related coverage.

While not dispositive, we do appreciate commenters' thoughts on whether health insurance issuers are in fact engaged in the business of providing health care. Commenters among other things, cited to section 1551 of the ACA, which specifies that, unless otherwise indicated, the definitions in 42 U.S.C. 300gg-91 shall apply with respect to title I of the ACA. Section 300gg-91(b)(1) defines the term “health insurance coverage” as “benefits consisting of

medical care (provided directly, through insurance or reimbursement,

or otherwise and including items and services paid for as medical care) . . . .” (Emphasis added.) The 2020 Rule specifies that “medical care” as used in that provision is limited to the “amounts paid for” certain medical services and that a health insurance issuer is not considered to be principally engaged in the business of providing health care merely by virtue of providing health insurance. However, the text of section 1557 does not support the 2020 Rule's position that the rule applies only to the business of providing “healthcare.”

OCR found commenters' concerns regarding the negative consequences that could result from the Proposed Rule's scope of application to insurance issuers unpersuasive given the lack of information provided to substantiate their concerns. For example, one commenter cited to Exchange participation statistics that indicated certain issuers have limited or no Exchange participation.

However, the statistics do not demonstrate the reason for such issuers' lack of participation or provide evidence that an issuer's decision not to participate in an Exchange was due to apprehension that section 1557 would apply to its activities that did not receive Federal financial assistance.

Mark Farrah Assocs.,

http://www.markfarrah.com

(statistics compiled using data from the National Association of Insurance Commissioners, the California Department of Managed Health Care, and CMS).

The application of civil rights laws to all operations of an entity receiving Federal financial assistance is not new and did not originate with section 1557. For more than 35 years, under the CRRA, a recipient of Federal financial assistance that accepts Federal funds in any part of its program has been required to comply with title VI, section 504, and the Age Act in “all of the[ir] operations.”

The CRRA specifies that the entire program or activity, as defined in that statute, is required to comply with title VI, section 504, and the Age Act if any part of the program or activity receives Federal financial

assistance. We note that the terms “program” and “program or activity” predate the CRRA in the underlying civil rights statutes, and the legislative history of the CRRA indicates that Congress did not believe it was enacting a new definition, but rather overturning an overly narrow construction of the term by the Supreme Court and thereby restoring what Congress and the executive branch had previously understood to be a broad, institution-wide application of the term “program.”

See

S. Rep. No. 100-64 (1987). OCR maintains that Congress adopted a similar approach in section 1557 by specifying in the statute that section 1557 applies when “any part of” the health program or activity receives Federal financial assistance.

Entities must comply with civil rights laws just as they must comply with any other State or Federal law that is applicable to their operations.

Public Law 100-259, 102 Stat. 29 (Mar. 1988), codified at 20 U.S.C. 1687; 29 U.S.C. 794(b); 42 U.S.C. 2000d-4(a); 6107(4).

Compare

CRRA, 20 U.S.C. 1687(4) (“any part of which is extended Federal financial assistance”)

with

section 1557, 42 U.S.C. 18116 (“any part of which is receiving Federal financial assistance”).

The 2020 Rule states it was applying the CRRA's definition of “program or activity” to cover all operations of entities under section 1557 only when they are “principally engaged in the business of providing healthcare.” We received some comments in support of the approach in that rulemaking, and while we appreciate the importance of the CRRA in shaping the interpretation of the scope of Federal civil rights protections under title VI, section 504, title IX, and the Age Act, it is not applicable here. Section 1557 employs the term “program or activity” without adopting by reference the CRRA or any of the underlying civil rights statutes. The 2020 Rule erred in applying the CRRA to narrow the application of section 1557 by excluding a significant portion of the health insurance industry. If Congress had intended to limit section 1557 to entities principally engaged in the business of providing “healthcare,” it could have provided as such in the statute. Instead, the statute expressly modified “program or activity” with “health,” without requiring that that entity be “principally engaged in the business of providing healthcare.”

While Congress did not incorporate the CRRA into section 1557 wholesale, it stated that section 1557 applies to “any health program or activity,

any part of which

is receiving Federal financial assistance.” 42 U.S.C. 18116(a) (emphasis added). By modifying “program or activity” with “health,” and noting a health programs or activity is covered if “any part” of it receives Federal financial assistance, it is reasonable to infer that Congress intended the term “health program or activity” to be interpreted broadly and to include all of that entity's operations, if the entity that receives Federal funding is principally engaged in the provision or administration of health insurance coverage or other health-related coverage. And because “health program and activity” is undefined in the section 1557 statute, it is also reasonable to infer that those health programs or activities include health-related services, health insurance coverage, or other health-related coverage.

