On June 12, 2020, the U.S. Department of Health and Human Services (“HHS”) released its
Final Rule under Section 1557 of the Affordable Care Act which, among other things,
modifies the regulation issued by HHS in May 2016 (“2016 Rules”). The 2016 Rules were
subject to multiple lawsuits over the years and HHS claims the Final Rules, among other
things, “better comply with the mandates of Congress…reduce confusion…and clarify the
scope of Section 1557 in keeping with pre-existing civil rights statutes and regulations
prohibiting discrimination on the basis of race, color, national origin, sex, age, and
Just days after the Final Rule was released, the United States Supreme Court released its
much anticipated opinion in Bostock v. Clayton County, Georgia regarding whether an
employee’s sexual orientation or gender identity protects them from discrimination on the
basis of sex under Title VII.
While these two issues are seemingly unrelated, as we discuss in this alert, we believe the
Court’s decision makes the Final Rule ripe for legal challenge. The decision also impacts
employer-sponsored group health plans regardless of whether they are “covered entities”
for purposes of Section 1557.