Nondiscrimination in Health Programs and Activities, 31375-31473 [2016-11458]

Agencies

• DEPARTMENT OF HEALTH AND HUMAN SERVICES
• Office of the Secretary

[Federal Register Volume 81, Number 96 (Wednesday, May 18, 2016)]
[Rules and Regulations]
[Pages 31375-31473]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-11458]



[[Page 31375]]

Vol. 81

Wednesday,

No. 96

May 18, 2016

Part IV





Department of Health and Human Services





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Office of the Secretary





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45 CFR Part 92





Nondiscrimination in Health Programs and Activities; Final Rule

Federal Register / Vol. 81 , No. 96 / Wednesday, May 18, 2016 / Rules 
and Regulations

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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Office of the Secretary

45 CFR Part 92

RIN 0945-AA02


Nondiscrimination in Health Programs and Activities

AGENCY: Office for Civil Rights (OCR), Office of the Secretary, HHS.

ACTION: Final rule.

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SUMMARY: This final rule implements Section 1557 of the Affordable Care 
Act (ACA) (Section 1557). Section 1557 prohibits discrimination on the 
basis of race, color, national origin, sex, age, or disability in 
certain health programs and activities. The final rule clarifies and 
codifies existing nondiscrimination requirements and sets forth new 
standards to implement Section 1557, particularly with respect to the 
prohibition of discrimination on the basis of sex in health programs 
other than those provided by educational institutions and the 
prohibition of various forms of discrimination in health programs 
administered by the Department of Health and Human Services (HHS or the 
Department) and entities established under Title I of the ACA. In 
addition, the Secretary is authorized to prescribe the Department's 
governance, conduct, and performance of its business, including, here, 
how HHS will apply the standards of Section 1557 to HHS-administered 
health programs and activities.

DATES: Effective Date: This rule is effective July 18, 2016.
    Applicability Dates: The provisions of this rule are generally 
applicable on the date the rule is effective, except to the extent that 
provisions of this rule require changes to health insurance or group 
health plan benefit design (including covered benefits, benefits 
limitations or restrictions, and cost-sharing mechanisms, such as 
coinsurance, copayments, and deductibles), such provisions, as they 
apply to health insurance or group health plan benefit design, have an 
applicability date of the first day of the first plan year (in the 
individual market, policy year) beginning on or after January 1, 2017.

FOR FURTHER INFORMATION CONTACT: Eileen Hanrahan at (800) 368-1019 or 
(800) 537-7697 (TDD).

SUPPLEMENTARY INFORMATION: 

Electronic Access

    This Federal Register document is also available from the Federal 
Register online database through Federal Digital System (FDsys), a 
service of the U.S. Government Printing Office. This database can be 
accessed via the Internet at https://www.gpo.gov/fdsys.

I. Background

    Section 1557 of the ACA provides that an individual shall not, on 
the grounds prohibited under Title VI of the Civil Rights Act of 1964 
(Title VI), 42 U.S.C. 2000d et seq. (race, color, national origin), 
Title IX of the Education Amendments of 1972 (Title IX), 20 U.S.C. 1681 
et seq. (sex), the Age Discrimination Act of 1975 (Age Act), 42 U.S.C. 
6101 et seq. (age), or Section 504 of the Rehabilitation Act of 1973 
(Section 504), 29 U.S.C. 794 (disability), 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, or under any program or 
activity that is administered by an Executive Agency or any entity 
established under Title I of the Act or its amendments. Section 1557 
states that the enforcement mechanisms provided for and available under 
Title VI, Title IX, Section 504, or the Age Act shall apply for 
purposes of addressing violations of Section 1557.
    Section 1557(c) of the ACA authorizes the Secretary of the 
Department to promulgate regulations to implement the nondiscrimination 
requirements of Section 1557. In addition, the Secretary is authorized 
to prescribe regulations for the Department's governance, conduct, and 
performance of its business, including how HHS applies the standards of 
Section 1557 to HHS-administered health programs and activities.\1\
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    \1\ 5 U.S.C. 301.
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A. Regulatory History

    On August 1, 2013, the Office for Civil Rights of the Department 
(OCR) published a Request for Information (RFI) in the Federal Register 
to solicit information on issues arising under Section 1557. OCR 
received 402 comments; one-quarter (99) were from organizational 
commenters, with the remainder from individuals.
    On September 8, 2015, OCR issued a proposed rule, 
``Nondiscrimination in Health Programs and Activities,'' in the Federal 
Register, and invited comment on the proposed rule by all interested 
parties.\2\ The comment period ended on November 9, 2015. In total, we 
received approximately 24,875 comments on the proposed rule. Comments 
came from a wide variety of stakeholders, including, but not limited 
to: Civil rights/advocacy groups, including language access 
organizations, disability rights organizations, women's organizations, 
and organizations serving lesbian, gay, bisexual, or transgender (LGBT) 
individuals; health care providers; consumer groups; religious 
organizations; academic and research institutions; reproductive health 
organizations; health plan organizations; health insurance issuers; 
State and local agencies; and tribal organizations. Of the total 
comments, 23,344 comments were from individuals. The great majority of 
those comments were letters from individuals that were part of mass 
mail campaigns organized by civil rights/advocacy groups.
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    \2\ 80 FR 54172 (Sept. 8, 2015).
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B. Overview of the Final Rule

    This final rule adopts the same structure and framework as the 
proposed rule: Subpart A sets forth the rule's general provisions; 
Subpart B contains the rule's nondiscrimination provisions; Subpart C 
describes specific applications of the prohibition on discrimination to 
health programs and activities; and Subpart D describes the procedures 
that apply to enforcement of the rule.
    OCR has made some changes to the proposed rule's provisions, based 
on the comments we received. Among the significant changes are the 
following.
    Section 92.4 now provides a definition of the term ``national 
origin.''
    OCR decided against including a blanket religious exemption in the 
final rule; however, the final rule includes a provision noting that 
insofar as application of any requirement under the rule would violate 
applicable Federal statutory protections for religious freedom and 
conscience, such application would not be required.
    OCR has modified the notice requirement in Sec.  92.8 to exclude 
publications and significant communications that are small in size from 
the requirement to post all of the content specified in Sec.  92.8; 
instead, covered entities will be required to post only a shorter 
nondiscrimination statement in such communications and publications, 
along with a limited number of taglines. OCR also is translating a 
sample nondiscrimination statement that covered entities may use in 
fulfilling this obligation. It will be available by the effective date 
of this rule.
    In addition, with respect to the obligation in Sec.  92.8 to post 
taglines in at least the top 15 languages spoken nationally by persons 
with limited English proficiency, OCR has replaced the national 
threshold with a threshold

[[Page 31377]]

requiring taglines in at least the top 15 languages spoken by limited 
English proficient populations statewide.
    OCR has changed Sec.  92.101 to provide that sex-specific health 
programs or activities are allowable only where the covered entity can 
demonstrate an exceedingly persuasive justification, i.e., that the 
sex-specific program is substantially related to the achievement of an 
important health-related or scientific objective.
    OCR has changed Sec.  92.201, addressing the obligation to take 
reasonable steps to provide meaningful access. That section now 
requires the Director to evaluate, and give substantial weight to, the 
nature and importance of the health program or activity and the 
particular communication at issue to the individual with limited 
English proficiency, and to take into account all other relevant 
factors, including whether the entity has developed and implemented an 
effective language access plan, appropriate to its particular 
circumstances. The final rule deletes the specific list of illustrative 
factors set out in the proposed rule.
    Also, OCR has changed Sec.  92.203, addressing accessibility of 
buildings and facilities for individuals with disabilities, to require 
covered entities that were covered by the 2010 Americans with 
Disabilities Act (ADA) Standards for Accessible Design prior to the 
effective date of this final rule to comply with those standards for 
new construction or alterations by the effective date of the final 
rule. The final rule also narrows Sec.  92.203's safe harbor for 
building and facility accessibility so that compliance with the Uniform 
Federal Accessibility Standards (UFAS) will be deemed compliance with 
this part only if construction or alteration was commenced before the 
effective date of the final rule and the facility or part of the 
facility was not covered by standards under the ADA. As nearly all 
covered entities under the final rule are already covered by the ADA 
standards, these changes impose a de minimis cost.
    Section 92.301 has been changed to clarify that compensatory 
damages for violations of Section 1557 are available in administrative 
and judicial actions to the extent they are available under the 
authorities referenced in Section 1557. Finally, we have added a 
severability clause to Sec.  92.2, to indicate our intention that the 
rule be construed to give the maximum effect permitted by law to each 
provision.
    In responding to the comments it received on the proposed rule, OCR 
has provided a thorough explanation of each of these changes in the 
preamble. OCR has also clarified some of the nondiscrimination 
requirements of Section 1557 and made some technical changes to the 
rule's provisions. In addition, we have added some definitions to 
proposed Sec.  92.4, as summarized in the preamble to this final rule.

II. Provisions of the Proposed Rule and Analysis and Responses to 
Public Comments

A. General Comments

    OCR received a large number of comments asking that we 
categorically declare in the final rule that certain actions are or are 
not discriminatory. For example, some commenters asked that OCR state 
that a modification to add medically necessary care, or a prohibition 
on exclusions of medically necessary services, is never a fundamental 
alteration to a health plan. Similarly, other commenters asked that OCR 
include a statement in the final rule that an issuer's refusal to cover 
core services commonly needed by individuals with intellectual 
disabilities is discrimination on the basis of disability. Still other 
commenters asked that OCR state that limiting health care and gender 
transition services to transgender individuals over the age of 18 is 
discriminatory. Other commenters asked that OCR state that it is 
discriminatory to require individuals with psychiatric disabilities to 
see a mental health professional in order to continue receiving 
treatment for other conditions.
    Many of these same commenters asked that OCR supplement the final 
rule with in-depth explanations and analyses of examples of 
discrimination. For example, several commenters asked that OCR add an 
example of discrimination in research trials. Similarly, many other 
commenters asked that OCR add an example of what they considered to be 
disability discrimination in health insurance practices, such as higher 
reimbursement rates for care in segregated settings.
    OCR appreciates the commenters' desire for further information on 
the application of the rule to specific circumstances. OCR's intent in 
promulgating this rule is to provide consumers and covered entities 
with a set of standards that will help them understand and comply with 
the requirements of Section 1557. Covered entities should bear in mind 
the purposes of the ACA and Section 1557--to expand access to care and 
coverage and eliminate barriers to access--in interpreting requirements 
of the final rule. But we neither address every scenario that might 
arise in the application of these standards nor state that certain 
practices as a matter of law are ``always'' or ``never'' permissible. 
The determination of whether a certain practice is discriminatory 
typically requires a nuanced analysis that is fact-dependent. 
Nonetheless, OCR has included in the preamble a number of examples of 
issues and circumstances that may raise compliance concerns under the 
final rule.
    OCR also received several comments, primarily from representatives 
of the insurance industry, recommending that where specific Centers for 
Medicare & Medicaid Services (CMS) or State requirements apply to 
covered entities, OCR should either (1) harmonize all standards with 
existing CMS rules, or (2) allow issuers to be deemed compliant with 
Section 1557 if they are compliant with existing Federal or State law. 
For example, some commenters requested that compliance with CMS 
regulations that pertain to qualified health plans or insurance benefit 
design, such as prescription drug formularies designed by a pharmacy 
and therapeutics committee, be deemed compliance with the final rule on 
Section 1557. These commenters were concerned that CMS or a State might 
approve a plan that OCR might later find discriminatory. The commenters 
sought clarification on how OCR will handle cases involving health 
plans regulated by multiple authorities, and suggested that a 
``deeming'' approach would reduce confusion and avoid duplication of 
costs and administrative effort. Other commenters asked that compliance 
with language access standards promulgated by CMS or the States be 
deemed compliance with the final rule; those comments are discussed in 
more detail in the preamble at Sec.  92.201.
    OCR recognizes the efficiencies inherent in harmonizing regulations 
to which covered entities are subject under various laws. Indeed, 
entities covered under Section 1557 are likely also subject to a host 
of other laws and regulations, including CMS regulations, the Genetic 
Information Nondiscrimination Act of 2008,\3\ the Family and Medical 
Leave Act, the ADA, Title VII of the Civil Rights Act of 1964, and 
State laws. OCR will coordinate as appropriate with other Federal 
agencies to avoid inconsistency and duplication in enforcement efforts.
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    \3\ Public Law 110-233, 122 Stat. 881 (2008).
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    That said, OCR declines to adopt a deeming approach whereby 
compliance with another set of laws or regulations automatically 
constitutes compliance with Section 1557. As to State laws, it

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is inappropriate to define requirements under Federal law based on what 
could be the varying, and potentially changing, requirements of 
different States' approaches. As to other Federal laws, OCR will give 
consideration to an entity's compliance with the requirements of other 
Federal laws where those requirements overlap with Section 1557. In 
such cases, OCR will work closely with covered entities where 
compliance with this final rule requires additional steps. But in the 
final analysis, OCR must, in its capacity as the lead enforcement 
agency for Section 1557, maintain the discretion to evaluate an 
entity's compliance with the standards set by the final rule. This is 
consistent with the approach taken by other agencies to civil rights 
obligations, in which compliance with one set of requirements, adopted 
under different laws or for different purposes, is not considered 
automatic compliance with civil rights obligations.
Subpart A--General Provisions
Purpose and Effective Date (Sec.  92.1)
    In Sec.  92.1, we proposed that the purpose of this part is to 
implement Section 1557 of the ACA, which prohibits discrimination in 
certain health programs and activities on the grounds prohibited under 
Title VI, Title IX, the Age Act, and Section 504, which together 
prohibit discrimination on the basis of race, color, national origin, 
sex, age, or disability.
    We also proposed that the effective date of the Section 1557 
implementing regulation shall be 60 days after the publication of the 
final rule in the Federal Register.
    The comments and our responses regarding the proposed effective 
date are set forth below.
    Comment: Some commenters asserted that 60 days after publication of 
the final rule did not allow sufficient time for entities to come into 
compliance with Section 1557 and requested that the effective date be 
one year after publication of the final rule. Similarly, one commenter 
stated that State agencies covered by Section 1557 need at least 150 
days to come into compliance with Section 1557. The commenter stated 
that State agencies need additional time to assess the impacts, align 
nondiscrimination requirements from multiple Federal agencies, and make 
the required policy, operational, and system changes.
    Response: OCR does not believe that extending the effective date 
beyond 60 days is warranted, except with regard to specific provisions 
for which there is a later applicability date, as set forth below. Most 
of the requirements of Section 1557 are not new to covered entities, 
and 60 days should be sufficient to come into compliance with any new 
requirements.
Summary of Regulatory Changes
    For the reasons set forth in the proposed rule and considering the 
comments received, we are finalizing the provisions as proposed in 
Sec.  92.1 with one modification. We recognize that some covered 
entities will have to make changes to their health insurance coverage 
or other health coverage to bring that coverage into compliance with 
this final rule. We are sensitive to the difficulties that making 
changes in the middle of a plan year could pose for some covered 
entities and are committed to working with covered entities to ensure 
that they can comply with the final rule without causing excessive 
disruption for the current plan year. Consequently, to the extent that 
provisions of this rule require changes to health insurance or group 
health plan benefit design (including covered benefits, benefits 
limitations or restrictions, and cost-sharing mechanisms, such as 
coinsurance, copayments, and deductibles), such provisions, as they 
apply to health insurance or group health plan benefit design, have an 
applicability date of the first day of the first plan year (in the 
individual market, policy year) beginning on or after January 1, 2017.
Application (Sec.  92.2)
    Section 92.2 of the proposed rule stated that Section 1557 applies 
to all health programs and activities, any part of which receives 
Federal financial assistance from any Federal agency. It also stated 
that Section 1557 applies to all programs and activities that are 
administered by an Executive Agency or any entity established under 
Title I of the ACA.
    In paragraph (a), we proposed to apply the proposed rule, except as 
otherwise provided in Sec.  92.2, to: (1) All health programs and 
activities, any part of which receives Federal financial assistance 
administered by HHS; (2) health programs and activities administered by 
the Department, including the Federally-facilitated Marketplaces; and 
(3) health programs and activities administered by entities established 
under Title I of the ACA, including the State-based Marketplaces.
    In paragraph (b), we proposed limitations to the application of the 
final rule. We proposed the adoption of the existing limitations and 
exceptions that already, under the statutes referenced in Section 1557, 
govern the health programs and activities subject to Section 1557. We 
noted that these limitations and exceptions are found in the Age Act 
and in the regulations implementing the Age Act, Section 504, and Title 
VI, which apply to all programs and activities that receive Federal 
financial assistance.
    In paragraph (b)(1), we proposed to incorporate the exclusions 
found in the Age Act, such that the provisions of the proposed rule 
would not apply to any age distinction contained in that part of a 
Federal, State, or local statute or ordinance adopted by an elected, 
general purpose legislative body which provides any benefits or 
assistance to persons based on age, establishes criteria for 
participation in age-related terms, or describes intended beneficiaries 
to target groups in age-related terms.\4\ We requested comment on 
whether the exemptions found in Title IX and its implementing 
regulation should be incorporated into the final rule. We noted that 
unlike the Age Act, Section 504, and Title VI, which apply to all 
programs and activities that receive Federal financial assistance 
(including health programs and activities), Title IX applies only in 
the context of education programs and not to the majority of the health 
programs and activities subject to the proposed rule. In addition, we 
noted that many of Title IX's limitations and exceptions do not readily 
apply in a context that is grounded in health care, rather than 
education.
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    \4\ See 42 U.S.C. 6103(b).
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    We invited comment on whether the regulation should include any 
specific exemptions for health service providers, health plans, or 
other covered entities with respect to requirements of the proposed 
rule related to sex discrimination. We stated that we wanted to ensure 
that the proposed rule had the proper scope and appropriately protected 
sincerely held religious beliefs to the extent that those beliefs may 
conflict with provisions of the proposed regulation. We noted that 
certain protections already exist with respect to religious beliefs, 
particularly with respect to the provision of certain health-related 
services; for example, we noted that the proposed rule would not 
displace the protections afforded by provider conscience laws,\5\ the 
Religious Freedom Restoration Act (RFRA),\6\ provisions in the ACA 
related to abortion services,\7\ or regulations issued

