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HHS Publishes Section 1557 Final Rule on Nondiscrimination in Health and Health Education Programs

On June 12, 2020, the Department of Health and Human Services’ (HHS’) Office for Civil Rights (OCR) published a prepublication version of a final rule on nondiscrimination in health programs and activities under Section 1557 of the Affordable Care Act (ACA). Section 1557 serves protected classes of individuals whose health coverage may not be denied, canceled, limited or refused on the basis of race, color, national origin, sex, age, or disability. Originally proposed in May 2019, this new final rule replaces the original final rule from 2016 and repeals or revises key provisions of that 2016 rule. The rule is effective Aug. 18, 2020, though legal challenges, particularly regarding gender identity and discrimination “on the basis of sex” following recent high court decisions, are expected that could impact when the rule takes effect.

Key provisions and updates from the 2016 rule include:

Repeal of prior regulation’s definition of discrimination on the “basis of sex”: The final rule repeals the 2016 rule’s expanded definition of “basis of sex” that included pregnancy termination, sex stereotyping, and gender identity. The new final rule continues to prohibit discrimination on the “basis of sex,” but under the prior interpretation of the word “sex” (i.e., as defined by gender assignment at birth). The final rule also amends regulations issued by the Centers for Medicare & Medicaid Services to ensure nondiscrimination on the “basis of sex” is consistently applied.

As it relates to how health benefits coverage may have been changed to comply with the 2016 rule, HHS clarifies that “nothing in this final rule prohibits a healthcare provider from offering or performing sex-reassignment treatments and surgeries, or an insurer from covering such treatments and procedures, either as a general matter or on a case-by-case basis.”

Narrowed scope of application: The final rule narrows the scope of application of Section 1557 so it only applies to health programs or activities, any part of which receives federal financial assistance, and any program or activity under Title I of the ACA (i.e., Exchanges) or entities established under that Title. In comparison, the 2016 final rule interpreted the regulation as applying to all operations of the covered entity, even if it is not “principally engaged” in health care.

This means that under the new rule, Section 1557 will generally not apply to self-funded group health plans under ERISA or short-term limited duration plans because the entities offering them are typically not principally engaged in the business of providing health care, nor do they receive federal financial assistance.

Removal of notice and tagline requirements: The final rule eliminates the notice and tagline provision that required covered entities to distribute nondiscrimination notices and taglines in at least fifteen languages with all “significant communications” to patients and customers.

Addition of a “four-factor analysis” for providing limited-English proficiency (LEP) individuals meaningful access: To ensure covered entities offer meaningful access for individuals with LEP, the final rule establishes a new four-factor analysis. The four factors include: 1) the number or proportion of LEP individuals eligible to be served, or likely to be encountered, in the eligible service population; 2) the frequency with which LEP individuals come in contact with the entity’s health program, activity, or service; 3) the nature and importance of the entity’s health program, activity, or service; and 4) the resources available to the entity and costs.

For more details on the final rule, review the information at these links:

Read the final rule [PDF]
Read the HHS fact sheet [PDF]

Final Rule Released on HRAs

On June 13, 2019, the Departments of Labor, Health & Human Services and Treasury released final rules concerning Health Reimbursement Arrangements (HRAs). The 497-page rule includes the creation of two new types of HRAs, the “Individual Coverage HRA” and the “Excepted Benefit HRA.”

Advantages of the Individual Coverage HRA include, but are not limited to:

  • Funds can be used to reimburse the employee’s premiums for an individual health insurance policy.
  • Reimbursements made to employees do not count towards the employee’s taxable wages.
  • The employer can choose to roll-over unused amounts into the following year.
  • Coverage can be offered to different classes of employees (e.g.; full-time, part-time, seasonal, salaried, hourly)
  • An offer of the Individual Coverage HRA represents an “offer of coverage” under the employer mandate, however, contributions must meet affordability guidelines. The IRS will release further guidelines regarding this later.

The Individual Coverage HRA also comes with restrictions and regulations including but not limited to:

  • An offer of an Individual Coverage HRA cannot be made to any employee that is offered a traditional group health plan.
  • If an offer of coverage is made to a class of employees, there is a minimum class size that is required. Size is typically 10% of that specific class of employees. For example, if an employer has 200 employees, a minimum of 20 employees would have to be in a specified class.
  • Contributions can be in any amount that the employer chooses, but contributions must be consistent for all employees in a specified class.
  • The employer must provide notice of the Individual Coverage HRA to employees.
  • The employer must be able to substantiate that the employee is enrolled in an individual plan or Medicare (model notices are available).
  • The employer must notify employees on an annual basis that the individual health insurance is NOT subject to ERISA.

The final rule also created the “Excepted Benefit HRA” which, starting in January of 2020, will permit employers to finance additional medical care. Employees can use the HRA without having to be enrolled in the group’s traditional health plan.

The requirements associated with the “Excepted Benefit HRA” include, but are not limited to:

  • The annual contribution is capped at $1,800.
  • It must be offered in conjunction with a group health plan, but there is no requirement for the employee to enroll in that plan.
  • The “Excepted Benefit HRA” cannot be used to fund group health or Medicare premiums.
  • It can fund premiums for dental, vision, or short-term limited duration insurance.

