Biden administration proposes to restore LGBTQ protections under Affordable Care Act

Xavier Becerra
Xavier Becerra leads the Department of Health and Human Services, which issued a proposal supporting LGBTQ protections in healthcare.
AP Photo/Patrick Semansky

The Biden administration’s Department of Health and Human Services (HHS) proposed new regulations on July 25 to replace the Trump Administration’s regulations issued in 2020 under the anti-discrimination provision of the Affordable Care Act (ACA), Section 1557.

The proposed regulations will not become effective until after a public comment period and subsequent possible revisions in light of the comments received, as required under the Administrative Procedure Act (APA). The proposed regulations build upon regulations adopted by the Obama administration in 2016, but they propose new coverage that is even more extensive than those regulations provided. The Trump administration regulations sharply cut back on the Obama regulations, including removing protection against discrimination because of gender identity and exempting insurance companies from the anti-discrimination requirements.

The ACA was adopted on a very close party-line vote in 2010, shortly before Republicans gained control of Congress as a result of the mid-term elections during President Obama’s first term.  Because of the complexities of the lengthy and detailed statute, it took several years until the Obama administration finished finalizing regulations in 2016. One of the most controversial elements of the 2016 regulations was the interpretation of the anti-discrimination provision to ban gender identity discrimination by entities subject to Section 1557, although the regulation was ambiguous about whether this meant that health insurers were required to cover gender-affirming surgery in order to meet the coverage requirements posed by the ACA. Litigation against the regulation quickly resulted in a preliminary injunction and it never actually went into effect.

The Trump administration was determined to remove gender identity from the list of prohibited grounds of discrimination, but it took until the spring of 2020 for HHS to publish a new proposed regulation to displace the 2016 regulation. This proposed regulation was published shortly before the Supreme Court ruled in June 2020 in Bostock v. Clayton County that the ban on employment discrimination because of sex under Title VII of the Civil Rights Act of 1964 extended to claims of discrimination because of sexual orientation or gender identity. The explanatory material accompanying the Trump administration’s proposed regulation asserted that the inclusion of gender identity in the 2016 regulation was not supported by Section 1557, but noted that a ruling in Bostock was pending. However, after the Bostock decision was announced, the Trump administration insisted that its reasoning applied only to Title VII, not to Section 1557.

Section 1557 does not directly list forbidden grounds of discrimination under the ACA. Instead, it provides that “an individual shall not, on the grounds prohibited under title VI of the Civil Rights Act of 1964, title IX of the Education Amendments of 1972, the Age Discrimination Act of 1975, or section 794 of title 29, be excluded from participation in, be denied the benefits of, or be subjected to discrimination under, any health program or activity, any part of which is receiving Federal financial assistance, including credits, subsidies, or contracts of insurance, or under any program or activity that is administered by an Executive Agency or any entity established under this title.”

Title VI of the Civil Rights Act refers to discrimination because of race, Title IX of the Education Amendments refers to discrimination on account of sex, the Age Discrimination Act’s purpose is obvious from its title, and Section 794 of title 29 prohibits discrimination because of disability. Thus, Section 1557 prohibits discrimination on the basis of race, sex, age, or disability to the extent such discrimination is prohibited under those statutes.

The Trump administration contended that because the prohibition of sex discrimination under Section 1557 was derived from Title IX of the Education Amendments rather than from Title VII of the Civil Rights Act, the Bostock decision did not apply to it, which was consistent with the Trump administration’s position that Bostock did not apply to any federal sex discrimination laws except Title VII, and then only in a limited way. The Department of Education under Trump also maintained that Title IX does not ban educational institutions receiving federal funds from discriminating based on sexual orientation or gender identity, and took that position in litigation under Title IX. Most, but not all, federal courts that have considered these questions have rejected the Trump administration’s position. Thus, although the Education Department under Secretary Betsy Devos stopped processing sexual orientation or gender identity claims by students against educational institutions, individual plaintiffs were filing suit and achieving court victories addressing such discrimination during the Trump administration, although some conservative judges (especially those appointed by Trump) were rejecting such claims.

When the ACA was enacted in 2010, some federal courts had already begun to recognize gender identity discrimination claims under Title VII, but it was only afterwards that some courts began to recognize gender identity discrimination claims under Title IX as well.  The Obama administration took an affirmative position on that issue a few years after the ACA was enacted by sending a letter of interest to the US District Court in Virginia that was considering a lawsuit by Gavin Grimm, a transgender boy whose high school refused to let him use the boys’ restroom facilities, so it was not surprising that HHS’s proposed regulations in 2016 took the position that Section 1557 prohibited gender identity discrimination by health care providers and insurers who were subject to Section 1557.  (Gavin Grimm eventually won his case in the US Court of Appeals for the 4th Circuit, whose ruling the Supreme Court refused to review.)