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under the ACA related to preventive health services.\8\ We invited 
comment on the extent to which these existing protections provide 
sufficient safeguards for any religious concerns in applying Section 
1557.
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    \5\ See, e.g., 42 U.S.C. 300a-7; 42 U.S.C. 238n; Consolidated 
and Further Continuing Appropriations Act 2015, Public Law 114-53, 
Div. G, Sec.  507(d) (Dec. 16, 2015).
    \6\ 42 U.S.C. 2000bb-1.
    \7\ See, e.g., 42 U.S.C. 18023.
    \8\ See 45 CFR 147.131.
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    We noted that a fundamental purpose of the ACA is to ensure that 
health services are available broadly on a nondiscriminatory basis to 
individuals throughout the country. Thus, we requested comment on any 
health care consequences that would ensue were the regulation to 
provide additional exemptions.
    We also requested comment on the scope of additional exemptions, if 
any, that should be included and the processes for claiming them, 
including whether those processes should track those used under Title 
IX, at 45 CFR 86.12.
    The comments and our responses regarding Sec.  92.2 are set forth 
below.
    Comment: Some commenters recommended that the final rule apply not 
only to health programs and activities receiving Federal financial 
assistance from the Department, but to health programs and activities 
receiving Federal financial assistance from other Departments. The 
commenters noted that in enacting Section 1557, Congress delegated 
rulemaking authority to the Department; they therefore maintained that 
the Department has the authority to promulgate rules that apply to 
other Departments. Commenters further noted that the Department has 
greater expertise in the application of civil rights laws to health 
programs and activities than do other Departments, and further urged 
that HHS regulations applicable to health programs and activities 
receiving Federal financial assistance from other Departments would be 
afforded deference under Chevron U.S.A. v. NRDC, Inc.\9\
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    \9\ 467 U.S. 837 (1984).
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    In the alternative, commenters recommended that we collaborate with 
other Departments to effectuate the provisions of the final rule and 
ensure that other Departments enter into delegation agreements or 
Memoranda of Understanding that grant HHS interpretation and 
enforcement authority over health programs funded and administered by 
other Departments or that commit other Departments to move quickly to 
engage in their own rulemaking on Section 1557.
    Response: While the rule recognizes that Section 1557 itself 
applies to health programs and activities receiving Federal financial 
assistance from other Departments, we decline to extend the scope of 
the rule to health programs and activities receiving Federal financial 
assistance from other Departments. Drafting a rule applicable to health 
programs and activities assisted by other Departments would pose 
numerous challenges, one of which is that the Department lacks the 
information and expertise necessary to apply the rule to those programs 
without further engagement and collaboration with those Departments. We 
agree that expeditious implementation of Section 1557 by other 
Departments is desirable, and hope that the Department's final rule 
will inform enforcement of Section 1557 by other Departments with 
respect to their federally assisted health programs and activities. To 
this end, the OCR Director sent a memorandum encouraging coordination 
of enforcement responsibilities under Section 1557 to all Federal 
agencies in November 2015.
    Comment: Commenters recommended that the final rule apply not just 
to programs administered by HHS, but also to programs administered by 
other Departments.
    Response: We decline to make the rule applicable to programs 
administered by other Departments. We will, however, continue to work 
with other Departments that administer health programs and activities 
to help those Departments ensure that their programs are 
nondiscriminatory.
    Comment: Many commenters responded to the proposed rule's request 
for comment on whether the rule should include a religious exemption 
for health care providers, health plans, or other covered entities with 
respect to the requirements of the rule related to sex discrimination, 
or whether existing protections, including RFRA, ACA regulations for 
preventive health services, and Federal provider conscience laws 
provide sufficient safeguards for religious concerns.
    Most of the organizations that commented on this issue, including 
professional medical associations and civil rights organizations, and 
the overwhelming majority of individual commenters, many of whom 
identified themselves as religious, opposed any religious exemption on 
the basis that it would potentially allow for discrimination on the 
bases prohibited by Section 1557 or for the denial of health services 
to women. Several religious organizations also opposed a religious 
exemption, asserting that RFRA, the Federal provider conscience 
statutes, and State RFRA statutes, which many States have enacted, 
provide sufficiently strong protections for religious providers and 
institutions. Many commenters said that mergers of religiously-
affiliated hospitals with other hospitals have deepened concerns that 
would be raised by providing a religious exemption, as the mergers may 
leave individuals in many communities with fewer health care options 
offering the full range of women's health services. Many commenters 
also pointed to the language in the majority opinion in the Supreme 
Court's decision in Hobby Lobby v. Burwell that RFRA is not a shield 
that permits discrimination ``cloaked as religious practice to escape 
legal sanction.'' \10\
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    \10\ 132 S. Ct. 2751, 2783 (2014).
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    Some religious organizations that submitted comments strongly 
supported a religious exemption, arguing that faith-based health care 
providers and employers would be substantially burdened if required to 
provide or refer for, or purchase insurance covering, particular 
services such as gender transition services. Supporters of an exemption 
recommended that Section 1557 incorporate the religious exemption in 
Title IX, which exempts educational institutions controlled by 
religious organizations from the prohibition of sex discrimination if 
the application would be inconsistent with the religious tenets of the 
organization.\11\ None of the commenters supporting a religious 
exemption asserted that there would be a religious basis for generally 
refusing to treat LGBT individuals for a medical condition, for 
example, refusing to treat a broken bone or cancer; rather, commenters 
asserted that the rule should exempt faith-based providers from 
providing particular services, such as services related to gender 
transition, that are inconsistent with their religious beliefs.
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    \11\ 20 U.S.C. 1681(a)(3).
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    Response: As noted in the preamble to the proposed rule, certain 
protections already exist in Federal law with respect to religious 
beliefs, particularly with regard to the provision of certain health-
related services. For example, we noted that the proposed rule would 
not displace the protections afforded by provider conscience laws,\12\ 
RFRA,\13\ provisions in the ACA related to abortion services,\14\ or 
regulations issued under the ACA related to preventive health 
services.\15\ Nothing in

[[Page 31380]]

this final rule displaces those protections.
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    \12\ See, e.g., 42 U.S.C. 300a-7; 42 U.S.C. 238n; Consolidated 
and Further Continuing Appropriations Act 2015, Pub. L. 114-53, Div. 
G, Sec.  507(d) (Dec. 16, 2015).
    \13\ 42 U.S.C. 2000bb-1.
    \14\ See, e.g., 42 U.S.C. 18023.
    \15\ See 45 CFR 147.131.
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    Although some commenters urged us also to incorporate Title IX's 
blanket religious exemption into this final rule, we believe that 
applying the protections in the laws identified above offers the best 
and most appropriate approach for resolving any conflicts between 
religious beliefs and Section 1557 requirements. With regard to 
abortion, for example, specific ACA provisions concerning abortion will 
continue to control, including, but not limited to, provisions that bar 
qualified health plans offered through a Marketplace\SM\ \16\ from 
discriminating against an individual health care provider or health 
care facility because of its unwillingness to provide, pay for, provide 
coverage of, or refer for abortions,\17\ and provisions that state that 
nothing in the ACA shall be construed to require a qualified health 
plan to provide coverage of abortion as an essential health 
benefit.\18\
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    \16\ Health Insurance Marketplace\SM\ and Marketplace\SM\ are 
service marks of the U.S. Department of Health and Human Services.
    \17\ 42 U.S.C. 18023(b)(4).
    \18\ 42 U.S.C. 18023(b)(1)(A).
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    In other cases, application of RFRA is the proper means to evaluate 
any religious concerns about the application of Section 1557 
requirements. The RFRA analysis evaluates whether a legal requirement 
substantially burdens the exercise of religion; if so, the question 
becomes whether the legal requirement furthers a compelling interest 
and is the least restrictive means to further that interest.
    We believe that the government has a compelling interest in 
ensuring that individuals have nondiscriminatory access to health care 
and health coverage and, under RFRA, would assess whether a particular 
application of Section 1557 substantially burdened a covered entity's 
exercise of religion and, if so, whether there were less restrictive 
alternatives available. Claims under RFRA are individualized and fact 
specific and we would make these determinations on a case-by-case 
basis, based on a thorough analysis and relying on the extensive case 
law interpreting RFRA standards.
    We decline to adopt commenters' suggestion that we import Title 
IX's blanket religious exemption \19\ into Section 1557. Section 1557 
itself contains no religious exemption. In addition, Title IX and its 
exemption are limited in scope to educational institutions, and there 
are significant differences between the educational and health care 
contexts that warrant different approaches.
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    \19\ 42 U.S.C. 18116(a).
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    First, students or parents selecting religious educational 
institutions typically do so as a matter of choice; a student can 
attend public school (if K-12) or choose a different college. In the 
health care context, by contrast, individuals may have limited or no 
choice of providers, particularly in rural areas or where hospitals 
have merged with or are run by religious institutions. Moreover, the 
choice of providers may be even further circumscribed in emergency 
circumstances.
    Second, a blanket religious exemption could result in a denial or 
delay in the provision of health care to individuals and in 
discouraging individuals from seeking necessary care, with serious and, 
in some cases, life threatening results. Thus, it is appropriate to 
adopt a more nuanced approach in the health care context, rather than 
the blanket religious exemption applied for educational institutions 
under Title IX.
    Based on the foregoing, we have included a provision in this final 
regulation making clear that where application of this regulation would 
violate applicable Federal statutory protections for religious freedom 
and conscience, that application will not be required. The Department 
also retains the discretion to provide other accommodations or 
exemptions where permitted by Federal law and supported by sound public 
policy.
    Comment: One commenter suggested that we clarify that the 
regulation applies only to a covered entity's health operations ``in 
the United States.''
    Response: This regulation applies only to individuals who are 
subjected to discrimination, at least in part, in the United States and 
to the provision or administration of health-related services or 
health-related insurance coverage in the United States, consistent with 
the four statutes referenced in Section 1557.\20\
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    \20\ 20 U.S.C. 1681(a); 29 U.S.C. 794(a); 42 U.S.C. 2000d; 42 
U.S.C. 6102.
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    Consistent with the Department's Title VI regulation,\21\ OCR 
interprets ``United States'' to include the U.S. territories. The 
definition of ``recipient'' of Federal financial assistance in the 
civil rights laws referenced in Section 1557 does not contain 
geographic limitations, and includes, in addition to States and 
political subdivisions, other ``public or private agenc[ies], 
institution[s], or organization[s].'' \22\ Thus, health programs and 
activities of the U.S. Territories, and those provided or administered 
in the U.S. Territories, are covered by the final rule.\23\
---------------------------------------------------------------------------

    \21\ 45 CFR 80.13(e).
    \22\ 45 CFR 80.13(i) (Title VI); 84.3(f) (Section 504); 86.2(i) 
(Title IX); 90.4 (Age Act).
    \23\ OCR notes that in contrast to Section 1557, which does not 
refer to the United States or to ``states,'' other ACA provisions 
refer to ``states'' and the Department has interpreted the meaning 
of ``state'' in the context of those statutory requirements. See 45 
CFR 144.103.
---------------------------------------------------------------------------

    Comment: One commenter requested that we clarify that expatriate 
health plans, plan sponsors of self-funded expatriate health plans, and 
issuers of fully-insured expatriate health plans are exempt from 
Section 1557 pursuant to the Expatriate Health Coverage Clarification 
Act of 2014 (EHCCA),\24\ which provides generally that provisions of 
the ACA do not apply to expatriate health plans, employer plan sponsors 
of expatriate health plans, or expatriate health insurance issuers. The 
commenter noted that the EHCCA does not include any exceptions or 
special rules pertaining to Section 1557; thus, the commenter asserted, 
applying Section 1557 to expatriate health plans would be contrary to 
Congressional intent and would competitively disadvantage American 
health issuers in the global marketplace, resulting in consumers 
choosing offshore options and American issuers moving their plans 
offshore to compete.
---------------------------------------------------------------------------

    \24\ Consolidated and Further Continuing Appropriations Act, 
2015, Public Law 113-235, Div. M, Sec.  3 (codified at 42 U.S.C. 
18014).
---------------------------------------------------------------------------

    Response: Section 3(a) \25\ of the EHCCA specifies that the 
provisions of (including any amendment made by) the ACA and Title I and 
subtitle B of Title II of the Health Care and Education Reconciliation 
Act of 2010 shall not apply with respect to expatriate health plans; 
employers with respect to such plans, solely in their capacity as plan 
sponsors for such plans; or expatriate health insurance issuers with 
respect to coverage offered by such issuers under such plans, subject 
to the exceptions and special rules enumerated in Sections 3(B) and 
3(C) of the EHCCA. Section 1557 is contained in Title I of the ACA; 
thus, pursuant to the EHCCA, Section 1557 does not apply with respect 
to expatriate health plans, expatriate health insurance issuers, or 
employer plan sponsors of expatriate plans, as defined in the EHCCA.
---------------------------------------------------------------------------

    \25\ 42 U.S.C. 18014(f).
---------------------------------------------------------------------------

    Comment: Tribes and tribal organizations submitted comments 
recommending that we make a number of changes throughout the rule and 
preamble to address the application of the rule to tribes and tribal 
health programs. Commenters objected to the characterization of 45 CFR 
80.3(d), the exception in the Title VI regulation for

[[Page 31381]]

Indian health programs and other programs limited by Federal law to 
individuals of a particular race, color, or national origin, that has 
been incorporated into the Section 1557 rule, and recommended that we 
refer to 45 CFR 80.3(d) throughout and describe it rather than simply 
cite to it. Commenters asked us to exempt tribes and tribal health 
programs from Sec.  92.207 and Sec.  92.208 and make clear that tribal 
governments and health programs can limit insurance to their members. 
Commenters asserted that Purchased/Referred Care \26\ programs should 
be permitted to limit coverage and be held harmless for discrimination 
on the basis of disability, age, or sex. One commenter recommended 
several additional changes to the rule to address its application to 
tribes, including excluding tribes and tribal health programs from the 
definitions of ``covered entity'' and ``health program or activity,'' 
and excluding assistance to tribes and tribal health programs from the 
definition of ``Federal financial assistance,'' along with other 
changes intended to achieve this purpose. Commenters stated that the 
changes proposed were necessary to reflect the full scope of 
protections in Federal law for tribal classifications and tribal 
sovereignty.
---------------------------------------------------------------------------

    \26\ Funds under the Purchased/Referred Care program (formerly 
the Contract Health Services program) are used to supplement and 
complement other health care resources available to eligible 
American Indians and Alaska Natives. See https://www.ihs.gov/newsroom/index.cfm/factsheets/purchasedreferredcare (last updated 
Jan. 2015).
---------------------------------------------------------------------------

    Response: 45 CFR 80.3(d) is not an exemption from coverage; it 
provides an exception to application of the prohibitions on race, 
color, and national origin discrimination when programs are authorized 
by Federal law to be restricted to a particular race, color, or 
national origin. The final rule incorporates that exception, and OCR 
will fully apply it, as well as other exemptions or defenses that may 
exist under Federal law. OCR intends to address any restrictions on 
application of the law to tribes in the context of individual 
complaints.
    Comment: One tribal organization commented that tribal consultation 
on development of the rule was insufficient.
    Response: We engaged in tribal consultation on the rule and, during 
that consultation, encouraged tribes and tribal organizations to submit 
comments on the proposed rule. Many did so. We believe that tribal 
consultation was sufficient.
    Comment: One tribal organization stated that the reference to 
Indian Health Services (IHS) programs in the preamble was misleading, 
as some IHS programs are administered directly by tribes.
    Response: We agree that the reference to IHS programs as an example 
of a federally administered program may be confusing, given that some 
IHS programs are administered directly by tribes. We have therefore 
changed the reference to ``IHS programs'' to ``IHS programs 
administered by IHS.''
    Finally, we have added a severability clause to Sec.  92.2, to 
indicate our intention that the rule be construed to give the maximum 
effect permitted by law to each provision. The rule provides that if a 
provision is held to be unenforceable in one set of circumstances, it 
should be construed to give maximum effect to the provision as applied 
to other persons or circumstances. Similarly, if a provision is held to 
be invalid or unenforceable, that provision should be severable from, 
and have no impact on the application of, the remainder of the rule. 
This provision is consistent with our interpretation of the 
Department's regulations implementing Title VI, Title IX, Section 504, 
and the Age Act.
Summary of Regulatory Changes
    For the reasons set forth in the proposed rule and considering the 
comments received, we are finalizing the provisions as proposed in 
Sec.  92.2, with two modifications. We are adding Sec.  92.2(b)(2), 
which clarifies that if an application of Section 1557 requirements or 
this part would violate applicable Federal statutory protections for 
religious freedom and conscience, application of Section 1557 is not 
required. In addition, we have added Sec.  92.2(c), containing a 
severability clause.
Relationship to Other Laws (Sec.  92.3)
    In Sec.  92.3 of the proposed rule, we proposed an explanation of 
the relationship of the rule to existing laws. Paragraph (a) proposed 
that Section 1557 is not intended to apply lesser standards for the 
protection of individuals from discrimination than the standards under 
Title VI, Title IX, Section 504, the Age Act, or the regulations issued 
pursuant to those laws. Consistent with the statute, paragraph (b) 
proposed that nothing in this part shall be interpreted to invalidate 
or limit the existing rights, remedies, procedures, or legal standards 
available to individuals aggrieved under other Federal civil rights 
laws or to supersede State or local laws that provide greater or equal 
protection against discrimination on the basis of race, color, national 
origin, sex, age, or disability. OCR explained that this intent is 
derived from Section 1557(b) of the ACA. In addition to the statutes 
that are cited directly in Section 1557(b), the proposed rule cited the 
Architectural Barriers Act of 1968,\27\ the Americans with Disabilities 
Act of 1990 (ADA),\28\ and Section 508 of the Rehabilitation Act of 
1973 (Section 508).\29\ We noted that these laws establish additional 
Federal civil rights protections for individuals with disabilities, and 
covered entities must be mindful that the obligations imposed by those 
laws apply to them independent of the application of Section 1557.
---------------------------------------------------------------------------

    \27\ 42 U.S.C. 4151-4157 (2012).
    \28\ 42 U.S.C. 12101 et seq. (codified as amended by the 
Americans with Disabilities Amendments Act of 2008, Public Law 110-
325, 122 Stat. 3553 (2008)).
    \29\ 29 U.S.C. 794d.
---------------------------------------------------------------------------

Summary of Regulatory Changes
    OCR did not receive any comments on this provision. Therefore, for 
the reasons set forth in the proposed rule, we are finalizing the 
provisions as proposed in Sec.  92.3 without modification.
Definitions (Sec.  92.4)
    In Sec.  92.4 of the proposed rule, we set out proposed definitions 
of various terms. The comments and our responses regarding Sec.  92.4 
are set forth below.
    Disability. We proposed that the definition of ``disability'' be 
the same as the definition of this term in the Rehabilitation Act,\30\ 
which incorporates the definition of disability in the ADA, as 
construed by the ADA Amendments Act of 2008.\31\ In addition, we 
proposed to use the term ``disability'' in place of the term 
``handicap,'' which is used in some previous civil rights statutes and 
regulations. We provided that when we cross-reference other regulatory 
provisions, regulatory language that uses the term ``handicap'' shall 
mean ``disability.'' We noted that this change in terminology does not 
reflect a change in the substance of the definition.
---------------------------------------------------------------------------

    \30\ 29 U.S.C. 705(9)(B).
    \31\ Public Law 110-325, 122 Stat. 3553, Sec.  4 (Sept. 25, 
2008) (codified at 42 U.S.C. 12102).
---------------------------------------------------------------------------

    Comment: OCR received many comments related to the definition of 
disability. Several commenters asked OCR to provide additional guidance 
regarding the meaning of terms used within the definition of 
disability, including ``physical or mental impairment,'' ``major life 
activities,'' and ``substantially limits.'' Other commenters asked OCR 
to include the term ``chronic conditions'' in the definition of 
disability or to add

[[Page 31382]]

regulatory language to the definition of disability that creates a 
rebuttable presumption of disability for serious and chronic 
conditions. Still other commenters urged that OCR clarify that the 
definitions of disability and qualified individual with a disability 
are broad.
    Response: As noted in the proposed rule, the definition of 
``disability'' is the same as the definition of this term in the 
Rehabilitation Act, which incorporates the definition of disability in 
the ADA, as construed by the ADA Amendments Act of 2008. Thus, the 
proposed rule incorporates the definition of ``major life activities'' 
and the construction of all of the terms and standards in the 
definition of ``disability'' set forth in the ADA Amendments Act. We 
believe this definition is appropriate and that OCR's intent, 
consistent with the ADA Amendments Act, to broadly interpret the term 
``disability'' is clear. Whether a chronic condition is a disability 
will depend on whether it falls within the definition of disability in 
the final rule.
    Comment: A few commenters asked for a definition of the term 
``reasonable modification.'' Other commenters asked for a definition of 
``accessibility,'' especially as that term pertains to electronic and 
information technology. Both sets of commenters suggested that adding 
definitions to the final rule would provide greater clarity to covered 
entities.
    Response: OCR believes that defining the terms ``reasonable 
modification'' and ``accessibility'' in this rule is unnecessary, given 
the meaning that these terms have acquired in the long history of 
enforcement of Section 504 and the ADA in the courts and 
administratively. We intend to interpret both terms consistent with the 
way that we have interpreted these terms in our enforcement of Section 
504 and the ADA and so decline to add these definitions to the final 
rule.
Summary of Regulatory Changes
    For the reasons set forth in the proposed rule and considering the 
comments received, we are finalizing the definition of ``disability'' 
as proposed without modification.
    Electronic and information technology. We proposed to define 
``electronic and information technology'' to be consistent with 36 CFR 
1194.4, the regulation implementing Section 508.
    Comment: A few commenters recommended that OCR amend the definition 
of ``electronic and information technology'' to state that ``electronic 
and information technology includes hardware, software, integrated 
technologies or related licenses, intellectual property, upgrades, or 
packaged solutions sold as services that are designed for or support 
the use by health care entities or patients for the electronic 
creation, maintenance, access, or exchange of health information.'' 
These commenters asserted that this definition, which is based on the 
definition of ``health information technology'' in the Health 
Information Technology for Economic and Clinical Health (HITECH) Act of 
2009,\32\ is preferable to the definition OCR proposed, which is based 
on the regulations implementing Section 508 that were promulgated in 
2000. According to these commenters, the Section 508 definition is 
outdated and unduly narrow.
---------------------------------------------------------------------------