Comment:

One commenter argued that, because the CRRA delineates the scope of coverage of section 1557's underlying civil rights statutes, failing to include this limitation in the final rule would expand the notion of Federal financial assistance to ultimate beneficiaries of the funding and would have significant effect on other civil rights laws dealing with funding, including title VI, title IX, and others.

Response:

The commenter's concerns regarding interference with the longstanding principle that Federal civil rights laws do not apply to direct, unconditional assistance to ultimate beneficiaries are unsupported. Ultimate beneficiaries are the intended class of private individuals receiving Federal aid,

a concept that is not impacted or modified under this rulemaking. In fact, the definition of “recipient” in the final rule at § 92.4 adopts standard language that explicitly states that the term “does not include any ultimate beneficiary.”

U.S. Dep't of Justice, Title VI Legal Manual, section V.C.2.F.

Comment:

OCR received comments specifically related to the rule's application to health insurance issuers' other products and lines of business that do not receive Federal financial assistance, such as health insurance coverage sold off the Exchange, excepted benefits, short-term, limited-duration insurance, and third party administrator activities.

Response:

These comments are addressed in the

Scope of Application

discussion under § 92.207 (Nondiscrimination in health insurance coverage and other health-related coverage).

Comment:

Some commenters, including an association representing State insurance regulators, critiqued OCR's “fungibility of funds” rationale for including all operations of recipients that are principally engaged in the provision or administration of health insurance coverage. These commenters argued it is inappropriate to consider funding to be fully fungible in the context of health insurance, where issuers justify their premiums based on expected costs in a particular market, not across all operations, and thus Federal financial assistance for one type of coverage does not actuarially support or subsidize an issuer's operations in other markets. Commenters noted that entities have a myriad of corporate structures, and that Federal funds received by one legal entity might not be shared with sibling entities in unrelated business ventures. Commenters pointed to the 2016 Rule's analysis regarding liability of third party administrators, where OCR discussed that a third party administrator that is legally separate from an issuer is unlikely to be covered under the rule. 81 FR 31433.

Conversely, other commenters agreed with OCR's fungibility of funds rationale, and argued that Federal financial assistance going to any part of a health program or activity necessarily benefits the entity receiving such funds as a whole. These commenters noted that a narrower construction, in which nondiscrimination rules apply only to part of a recipient, makes it easier for discriminatory actors to structure their operations to evade responsibility and frustrates the purpose of the statute.

Response:

As commenters noted, OCR discussed the fungibility of funds rationale as one means of support for the interpretation that all of a health insurance issuer's operations will be covered by the final rule when the health insurance issuer receives Federal financial assistance.

See

87 FR 47844. However, we note that reliance on this rationale is not necessary to support OCR's interpretation that this final rule applies to all of the operations of a recipient that is “principally engaged,” as discussed above. Under the best reading of the statutory text, where an entity receives Federal financial assistance and that entity is “principally engaged in the provision or administration of any health projects, enterprises, ventures, or undertakings described in paragraph (1)” of the definition of “health program or activity,” the whole entity is defined as a health program or activity covered under section 1557 and must comply with the final rule.

We acknowledge that covered entities may structure their businesses in a variety of ways. Unless an entity that is principally engaged can demonstrate that part of their operations is truly a separate legal entity, as discussed below, a recipient that is principally engaged is liable for all its operations under the final rule.

Comment:

One organization recommended that OCR explicitly identify patient billing and collections activities as “health programs or activities” by amending the definition to add a new paragraph (1)(vi) as follows: “provide or administer billing and collections services for health-related services, including providing assistance to persons to obtain financial help or counseling.”

Response:

This final rule, consistent with OCR's other civil rights implementing regulations, prohibits covered entities—directly or through contractual or other arrangements—from discriminating in patient billing and collection activities related to health programs and activities. For example, a hospital's in-house administration of billing would be covered and any contractual arrangement for collections of debt would also be covered. We decline to add the recommended language because it is unnecessary.

Comment:

Many commenters strongly supported the Proposed Rule's explicit inclusion of health research in the definition of “health program or activity.” Some commenters recommended updating paragraph (1)(iv) to include “clinical” research for clarity and to update paragraph (2) to include: “clinical trial sites including wherever potential clinical trial participants are screened or recruited” in the list of entities considered “principally engaged.” In addition, other commenters recommended that OCR provide technical guidance in what “inclusion” in clinical research looks like and how it can be achieved through nondiscriminatory research protocols.

