Sept. 7, 2016

Update: Section 1557 Nondiscrimination in Health Programs and Activities Final Rule

As we have reported previously, on May 18, the Office for Civil Rights (OCR) within the Department of Health and Human Services (HHS) released the Nondiscrimination in Health Programs and Activities Final Rule (Final Rule).

Many groups have inquired about Blue Cross and Blue Shield of Texas (BCBSTX) implementation of this rule and how it specifically may impact plan coverage of transgender-related services for 2017.
 

• For insured groups, we will no longer have blanket exclusions for medically necessary gender transition services, beginning with the plan year on or after Jan 1, 2017.
   
• Standard self-insured plan designs will follow the insured approach. Self-insured groups that do not wish to take the insured approach will need to follow the standard benefit customization process in the BPA.

Following are updated FAQs that may assist in discussions around the implications of the Final Rule on transgender benefits.

Q: What is Section 1557?
A: Section 1557 of the Affordable Care Act (ACA) generally prohibits discrimination in the administration of health insurance based on race, color, national origin, age, gender or disability.

Q: What is BCBSTX doing regarding benefit exclusions related to gender transition services for insured groups?
A: Any blanket exclusions for gender transition services will be removed for insured groups, including grandfathered plans, beginning with new and renewing plans after Jan. 1, 2017.

Q: What does this rule mean for self-insured health plans?
A: As a default, plan designs for self-insured groups will remove all exclusions for gender transition services. Self-insured plans that do not wish to take the insured approach can follow the standard process to customize their benefits.

NEW Q: What steps does an ASO group need to take if it wishes to do something different than the standard approach?
A: Self-insured plans that do not wish to take the insured approach will need to work with their counsel to determine appropriate plan design and follow the standard process to customize benefits.

NEW Q: Will gender transition services now be considered essential health benefits (EHBs)?
A: Covered gender transition services will be treated consistently with the applicable EHB under a plan’s selected EHB benchmark.

• Example: Acme covers surgery with an exclusion for gender reassignment surgery and uses a benchmark plan with a surgery benefit as an EHB. This plan would have the exclusion for gender reassignment surgery removed and the service would be treated as an EHB under the surgery benefit. 

NEW Q: Will lifetime and annual maximum limits for gender transition service be removed?
A: Covered gender transition services will be treated consistently with the applicable EHB under a plan’s selected EHB benchmark. If a covered gender transition service is an EHB under a plan’s selected EHB benchmark, it will not have annual or lifetime limits.

Q: Does this mean plans are required to cover gender reassignment surgery?
A: Section 1557 does not mandate any coverage of benefits, but prohibits discriminatory exclusions or limitations from being placed on benefits. Groups may not exclude gender reassignment surgery (or other benefits) based on a discriminatory factor. This means that a group health plan may exclude or limit gender reassignment surgery (or any other benefit) based on neutral, non-discriminatory factors, such as clinical criteria; however, a group health plan may not exclude or limit gender transition surgery (or any other benefit) because of a discriminatory factor (i.e., age, gender, gender identity, sexual orientation, disability, etc.).

Our insured plans will cover gender reassignment surgery when medically necessary.
 

• Example 1: Acme chooses to not cover gender reassignment surgery because the owner does not want to employ transgendered persons. Such an exclusion would likely violate 1557, as it is based on a discriminatory factor.
   
• Example 2: Acme chooses to cover gender reassignment surgery, subject to medical necessity and other clinical criteria. Such a limitation may be permissible under 1557, provided those criteria are neutral and non-discriminatory.

Q: Are there ancillary services tied to gender reassignment that are covered/not covered?
A: The Final Rule does not mandate coverage of ancillary services tied to gender reassignment. When deemed medically necessary, these services will follow the same guidelines as other medically necessary services.

Q: Does this mean plans are required to cover preventive services for transgender individuals?
A: We provide coverage for all ACA-required preventive services with no member cost-share, regardless of an individual’s sex assigned at birth, gender identity or recorded gender.

Q: Does BCBSTX have medical necessity guidelines for transgender services?
A: We are reviewing our existing medical policy and will provide updates on any changes.

Q: When do group plans need to implement this change?
A: Plan changes to comply with nondiscrimination requirements must be effective on the first day of the first plan year beginning on or after Jan. 1, 2017.

This communication is intended for informational purposes only. It is not intended to provide, does not constitute, and cannot be relied upon as legal, tax or compliance advice. The information contained in this communication is subject to change based on future regulation and guidance.