    \32\ 42 U.S.C. 300jj(5).
---------------------------------------------------------------------------

    Response: As OCR stated in the Notice of Proposed Rulemaking, the 
definition of ``electronic and information technology'' is based on 36 
CFR 1194.4, the regulation implementing Section 508. OCR believes that 
a definition of ``electronic and information technology'' that is 
consistent with the regulations implementing Section 508 will reduce 
the possibility of confusing or conflicting standards for covered 
entities. Moreover, the definition used in the HITECH Act was created 
for use in another context and is narrower in some respects than would 
be appropriate for Section 1557. However, OCR also shares the 
commenters' concern that the current definition found at 36 CFR 1194.4 
is outdated and unduly narrow. Accordingly, OCR notes the recent Access 
Board proposal to replace the term ``electronic and information 
technology'' with an updated term and definition.
    Specifically, on February 27, 2015, the Access Board proposed to 
revise and update its standards for electronic and information 
technology developed, procured, maintained, or used by Federal agencies 
covered by Section 508.\33\ As part of these proposed revisions and 
updates, the Access Board announced that it intends to replace the term 
``electronic and information technology'' in 36 CFR 1194.4 with the 
term ``information and communication technology'' and revise the 
definition significantly to make it broader and more compatible with 
modern technology.\34\ OCR believes that the changes proposed by the 
Access Board will address the commenters' concerns. Therefore, and in 
order to maintain consistency with Section 508 while also addressing 
commenters' concerns that the definition proposed by OCR is outdated 
and unduly narrow, OCR has decided to change the definition of 
``electronic and information technology'' in this rule so that it means 
the same as ``electronic and information technology'' as defined at 36 
CFR 1194.4 or any term that replaces ``electronic and information 
technology'' at 36 CFR 1194.4. By citing to the regulation, OCR's 
definition will update with the Access Board's finalized rule.
---------------------------------------------------------------------------

    \33\ Architectural and Transportation Barriers Compliance Board, 
Information and Communication Technology (ICT) Standards and 
Guidelines. 80 FR 10880 (proposed Feb. 27, 2015) (to be codified at 
36 FR pt. 1194).
    \34\ See 80 FR at 10905.
---------------------------------------------------------------------------

Summary of Regulatory Changes
    For the reasons set forth above and considering the comments 
received, we have changed the definition of ``electronic and 
information technology'' as proposed in Sec.  92.4 to state that it 
means the same as ``electronic and information technology,'' or any 
term that replaces it at 36 CFR 1194.4.
    Employee health benefit program. We proposed that the term 
``employee health benefit program'' means (1) health benefits coverage 
or health insurance provided to employees and/or their dependents 
established, operated, sponsored or administered by, for, or on behalf 
of one or more employers, whether provided or administered by entities 
including but not limited to a health insurance issuer, group health 
plan (as defined in the Employee Retirement Income Security Act of 1974 
(ERISA), at 29 U.S.C. 1191b(a)), a third party administrator, or an 
employer; (2) an employer-provided or -sponsored wellness program; (3) 
an employer-provided health clinic; or (4) long term care coverage or 
insurance provided or administered by an employer, group health plan, 
third party administrator, or health insurance issuer for a covered 
entity's employees.
    Comment: One commenter requested that OCR clarify that wellness 
programs that are separate from the employee health benefit plan are 
still an ``employee health benefit program.''
    Response: We agree that wellness programs separate from an employee 
health benefit plan fall within the definition of an employee health 
benefit program. For example, an employer providing a gift card to each 
employee who receives a flu shot would be a wellness program within the 
meaning of the regulation, regardless of whether the wellness program 
is part of the employer's group health plan. We believe that the 
definition of ``employee health benefit program'' in the

[[Page 31383]]

regulation makes this clear and thus are not adopting any revisions.
    Comment: Some commenters requested that the definition of 
``employee health benefit program'' specifically include excepted 
benefits, as defined for purposes of section 2791(c) of the Public 
Health Service Act (codified at 42 U.S.C. 300gg-91(c)), such as limited 
scope vision and dental insurance, disease-specific insurance and 
fixed-indemnity plans.
    Response: We do not believe it is necessary to include an 
exhaustive list of types of benefits that would be included as an 
``employee health benefit program.'' The definition is broad enough to 
encompass any health benefit coverage or health insurance provided by 
an employer to its employees. Excepted benefits are further discussed 
infra under Sec.  92.207.\35\
---------------------------------------------------------------------------

    \35\ See infra discussion of excepted benefits under Sec.  
92.207.
---------------------------------------------------------------------------

Summary of Regulatory Changes
    For the reasons set forth in the proposed rule and considering the 
comments received, we are finalizing this definition as proposed in 
Sec.  92.4 with minor technical revisions for clarity and for 
consistency with other parts of the final rule. We are making minor 
technical corrections to correct the ERISA citation to read ``29 U.S.C. 
1191b(a)(1)''; to clarify that the term ``sponsored wellness program'' 
is an ``employer-sponsored'' wellness program; to add ``coverage'' to 
the term ``health insurance''; and to clarify that long term care 
coverage or insurance is provided or administered ``for the benefit of 
an employer's employees.''
    Federal financial assistance. We proposed that the term ``Federal 
financial assistance'' includes grants, loans, and other types of 
assistance in accordance with the definition of ``Federal financial 
assistance'' in the regulations implementing Section 504 \36\ and the 
Age Act,\37\ and also specifically includes subsidies and contracts of 
insurance, in accordance with the statutory language of Section 1557. 
We also proposed that, consistent with OCR's enforcement of other civil 
rights authorities, the definition of Federal financial assistance does 
not include Medicare Part B.
---------------------------------------------------------------------------

    \36\ 45 CFR 84.3(h).
    \37\ 45 CFR 91.4.
---------------------------------------------------------------------------

    An additional clause was added to the proposed regulatory 
provision, modeled on the definition of ``Federal financial 
assistance'' in the regulation implementing Title IX, which clarifies 
that in the educational context, Federal financial assistance includes 
wages, loans, grants, scholarships and other monies that are given to 
any entity for payment to or on behalf of students who are admitted to 
that entity or that are given directly to these students for payment to 
that entity.\38\ In the proposed rule, we noted that in the health care 
context, Federal funds are provided to or on behalf of eligible 
individuals for premium tax credits and advance payments of premium tax 
credits and cost sharing reductions to ensure the affordability of 
health insurance coverage purchased through the Health Insurance 
Marketplaces. Thus, we noted that an issuer participating in any Health 
Insurance Marketplace\SM\ is receiving Federal financial assistance 
when advance payments of premium tax credits and/or cost sharing 
reductions are provided to or on behalf of any of the issuer's 
enrollees. We noted that a health care provider that contracts with 
such an issuer does not become a recipient of Federal financial 
assistance by virtue of the contract, but would be a recipient if the 
provider otherwise receives Federal financial assistance.
---------------------------------------------------------------------------

    \38\ See 45 CFR 86.2(g)(1)(ii).
---------------------------------------------------------------------------

    Comment: Many commenters objected to the statement in the preamble 
to the proposed rule that, consistent with OCR's enforcement of other 
civil rights authorities, the definition of Federal financial 
assistance does not include Medicare Part B. These commenters urged us 
to reverse this position, asserting that the historical rationale for 
the Department's position that Medicare Part B payments are not Federal 
financial assistance is inapplicable to Section 1557, which explicitly 
covers ``contracts of insurance,'' and inconsistent with the current 
Medicare Part B payment scheme, in which providers are paid directly by 
the Medicare program instead of receiving payment from consumers who 
are then reimbursed by the Medicare program.
    Response: OCR notes commenters' concerns, but does not believe that 
this rule is the appropriate vehicle to modify the Department's 
position.
    Comment: We received many comments proposing that OCR revise the 
statement that a health care provider that contracts with an issuer 
does not become a recipient of Federal financial assistance by virtue 
of the contract. Commenters proposed that such a provider should become 
a recipient, and thus be covered by Section 1557, by virtue of the 
contract. The commenters expressed concern that under OCR's 
interpretation, such contractors would not be covered by the 
nondiscrimination requirements of Section 1557, thereby weakening the 
rule's effect.
    Response: We do not believe the law supports the commenters' 
proposed across-the-board revision. Under the regulations implementing 
the statutes cited in Section 1557 and incorporated into this final 
rule, a recipient of Federal financial assistance is an entity to which 
Federal financial assistance is extended directly or through another 
recipient, including any successor, assignee, or transferee of a 
recipient. To determine whether an entity is a recipient of such 
assistance, courts look to the entity that Congress intended to assist 
or subsidize with those funds.\39\ In this context, the contractor that 
is providing health services is not the intended recipient of a premium 
tax credit or cost-sharing reduction that an issuer receives and is 
therefore not covered under Section 1557 by virtue of the contract.
---------------------------------------------------------------------------

    \39\ United States Dep't of Transport. v. Paralyzed Veterans of 
Amer., 477 U.S. 597, 604-06 (1986).
---------------------------------------------------------------------------

    That said, there are numerous ways in which health services 
providers are recipients in their own right, whether the Federal 
financial assistance they receive comes through certain Medicare 
payments, Medicaid payments, or other funds from the Department. 
Therefore, instead of falling outside of Section 1557's purview, many 
health care providers will be subject to Section 1557 irrespective of 
their relationship to issuers receiving Federal financial assistance.
    Moreover, nothing in the rule authorizes qualified health plan 
issuers or other issuers that are covered entities to contract away 
their own nondiscrimination obligations. Issuers must ensure that 
enrollees have equal access to health services provided by their 
coverage without discrimination on the basis of a prohibited criterion. 
Thus, even if individual providers do not independently receive Federal 
financial assistance, an issuer maintains a duty to ensure compliance 
with civil rights laws with respect to the treatment of its enrollees 
who use its networks.
    Comment: One comment inquired whether the rule applies to programs 
in which the Department is an employer or when the Department offers 
benefits to Department employees.
    Response: The Department is not covered as a federally assisted 
program, although the Department is covered by the rule as an 
administrator of health programs and activities. As to programs for 
Department employees, HHS is covered by employment discrimination laws, 
including Section 504 and Title VII, protecting Federal employees.

[[Page 31384]]

    Comment: One commenter raised concerns over the applicability of 
the rule to doctors in solo medical practice, to doctors who practice 
in many settings, and to medical students receiving student loans. The 
commenter suggested that the health program or activity--not the solo 
practitioner as an individual--be required to comply with the rule, and 
requested that we clarify how a doctor can determine whether she is 
covered by the rule as she moves between practice settings. The 
commenter also expressed concern that a disproportionate number of 
younger doctors would be required to comply with the rule as recipients 
of Federal financial assistance in the form of student loans.
    Response: We have not modified the final rule in response to these 
comments; however, we offer the following for clarification.
    Section 1557 applies to a recipient of Federal financial 
assistance, whether a hospital, clinic, medical practice, or individual 
physician. Where, for example, a doctor is an employee of a hospital 
and the hospital receives Federal financial assistance, the hospital's 
program is the relevant health program or activity and it is the 
hospital that will be held accountable for discrimination under Section 
1557. Where, similarly, a doctor contracts as an individual to provide 
health services at a free neighborhood clinic that receives Federal 
financial assistance, the clinic is the recipient of Federal financial 
assistance and liable for discrimination; the doctor is simply a 
contractor who is assisting the clinic in performing clinic services.
    When a doctor has a private medical practice that receives Federal 
financial assistance, and the doctor, through her practice, works as an 
attending physician at a hospital, it is the medical practice that is 
providing the services at the hospital, and thus the practice that is 
liable for the discrimination.\40\ Moreover, a solo medical practice 
(whether incorporated or not) that receives Federal financial 
assistance is a covered health program or activity.\41\
---------------------------------------------------------------------------

    \40\ The hospital may also be responsible for discrimination by 
the doctor's practice that occurs at the hospital.
    \41\ The rule defines a ``recipient'' of Federal financial 
assistance to include an individual. See Sec.  92.4.
---------------------------------------------------------------------------

    This approach is consistent with longstanding interpretations of 
civil rights law and the definition of a ``recipient'' of Federal 
financial assistance in the regulations implementing Section 504, Title 
VI, Title IX and the Age Act.
    Finally, regarding receipt of student loan payments as Federal 
financial assistance, we clarify that the educational institution--not 
the student--is the recipient of the Federal financial assistance in 
that circumstance. Although the money is paid directly to the student, 
the university or other educational institution is the intended 
recipient. This is consistent with longstanding regulations 
implementing civil rights laws.
    We made two clarifying changes to the definition of Federal 
financial assistance. In the proposed rule, we defined Federal 
financial assistance in subsection (1) as any type of arrangement in 
which the Federal government ``provides or makes available'' 
assistance. In subsection (2), we explained that Federal financial 
assistance ``provided or administered by the Department'' includes tax 
credits and other subsidies under Title I of the ACA and other funds 
providing health insurance coverage. Because our intention was to 
explain further the meaning of (1) as it applies to the Department in 
(2), we have changed (2) to use the same terms used in (1). Thus, (2) 
now refers to Federal financial assistance ``provided or made 
available'' by the Department.
    In addition, in the proposed rule, subsection (2) provided that 
``Federal financial assistance provided or administered by the 
Department includes all tax credits under Title I of the ACA,'' as well 
as other funds extended by the Department for providing health 
coverage. Because the Department plays a role in administering tax 
credits under Title I of ACA but does not have primary responsibility 
for administering that credit, and to ensure that tax credits under 
Title I of the ACA are understood to be included within the definition, 
we have modified this subsection to state that Federal financial 
assistance the Department provides or makes available includes Federal 
financial assistance that the Department plays a role in providing or 
administering.
Summary of Regulatory Changes
    For the reasons set forth in the proposed rule and considering the 
comments received, we are finalizing this definition as proposed in 
Sec.  92.4 with two modifications. The language of Subsection (2) of 
the definition has been modified to state that Federal financial 
assistance the Department provides or makes available includes Federal 
financial assistance that the Department plays a role in providing or 
administering.
    Gender identity. We proposed that the term ``gender identity'' 
means an individual's internal sense of gender, which may be different 
from an individual's sex assigned at birth. We noted that the way an 
individual expresses gender identity is frequently called ``gender 
expression,'' and may or may not conform to stereotypes associated with 
a particular gender. We also noted in the proposed rule that gender may 
be expressed through, for example, dress, grooming, mannerisms, speech 
patterns, and social interactions. For purposes of this part, we 
proposed that an individual has a transgender identity when the 
individual's gender identity is different from the sex assigned to that 
person at birth; an individual with a transgender identity is referred 
to in this part as a transgender individual. In the proposed rule, we 
noted that the approach taken in the proposed definition is consistent 
with the approach taken by the Federal government in similar 
matters.\42\
---------------------------------------------------------------------------

    \42\ See, e.g., U.S. Office of Personnel Management, Guidance 
Regarding the Employment of Transgender Individuals in the Federal 
Workplace (May 27, 2011), https://www.opm.gov/policy-data-oversight/diversity-and-inclusion/reference-materials/gender-identity-Guidance/; U.S. Office of Personnel Management, U.S. Equal 
Employment Opportunity Commission, U.S. Office of Special Counsel, 
U.S. Merit Systems Protection Board. Addressing Sexual Orientation 
and Gender Identity Discrimination in Federal Civilian Employment: A 
Guide to Employment Rights, Protections, and Responsibilities, p. 2 
(June 2015), https://www.opm.gov/LGBTGuide.
---------------------------------------------------------------------------

    Comment: Several commenters suggested that we revise the definition 
of ``gender identity'' to reference non-binary identities in order to 
avoid ambiguity regarding application of the rule to individuals with 
non-binary gender identities. Some commenters noted that explicitly 
referencing non-binary identities in this definition would be important 
to avoid any doubt or misinterpretation given that gender has often 
been assumed to be binary, thus ignoring or marginalizing individuals 
with non-binary gender identities.
    Response: OCR has made a slight change to the definition of 
``gender identity'' to insert the clause ``which may be male, female, 
neither, or a combination of male and female.'' The insertion of this 
clause helps clarify that those individuals with non-binary gender 
identities are protected under the rule.
    Comment: Some commenters suggested that, consistent with previous 
court and Federal agencies' interpretations, OCR add ``gender 
expression'' to the definition of ``gender identity'' in order to make 
explicit our

[[Page 31385]]

intention to protect individuals on this basis.
    Response: In the proposed and final rules' definition of gender 
identity, we explain that the way an individual expresses gender 
identity is frequently called ``gender expression.'' OCR is clarifying 
that throughout this final rule, we interpret references to the term 
``gender identity'' as encompassing ``gender expression'' and 
``transgender status.'' This position is consistent with the position 
taken by courts and Federal agencies.\43\ These bases of discrimination 
are protected under the rule.
---------------------------------------------------------------------------

    \43\ See Rumble v. Fairview Heath Servs., Civ. No. 14-cv-2037, 
2015 WL 1197415, at *10 (D. Minn. Mar. 16, 2015) (Section 1557); 
Schroer v. Billington, 577 F. Supp.2d 293, 303 (D.D.C. 2008)(Title 
VII); Macy v. Holder, EEOC Appeal No. 0120120821, Agency No. ATF-
2011-00751, 2012 WL 1435995, at *7 (Apr. 20, 2012), https://www.eeoc.gov/decisions/0120120821%20Macy%20v%20DOJ%20ATF.txt (Title 
VII).
---------------------------------------------------------------------------

Summary of Regulatory Changes
    For the reasons set forth in the proposed rule and considering the 
comments received, we are finalizing the definition as proposed in 
Sec.  92.4 with three modifications. The first sentence of the 
definition of gender identity has been revised to reference the 
application of the rule to individuals with non-binary gender 
identities. OCR also made a technical edit to the last sentence to 
delete reference to the term ``transgender identity.'' Finally, for 
clarity and consistency within the final rule, OCR has made a technical 
revision to the definition of gender identity to clarify that a 
transgender individual is an individual whose gender identity is 
different from the sex assigned to that person at birth.
    Health program or activity. We proposed that the term ``health 
program or activity'' means the provision or administration of health-
related services or health-related insurance coverage and the provision 
of assistance in obtaining health-related services or health-related 
insurance coverage. We also proposed that, similar to the approach of 
the Civil Rights Restoration Act of 1987 (CRRA) \44\ and except as 
specifically set forth otherwise in this part,\45\ the term further 
includes all of the operations of an entity principally engaged in 
providing or administering health services or health insurance 
coverage, such as a hospital, health clinic, community health center, 
group health plan, health insurance issuer, physician's practice, 
nursing facility, or residential or community-based treatment facility. 
We proposed that OCR interpret ``principally engaged'' in a manner 
consistent with civil rights laws that use this term.
---------------------------------------------------------------------------

    \44\ Public Law 100-259, 102 Stat. 28 (1988).
    \45\ Employee health benefits programs are discussed elsewhere 
in rule. See infra discussion of Sec.  92.208.
---------------------------------------------------------------------------