Response:

OCR supports the request to include clinical research in the definition of “health program and activity,” and have revised paragraph (1)(iv) accordingly. Clinical research is the comprehensive study of the safety and effectiveness of the most promising advances in patient care, and is different from laboratory research as it involves people who volunteer to help the field better understand medicine and health.

However, we decline to add reference to physical sites, as the jurisdiction applies to the health program or activity regardless of where it takes place and whether it can be said to take place at a site at all. For example, if a hospital receives a grant from the National Institutes of Health to conduct a clinical study on the effects of Tuberous Sclerosis Complex, the hospital is prohibited from discriminating in its screening and recruitment activities wherever they take place, such as at the hospital itself, at community health fairs, online, or at the home of a hospital researcher who is working out of their own home.

John Hopkins Medicine, Research,

Understanding Clinical Trials, Clinical Research: What Is It?, https://www.hopkinsmedicine.org/research/understanding-clinical-trials/clinical-research-what-is-it.html.

Comment:

One organizational commenter requested that OCR clarify section 1557's application to health research projects and activities to explicitly recognize that health research is conducted to answer specific questions, and that research protocols may target or exclude certain populations where nondiscriminatory justifications show that such criteria are appropriate, consistent with the 2016 Rule preamble.

Response:

Consistent with the 2016 Rule, OCR does not intend the inclusion of health or clinical research within the definition of “health program or activity” to alter the fundamental nature in which research projects are designed, conducted, or funded. 81 FR 31385. As in the 2016 Rule, we note that criteria in research protocols that target or exclude certain populations are warranted where nondiscriminatory justifications establish that such criteria are appropriate with respect to the health or safety of the subjects, the scientific study design, or the purpose of the research.

See

81 FR 31385.

Comment:

Some commenters recommended that OCR narrow the definition of “health program or activity” to exclude programs and activities unrelated to health. These commenters also requested that OCR clarify what “any project, enterprise, venture or undertaking to provide or administer health-related services” means. For example, these commenters were unclear whether a health-related venture may include such things as vitamin manufacturing.

Response:

The final rule applies to health programs and activities that receive Federal financial assistance from the Department (or that are administered by the Department or a title I entity) and does not apply generally to programs and activities that are unrelated to health. However, where an entity is principally engaged as set forth in paragraph (2) of the definition of “health program or activity,” all operations of the covered entity must comply with the final rule. This applies even where the covered entities' other operations are not necessarily health-related.

Though not an exhaustive list, “health-related service” would include the provision of medical, dental, and pharmaceutical care; preventive health services; physical, occupational, or speech therapy; behavioral health care; clinical trials; and transportation to and from such services when necessary to facilitate access to other health-related services.

Should an entity engaged in commercial vitamin manufacturing receive Federal financial assistance from the Department, OCR would conduct an analysis as to whether the program or activity in question meets the definition of “health program or activity.”

See, e.g.,

42 CFR 431.53 (requiring a state Medicaid plan to specify that the Medicaid agency will ensure “necessary transportation for beneficiaries to and from providers”).

Comment:

A few commenters urged the Department to expressly list Medicaid programs, Children's Health Insurance Program (CHIP), or the Basic Health Program in its definition for “health program or activity.”

Response:

The 2016 Rule included Medicaid programs, CHIP and the Basic Health Program in its definition of “health program or activity” at former 45 CFR 92.4. As stated in the preamble to the 2022 NPRM, these entities would be covered in their entirety as operations of State or local health agencies and we sought comment on whether such programs should be explicitly referenced in the regulatory language. 87 FR 47844. For clarity and to reduce confusion, OCR accepts the recommendation to include State Medicaid programs, CHIP, and the Basic Health Program in paragraph (2) of the definition of “health program or activity.”

Comment:

Numerous commenters objected to the 2022 NPRM's proposal to not explicitly include group health plans

in the list of entities considered to be principally engaged in paragraph (2) of the “health program or activity”

definition. Expressing concerns that this would result in confusion that the rule excludes group health plans, commenters urged OCR to reinstate the 2016 Rule's approach by expressly including group health plans in the definition of “health program or activity.” Former 45 CFR 92.4.

“Group health plan” is defined in the Employee Retirement Income Security Act (ERISA) as an employee welfare benefit plan to the extent that the plan provides medical care (as defined in paragraph (2) and including items and services paid for as medical care) to employees or their dependents (as defined under the terms of the plan) directly or through insurance, reimbursement, or otherwise. Such term shall not include any qualified small employer health reimbursement arrangement (as defined in 26 U.S.C. 9831(d)(2)). 29 U.S.C. 1191b(a)(1);