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Northwest OH Legal Blog

Tuesday, July 19, 2016

New Regulations Require that Health Plans Must Now Cover Transgender Services And Further Accommodate Disabled Participants and Those with Limited English Proficiency

What do the new regulations cover?

            Just when we though the Affordable Care Act complicated health plans more than we could imagine, new regulations emerged!  The Department of Health and Human Services (HHS) published a final rule, on May 18, 2016, that expands Section 1557 of the Affordable Care Act (“ACA”) and will require many group health plans to cover health care services previously denied to transgender individuals.  Additionally, plan participants with limited English proficiency or a communications’ disability, must now have equal access benefits communications under this final regulation. To what extent the regulations apply to each multiemployer plan may be complicated. However, the intentions of HHS are clear.  Plan sponsors will be strongly encouraged to cover health care services for transgender individuals and accommodate and provide plan communications to disabled and limited English- speaking participants in a more comprehensive way.

            The effective date of this final rule applies to plan years beginning on or after January 1, 2017.  However, there is a “fly in the ointment” where this effective date is concerned. Parts of the final regulations require that notices and accommodations (previously mentioned) must be communicated 90 days after the July 18, 2016 effective date of the final rule.  And since that date is October 17, 2016, Boards of Trustees for multiemployer health and welfare funds should act fast!

Plans May not Discriminate on the Basis of Gender Identity

            The ACA under Section 1557 now prohibits “Covered Entities” from discriminating on the basis of race, color, national origin, sex (including gender identity), age or disability. Specifically, Covered Entities cannot deny, cancel, limit or refuse to issue health coverage, deny or limit a claim or impose additional cost sharing on these protected categories within their plans.

            Many multiemployer plans do not consider themselves as “Covered Entities” under the Affordable Care Act. However, if a plan accepts the Retiree Drug Subsidy under the Centers for Medicare and Medicaid Services or receives any funds from HHS, including for self-insured Employer Group Waiver Plans (EGWPs), Medicare Advantage or Medicare Prescription Drug Plans, it is considered to be a Covered Entity.   Therefore, many multiemployer plans do fit the description of a Covered Entity.

            According to the new rules, a Covered Entity may not deny or limit coverage or impose additional cost sharing or other limitations for sex-specific health services provided to transgender individuals if the individual’s gender identity or recorded gender is different from the one to which such health services are customarily provided. For instance, if a plan covers medically appropriate pelvic exams (traditionally for females), coverage cannot be denied when a doctor advocates a pelvic exam as medically appropriate for an individual either who  identifies as a transgender man or is enrolled in the plan as a man. Most notably, Covered Entities are prohibited from categorically excluding coverage for services related to gender transition such as re-assignment surgery, hormonal treatments or other plastic surgeries to enhance gender re-assignment.  Therefore, plans that exclude transition-related treatments as experimental or cosmetic will no longer be in compliance with the new rule and should be reviewed for amendment purposes before the next plan year begins. Furthermore, psychotherapy treatments that address gender dysphoria or gender transitions may no longer be excluded from plan coverage. 

            However, the new rules have not totally upended plan coverages and documents. Plans are not required to abandon reasonable medical-management techniques and are not required to cover any specific treatment or procedure; however, plans will be expected to provide a neutral, nondiscriminatory reason for any denial or limitation that might be seen as a pretext for discrimination.

New Rule Also Requires Notice and Accommodations

            Multiemployer plans that fall under the description of Covered Entities must comply with additional requirements to protect disabled participants and those with limited English proficiency.  Plans must assure that communications, such as notices, plan documents and dedicated phone messages and on-line portals that address these groups are effective.  This could require that plans have access to a qualified oral interpreters and/or qualified translators when communicating with individuals with limited English proficiency. In addition, plans considered to be Covered Entities with 15 or more participants must design and provide participants with disabilities and limited English proficiencies a grievance procedure and a compliance coordinator to properly document and rectify instances when communications are not effective to these protected groups.

What Changes must our Plan make?

Plans that are Covered Entities should send initial notices to all participants to inform them of nondiscrimination practices and ‘taglines’ that alert participants with limited English proficiency and communications’ disabilities to the availability of language assistance services by October 18, 2016.  “Taglines” are described in the new rules as statements written in non-English languages that indicate the availability of language assistance services, free of charge, in at least the top 15 non-English languages spoken by individuals with limited English proficiency in the applicable state (The SBC charts only require the top 4 languages spoken currently). HHS has provided sample language for both the notice and taglines.

            Going forward, notices that specifically describe these accommodations must be included in publications and communications sent to participants and beneficiaries like Summary Plan Descriptions and Summaries of Material Modifications and Summary of Benefits Coverage charts.  Notices must also be posted on the Plan’s website and must be made clear by plan administrators on email messages and on telephone message scripts. However, HHS will allow Plans to exhaust current supplies of plan documents and publications, rather than require a special re-printing for Summary Plan Description just for this compliance measure. However, when documents and significant plan publications are redrafted or restocked, the materials must include the notice provisions.

Will these new rules cost our plan money?

            With regard to the gender-transition services and the new coverage rules, the cost to multiemployer plans may be low because the number of participants who require these services is likely to be low. However, the plan will incur costs for plan document amendments and communications’ changes to eliminate exclusions and limitations currently contained in plan provisions. These exclusions should be removed for plan years beginning on or after January 1, 2017.

            Reviewing and revising the disclosure and accommodations requirements of the Section 1557 rule changes may cost the plan additional printing costs for future plan communications, interpreter fees and other accommodations required for those with limited English capabilities.  Plans should draft and send notices to all participants by October 18, 2016 to timely inform them of the options available to accommodate these protected groups.  Going forward, all forms of communications used by plans should be reviewed and revised to be sure plans are complying with these new rules. 


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