    In the proposed rule, OCR stated that we intended the plural 
``health programs or activities'' used in this part to have the same 
meaning as the term ``health program or activity'' in the singular. 
Similarly, we noted that the proposed part's use of ``health programs 
and activities,'' a variation of ``health program or activity,'' does 
not reflect a change in the substance of the definition of ``health 
program or activity.''
    We proposed to interpret ``health programs and activities'' to 
include programs such as health education and health research programs. 
Because Federal civil rights laws already prohibit discrimination on 
the basis of race, color, national origin, disability, or age in all 
health research programs and activities that receive Federal financial 
assistance and prohibit discrimination on the basis of sex in all 
health research programs conducted by colleges and universities, we 
determined that the application of Section 1557 to health research 
should impose limited additional burden on covered entities.
    However, OCR recognized that health research is conducted to answer 
scientific questions and improve health through the advancement of 
knowledge; it is not designed to result in direct health benefits to 
participants. We also recognized that research projects are often 
limited in scope for many reasons, such as the principal investigator's 
scientific interest, funding limitations, recruitment requirements, and 
other nondiscriminatory considerations. Thus, we noted that criteria in 
research protocols that target or exclude certain populations are 
warranted where nondiscriminatory justifications establish that such 
criteria are appropriate with respect to the health or safety of the 
subjects, the scientific study design, or the purpose of the 
research.\46\ OCR noted that we do not intend for inclusion of health 
research within the definition of health program or activity to alter 
the fundamental manner in which research projects are designed, 
conducted, or funded; nor did OCR propose to systematically review 
health research protocols.
---------------------------------------------------------------------------

    \46\ We note that it is not permissible for clinical researchers 
to consider ``cost'' of accommodating participants with disabilities 
as a reason to exclude them from participation.
---------------------------------------------------------------------------

    We invited comment on programs and activities that should be 
considered health programs or activities.
    Comment: We received comments requesting that we enumerate 
additional examples of a health program or activity, including but not 
limited to the Children's Health Insurance Program, all of the 
operations of Medicare, and student health plans.
    Response: We agree that the Children's Health Insurance Program and 
other health programs operated by State and local governments are 
covered by the rule. We also agree that student health plans are a 
health program or activity covered by the rule, and note that all 
student health plans are covered by Title IX, as well as the other 
civil rights laws cited in Section 1557, if the institution receives 
Federal financial assistance.
    Although the definition does not and could not specifically 
identify all health programs and activities covered by the rule (for 
example, we do not specifically mention programs that provide physical 
and/or behavioral health services, although they are health programs), 
we are adding the Children's Health Insurance Program and the Basic 
Health Program as additional examples, given their significance.
    We decline to include ``all the operations of Medicare'' in the 
definition of health program or activity. While we agree that all parts 
of the Medicare program are a health program or activity, not all 
operations in the Medicare program constitute Federal financial 
assistance; as discussed above, Medicare Part B is excluded from the 
definition of Federal financial assistance under this rule and other 
HHS civil rights authorities.\47\ Thus, we believe the proposed 
language could create confusion in determining the scope of the final 
rule.
---------------------------------------------------------------------------

    \47\ Medicare Parts A, C, and D all constitute Federal financial 
assistance. See www.hhs.gov/civil-rights/for-individuals/faqs/what-qualifies-as-federal-financial-assistance/301/indeix.html.
---------------------------------------------------------------------------

    Comment: Some commenters noted that OCR did not propose to define 
the term ``health'' in ``health program and activity,'' and recommended 
that OCR use the definition of ``health'' adopted by the World Health 
Organization, which includes an individual's or population's physical, 
mental, or social well-being.\48\
---------------------------------------------------------------------------

    \48\ See https://www.who.int/about/definition/en/print.html.(last 
visited Mar. 11, 2016).
---------------------------------------------------------------------------

    Response: OCR declines to add a definition of ``health,'' but 
interprets ``health'' to include physical and mental well-being.
    Comment: Several commenters recommended that the rule apply only to 
the specific health program for which the entity receives Federal 
financial assistance, such as health insurance coverage sold through 
the Marketplace\SM\, and not to other

[[Page 31386]]

products and services provided outside the Marketplace\SM\ by issuers 
participating in the Marketplace\SM\. These commenters stated that 
applying the rule to operations or products that are not the direct 
recipients of Federal financial assistance conflicts with the plain 
meaning of Section 1557.
    Response: Section 1557 prohibits discrimination under ``any health 
program or activity, any part of which is receiving Federal financial 
assistance. . . .'' By applying the prohibition if ``any part'' of the 
health program or activity receives Federal financial assistance, the 
law provides that the term ``health program or activity'' must be 
interpreted in a manner that uniformly covers all of the operations of 
any entity that receives Federal financial assistance and that is 
principally engaged in health services, health insurance coverage, or 
other health coverage, even if only part of the health program or 
activity receives such assistance. This interpretation serves the 
central purposes of the ACA, and effectuates Congressional intent, by 
ensuring that entities principally engaged in health services, health 
insurance coverage, or other health coverage do not discriminate in any 
of their programs and activities, thereby enhancing access to services 
and coverage.
    This approach is consistent with the approach Congress adopted in 
the CRRA, which amended the four civil rights laws referenced in 
Section 1557 and defines ``program or activity'' to mean ``all of the 
operations of . . . an entire corporation, partnership, or other 
private organization, or an entire sole proprietorship . . . which is 
principally engaged in the business of providing,'' among other things, 
a range of social and health services. The CRRA establishes that the 
entire program or activity is required to comply with the prohibitions 
on discrimination if any part of the program or activity receives 
Federal financial assistance. The CRRA has been consistently applied 
since its enactment in 1988, and we believe that Congress adopted a 
similar approach with respect to the scope of health programs and 
activities covered by Section 1557. If any part of a health care entity 
receives Federal financial assistance, then all of its programs and 
activities are subject to the discrimination prohibition.
Summary of Regulatory Changes
    For the reasons set forth in the proposed rule and considering the 
comments received, we are modifying the definition as proposed in Sec.  
92.4 to include the Children's Health Insurance Program and the Basic 
Health Program as additional examples of a health program or activity.
    Individual with limited English proficiency. We proposed that the 
term ``individual with limited English proficiency'' codify the 
Department's longstanding definition reflected in guidance interpreting 
Title VI's prohibition of national origin discrimination, entitled 
Guidance to Federal Financial Assistance Recipients Regarding Title VI 
Prohibition Against National Origin Discrimination Affecting Limited 
English Proficient Persons \49\ (HHS LEP Guidance). Under the proposed 
definition, an individual whose primary language for communication is 
not English is considered an individual with limited English 
proficiency if the individual has a limited ability to read, write, 
speak or understand English. Accordingly, we proposed that an 
individual whose primary language for communication is not English, 
even if he or she has some ability to speak English, is an individual 
with limited English proficiency if the individual has a limited 
ability to read, write, speak or understand English.
---------------------------------------------------------------------------

    \49\ 68 FR 47311, 47313 (Aug. 8, 2003).
---------------------------------------------------------------------------

    Commenters addressing this definition overwhelmingly supported its 
codification from the HHS LEP Guidance to regulatory text. We did not 
receive suggested revisions to the wording of this definition.
Summary of Regulatory Changes
    For the reasons set forth in the proposed rule and considering the 
comments received, we are finalizing this definition as proposed in 
Sec.  92.4, without modification.
    Language assistance services. OCR proposed that the term ``language 
assistance services'' identify types of well-established methods or 
services used to communicate with individuals with limited English 
proficiency, including (1) oral language assistance; (2) written 
translation of documents and Web sites; and (3) taglines. We noted that 
a covered entity has flexibility to provide language assistance 
services in-house or through commercially available options. We 
declined to offer an exhaustive list of available methods. However, we 
proposed that paragraph (1) identify the following as available methods 
to communicate orally with individuals with limited English 
proficiency: Oral interpretation (in-person or remotely) \50\ and 
direct communication through the use of bilingual or multilingual staff 
competent to communicate directly, in non-English languages using any 
necessary specialized vocabulary, with individuals with limited English 
proficiency.
---------------------------------------------------------------------------

    \50\ We use the terms ``oral interpretation'' and ``written 
translation'' for clarity. The term ``interpretation'' used without 
the preceding descriptor of ``oral'' refers to the communication of 
information orally and the term ``translation'' used without the 
preceding descriptor of ``written'' refers to the communication of 
information in writing. See, e.g., U.S. Dep't of Justice, Commonly 
Asked Questions and Answers Regarding Limited English Proficient 
(LEP) Individuals, https://www.lep.gov/faqs/faqs.html#OneQ11 (last 
visited Mar. 15, 2016) (differentiating between interpreters and 
translators in FAQ 11); Interpreters and Translators, U.S. Dep't of 
Labor, Bureau of Labor Statistics, Occupational Outlook Handbook, 
2014-15, https://www.bls.gov/ooh/media-and-communication/interpreters-andtranslators.htm (explaining that interpreters 
convert information in a spoken language and translators convert 
information in written language).
---------------------------------------------------------------------------

    We did not receive suggested revisions to the wording of this 
definition. Comments we received on the specific types of language 
assistance services mentioned in the definition are addressed in the 
relevant portions of the preamble to Sec.  92.4 for those respective 
terms.
    For clarity and consistency within the final rule, we are replacing 
several phrases in this definition with other terms to conform to 
changes made in other provisions of the final rule. First, in paragraph 
(1) regarding oral language assistance, we are adding the words ``for 
an individual with limited English proficiency'' after ``qualified 
interpreter'' because Sec.  92.4 now defines ``qualified interpreter 
for an individual with limited English proficiency'' separately from a 
``qualified interpreter for an individual with a disability.'' Also, 
because Sec.  92.4 defines ``qualified bilingual/multilingual staff,'' 
we are replacing ``bilingual or multilingual staff competent to 
communicate, in non-English languages using any necessary specialized 
vocabulary'' with ``the use of qualified bilingual/multilingual staff 
to communicate.'' In paragraph (2) regarding written translation, we 
are replacing the reference to written translation of ``documents and 
Web sites'' to ``written content in paper or electronic form.'' 
Finally, because Sec.  92.4 defines ``qualified translator,'' we are 
adding ``performed by a qualified translator'' after ``written 
translation.''
Summary of Regulatory Changes
    For the reasons set forth in the proposed rule and considering the 
comments received, we are finalizing the definition as proposed in 
Sec.  92.4 with technical revisions, as described in the preceding 
paragraph, to ensure consistency with other provisions of the final 
rule.

[[Page 31387]]

    National origin. The proposed rule did not define the term 
``national origin.''
    Comment: A few commenters recommended defining ``race, color, or 
national origin'' to include ``language'' and ``immigration status.'' 
Commenters asserted that ``language'' should be included to capture the 
application of national origin discrimination to individuals with 
limited English proficiency. As to immigration status, some commenters 
requested clarification that immigrants, and particularly non-U.S. 
citizens, are protected from discrimination on the basis of race, 
color, national origin, sex, age, or disability under Section 1557 and 
this part.
    Response: In response to comments, we are providing further 
clarification on the scope of ``national origin''; we determine it 
unnecessary to define ``race'' or ``color.'' Thus, this final rule 
defines ``national origin'' consistent with the well-established 
definition of the term that the Equal Employment Opportunity Commission 
(EEOC) uses in its interpretation of Title VII of the Civil Rights Act 
of 1964.\51\ This definition clarifies that national origin includes 
not only an individual's place of origin, but also his or her 
ancestor's place of origin, which reflects our intent that individuals 
born in the United States but who have an ancestry outside the United 
States are protected. This definition also clarifies that national 
origin includes an individual's manifestation of the physical, 
cultural, or linguistic characteristics of a national origin group.\52\
---------------------------------------------------------------------------

    \51\ 29 CFR 1606.1 (defining ``national origin 
discrimination'').
    \52\ In addition, courts have adopted this principle. See, e.g., 
Bennun v. Rutgers State Univ., 941 F.2d 154, 173 (3d Cir. 1991), 
cert. denied, 502 U.S. 1066 (1992) (stating that an individual's 
birth in a foreign country where another culture predominates, 
immersion in that country's ways of life, and speaking the native 
language in one's home, are sufficient to identify the individual as 
part of a national origin group); Fragante v. City and County of 
Honolulu, 888 F.2d 591, 595-96 (9th Cir. 1989), cert. denied, 494 
U.S. 1081 (1990) (stating that accent and national origin are 
inextricably intertwined in many cases); Gutierrez v. Mun. Court of 
Southeast Jud. Dist., Los Angeles Cnty., 838 F.2d 1031, 1039 (9th 
Cir. 1988 vac'd and rem, 490 U.S. 1016 (1989)(stating that 
``[b]ecause language and accents are identifying characteristics, 
``rules which have a negative effect on bilinguals, individuals with 
accents, or non-English speakers, may be mere pretexts for 
intentional national origin discrimination''). A member of a 
religious group states a cognizable national origin discrimination 
claim under Title VI and Section 1557 and this part when that 
discrimination is based on a religious group's shared ancestry or 
its physical, cultural, and linguistic characteristics rather than 
its members' religious practice. See Letter from Thomas Perez, 
Assistant Attorney Gen., Civil Rights Div., U.S. Dep't of Justice to 
Russlynn Ali, Assistant Sec'y for Civil Rights, Office for Civil 
Rights, U.S. Dep't of Educ. Re: Title VI and Coverage of Religiously 
Identifiable Groups, at 2 (Sept. 8, 2010), https://www.justice.gov/sites/default/files/crt/legacy/2011/05/04/090810_AAG_Perez_Letter_to_Ed_OCR_Title%20VI_and_Religiously_Identifiable_Groups.pdf.
---------------------------------------------------------------------------

    By contrast, we decline to include the term ``immigration status'' 
in the definition of ``national origin.'' An individual's national 
origin is not the same as her citizenship or immigration status, and 
neither Title VI nor Section 1557 explicitly protects individuals 
against discrimination on the basis of citizenship or immigration 
status. However, as under Title VI, Section 1557 and this part protect 
individuals present in the United States, whether lawfully or not, who 
are subject to discrimination based on race, color, national origin, 
sex, age, or disability. Moreover, OCR considers an immigrant or 
noncitizen to state a cognizable national origin discrimination claim 
under Title VI,\53\ Section 1557, and this part when the claim alleges 
that a covered entity's use of a facially neutral policy or practice 
related to citizenship or immigration status has a disparate impact on 
individuals of a particular national origin group.
---------------------------------------------------------------------------

    \53\ See Voluntary Resolution Agreement between U.S. Dep't of 
Health & Human Servs., Office for Civil Rights and Ariz. Health Care 
Cost Containment System & the Ariz. Dep't of Econ. Sec., OCR 
Transaction Nos. 10-117078 & 10-117875 (2015), https://www.hhs.gov/sites/default/files/ocr/civilrights/activities/agreements/Arizona/vra.pdf [hereinafter HHS OCR VRA with AZ Agencies] (resolving 
cognizable complaints of national origin discrimination under Title 
VI following implementation of a State law requiring State 
employees, in the administration of public benefits programs, to 
report ``discovered violations of federal immigration law'' to U.S. 
Immigration and Customs Enforcement).
---------------------------------------------------------------------------

Summary of Regulatory Changes
    For the reasons set forth above and considering the comments 
received, we are defining the term ``national origin'' in Sec.  92.4 to 
include an individual's manifestation of the physical, cultural, or 
linguistic characteristics of a national origin group as well as an 
individual's or her ancestor's place of origin.
    On the basis of sex. We proposed that the term ``on the basis of 
sex'' includes, but is not limited to, discrimination on the basis of 
pregnancy, false pregnancy, termination of pregnancy, or recovery 
therefrom, childbirth or related medical conditions, sex stereotyping, 
and gender identity.
    We noted that Section 1557 extends the grounds for discrimination 
found in the nondiscrimination laws cited in the statute (i.e., race, 
color, national origin, sex, age, or disability) to certain health 
programs and activities. We noted that the HHS Title IX regulation 
explicitly includes discrimination on the basis of pregnancy as a form 
of discrimination on the basis of sex, and we proposed that the 
definition in this section mirror that regulation.\54\
---------------------------------------------------------------------------

    \54\ See 45 CFR 86.40(b) (prohibiting discrimination on the 
basis of ``pregnancy, childbirth, false pregnancy, termination of 
pregnancy or recovery therefrom'').
---------------------------------------------------------------------------

    We noted that the proposed inclusion of sex stereotyping reflects 
the Supreme Court's holding in Price Waterhouse v. Hopkins,\55\ and 
that discrimination based on stereotypical notions of appropriate 
behavior, appearance or mannerisms for each gender constitutes sex 
discrimination.
---------------------------------------------------------------------------

    \55\ 490 U.S. 228, 250-51 (1989).
---------------------------------------------------------------------------

    We proposed that discrimination on the basis of sex further 
includes discrimination on the basis of gender identity. We noted that 
like other Federal agencies,\56\ HHS has previously interpreted sex 
discrimination to include discrimination on the basis of gender 
identity.\57\ We also noted that courts, including in the context of 
Section 1557, have recognized that sex discrimination includes 
discrimination based on gender identity.\58\ Thus, we proposed to adopt 
formally this well-

[[Page 31388]]

accepted interpretation of discrimination ``on the basis of sex.''
---------------------------------------------------------------------------

    \56\ See 5 CFR 300.102(c), 300.103(c), 300.103(c), 315.806(d), 
335.103(b)(1), 537.105(d), 900.603(e) (U.S. Office of Personnel 
Management regulations providing that discrimination on the basis of 
sex includes discrimination on the basis of gender identity); 
Directive 2014-02, U.S. Dep't of Labor, Office of Fed. Contract 
Compliance Programs, Sec.  5 (Aug. 19, 2014), https://www.dol.gov/ofccp/regs/compliance/directives/dir2014_02.html; Statement of 
Interest of the United States, Jamal v. SAKS & Co., No. 4:14-CV-2782 
(S.D. Tex. Jan. 26, 2015) https://www.justice.gov/sites/default/files/crt/legacy/2015/02/27/jamalsoi.pdf; Statement of Interest of 
the United States, Tooley v. Van Buren Pub. Sch., No. 2:14-cv-13466-
AC-DRG (E.D. Mich. Feb. 24, 2015) https://www.justice.gov/sites/default/files/crt/legacy/2015/02/27/tooleysoi.pdf; Memo from Eric 
Holder, Att'y Gen., to U.S. Att'ys & Heads of Dep't Components (Dec. 
18, 2014), https://www.justice.gov/opa/pr/attorney-general-holder-directs-department-include-gender-identity-under-sex-discrimination; 
U.S. Dep't of Educ., Questions and Answers on Title IX and Sexual 
Violence, p. B-2, https://www2.ed.gov/about/offices/list/ocr/docs/qa-201404-title-ix.pdf; Macy, 2012 WL 1435995, at *11.
    \57\ See Letter from Leon Rodriguez, Director, U.S. Dep't of 
Health & Human Servs., Office for Civil Rights, to Maya Rupert, 
Federal Policy Director, National Center for Lesbian Rights (Jul. 
12, 2012), https://www.nachc.com/client/OCRLetterJuly2012.pdf.
    \58\ See, e.g., Rumble v. Fairview Heath Servs., Civ. No. 14-cv-
2037, 2015 WL 1197415, at *10 (D. Minn. Mar. 16, 2015) (Section 
1557) (order denying motion to dismiss); Barnes v. City of 
Cincinnati, 401 F.3d 729, 737 (6th Cir.), cert. denied, 546 U.S. 
1003 (2005)(Title VII); Smith v. City of Salem, Ohio, 378 F.3d 566, 
575 (6th Cir. 2004) (Title VII); Schroer v. Billington, 577 
F.Supp.2d 293, 304 (D.D.C. 2008) (Title VII). But see Johnston v. 
Univ. of Pittsburgh, 97 F.Supp.3d 657, 671 (W.D. Pa. 2015) (appeal 
docketed, No. 1502922) (3d Cir. Apr. 24, 2015) (holding that an 
individual treated in accordance with sex assigned at birth has not 
been discriminated against on the basis of sex under Title IX).
---------------------------------------------------------------------------