Employers who want to offer the “Individual Coverage HRA” for January 1, 2020, can do so but employees will need to enroll in an individual plan during the 2019 open enrollment period (November 1, 2019 – December 15, 2019).

2019 ACA and HSA Inflation Adjustment

Earlier this year the IRS announced its 2019 inflation adjustment indexing for a number of ACA  provisions such as the employer shared-responsibility penalty affordability percentage (employee contribution limit that determines employer penalty), and Maximum out of pocket limits.

The two shared-responsibility penalties are for when employers fail to meet the minimum essential coverage (4980H(a)) and minimum value and affordability (4980H(b)). The section 4980H(a) penalty may be assessed when an ALE (applicable large employer) does not offer minimum essential coverage to at least 95 percent of its full-time employees, and at least one full-time employee receives a premium tax credit. The section 4980H(b) penalty may be assessed if an ALE offers minimum essential coverage to at least 95 percent of its full-time employees, but at least one full-time employee receives a premium tax credit because the coverage offered was not considered affordable and/or did not provide minimum value.

Employers need to make sure that they don’t overlook the adjusted ACA cost-sharing limits as they could face sharp penalties under the ACA’s shared responsibility provisions. In addition to the ACA adjusted index, the IRS released the 2019 HSA inflation-adjusted contribution limits as well:

2019 ACA and HSA Inflation Adjustment chart

CO Senator Michael Bennet’s new idea to fix US Health Insurance: “Medicare X”

Bennett introduced the idea last week at the Colorado Health Institute’s annual Hot Issues in Health conference.

On the political spectrum of health-policy ideas, Medicare-X sits somewhere in the middle – a more moderate and incremental approach than the single-payer plans many of his fellow Democrats have been endorsing, but with plenty of federal involvement to attract attention from Republicans skeptical of government meddling in the marketplace.

Medicare-X is a basic buy-in plan for government health care coverage – a “public option”. People of any age shopping for their own health insurance would have the choice of buying insurance plans from private companies or, instead, buying into coverage through Medicare. (Medicare is normally the government health insurance program for those age 65 and older.)

http://colorado.hcbusinessnews.com/?p=18961

Safe Injection Facility Pilot Program Could Come to Denver

Denver has taken another step toward being the first U.S. city with a supervised site for illicit drug users to inject.aThe City Council passed an ordinance Monday night in support of a single facility pilot program for two years. The bill is sponsored by Councilman Albus Brooks.

The safe space idea would provide trained professionals and clean needles with an eye toward overdose and preventable disease intervention.

More than 1,000 people died from drug overdose in Colorado in 2017. A record 201 people died in Denver. Four years ago, Joelle Fairchild’s son, Tony, was among the overdose fatalities. He was found on the Cherry Creek Trail in Denver. Fairchild said a “supervised use site could have saved his life.”

The first step in support of a supervised drug use site came at a Nov. 7, Denver Safety, Housing, Education and Homelessness Committee public hearing.

At that hearing, people with histories of IV drug use, social workers, doctors and parents urged the council to approve supervised use facilities. Dr. Donald Stader, an emergency physician at Swedish Medical Center in Denver and representative of the American College of Emergency Physicians, pointed to research and the cost that taxpayers endure to treat cases of hepatitis and HIV.

He called it “not only the scientifically sound thing to do, but it is the moral thing for each one of you to do.”

Once the site is open, users could come in with their own drugs. The facility’s staff would be on site with overdose antidote naloxone, safe injection education and referrals to addiction treatment.

Lisa Raville of the Harm Reduction Action Center sees the possible pilot site as an extension of Denver’s flourishing needle exchange program. The center began providing sterile injection supplies in 2012.

In the last six years, the organization has given 52,000 referrals to testing, mental health support and substance abuse help centers. Raville said the safe injection site would help recovery programs meet drug addicts where they are.

“I can’t get them into treatment if they’re not alive,” she said.

Several cities around the country have considered safe injection sites as a way to cut down on overdose deaths. California sent a law to Gov. Jerry Brown to allow a site in San Francisco, but he vetoed it. Colorado’s potential pilot program is still contingent on the state legislature’s approval of such sites.

A bill to do that failed in the 2018 session.

While there are still implementation and legal hurdles to clear, Denver Mayor Michael Hancock said the City Council bill approved Monday has his full support and he will sign it.

“Like cities across the country, Denver is seeing significant numbers of people dying each year of drug overdoses,” Hancock said in a news release Tuesday. “I applaud Councilman Brooks for looking for innovative answers.”

Opponents to the program argue it will encourage drug use and bring crime to the site’s neighborhood.

The council said there will be opportunities for residents to give input about the possible location.

“It’s not the path I think the city ought to be taking,” said Councilman Kevin Flynn, who voted against the ordinance Monday. “To establish a designated area where dangerous illegal drugs, heroin, can be consumed.”

Flynn noted he would be in favor of the bill if it included a more “aggressive path toward treatment.”

Councilman Paul Lopez disagreed and argued addicts will use dangerous drugs regardless.

“You’re not enabling,” he said. “You’re being there as a supervisor to make sure they aren’t killing themselves. It’s not supervised injection sites replacing treatment. This is just another tool for a society that still doesn’t know how to address addiction.”