The Equal Employment Opportunity Commission (EEOC) began recognizing gender identity discrimination claims under Title VII in 2012, ruling on a discrimination claim by Mia Macy, a transgender woman who was denied a job by the Bureau of Alcohol, Tobacco, Firearms and Explosives, a unit of the US Department of Justice. In 2015, the EEOC first recognized a sexual orientation discrimination claim against the Department of Transportation in a case brought by David Baldwin, a gay air traffic controller. By the time the Supreme Court ruled in Bostock in 2020, several federal circuit courts had overruled old precedents to hold that sexual orientation and gender identity claims could be brought under Title VII, although the circuit courts were not unanimous on the issue.

The Trump administration went ahead and published its proposed 2020 regulation, withdrawing coverage of gender identity claims, despite the Supreme Court’s ruling in Bostock. Although technically Bostock was decided only under Title VII, Justice Neil Gorsuch’s opinion for the Supreme Court employed reasoning that was obviously applicable to all sex discrimination laws. He proclaimed that it was impossible to discriminate “because of” a person’s sexual orientation or gender identity without taking account of their sex assigned at birth. He exclaimed that it would be impossible to describe the concepts of “sexual orientation” or “gender identity” without mentioning sex, so discrimination on those grounds necessarily involved taking account of an individual’s sex. Because Title VII prohibited discriminating “because of” a person’s sex, taking account of a person’s sex in deciding to discharge them (which was the issue in the cases from three circuit courts that the Supreme Court was deciding in Bostock) potentially violated the statute. Title VII does allow an employer to discriminate based on sex when sex is a “bona fide occupational qualification” for the job in question, but the Supreme Court has ruled that this is a narrow exception to the general rule, and it would not have applied to any of the cases then pending before the Supreme Court in Bostock.

On January 20, 2021, President Biden issued an executive order directing federal agencies that enforce sex discrimination laws to follow the reasoning of the Bostock decision, and to issue new guidelines or regulations as necessary to prevent discrimination against LGBTQ people.  A few months later, the Education Department and the Health and Human Services Department had given notice that they would follow the Bostock ruling in enforcing Title IX and Section 1557, and the EEOC has never wavered from its prior rulings under Title VII in the Macy and Baldwin cases. However, litigation challenging these positions has been filed in federal courts, and preliminary injunctions issued to block enforcement actions by the agencies while the cases are pending. The 2016 regulation adopted by the Obama administration under Section 1557 was not enforced by the Trump administration, which had informed the courts that it would not be enforced while they worked on proposing a new regulation to replace it.

Removing gender identity protection was not the only change effected by the Trump administration’s 2020 regulation. It also adopted a narrow interpretation of Section 1557, under which it asserted that insurance companies were not covered by the anti-discrimination requirement because they did not deliver health care directly. It asserted that various exceptions contained in Title IX, such as religious educational institutions, should be interpreted to carry over as exceptions under Section 1557. It asserted that Section 1557 applied only to entities covered by the ACA, giving a narrow reading to the somewhat ambiguous part of Section 1557 dealing with its scope of application to all health care programs that receive federal money. The 2020 regulation also repealed various procedural requirements that the 2016 regulation imposed on employers and insurance companies to designate individuals charged with enforcing the anti-discrimination requirements, undertaking training of staff, giving formal notice to individuals about their rights, and setting up formal procedures for dealing with discrimination complaints.

Under the regulations proposed by the Biden administration, the existing regulations will be amended to explicitly list sexual orientation and gender identity wherever discrimination because of sex is addressed, the Trump administration’s narrow definition of covered entities and Title IX exception is replaced by a broad reading including insurance companies and going beyond programs established under the ACA, the procedural requirements imposed by the Obama administration’s 2016 regulation are reinstated, and for the first time HHS is taking the position that Section 1557 applies to Medicare Part B, the health insurance program covering Americans age 65 and older. It already applies to Medicaid, as well as the health insurance programs adopted by state and local governments for their employees. The regulation does acknowledge, however, that its application is subject to the requirements of the Religious Freedom Restoration Act, which provides an affirmative defense against enforcement by the government that burdens the free exercise of religion, so it is questionable whether the requirement that insurance plans cover gender-affirming treatment will ultimately extend to health care institutions operated by those religious bodies which reject such treatments.

The proposed regulations run to more than 300 very detailed pages in the pdf file released by HHS, which helps to explain why it took 18 months for the department to come up with this comprehensive proposal. It will definitely attract litigation, most likely from the same states and associations that attacked the 2016 regulations. If such litigation eventually rises to the level of the Supreme Court, it will test the willingness of the Court to treat Bostock as a broadly binding precedent. That case was decided by a 6-3 vote, with Chief Justice John Roberts joining Justice Gorsuch’s opinion, which was also supported by Justices Ruth Bader Ginsburg, Stephen Breyer, Sonia Sotomayor and Elena Kagan. If Roberts and Gorsuch do not back away from the logical extension of Bostock’s reasoning, there would still be at least a 5-4 majority assuming that Justice Ketanji Brown Jackson, the Court’s newest member, and Justices Sotomayor and Kagan would also vote to reaffirm and apply Bostock to Title IX and thus by extension to Section 1557.

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