    OCR stated that as a matter of policy, we also support banning 
discrimination in health programs and activities on the basis of sexual 
orientation. We noted that current law is mixed on whether existing 
Federal nondiscrimination laws prohibit discrimination on the basis of 
sexual orientation as a part of their prohibitions on sex 
discrimination. However, we further noted that a recent U.S. EEOC 
decision, Baldwin v. Department of Transportation,\59\ concluded that 
Title VII's prohibition of discrimination ``on the basis of sex'' 
includes sexual orientation discrimination because discrimination on 
the basis of sexual orientation necessarily involves sex-based 
considerations.
---------------------------------------------------------------------------

    \59\ U.S. Equal Employment Opportunity Comm'n Appeal No. 
0120133080, Agency No. 2012-24738-FAA-03 (July 15, 2015), https://www.eeoc.gov/decisions/0120133080.txt.
---------------------------------------------------------------------------

    We proposed that the final rule reflect the current state of 
nondiscrimination law, and we sought comment on the best way of 
ensuring that this rule includes the most robust set of protections 
supported by the courts on an ongoing basis.
    Comment: Several commenters commended OCR's inclusion of 
discrimination not only on the basis of pregnancy, but also on the 
basis of pregnancy-related procedures or conditions in the definition 
of ``on the basis of sex'' and noted that such a position is consistent 
with existing civil rights statutes. Other commenters noted concern 
that the inclusion of the phrase ``termination of pregnancy'' in the 
definition of ``on the basis of sex'' will be interpreted as requiring 
the provision or coverage of, or referral for, pregnancy termination, 
and urged OCR to state explicitly that neither Section 1557 nor the 
regulation imposes such a requirement.
    Response: The definition of ``on the basis of sex'' established by 
this rule is based upon existing regulation and previous Federal 
agencies' and courts' interpretations that discrimination on the basis 
of sex includes discrimination on the basis of pregnancy, childbirth, 
false pregnancy, termination of pregnancy or recovery therefrom.
    Additionally, the final rule balances an individual's right to 
access health programs and activities free from discrimination with 
protections for religious beliefs and practices. As we explained in the 
preamble to the proposed rule and have reiterated here, this rule does 
not displace existing protections afforded by, for example, Federal 
provider conscience laws and RFRA. Again, with respect to concerns 
about potential conflicts between provisions of the final rule and 
individuals' or organizations' sincerely held religious beliefs, we 
refer to the discussion at Sec.  92.2 in this preamble. With respect to 
abortion, moreover, nothing in Section 1557 displaces the ACA 
provisions regarding abortion, including but not limited to the 
provision that no qualified health plan offered through a Marketplace 
may discriminate against an individual health care provider or health 
care facility because of its unwillingness to provide, pay for, provide 
coverage of, or refer for abortions; \60\ provisions that state that 
nothing in the ACA shall be construed to require a qualified health 
plan to provide coverage of abortion as an essential health benefit; 
\61\ and the provision permitting States to prohibit abortion coverage 
in qualified health plans and restricting the use of Federal funding 
for abortion services.\62\
---------------------------------------------------------------------------

    \60\ 42 U.S.C. 18023(b)(4).
    \61\ 42 U.S.C. 18023(b)(1)(A).
    \62\ 42 U.S.C. 18023.
---------------------------------------------------------------------------

    Comment: A significant number of commenters commended our inclusion 
of gender identity and sex stereotyping in the definition of ``on the 
basis of sex'' and noted that the inclusion is consistent with a 
growing body of legal precedent. Some commenters suggested OCR add 
transgender status and gender expression in the definition of ``on the 
basis of sex'' in order to make explicit our intention to protect 
individuals on these bases, consistent with previous court and Federal 
agency interpretations.
    Conversely, a few commenters opined that the inclusion of gender 
identity discrimination as a form of discrimination on the basis of sex 
was based on erroneous interpretations of Title IX legislative history 
because Congressional intent to ban sex discrimination was based only 
on the biological classifications of males and females, not gender 
identity. A few commenters thought that OCR's reliance on previously 
adopted Federal agencies' interpretations was weak and unpersuasive and 
that the reliance on cases arising under Federal civil rights laws 
other than Title IX was misplaced, further pointing to a few recent 
court decisions under Title IX that rejected claims that discrimination 
on the basis of sex includes discrimination on the basis of gender 
identity.
    A few commenters also suggested that the inclusion of ``gender 
identity'' as a prohibited basis of discrimination on the basis of sex 
may infringe upon individual patients' constitutional right to privacy 
by requiring those patients to participate in sex-specific programs or 
activities with a ``non-biological'' male or female and additionally 
contravenes employees' and faith-based organizations' religious beliefs 
by forcing them to participate in services affirming gender identity in 
violation of their religious convictions.
    Response: The definition of ``on the basis of sex'' established by 
this rule is based upon existing regulation and previous Federal 
agencies' and courts' interpretations that discrimination on the basis 
of sex includes discrimination on the basis of gender identity and sex 
stereotyping. While OCR appreciates the commenters' request that we add 
transgender status and gender expression to the definition of ``on the 
basis of sex,'' we do not believe that it is necessary to add these 
terms to the definition. As previously stated, we encompass these bases 
in the definition of ``gender identity''; thus, references to ``gender 
identity'' include ``gender expression'' and ``transgender status.'' 
Because the definition of ``on the basis of sex'' includes gender 
identity, further reference to transgender status or gender expression 
here is superfluous.
    OCR also believes that its inclusion of gender identity is well 
grounded in the law and disagrees with those commenters who argued to 
the contrary. As the Supreme Court made clear in Price Waterhouse v. 
Hopkins, in prohibiting sex discrimination, Congress intended to strike 
at the entire spectrum of discrimination against men and women 
resulting from sex stereotypes.\63\ Courts after Price Waterhouse 
interpret Title VII's protections against discrimination on the basis 
of sex as encompassing not only ``sex,'' or biological differences 
between the sexes, but also ``gender'' and its manifestations.\64\ In 
essence, Price Waterhouse thus rejects the reasoning, and vitiates the 
precedential value, of earlier Federal appellate court decisions that 
limited Title VII's coverage of ``sex'' to the anatomical and 
biological characteristics of sex. Moreover, courts frequently look to 
case law interpreting other civil rights provisions, including Title 
VII, for guidance in interpreting Title IX.\65\
---------------------------------------------------------------------------

    \63\ 490 U.S. at 251 (citations omitted).
    \64\ See, e.g., Smith v. City of Salem, Ohio, 378 F.3d. 566, 
573-74 (6th Cir. 2004).
    \65\ See, e.g., Wolfe v. Fayetteville, Ark. Sch. Dist., 648 F.3d 
860, 864 n.4 (8th Cir. 2011); Weinstock v. Columbia Univ., 224 F.3d 
33, 42 n.1 (2d Cir. 2000), cert. denied, 540 U.S. 811 (2003).
---------------------------------------------------------------------------

    OCR's approach accords with well-accepted legal interpretations 
adopted by other Federal agencies and courts.

[[Page 31389]]

For example, Title IX Guidance issued by the U.S. Department of 
Education generally requires recipients of federal financial assistance 
to treat transgender students consistent with their gender 
identity.\66\ The Fourth Circuit reversed a lower court decision 
dismissing the Title IX sex discrimination claim of a transgender 
student prohibited from using the school bathroom consistent with his 
gender identity, holding that the Department of Education's 
interpretation of its regulation was not plainly erroneous, and thus 
was entitled to controlling weight.\67\
---------------------------------------------------------------------------

    \66\ U.S. Dep't of Education, Office for Civil Rights, Questions 
and Answers in Title IX and Single Sex Elementary and Secondary 
Classes and Extra-Curricular Activities, (2014), https://www2.ed.gov/about/offices/list/ocr/docs/faqs-title-ix-single-sex-201412.pdf.
    \67\ .G. ex rel. Grimm v. Gloucester Cty. Sch. Bd., No. 15-2056, 
2016 WL 1567467 at * 6 (4th Cir. 2016).
---------------------------------------------------------------------------

    The fact that there may be circumstances in which it is permissible 
to make sex-based distinctions is not a license to exclude individuals 
from health programs and activities for which they are otherwise 
eligible simply because their gender identity does not align with other 
aspects of their sex, or with the sex assigned to them at birth. The 
Department has a responsibility to ensure that health programs and 
activities of covered entities are carried out free from such 
discrimination.
    To the extent that privacy considerations may be relevant in an 
anti-discrimination analysis, OCR will consider these interests in the 
context of individual complaints. We note, however, that at least one 
court has rejected a claim that an individual's legal right to privacy 
is violated simply by permitting another person access to a sex-
specific program or facility that corresponds to their gender 
identity.\68\ With respect to concerns about potential conflicts 
between provisions of the final rule and individuals' or organizations' 
sincerely held religious beliefs, we refer to the discussion at Sec.  
92.2 in this preamble.
---------------------------------------------------------------------------

    \68\ See e.g., Crosby v. Reynolds, 763 F. Supp. 666 (D. Me. 
1991) (requiring female prisoner to share a cell with a transgender 
woman violated no clearly established constitutional right); cf. 
Cruzan v. Special Sch. Dist., #1, 294 F.3d 981 (8th Cir. 2002) (per 
curiam) (teacher's assertion that her personal privacy was invaded 
when school permitted a transgender woman to use women's restroom 
was not cognizable under employment discrimination law).
---------------------------------------------------------------------------

    Comment: A few commenters recommended that OCR clarify that the 
prohibition on sex discrimination extends to discrimination on the 
basis of the presence of atypical sex characteristics and intersex 
traits (i.e., people born with variations in sex characteristics, 
including in chromosomal, reproductive, or anatomical sex 
characteristics that do not fit the typical characteristics of binary 
females or males). At least one commenter noted that this clarification 
is necessary because intersex people may face discrimination when 
medical providers or insurance companies follow policies which deem 
certain medical procedures available to only one sex, thereby excluding 
intersex people who may be registered under another sex.
    Response: We agree with the commenters that the prohibition on sex 
discrimination extends to discrimination on the basis of intersex 
traits or atypical sex characteristics. OCR intends to apply its 
definition of ``on the basis of sex'' to discrimination on these bases.
    Comment: Many commenters requested that OCR explicitly state in the 
rule that Section 1557's prohibition of discrimination on the basis of 
sex includes discrimination on the basis of sexual orientation. Other 
commenters asserted that Section 1557 did not intend to protect against 
sexual orientation discrimination and that OCR does not have authority 
to include this basis because no Federal appellate court has 
interpreted Title IX's or Title VII's ban on sex discrimination to 
protect same-sex relationships or conduct.
    Response: As we noted in the preamble to the proposed rule, we 
support a prohibition on discrimination based on sexual orientation as 
a matter of policy. We believe that it is critical to meeting the goals 
of Section 1557 and, more broadly, the ACA, to ensure equal access to 
health care and health coverage. Indeed, these policy goals are 
reflected in the increasing number of actions taken by Federal agencies 
to ensure that lesbian, gay, and bisexual individuals are protected 
from discrimination. For example, CMS regulations bar discrimination on 
the basis of sexual orientation by Health Insurance Marketplaces and 
issuers offering qualified health plans; \69\ Medicare regulations 
prohibit the restriction of visitation rights in hospitals based on 
sexual orientation (or gender identity); \70\ and the Social Security 
Administration is now processing Medicare enrollments for same-sex 
spouses.\71\ Court decisions have, moreover, repeatedly made clear that 
individuals and couples deserve equal rights regardless of their sexual 
orientation.\72\
---------------------------------------------------------------------------

    \69\ 45 CFR 155.120(c)(1)(ii); 156.200(e).
    \70\ 42 CFR 482.13(h)(3).
    \71\ https://www.medicare.gov/sign-up-change-plans/same-sex-marriage.html (last visited Mar. 11, 2016).
    \72\ For example, in 1996, the Supreme Court struck down an 
amendment to the Colorado constitution that prohibited the State 
government from providing any legal protections to gay, lesbian, and 
bisexual individuals. Romer v. Evans, 517 U.S. 620 (1996). And, just 
last year, the Supreme Court ruled in Obergefell v. Hodges, 135 S. 
Ct. 2584 (2015), that states may not prohibit same-sex couples from 
marrying and must recognize the validity of same-sex couples' 
marriages.
---------------------------------------------------------------------------

    The preamble to the proposed rule stated our policy position and 
noted that ``[t]he final rule should reflect the current state of 
nondiscrimination law, including with respect to prohibited bases of 
discrimination'' while seeking comment on the issue. While the preamble 
observed that no Federal appellate court has concluded to date ``that 
Title IX's prohibition of discrimination `on the basis of sex'--or 
Federal laws prohibiting sex discrimination more generally--prohibits 
sexual orientation discrimination,'' it also noted recent court 
decisions that have prohibited discrimination in cases involving 
allegations of discrimination relating to an individual's sexual 
orientation on the grounds that such discrimination is discrimination 
on the basis of sex stereotyping.
    Price Waterhouse v. Hopkins \73\ is the foundational decision that 
underlies these legal developments. Though Price Waterhouse did not 
involve an allegation of discrimination based on an individual's sexual 
orientation, the Supreme Court recognized in that case that unlawful 
sex discrimination occurs where an individual is treated differently 
based on his or her failure to conform to gender-based stereotypes 
about how men or women should present themselves or behave. The 
Department of Justice has therefore taken the position that a well-pled 
complaint alleging discrimination against a gay employee because of his 
failure to conform to sex stereotypes states a viable sex 
discrimination claim under Title VII.\74\ When a covered entity 
discriminates against an individual based on his or her sexual 
orientation, the entity may well rely on stereotypical notions or 
expectations of how members of a certain sex should act or behave. 
These stereotypes are precisely the type of gender-based assumptions 
prohibited by Price Waterhouse.\75\
---------------------------------------------------------------------------

    \73\ 490 U.S. 228 (1989).
    \74\ See Def.'s Renewed Mot. to Dismiss at 18-19, Terveer v. 
Billington, No. 1:12-cv-1290, ECF No. 27 (D.D.C. Mar. 21, 2013).
    \75\ See, e.g., Deneffe v. SkyWest, Inc., No. 14-cv-00348, 2015 
WL 2265373, at * (D. Colo. May 11, 2015); Terveer v. Billington, 34 
F. Supp. 3d 100, 116 (D.D.C. 2014); Boutillier v. Hartford Pub. 
Schs., 2014 WL 4794527 at *2 (D. Conn. 2014); Koren v. The Ohio Bell 
Tel. Co., 894 F. Supp.2d 1032, 1037-38 (N.D. Ohio. 2012); Heller v. 
Columbia Edgewater Country Club, 195 F. Supp.2d 1212, 1224, adopted, 
195 F. Supp.2d 1216 (D. Or. 2002); Centola v. Potter, 183 F. Supp.2d 
403, 410 (D. Mass. 2002).

---------------------------------------------------------------------------

[[Page 31390]]

    Based on this understanding, some courts have recognized in the 
wake of Price Waterhouse that discrimination ``because of sex'' 
includes discrimination based on sex stereotypes about sexual 
attraction and sexual behavior \76\ or about deviations from 
``heterosexually defined gender norms.'' \77\ For example, a recent 
district court decision in the Ninth Circuit held that the distinction 
between discrimination based on gender stereotyping and discrimination 
based on sexual orientation is artificial, and claims based on sexual 
orientation are covered by Title VII and Title IX, not as an 
independent category of claims separate from sex and gender 
stereotyping, but as sex or gender discrimination.\78\
---------------------------------------------------------------------------

    \76\ See Videckis and White v. Pepperdine Univ., No. 15-00298, 
2015 WL 8916764 (C.D. Cal. Dec. 15, 2015) (denying motion to 
dismiss).
    \77\ Isaacs v. Felder, No. 2:13 cv 693, 2015 WL 6560655, at * 9 
(M.D. Ala. Oct. 29, 2015) (internal quotation marks omitted).
    \78\  Videckis, 2015 WL 8916764. Prior circuit court decisions 
have drawn such distinctions. See, e.g., Dawson v. Bumble & Bumble, 
398 F.3d 211, 218 (2d Cir. 2005); Vickers v. Fairfield Med. Ctr., 
453 F.3d 757, 763 (6th Cir. 2006).
---------------------------------------------------------------------------

    In addition, in Baldwin v. Department of Transportation the EEOC 
concluded that Title VII's prohibition of discrimination ``because of 
sex'' includes sexual orientation discrimination because discrimination 
on the basis of sexual orientation necessarily involves sex-based 
considerations.\79\ The EEOC relied on several theories to reach this 
conclusion: A plain reading of the term ``sex'' in the statutory 
language, an associational theory of discrimination based on ``sex,'' 
and the gender stereotype theory announced in Price Waterhouse.
---------------------------------------------------------------------------

    \79\ U.S. Equal Employment Opportunity Comm'n Appeal No. 
0120133080, Agency No. 2012-24738-FAA-03 (July 15, 2015), https://www.eeoc.gov/decisions/0120133080.txt (finding that sexual 
orientation is inseparable from and inescapably linked to sex and 
thus that an allegation of discrimination based on sexual 
orientation is necessarily an allegation of sex discrimination).
---------------------------------------------------------------------------

    For all of these reasons, OCR concludes that Section 1557's 
prohibition of discrimination on the basis of sex includes, at a 
minimum, sex discrimination related to an individual's sexual 
orientation where the evidence establishes that the discrimination is 
based on gender stereotypes. Accordingly, OCR will evaluate complaints 
alleging sex discrimination related to an individual's sexual 
orientation to determine whether they can be addressed under Section 
1557.
    OCR has decided not to resolve in this rule whether discrimination 
on the basis of an individual's sexual orientation status alone is a 
form of sex discrimination under Section 1557. We anticipate that the 
law will continue to evolve on this issue, and we will continue to 
monitor legal developments in this area. We will enforce Section 1557 
in light of those developments and will consider issuing further 
guidance on this subject as appropriate.
Summary of Regulatory Changes
    For the reasons set forth in the proposed rule and considering the 
comments received, we are finalizing this definition as proposed in 
Sec.  92.4 without modification.
    Qualified bilingual/multilingual staff. In the proposed rule, we 
proposed to define ``language assistance services'' to include, as a 
type of oral language assistance, the use of staff members who are 
``competent to communicate, in non-English languages using any 
necessary specialized vocabulary, directly with individuals with 
limited English proficiency.'' \80\ The proposed rule did not define 
the term ``qualified bilingual/multilingual staff.''
---------------------------------------------------------------------------

    \80\ See 80 FR at 54176, 54216.
---------------------------------------------------------------------------

    Comment: Some commenters observed that as an alternative to 
providing oral interpretation, many covered entities rely on staff 
members to serve individuals with limited English proficiency in their 
respective primary languages. According to these commenters, covered 
entities mistakenly assume that staff members who possess a rudimentary 
familiarity with at least one non-English language are competent to 
provide oral language assistance for the covered entity's health 
program or activity. Commenters asked us to require covered entities to 
assess the proficiency of staff members who communicate directly with 
individuals with limited English proficiency in their respective 
primary languages.
    Response: In response to commenters' observations, we have defined 
the term ``qualified bilingual/multilingual staff'' in Sec.  92.4 to 
clarify the knowledge, skills, and abilities that a staff member must 
demonstrate for a covered entity to designate that staff member to 
provide effective oral language assistance.\81\ Specifically, qualified 
bilingual/multilingual staff must demonstrate to the covered entity 
that they are proficient in English and at least one other spoken 
language, including any necessary specialized vocabulary, terminology 
and phraseology, and are able to effectively, accurately, and 
impartially communicate directly with individuals with limited English 
proficiency in their primary language. An individual who meets the 
definition of ``qualified bilingual/multilingual staff'' does not 
necessarily qualify to interpret or translate for individuals with 
limited English proficiency within the meaning of this rule.
---------------------------------------------------------------------------

    \81\ See HHS LEP Guidance, supra note 49, 68 FR at 47317 
(stating that the covered entity may provide oral language 
assistance through bilingual staff members that are ``competent to 
communicate directly with [limited English proficient] persons in 
their language'').
---------------------------------------------------------------------------

Summary of Regulatory Changes
    For the reasons set forth above and considering the comments 
received, we are defining the term ``qualified bilingual/multilingual 
staff'' in Sec.  92.4 to clarify that such an individual must be 
proficient in speaking and understanding both spoken English and at 
least one other spoken language, including any necessary specialized 
vocabulary, terminology and phraseology, and must be able to 
effectively, accurately, and impartially communicate directly with 
individuals with limited English proficiency in their primary 
languages.
    Qualified interpreter. We proposed that the term ``qualified 
interpreter'' means an individual who has the characteristics and 
skills necessary to interpret for an individual with a disability, for 
an individual with limited English proficiency, or for both. In the 
proposed rule, the language in paragraph (1), applicable for 
interpreting for an individual with a disability, is the same as 
language in the regulations implementing Titles II and III of the ADA, 
at 28 CFR 35.104 and 36.104, respectively. The language in paragraph 
(2) of the proposed rule, applicable for interpreting for an individual 
with limited English proficiency, reflects a synthesis of the 
attributes, described in the Department's LEP Guidance, that are 
necessary for an individual to interpret competently and effectively 
under the circumstances and thus to provide the effective oral language 
assistance services required under the law.\82\ We noted that the fact

[[Page 31391]]

that an individual has above average familiarity with speaking or 
understanding a language other than English does not suffice to make 
that individual a qualified interpreter for an individual with limited 
English proficiency.
---------------------------------------------------------------------------

    \82\ See HHS LEP Guidance, 68 FR at 47311, 47316 (explaining 
that an individual's proficiency in another language, knowledge of 
specialized terminology, and adherence to interpreter ethics are 
considerations in determining competency to interpret); id. at 
47317-18, 47323 (discussing why family members, friends, and ad hoc 
interpreters may not be competent to interpret); The language is 
also consistent with the approach we have taken in our Title VI 
enforcement efforts. See, e.g., Voluntary Resolution Agreement 
between U.S. Dep't of Health & Human Servs., Office for Civil Rights 
and Mee Memorial Hosp., OCR Transaction Nos. 12-143846, 13-1551016 & 
13-153378, pt. II.J. (2014) [hereinafter HHS OCR VRA with Mee 
Memorial Hospital], https://www.hhs.gov/ocr/civilrights/activities/agreements/mee.html (defining qualified interpreter); Voluntary 
Resolution Agreement between U.S. Dep't of Health & Human Servs., 
Office for Civil Rights and Montgomery County Dep't of Soc. Servs., 
OCR Transaction No. 08-79992, pts. II.E (defining qualifications of 
an ``interpreter'' under the agreement), IV.H (requiring timely, 
competent language assistance); & IV.L (identifying interpreter 
standards) [hereinafter HHS OCR VRA with Montgomery County DSS], 
https://www.hhs.gov/civil-rights/for-providers/compliance-enforcement/examples/limited-english-proficiency/MCDSS-resolution-agreement/.
---------------------------------------------------------------------------

    We proposed that the definition of ``qualified interpreter'' 
includes criteria regarding interpreter ethics, including maintaining 
client confidentiality. As we stated in the proposed rule, bilingual or 
multilingual staff members may not possess competence in the skill of 
interpreting nor have knowledge of generally accepted principles of 
interpreter ethics. A qualified bilingual/multilingual nurse who is 
competent to communicate in Spanish directly with Spanish-speaking 
individuals may not be a qualified interpreter for an individual with 
limited English proficiency if serving as an interpreter would pose a 
conflict of interest with the nurse's treatment of the patient.
    Comment: A few commenters suggested that OCR amend the definition 
of qualified interpreter to require interpreters to be licensed by 
State law in the State where the entity is providing services. Other 
commenters suggested that OCR require interpreters to be certified by a 
national nonprofit certification organization.
    Response: We recognize the commenters' concerns regarding licensure 
and certification, but we decline to accept these recommendations. 
Although OCR considers licensure and certification as evidence that an 
interpreter is qualified, licensure and certification are neither 
necessary nor sufficient evidence of qualification for the following 
reasons.\83\ First, OCR does not wish to unduly narrow the pool of 
qualified interpreters available to a covered entity by requiring 
certification or licensure; many interpreters who are currently 
unlicensed and uncertified are competent to translate at a level that 
would meet the requirements of Section 1557 and this part.
---------------------------------------------------------------------------

    \83\ See HHS LEP Guidance, 68 FR at 47316 (``Competency to 
interpret, however, does not necessarily mean formal certification 
as an interpreter, although certification is helpful.'').
---------------------------------------------------------------------------

    Second, there are several organizations, both for-profit and non-
profit, that offer certification programs for interpreters. Even if the 
credentialing standards developed by those organizations currently 
satisfy Section 1557 requirements, the organizations' standards are 
subject to change and there is no assurance that such standards would 
consistently meet the standards of Section 1557. In addition, other 
national credentialing organizations could be established whose 
standards failed to meet the requirements of the law. Similar issues 
with respect to new and changing standards could also arise in the 
State licensing context.
    Third, there are factors unrelated to credentials that could cause 
OCR to determine that an interpreter is unqualified. For example, if an 
interpreter has not practiced in a long time or is late to 
appointments, the interpreter might be unqualified regardless of the 
interpreter's State or non-profit credentials. For all of these 
reasons, we decline to amend the definition of qualified interpreter in 
the ways these commenters proposed.
    Comment: We received many comments in support of the proposed 
rule's inclusion of a definition of ``qualified interpreter.'' Some 
commenters, however, requested that we define a qualified interpreter 
who interprets for individuals with limited English proficiency 
separately from a qualified interpreter who interprets for individuals 
with disabilities, noting that there are significant differences 
between the provision of oral interpretation services in these two 
contexts. Other commenters suggested broadening the lexicon an 
interpreter must possess to be a qualified interpreter for a particular 
covered entity's health program. Specifically, commenters suggested 
that an interpreter's required knowledge and abilities to be 
``qualified'' should include not only knowledge of any necessary 
specialized vocabulary but also knowledge of terminology and 
phraseology.
    Response: We have modified Sec.  92.4 to provide separate 
definitions of ``qualified interpreter for an individual with limited 
English proficiency'' \84\ and ``qualified interpreter for an 
individual with a disability.'' We agree that it is important to 
account for the qualifications necessary for interpreting for each set 
of individuals. In addition, we added the words ``terminology'' and 
``phraseology'' in both definitions to align the final rule's 
description of the requisite knowledge, skills, and abilities an 
interpreter must possess with those recognized within the field.
---------------------------------------------------------------------------

    \84\ We note that this final rule uses the terms ``qualified 
interpreter for an individual with limited English proficiency'' 
interchangeably with ``qualified interpreter for the individual with 
limited English proficiency'' and ``qualified interpreter to an 
individual with limited English proficiency.'' The preposition and 
article used within the phrase do not represent a change in meaning.
---------------------------------------------------------------------------

Summary of Regulatory Changes
    For the reasons set forth above and considering the comments 
received, we no longer define ``qualified interpreter'' as one term. We 
are using the content from proposed paragraphs (1), (1)(i), and (2) to 
create a separate definition for ``qualified interpreter for an 
individual with a disability'' and similarly use the content from 
proposed paragraphs (1) and (1)(ii) to create a separate definition for 
``qualified interpreter for an individual with limited English 
proficiency.'' For both definitions, we added ``terminology and 
phraseology'' to the lexicon a qualified interpreter in both contexts 
must possess.
    Qualified translator. The proposed rule did not use or define the 
term ``qualified translator.''
    Comment: We received a significant number of comments recommending 
that the proposed rule define ``qualified translator.'' Commenters 
explained that bilingual individuals do not necessarily possess the 
skill of translating or the knowledge of specialized terminology to be 
able to translate written documents from English to another language. 
Similarly, a qualified interpreter for an individual with limited 
English proficiency may not possess the knowledge, skills, and 
abilities to translate, as the skill of interpreting is different from 
the skill of translating.\85\
---------------------------------------------------------------------------

    \85\ See HHS LEP Guidance, supra note 49, 68 FR at 47316; Int'l 
Medical Interpreters Assoc., Guide on Medical Translation 4 (Jan. 
2009), https://www.imiaweb.org/uploads/pages/438.pdf.
---------------------------------------------------------------------------

    Response: In response to commenters' recommendations, we are adding 
the term ``qualified translator'' to the final rule. The final rule 
defines qualified translator as someone who translates effectively, 
accurately, and impartially; adheres to generally accepted translator 
ethics principles; and is proficient in both written English and at 
least one other written non-English language, including any necessary 
specialized vocabulary, terminology and phraseology. We agree with 
commenters that even if an individual meets the definition of 
``qualified bilingual/multilingual staff'' or ``qualified interpreter 
for an individual with

[[Page 31392]]

limited English proficiency'' under this rule, that individual does not 
necessarily possess the knowledge, skills, or abilities to translate 
written content in paper or electronic form used in a covered entity's 
health programs or activities.
Summary of Regulatory Changes
    For the reasons set forth above and considering the comments 
received, we are defining the term ``qualified translator'' in Sec.  
92.4 to set out the competencies an individual must have to translate 
written content in paper or electronic form in the covered entity's 
health programs or activities.
    Sex stereotypes. We proposed that the term ``sex stereotypes'' 
refers to stereotypical notions of masculinity or femininity, including 
expectations of how individuals represent or communicate their gender 
to others, such as behavior, clothing, hairstyles, activities, voice, 
mannerisms, or body characteristics. We noted that these stereotypes 
can include expectations that gender can only be constructed within two 
distinct opposite and disconnected forms (masculinity and femininity), 
and that gender cannot be constructed outside of this gender construct.
    Comment: Commenters suggested that OCR revise the definition of 
``sex stereotypes'' because, while accurate in describing the types of 
assumptions that may motivate discrimination against non-binary 
individuals, the definition is cumbersome and may not be readily 
understood by persons not familiar with the issue. Several commenters 
expressed concern that the proposed language might be interpreted as 
limiting sex discrimination based on sex stereotyping to only include 
discrimination based on gender identity. Commenters suggested affirming 
in the final rule that any form of sex discrimination on the basis of 
sex stereotypes constitutes sex discrimination, whether or not it also 
constitutes discrimination on the basis of gender identity. Some 
commenters requested that OCR provide examples illustrating 
discrimination based on sex stereotypes that can form the basis of 
prohibited sex discrimination.
    Several commenters suggested that OCR clarify the definition of 
``sex stereotypes'' to address the relationship between sex stereotypes 
and sexual orientation. In this regard, commenters suggested that OCR 
revise the definition of ``sex stereotypes'' to add that ``sex-
stereotypes also include gendered expectations related to the 
appropriate roles of men and women, such as the expectation that women 
are primary caregivers, and aspects of an individual's sexual 
orientation, such as the sex of an individual's sexual or romantic 
partners.''
    Response: We have added a reference in the regulatory text to make 
clear that sex stereotypes include gendered expectations related to the 
appropriate roles of a certain sex.\86\ With regard to sexual 
orientation, we refer commenters to the discussion in the preamble 
addressing the definition of ``on the basis of sex.'' \87\
---------------------------------------------------------------------------

    \86\ See, e.g., Chadwick v. Wellpoint, Inc., 561 F.3d 38, 45 
(1st Cir. 2009) (adverse employment action based on assumption that 
women are responsible for family caregiving and will perform their 
jobs less well as a result of caregiving responsibilities is 
discrimination based on sexual stereotypes in violation of Title 
VII). See also Glenn v. Brumby, 663 F.3d 1312 (11th Cir. 2011) 
(``These instances of discrimination against plaintiffs because they 
fail to act according to socially prescribed gender roles constitute 
discrimination under Title VII according to the rationale of Price 
Waterhouse.'').
    \87\ See discussion Sec.  92.4, supra.
---------------------------------------------------------------------------

    Comment: Some commenters stated that the proposed definition of sex 
stereotypes is unprecedented in its breadth with no legal authority to 
support the proposition that individuals who claim to identify with 
non-binary genders constitute a protected class under Title IX or any 
other Federal law. Commenters suggested that it is impossible for an 
individual to have a non-binary gender identity.
    Response: OCR has adopted the approach taken by the Federal 
government and numerous courts in similar matters--that sex stereotypes 
encompass not only stereotypes concerning the biological differences 
between the sexes, but also include stereotypes concerning gender 
norms.\88\ As stated in the preamble to the proposed rule and clarified 
in the final rule, OCR recognizes that sex stereotypes can include the 
expectation that individuals consistently identify with only one of two 
genders (male or female), and that they act in conformity with the 
gender-related expressions stereotypically associated with that gender. 
Sex stereotypes can also include a belief that gender can only be 
binary and thus that individuals cannot have a gender identity other 
than male or female. OCR recognizes that an individual's gender 
identity involves the interrelationship between an individual's 
biology, gender, internal sense of self and gender expression related 
to that perception; thus, the gender identity spectrum includes an 
array of possible gender identities beyond male and female.
---------------------------------------------------------------------------

    \88\ See Price Waterhouse, 490 U.S. at 251; Smith, 378 F.3d. at 
573 (citations omitted).
---------------------------------------------------------------------------

Summary of Regulatory Changes
    For the reasons set forth in the proposed rule and considering the 
comments received, we are finalizing the definition as proposed in 
Sec.  92.4 with the following modifications: We have clarified that sex 
stereotypes can be based on expectations about gender roles.
    Taglines. In the proposed rule, we defined taglines as short 
statements written in non-English languages to alert individuals with 
limited English proficiency to the availability of language assistance 
services, free of charge, and how the services can be obtained.\89\ We 
did not receive comments with suggested revisions to the wording of 
this definition.
---------------------------------------------------------------------------

    \89\ The HHS LEP Guidance, supra note 49, 68 FR at 47320, 
describes the practice of tagging non-English statements on the 
front of common documents, such as ``brochures, booklets, and in 
outreach and recruitment information'' informing individuals with 
limited English proficiency of the availability of language 
assistance services.
---------------------------------------------------------------------------

Summary of Regulatory Changes
    For the reasons set forth in the proposed rule and considering the 
comments received, we are finalizing this definition as proposed in 
Sec.  92.4 without modification.
Assurances Required (Sec.  92.5)
    In Sec.  92.5, we proposed that each entity applying for Federal 
financial assistance, each issuer seeking certification to participate 
in a Health Insurance Marketplace \SM\, and each state seeking approval 
to operate a State-based Marketplace \SM\ be required to submit an 
assurance that its health programs and activities will be operated in 
compliance with Section 1557. We noted that the regulations 
implementing Title VI, Title IX, Section 504, and the Age Act all 
require similar assurances. We modeled the assurance, duration of 
obligation, and covenants language on the Section 504 regulation.\90\ 
We also proposed to revise the Assurance of Compliance HHS-690 Form to 
include all civil rights laws, including Section 1557, with which 
covered entities must comply.
---------------------------------------------------------------------------

    \90\ 45 CFR 84.5.
---------------------------------------------------------------------------

    The comments and our responses regarding Sec.  92.5 are set forth 
below.
    Comment: Several commenters recommended that OCR require covered 
entities to collect data on race, ethnicity, language, sex, gender, 
gender identity, sexual orientation, disability, and age. These 
commenters suggested that covered entities should be required to assess 
the populations they serve so that the covered entities can better plan 
how to meet the needs of those populations.

[[Page 31393]]

The commenters also urged that OCR require annual submission of the 
data to OCR and develop standards to address training on data 
collection, privacy protections, safeguarding, voluntary reporting by 
patients, and supporting analyses based on multiple variables.
    Response: OCR agrees that data collection is an important tool that 
can help covered entities to better serve their communities, and 
encourages covered entities to regularly evaluate the impact of the 
services they provide on different populations. However, OCR declines 
to require data collection as part of the assurances required under 
Section 1557. The Department collects data pursuant to Section 4302 of 
the ACA, and OCR has access to these data. In addition, OCR has the 
authority to require covered entities to collect data and to provide 
OCR access to information under Sec. Sec.  92.302 and 92.303 of this 
part,\91\ and will exercise this authority as needed and appropriate 
under particular circumstances in the future. With respect to 
recipients and State-based Marketplaces, Sec. Sec.  92.302(a) and 
92.302(b) incorporate the procedural provisions in the Title VI and the 
Age Act implementing regulations regarding enforcement actions under 
this part. Pursuant to these procedural provisions, when a recipient or 
State-based Marketplace \SM\ fails to provide OCR with requested 
information in a timely, complete, and accurate manner, OCR may find 
noncompliance with Section 1557 and initiate appropriate enforcement 
procedures, including beginning the process for fund suspension or 
termination and taking other action authorized by law. OCR has inserted 
a new subsection (c) to Sec.  92.302 to clarify that it has that it has 
this authority, and the text that was previously found at Sec.  
92.302(c) has been moved to the new Sec.  92.302(d).
---------------------------------------------------------------------------

    \91\ Section 92.302 incorporates provisions of the Title VI 
implementing regulation with respect to enforcement actions 
concerning discrimination on the basis of race, color, national 
origin, sex, age, or disability. Those provisions authorize OCR to 
collect reports from recipients as necessary to determine 
compliance. Section 92.303 incorporates provisions in the Section 
504 implementing regulation with respect to discrimination on the 
basis of prohibited criteria in health programs or activities 
administered by the Department. Those provisions authorize OCR to 
initiate actions as necessary to ensure compliance.
---------------------------------------------------------------------------

Summary of Regulatory Changes
    For the reasons set forth in the proposed rule and considering the 
comments received, we are finalizing the provisions proposed in Sec.  
92.5 without modification.
Remedial Action and Voluntary Action (Sec.  92.6)
    In Sec.  92.6, we proposed provisions addressing remedial action 
and voluntary action by covered entities. In paragraph (a), we proposed 
that a recipient or State-based Marketplace \SM\ that has been found to 
have discriminated on any of the bases prohibited by Section 1557 be 
required to take remedial action as required by the Director to 
overcome the effects of that discrimination. We proposed that similar 
to recipients and State-based Marketplaces, the Department, including 
the Federally-facilitated Marketplaces, is also obligated to address 
discrimination, but is subject to a different remedial process than 
recipients and State-based Marketplaces. In paragraph (b), we proposed 
to permit but not require all covered entities to take voluntary action 
in the absence of a finding of discrimination to overcome the effects 
of conditions that result or resulted in limited participation by 
persons based on race, color, national origin, sex, age, or disability. 
The provisions at Sec. Sec.  92.6(a) and (b) are modeled after the 
Title VI, Title IX, Section 504, and Age Act regulations.
    The comments and our responses regarding Sec.  92.6 are set forth 
below.
    Comment: One commenter requested that OCR specifically list the 
remedial actions available to OCR as well as the circumstances under 
which such remedial actions will be taken.
    Response: In the discussion of enforcement mechanisms and 
procedures in the preamble to the proposed rule, OCR identified the 
range of enforcement tools available to OCR. However, it would not be 
feasible to specify the circumstances in which specific remedial 
actions would be taken. OCR evaluates each situation on a case-by-case 
basis and may use different remedial actions in different cases. In all 
cases, OCR attempts to achieve compliance and, in our experience, this 
approach has been successful.
    Comment: One commenter requested clarification of the word 
``control'' in the part of the regulation that states that where a 
recipient exercises ``control'' over a recipient that has 
discriminated, the Director may require both entities to take remedial 
action. Another commenter suggested that OCR only pursue remedial 
action against the entity actually found to have discriminated against 
an individual and not against the controlling entity.
    Response: OCR declines to further define the word ``control'' as 
used in the regulation. This term has appeared in civil rights 
regulations enforced by OCR for many years, and its meaning has been 
established over time. OCR also declines to limit its authority to 
pursue remedial action with respect to an entity that exercises control 
over an entity that has discriminated. This too is longstanding 
authority under OCR's other authorities, and in OCR's experience, 
controlling entities that are recipients often play an important role 
in securing appropriate action to remedy discrimination.
    Comment: One commenter suggested that there be limitations on the 
uses of remedial action. Specifically, the commenter stated that OCR 
should require remedial action only on behalf of individuals who either 
(1) applied to participate but were unable to participate due to 
alleged discrimination; or (2) had been participants and were subject 
to alleged discrimination. The commenter asserted that without such 
limitations, covered entities could be unfairly exposed to claims by 
individuals who would not have been participants notwithstanding any 
alleged discrimination.
    Response: OCR does not believe that limiting the availability of 
remedial action as suggested is appropriate. It would not be consistent 
with Section 1557's and OCR's commitment to eliminating discrimination 
in all parts of a program or activity and remedying discrimination, 
where necessary, with respect to harmed individuals.
Summary of Regulatory Changes
    For the reasons set forth in the proposed rule and considering the 
comments received, we are finalizing the provisions as proposed in 
Sec.  92.6 without modification.
Designation of Responsible Employee and Adoption of Grievance 
Procedures (Sec.  92.7)
    In Sec.  92.7, we proposed requirements for each covered entity 
that employs 15 or more persons to designate a responsible employee to 
coordinate the entity's compliance with the rule and adopt a grievance 
procedure. Many entities covered by Section 1557 and this part are 
already required to designate a compliance coordinator and have a 
written process in place for handling grievances with respect to 
disability discrimination in all programs and activities or sex 
discrimination in education programs or activities.\92\
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    \92\ Under Section 504, a recipient of Federal financial 
assistance with 15 or more employees must designate at least one 
individual to coordinate the covered entity's compliance with 
Section 504's prohibition of disability discrimination and must have 
a written process in place for handling grievances. 45 CFR 84.7(a). 
Under Title IX, a recipient of Federal financial assistance must 
designate at least one individual to coordinate the recipient's 
compliance with Title IX's prohibition of sex discrimination with 
respect to the recipient's education program or activity and must 
have a written process in place for handling grievances. 45 CFR 
86.8(a). Under Title II of the ADA, an entity with 50 or more 
employees must designate at least one individual to coordinate the 
covered entity's compliance with Title II's prohibition of 
disability discrimination and must have a written process in place 
for handling grievances. 28 CFR 35.107(a).

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[[Page 31394]]

    In paragraph (a), we proposed that a covered entity that employs 15 
or more persons be required to designate at least one employee to 
coordinate compliance with the requirements of the rule. We noted that 
a covered entity that has already designated a responsible employee 
pursuant to the regulations implementing Section 504 or Title IX may 
use that individual to coordinate its efforts to comply with Section 
1557.
    In paragraph (b), we proposed that a covered entity that employs 15 
or more persons be required to adopt a grievance procedure that 
incorporates appropriate due process standards and allows for the 
prompt and equitable resolution of complaints concerning actions 
prohibited by Section 1557 and this part. We noted that a covered 
entity that already has a grievance procedure addressing claims of 
disability discrimination that meets the standards established under 
the Section 504 regulation may use that procedure to address disability 
claims under Section 1557. In addition, we noted that covered entities 
may use that procedure to address all other Section 1557 claims, 
provided that the entity modifies the procedure to apply to race, 
color, national origin, sex, and age discrimination claims.
    We proposed that for the Department, including Federally-
facilitated Marketplaces, OCR will be deemed the responsible employee. 
In addition, we proposed that OCR's procedures for addressing 
complaints of discrimination on the grounds protected under Section 
1557 will be deemed grievance procedures for the Department, including 
for the Federally-facilitated Marketplaces.
    In the proposed rule, OCR invited comment on whether all covered 
entities, not only those that employ 15 or more persons, should be 
required to designate responsible employees and establish grievance 
procedures.
    The comments and our responses regarding Sec.  92.7 are set forth 
below.
    Comment: Some commenters opposed inclusion of proposed Sec.  92.7, 
arguing that it is unnecessary and costly and has few benefits because 
discrimination in health programs and activities does not exist. Other 
commenters urged that Federal regulation in this area constrains 
covered entities' flexibility to decide how to address individuals' 
complaints of discrimination. Specifically, these commenters encouraged 
OCR to allow covered entities to retain existing internal grievance 
processes, leverage grievance processes within State agencies or within 
other entities, or develop new grievance procedures.
    Response: We recognize commenters' concerns, but we disagree with 
commenters regarding the necessity of proposed Sec.  92.7. To promote 
the effective and efficient implementation of Section 1557 and this 
part, it is necessary for covered entities with 15 or more employees to 
identify at least one individual accountable for coordinating the 
covered entity's compliance and to have a written process in place for 
handling grievances. We recognize that not all covered entities are 
organized and operate in the same way. Thus, we do not prescribe who in 
the covered entity must serve as the responsible employee--nor do we 
prohibit combining this function with other duties so long as there is 
no conflict of interest.
    In addition, we disagree with commenters that proposed Sec.  92.7 
is costly, limits covered entities' flexibility, or conflicts with 
existing internal or State-mandated grievance procedures. As we stated 
in the proposed rule, recipients of Federal financial assistance with 
15 or more employees, as well as the State-based Marketplaces, could 
increase the responsibilities of an already-designated coordinator to 
include the coordination of compliance with Section 1557 and this 
part.\93\ These entities could also increase the scope of the existing 
grievance procedures required under Section 504 and the ADA to 
accommodate complaints of discrimination addressing all bases 
prohibited under Section 1557. Moreover, nothing in the rule bars a 
covered entity from combining the grievance procedure required under 
Section 1557 with procedures it uses to address other grievances, 
including those unrelated to individuals' civil rights. As described in 
the Regulatory Impact Analysis of the proposed rule \94\ and reiterated 
in the Regulatory Impact Analysis to this final rule, the costs 
associated with these requirements are estimated to be minimal.
---------------------------------------------------------------------------

    \93\ See 80 FR 54172, 54202 (Sept. 8, 2015).
    \94\ Id.
---------------------------------------------------------------------------

    Comment: Some commenters stated that the final rule should specify 
minimum regulatory requirements for the grievance procedure required in 
Sec.  92.7(b). Such minimum requirements would include, for instance: 
Timeframes for filing, resolving, and issuing written decisions 
regarding complaints; an appeal process; notice regarding retaliation 
protections; and clarification that no person needs to exhaust a 
covered entity's grievance procedure prior to filing a Section 1557 
complaint with OCR. These commenters urged OCR to adopt regulatory 
requirements, instead of a model grievance procedure only, stating that 
a model policy alone is insufficient to ensure that an entity's 
grievance procedure provides meaningful rights and protections.
    Response: We understand the commenters' concerns, but we decline to 
promulgate minimum standards for the content of the grievance procedure 
required in Sec.  92.7(b); such an approach would be too prescriptive. 
Because Section 1557 and this part cover a variety of types of 
entities, we want to preserve flexibility for entities to adapt the 
rule's requirements to their own health programs and operational 
capacity, so long as the rules result in the prompt and equitable 
resolution of complaints. However, to provide covered entities an 
example of how to structure a grievance procedure that affords 
individuals appropriate procedural safeguards and provides for the 
prompt and equitable resolution of complaints, we have included a 
sample procedure as Appendix C. We disagree with commenters that a 
sample grievance procedure is insufficient; rather, a sample grievance 
procedure provides guidance to covered entities while also preserving 
their flexibility. In response to commenters' suggestion that we note 
that an individual need not exhaust a covered entity's grievance 
procedure prior to filing a Section 1557 complaint, we clarify that no 
such exhaustion requirement exists, as reflected in the sample 
grievance procedure included as Appendix C to the final rule.
    Comment: Many commenters supported the alternate approach that 
would require covered entities with fewer than 15 employees to comply 
with Sec.  92.7. These commenters reasoned that requiring all covered 
entities to designate a coordinator and establish a grievance procedure 
would give each entity the internal mechanisms to resolve compliance 
issues earlier and informally, allowing them to potentially avoid a 
formal investigation by OCR. Accordingly, these commenters asserted 
that the importance of extending

[[Page 31395]]

required compliance with Sec.  92.7 to covered entities with fewer than 
15 employees justified the anticipated additional expense of 
compliance.
    Some commenters observed that the Health Insurance Portability and 
Accountability Act (HIPAA) Privacy Rule already requires many entities 
covered by Section 1557 and this part to implement grievance policies 
and identify compliance coordinators, regardless of the number of 
employees of the entity.\95\ The commenters suggested that the 
implementation of these requirements under the HIPAA Privacy Rule has 
given entities with fewer than 15 employees covered by both the HIPAA 
Privacy Rule and Section 1557 and this part the experience necessary to 
implement the similar requirements of Sec.  92.7. Because many of the 
covered entities with fewer than 15 employees, such as most health care 
providers receiving Federal financial assistance, are subject to the 
HIPAA Privacy Rule, commenters asserted that extending the requirements 
of Sec.  92.7 to covered entities with fewer than 15 employees would 
impose a limited burden.
---------------------------------------------------------------------------

    \95\ See 45 CFR 164.520(b)(1)(vi) and Sec.  164.530(a)(1)(ii) 
(requires designation of ``contact person or office who is 
responsible for receiving complaints under this subsection'' and the 
provision of a notice ``that contains a statement that individuals 
may complain to the covered entity and to the Secretary if they 
believe their privacy rights have been violated, a brief description 
of how the individual may file a complaint with the covered entity, 
and a statement that the individual will not be retaliated against 
for filing a complaint,'' respectively.)
---------------------------------------------------------------------------

    Conversely, some commenters suggested that compliance with Sec.  
92.7 would be too time consuming and costly for covered entities with 
fewer than 15 employees. These commenters explained that due to the 
small number of employees, small covered entities may have difficulty 
identifying an unbiased third-party employee to investigate and respond 
to grievances. For instance, commenters noted that it is not uncommon 
for the chief physician or other professional to serve as the 
compliance coordinator for a small covered entity, but that such a role 
would be inappropriate if that individual was the subject of a 
grievance. These commenters also observed that requiring a covered 
entity to handle internal grievances under Section 1557 might expose 
the entity to the risk of civil liability, because Section 1557 allows 
for private enforcement. These commenters recommended that OCR allow 
small covered entities flexibility in determining when to defer to 
outside counsel or other independent, unbiased third parties to address 
grievances and thus mitigate their liability risk.
    Response: We decline to extend the requirements of Sec.  92.7 to 
covered entities with fewer than 15 employees. Although we recognize 
the benefits that extension of the requirements of Sec.  92.7 would 
generate, we conclude that the costs, which would be borne by small 
entities, likely outweigh the benefits. Although many covered entities 
with fewer than 15 employees may have already identified a compliance 
coordinator and implemented a grievance policy to comply with the HIPAA 
Privacy Rule, extending the requirements of Sec.  92.7 to such entities 
would create additional costs, as entities would need to revise their 
existing policies and retrain compliance coordinators.
    Although we decline to extend the requirement of Sec.  92.7 to 
covered entities with fewer than 15 employees, nothing in the final 
rule bars a covered entity with fewer than 15 employees from 
designating an employee to coordinate compliance with Section 1557 and 
this part or from adopting and implementing a grievance procedure. As 
we stated in the proposed rule, in OCR's experience, the presence of a 
coordinator and grievance procedure enhances the covered entity's 
accountability and helps bring concerns to prompt resolution, 
oftentimes prior to an individual bringing a private right of action.
Summary of Regulatory Changes
    For the reasons described in the proposed rule and considering the 
comments received, we are finalizing the provisions as proposed in 
Sec.  92.7 with one technical modification in Sec.  92.7(a): We 
replaced the reference to the ``Office for Civil Rights'' with 
``Director,'' as Sec.  92.4 defines ``Director'' to mean the Director 
of the Department's OCR. We have also added a sample grievance 
procedure as Appendix C to the final rule to provide covered entities 
an example of a grievance procedure that meets the requirements of 
Sec.  92.7(b).
Notice Requirement (Sec.  92.8)
    In Sec.  92.8, OCR proposed that each covered entity take initial 
and continuing steps to notify beneficiaries, enrollees, applicants, or 
members of the public of individuals' rights under Section 1557 and 
this part and of covered entities' nondiscrimination obligations with 
respect to their health programs and activities. We modeled this 
section generally after the notice requirements found in regulations 
implementing Title VI, Title IX, Section 504, and the Age Act, which 
require covered entities to have a notice in place.\96\
---------------------------------------------------------------------------

    \96\ 45 CFR 80.6(d) (requiring recipients to provide notice of 
individuals' rights under Title VI), 84.8(a)-(b) (requiring 
recipients to provide notice of individuals' rights under Section 
504), 86.9(a)-(c) (requiring notice of individuals' rights under 
Title IX), 91.32 (requiring recipients to provide notice of 
individuals' rights under the Age Act).
---------------------------------------------------------------------------

    Paragraphs (a)(1)-(7) of proposed Sec.  92.8 identify the 
components of the notice. Specifically, paragraph (a)(1) proposed that 
the notice include that the covered entity does not discriminate on the 
basis of race, color, national origin, sex, age, or disability.
    Paragraph (a)(2) proposed that the notice include a statement that 
the covered entity provides auxiliary aids and services, free of 
charge, in a timely manner, to individuals with disabilities, when such 
aids and services are necessary to provide an individual with a 
disability an equal opportunity to benefit from the entity's health 
programs or activities. Paragraph (a)(3) proposed that the notice state 
that the covered entity provides language assistance services, free of 
charge, in a timely manner, to individuals with limited English 
proficiency, when those services are necessary to provide an individual 
with limited English proficiency meaningful access to a covered 
entity's health programs or activities.
    Paragraph (a)(4) proposed that the notice include information on 
how an individual can access the aids and services referenced in (a)(2) 
and (a)(3).
    Paragraph (a)(5) proposed that the notice provide contact 
information for the responsible employee coordinating compliance with 
Section 1557 and this part, where such a responsible employee is 
required by Sec.  92.7(a).
    Paragraph (a)(6) proposed that the notice state that the covered 
entity has a grievance procedure where such a grievance procedure is 
required by Sec.  92.7(b), and information on how to file a grievance.
    Paragraph (a)(7) proposed that the notice provide information on 
how to file a complaint with OCR. We noted that inclusion of this 
requirement ensures that covered entities inform individuals about the 
enforcement mechanisms outside of the covered entity's internal 
process.
    Proposed paragraph (b) stated that within 90 days of the effective 
date of this part, each covered entity shall post the notice required 
in Sec.  92.8(a) in English, consistent with paragraph (f) of this 
section.
    Paragraph (c) proposed that the Director shall make available a 
sample notice. We provided that covered

[[Page 31396]]

entities may use this sample notice or may develop their own notices 
that convey the information in paragraphs (a)(1) through (7).
    OCR invited comment on whether the proposed rule should permit 
covered entities to combine the content of the notice with the content 
of other notices that covered entities may be required to disseminate 
or post under Federal laws. OCR further invited comment on what steps 
covered entities may or should take to ensure that notices that combine 
the content required in Sec.  92.8(a)(1)-(7) with other required 
notices do so without compromising the intent of Sec.  92.8 to inform 
individuals of their civil rights under Section 1557 and this part. OCR 
also invited comment on whether the final rule should allow the notice 
to be modified for publications and other communication vehicles that 
may not have sufficient space to accommodate the full notice.
    Paragraph (c) also proposed that the Director shall translate the 
sample notice into the top 15 languages spoken by individuals with 
limited English proficiency nationally and make the translated notices 
available to covered entities electronically and in any other manner 
the Director determines appropriate. We encouraged covered entities to 
post one or more of the translated notices that the Director provides 
and to make the notice available in non-English languages other than 
those provided by the Director. OCR sought comments on requiring, 
rather than merely encouraging, covered entities to post one or more of 
the notices in the most prevalent non-English languages frequently 
encountered by covered entities in their geographic service areas.
    With regard to the proposal that the Director provide translations 
of the sample notice, we described that we selected the top 15 
languages spoken by individuals with limited English proficiency 
nationally as a data driven policy.\97\ We noted that we plan to review 
U.S. Census Bureau data as newer data become available to determine if 
and when the top 15 languages spoken nationally by individuals with 
limited English proficiency change, warranting the Director to make 
available notices in additional non-English languages.
---------------------------------------------------------------------------

    \97\ See 80 FR 54179 (describing the methodology used in the 
proposed rule).
---------------------------------------------------------------------------

    Paragraph (d) proposed that within 90 days of the effective date of 
this part, each covered entity shall post, consistent with paragraph 
(f) of this section, taglines in at least the top 15 languages spoken 
nationally by individuals with limited English proficiency. We 
requested comment on a sample tagline in Appendix B to the proposed 
rule.
    Paragraph (e) proposed that the Director shall make available 
taglines in the top 15 languages spoken nationally by individuals with 
limited English proficiency for use by covered entities. OCR proposed 
this approach to maximize efficiency and economies of scale by enabling 
covered entities to receive the benefits of having multi-language 
taglines available without incurring the associated translation costs.
    In paragraph (f), we proposed that covered entities must post the 
English-language notice required in Sec.  92.8(a) and taglines required 
in Sec.  92.8(d) in a conspicuously-visible font size in: Significant 
publications or significant communications targeted to beneficiaries, 
enrollees, applicants, or members of the public, which may include 
patient handbooks, outreach publications, or written notices pertaining 
to rights or benefits or requiring a response from an individual; in 
conspicuous physical locations; and in a conspicuous location on the 
home page of a covered entity's Web site. We sought comment on the 
scope of significant publications and significant communications.
    We noted that covered entities that distribute significant 
publications or significant communications will need to update these 
publications to include the notice required in Sec.  92.8(a) and 
taglines required in Sec.  92.8(d). However, we proposed allowing 
entities to exhaust their current stock of hard copy publications 
rather than requiring a special printing of the publications to include 
the new notice.
    We stated that covered entities may satisfy the requirement to post 
the notice on the covered entity's home page by including a link in a 
conspicuous location on the covered entity's home page that immediately 
directs the individual to the content of the notice elsewhere on the 
Web site. Similarly, we stated with regard to the requirement to post 
taglines that covered entities can comply by posting ``in language'' 
Web links, which are links written in each of the 15 non-English 
languages posted conspicuously on the home page that direct the 
individual to the full text of the tagline indicating how the 
individual may obtain language assistance services. For instance, a 
tagline directing an individual to a Web site with the full text of a 
tagline written in Haitian Creole should appear as ``Krey[ograve]l 
Ayisien'' rather than ``Haitian Creole.''
    In the proposed rule, we invited comment on a State-based 
methodology for identifying the languages in which covered entities 
would be required to post taglines and for which the OCR Director would 
be required to translate the notice. We explained that the top 15 
languages spoken by individuals with limited English proficiency 
nationally can differ from the languages spoken most frequently by 
individuals within the areas served by covered entities' health 
programs and activities. Thus, we invited comment on a requirement for 
entities to make taglines available in the top 15 languages spoken 
State-wide, rather than nationwide, by individuals with limited English 
proficiency. This threshold aligns with Federal regulations governing 
the Health Insurance Marketplaces and qualified health plan 
issuers.\98\
---------------------------------------------------------------------------

    \98\ See 45 CFR 155.205(c)(2)(iii)(A). This regulation, which 
requires taglines on certain documents and Web site content in at 
least the top 15 languages spoken State-wide by individuals with 
limited English proficiency is not the only tagline requirement with 
which qualified health plan issuers must comply. Qualified health 
plan issuers must comply with another tagline requirement applicable 
to group health plans and health insurance issuers, which requires 
taglines, on certain notices and on a health plan's summary of 
benefits and coverage, in languages in which 10% of individuals with 
limited English proficiency county-wide are exclusively literate. 
See, e.g., 45 CFR 147.136(e)(2)(iii), (e)(3) (HHS regulations); 29 
CFR 2590.715-2719(e)(2)(iii), (3) (DOL regulations for group health 
plans and health insurance issuers that are not grandfathered health 
plans).
---------------------------------------------------------------------------

    To reduce the burden on covered entities, proposed subsection (g) 
of this section stated that a covered entity's compliance with Sec.  
92.8 satisfies the notice requirements under HHS's Title VI, Section 
504, Title IX, and Age Act regulations. We requested comment on this 
proposal.
    The comments and our responses regarding Sec.  92.8 are set forth 
below.
    Comment: Some commenters suggested that we revise the information 
required in Sec.  92.8(a)(1)-(7) regarding the notice of individuals' 
rights. For instance, some commenters suggested that we specify that 
Section 1557 prohibits discrimination on the basis of ``national 
origin, including primary language and immigration status'' and ``sex, 
including pregnancy, gender identity, sex stereotypes, or sexual 
orientation. . . .'' These commenters asserted that the addition of 
these terms would more completely reflect the scope of protected 
classes under Section 1557. A few commenters recommended that the 
notice inform individuals of any religious accommodations or exemptions 
that the covered entity has received from compliance with civil rights 
laws and explain the services that

[[Page 31397]]

the covered entity will and will not provide as a result of any 
religious exemptions or accommodations. Finally, a few commenters 
recommended revising Sec. Sec.  92.8(a)(2) and (a)(3) to more closely 
parallel each other. For example, these commenters recommended that we 
list examples of language assistance services in paragraph (a)(3) and 
add a reference to providing meaningful access for persons with 
disabilities in paragraph (a)(2) of Sec.  92.8.
    Response: We decline to incorporate the suggestions made with 
regard to Sec.  92.8(a)(1). The final rule defines the terms ``on the 
basis of sex'' and ``national origin'' in Sec.  92.4, which is 
sufficient to define the scope of these protected classes as used in 
Sec.  92.8(a)(1) and in Appendix A.\99\ We are concerned that 
replicating the regulatory definitions of ``on the basis of sex'' and 
``national origin'' in Sec.  92.8(a)(1) and across-the-board in the 
final rule would dilute the concise, targeted message of the 
nondiscrimination statement and reduce the value of identifying the 
core bases on which discrimination is prohibited. Further, replicating 
the definitional text of these bases in Sec.  92.8(a)(1) but not 
throughout the final rule may cause unnecessary confusion regarding the 
scope of discrimination prohibited by Section 1557 and this part. 
Accordingly, we decline to make the suggested revisions and are 
removing the terms ``including sex stereotypes and gender identity'' 
from the sample notice in Appendix A. OCR intended the 
nondiscrimination statement in Sec.  92.8(a)(1) to convey covered 
entities' overarching nondiscrimination obligations in a simple and 
streamlined manner, as the notice requirements do in regulations 
implementing Title VI, Title IX, Section 504, and the Age Act.\100\ The 
notice requirement of the Title IX implementing regulations does not 
require recipients of Federal financial assistance to identify 
exclusions from Title IX's application or exceptions to discrimination 
prohibited under Title IX.\101\ Moreover, under the final rule, the 
availability of a religious exemption will depend on an analysis of the 
particular situation; thus, it would be difficult for an entity to 
state that it was exempt for all purposes. Accordingly, this final rule 
preserves the simplicity of the nondiscrimination statement consistent 
with other Federal civil rights laws.
---------------------------------------------------------------------------

    \99\ An individual's national origin is not the same as her 
citizenship or immigration status, and neither Title VI nor Section 
1557 explicitly protects individuals against discrimination on the 
basis of citizenship or immigration status. However, as under Title 
VI, Section 1557 and this part protect individuals present in the 
United States, whether lawfully or not, who are subject to 
discrimination based on race, color, national origin, sex, age, or 
disability. See discussion supra note 53.
    \100\ Supra note 96.
    \101\ 45 CFR 86.9(a).
---------------------------------------------------------------------------

    We have revised Sec.  92.8(a)(3) to list examples of language 
assistance services to parallel Sec.  92.8(a)(2), which lists examples 
of auxiliary aids and services. We decline to modify the standards in 
paragraphs (a)(2) and (a)(3) because ``meaningful access'' is not the 
proper standard used in Section 504 for ensuring effective 
communication for individuals with disabilities.
    Finally, as we stated in the proposed rule, Appendix A to part 92 
is a sample notice. Covered entities are free to draft their own 
notices that convey the content in Sec.  92.8(a)(1)-(7).
    Comment: We received many comments addressing practical concerns 
about the size and length of required notices and taglines. Some 
commenters supported giving covered entities the flexibility to combine 
the content of the notice in Sec.  92.8(a)(1)-(7) with other notices 
required under other Federal laws. For instance, a few comments stated 
that the State-based Marketplaces should be allowed to combine the 
content of the notice in Sec.  92.8(a) with disclosures required by 
Federal regulations governing the Health Insurance Marketplaces at 45 
CFR 155.230. Conversely, some commenters strongly opposed the idea of 
combining the content of the notice required in Sec.  92.8(a) with 
other notices, reasoning that the combination, and likely modification, 
of the notice's content would diminish the clear message of the notice.
    Some commenters expressed concern that posting the notice and the 
taglines in a ``conspicuously-visible font size'' as proposed in Sec.  
92.8(f)(1) and a ``conspicuous physical location'' as proposed in Sec.  
92.8(f)(1)(ii) would occupy prohibitive amounts of space for covered 
entities operating in small physical spaces, such as pharmacies. These 
commenters suggested that OCR permit covered entities operating in 
smaller physical spaces to post taglines in fewer than 15 non-English 
languages. Other commenters requested clarification from OCR on what 
constitutes a ``conspicuous physical location'' in Sec.  92.8(f)(ii) 
and ``conspicuously visible font size'' in Sec.  92.8(f)(1).
    A number of commenters recommended that the final rule require 
covered entities to post the notice of individuals' rights--and not 
just taglines--in non-English languages.
    Response: We intend to provide covered entities some flexibility to 
implement the requirements of Sec.  92.8 in the manner that they 
determine meets the standards of this section while also reducing 
burden.
    For instance, we will permit covered entities to combine the 
content of the notice in Sec.  92.8(a)(1)-(7) with the content of other 
notices, such as notices required under other Federal civil rights 
laws. The content of the combined notice still must clearly convey the 
information required in Sec.  92.8 (a)(1)-(7) and must separately meet 
any applicable notice requirements under relevant legal authorities. 
For instance, the regulations implementing Title IX and Section 504 
require that a recipient provide a notice of individuals' rights to 
employees and applicants for employment.\102\ Because this final rule 
is limited in its application to employment, it may not be sufficient 
for an entity covered by Title IX, Section 504, and Section 1557 and 
this part to rely on a notice conveying the content required in Sec.  
92.8(a)(1)-(7) as meeting its notice obligations under the regulations 
implementing Section 504 and Title IX. Accordingly, proposed paragraph 
(g), which is now re-designated as paragraph (h) of this final rule, no 
longer treats an entity's compliance with particular paragraphs of 
Sec.  92.8 as constituting compliance with the notice provisions of 
other Federal civil rights authorities.
---------------------------------------------------------------------------

    \102\ See 45 CFR 86.9(a)(1) (requiring a recipient to provide a 
notice of individuals' rights to applicants for employment and to 
employees, among other groups of individuals); id. 84.8(a) 
(requiring a recipient to provide a notice of individuals' rights 
requiring notice to employees, among other groups of individuals).
---------------------------------------------------------------------------

    Specifically, Sec.  92.8(h) now clarifies that covered entities may 
combine the content of the notice in Sec.  92.8(a)(1)-(7) with the 
content of other notices as long as the combined notice clearly informs 
individuals of their civil rights under Section 1557 and this part. In 
addition to having flexibility with respect to combining notices, 
covered entities also have flexibility in determining the exact size 
and location of notices and taglines within their facilities as long as 
they do not compromise the intent of Sec.  92.8 to clearly inform 
individuals of their civil rights under Section 1557 and this part.
    The touchstone by which we will assess whether a covered entity's 
provision of notice and taglines is effective is whether the content is 
sufficiently conspicuous and visible that individuals seeking services 
from, or participating in, the health program or activity could 
reasonably be expected to see and be able to read the information.

[[Page 31398]]

    Although we encourage covered entities to post the notice of 
individuals' rights in one or more of the most prevalent non-English 
languages frequently encountered by covered entities in their 
geographic service areas, we decline to require such posting in the 
final rule because of the resource burdens and opportunity costs to 
covered entities. Posted taglines sufficiently alert individuals to the 
language assistance services available and appropriately balance the 
educational value of the notices with the burdens to covered entities.
    Given that we are not requiring covered entities to post notices in 
non-English languages, having taglines available in multiple languages 
is even more important to provide notice to individuals with limited 
English proficiency of the availability of language assistance 
services. Thus, we decline to reduce the number of languages in which 
taglines are required to appear, even for covered entities operating in 
smaller physical spaces. Covered entities have flexibility in 
determining the exact size and location of notices and taglines as long 
as they meet the requirements of this section.
    Comment: We received many comments recommending alternative 
approaches to the proposed rule's requirement for taglines. A few 
commenters opposed the requirement in proposed Sec.  92.8(d) as 
unnecessary because oral interpretation is generally available through 
the customer service telephone line listed on many consumers' health 
insurance cards. Some commenters suggested that the final rule should 
permit covered entities to include taglines on the inside of an 
envelope that a covered entity's health program or activity uses to 
mail a significant publication or a significant communication. A few 
commenters suggested replacing tagline text with an icon that would 
symbolize the availability of oral interpretation services. These 
commenters suggested that the icon would likely reach more language 
groups than taglines, and would also occupy substantially less space on 
significant publications and significant communications.
    Response: We decline to eliminate the tagline requirement because 
such an approach would not provide adequate notice of language 
assistance services. We appreciate that many health insurance issuers 
provide telephonic oral interpretation services through their customer 
service lines/call centers--a number that usually appears on an insured 
individual's health insurance identification card. We do not, however, 
regard the mere availability of this information as adequate notice to 
individuals with limited English proficiency of the availability of 
language assistance services, much less as notice of each of the 
components of paragraphs (a)(1)-(7) of Sec.  92.8. Moreover, this 
approach is not appropriate in all instances because not all covered 
entities rely on the use of an individual identification card.
    In addition, we decline to authorize placement of taglines on the 
inside of an envelope. Such a placement would diminish the visibility 
of the taglines, downgrade their importance, and fail to adequately 
notify individuals because envelopes are generally torn open and then 
discarded.
    With respect to use of an icon, we appreciate the commenters' 
suggestion and believe that it may hold promise in the future. However, 
we also decline to require the use of an icon in the final rule. At 
this point in time, use of an icon alone would not provide consumers 
with sufficient notice of the availability of language assistance 
services, which is the intent of Sec.  92.8(d).
    Comment: A small number of commenters provided feedback on the 
application of the requirement to post the notice and taglines in 
significant publications and significant communications that are small 
in size, such as brochures, postcards, targeted fliers, small posters, 
and those that are communicated through social media platforms. Some 
commenters recommended that the final rule exempt such communications 
and publications from the posting requirement in Sec.  92.8(f)(1)(i); 
others recommended that the final rule provide covered entities 
latitude to substantially shorten the notice and taglines for these 
publications and communications. Commenters advocating for either of 
these two positions stated that the limited amount of space in such 
publications and communications makes them an impractical medium for 
disclosures of civil rights.
    Other commenters opposed any exceptions for significant 
publications and significant communications that are small-sized, given 
the importance of notifying individuals about their rights under 
Section 1557, such as how to obtain auxiliary aids and services for 
individuals with disabilities and how to obtain language assistance 
services for individuals with limited English proficiency.
    Response: We agree that the notice and tagline requirements for 
small-sized significant publications and communications should be 
distinguished from the requirements for significant publications and 
significant communications that are not small-sized. We also agree with 
commenters who suggested that small-sized significant publications and 
significant communications are not well-suited to extensive civil 
rights disclosures and that they function to drive consumers to other 
sources of information, such as a covered entity's Web site, where the 
full civil rights notice and taglines are required by Sec.  
92.8(f)(iii). Furthermore, posting the full notice and all 15 taglines 
to small-sized publications and communications may obscure the content 
and message of the document, thus undermining the value of such 
publication or communication. As a result, we are modifying Sec.  
92.8(f)(1)(i) to exclude small-sized significant publications and 
communications from requirements to have a notice and at least 15 
taglines.
    We disagree, however, with fully exempting significant publications 
and significant communications that are small-sized from the notice and 
tagline requirements because these documents, such as tri-fold 
brochures, pamphlets, and postcards, often serve as a gateway for an 
individual to apply for, or participate in, a particular health program 
or activity. To this end, the final rule establishes a separate 
requirement for small-sized significant publications and significant 
communications: A covered entity must include a nondiscrimination 
statement in lieu of the full notice, and taglines in two non-English 
languages in lieu of all 15 taglines, on small-size significant 
publications and significant communications.
    Specifically, we moved most of the text from proposed paragraph (b) 
into a new paragraph (b)(1) and added paragraph (b)(2), which addresses 
the obligation to post a nondiscrimination statement that conveys the 
information in Sec.  92.8(a)(1) on small-sized significant publications 
and significant communications. Similarly, we moved most of the text 
from proposed paragraph (d) into a new paragraph (d)(1) and added 
paragraph (d)(2), which addresses the obligation to post taglines in at 
least the top two languages spoken by individuals with limited English 
proficiency in the relevant State or States on small-size significant 
publications and significant communications. Finally, we re-designated 
proposed paragraph (g) as paragraph (h) and we added new paragraphs 
(g)(1)-(2) to address the posting standards applicable to small-sized 
significant publications and significant communications.
    In choosing a lower threshold than at least the top 15 languages 
spoken by

[[Page 31399]]

individuals with limited English proficiency, we chose a concrete 
number of languages, rather than a threshold formulated as a 
percentage, because on average about two-thirds of the limited English 
proficient population in each State \103\ is reached by the top two 
languages spoken by individuals with limited English proficiency in 
that State. Moreover, requiring a specific number of taglines makes the 
impact of the requirement predictable for all covered entities in 
planning how these two taglines, along with the nondiscrimination 
statement, will fit on their significant communications and significant 
publications that are small-sized. In almost all States, the top two 
languages spoken by individuals with limited English proficiency 
captures Spanish and the other most prevalent non-English language. 
This approach in paragraphs (b)(2), (d)(2), and (g)(1)-(2) of Sec.  
92.8 is more streamlined than requiring the full notice and all 15 
taglines but still will inform the majority of individuals with limited 
English proficiency of their rights to be protected from discrimination 
under Section 1557 and this part.
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    \103\ In estimating this percentage, we used the same data 
sources, infra notes 109 and 110, and the same methodology described 
in the discussion, infra, that we used to identify the languages 
under the State-based approach in which the Director will translate 
the sample notice and taglines, as required by Sec.  92.8(c) and (e) 
of the final rule.
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    In addition, we have added a sample nondiscrimination statement in 
Appendix A that conveys the information in Sec.  92.8(a)(1), for which 
the Director will also provide translations. Accordingly, we have 
modified paragraph (c) of Sec.  92.8 to state that the Director will 
provide translations of the sample nondiscrimination statement. The 
translations of the sample notice and sample nondiscrimination 
statement are for covered entities' discretionary use only--the final 
rule does not require the posting of the notice or nondiscrimination 
statement in non-English languages.
    Comment: A substantial majority of commenters on Sec.  92.8 
provided feedback on the methodology for determining the number of 
languages in which covered entities will be required to post taglines. 
Some commenters supported the proposed rule's national methodology 
because of its simplicity, particularly for covered entities that 
operate in multiple States. Conversely, other commenters expressed 
concern that the national standard fails to account for concentrations 
of particular limited English proficient communities within areas 
served by covered entities' health programs and activities, including 
Native American languages spoken by those served in Tribal health 
programs. One commenter recommended that if the final rule includes a 
national standard, OCR should require taglines in the top 25 languages 
spoken nationally by individuals with limited English proficiency. This 
commenter further recommended that when calculating the top 25 
languages, OCR should rely on a data set that ``unbundles'' bundled 
language groups, such as ``other Asian languages,'' because some 
languages represented in bundled categories may be highly prevalent in 
the service area of a particular covered entity's health program or 
activity.\104\
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    \104\ In October 2015, for the second time since the U.S. Census 
Bureau's American Community Survey (ACS) began, the Census Bureau 
released detailed tables that unbundle the 39 languages and language 
groups that ACS publishes annually through its American Factfinder 
data set. U.S. Dep't of Commerce, U.S. Census Bureau, Data, Detailed 
Languages Spoken at Home and Ability to Speak English for the 
Population 5 Years and Over: 2009-2013, https://www.census.gov/data/tables/2013/demo/2009-2013-lang-tables.html [hereinafter U.S. Census 
Bureau, ACS 2009-2013 Detailed Languages] (last visited May 3, 
2016). The unbundled data includes 380 possible languages or 
language groups spoken by individuals who speak English less than 
``very well.'' In the proposed rule, HHS explained that it 
calculated the top 15 languages spoken nationally by individuals 
with limited English proficiency by relying on the American 
Factfinder data set that bundles languages. See 80 FR 54172, 54179 
n.30 (Sept. 8, 2015) (describing the tagline methodology).
---------------------------------------------------------------------------

    Most commenters disfavoring a national methodology recommended that 
the languages in which covered entities must post taglines should be 
the top 15 languages spoken State-wide by individuals with limited 
English proficiency. Commenters explained that the State-wide threshold 
would be more attuned to the diversity of languages spoken by 
individuals with limited English proficiency in each State and would 
align with Federal regulations governing the Marketplaces and qualified 
health plan issuers.\105\ Some of these commenters also recommended 
that the final rule should require covered entities that serve 
individuals in multiple States to post more than 15 taglines if the 
composite list of each State's list aggregates to a total of more than 
15 languages. These commenters reasoned that such an interpretation is 
necessary to further the purpose of addressing the diversity of 
languages spoken by individuals with limited English proficiency served 
by a particular covered entity.
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    \105\ 45 CFR 155.205(c)(iii)(A) (beginning no later than 
November 1, 2016, requiring taglines on Web site content and 
documents that are critical for obtaining coverage or access to 
health care services through a qualified health plan for certain 
individuals in at least the top 15 languages spoken by individuals 
with limited English proficiency in the relevant State; documents 
are deemed to be critical for obtaining health insurance coverage or 
access to health care services through a qualified health plan if 
they are required to be provided by law or regulation to certain 
individuals); see infra note 107 (describing other tagline 
requirements applicable to qualified health plan issuers as a result 
of market-wide regulations).
---------------------------------------------------------------------------

    Other commenters recommended other approaches, such as requiring 
taglines in languages in which at least 10% of individuals with limited 
English proficiency county-wide are exclusively literate,\106\ or, in 
languages spoken by at least 5% of individuals with limited English 
proficiency or 500 individuals with limited English proficiency in the 
covered entity's service area, whichever yielded the greater number of 
languages. Still other commenters recommended that the rule allow 
covered entities to choose between a State-wide and a national 
methodology in determining the languages in which to post taglines, 
depending on the geographic scope of the intended audience for the 
``significant publication or significant communication'' to which the 
taglines are posted. These commenters explained that a covered entity 
that operates nationally may choose to post on the covered entity's Web 
site taglines in languages based on a nationwide threshold but may 
choose to include on a significant communication to an individual 
taglines in languages based on a State-wide threshold for the State in 
which the individual resides.
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    \106\ This 10% county-level threshold for taglines applies to 
group health plans and health insurance issuers. See, e.g., 45 CFR 
147.136(e)(2)(iii), (e)(3) (HHS regulations); 29 CFR 2590.715-
2719(e)(2)(iii), (3) (DOL regulations).
---------------------------------------------------------------------------

    Response: In response to commenters' recommendations, Sec.  
92.8(d)(1) of the final rule requires covered entities to post taglines 
in at least the top 15 languages spoken by individuals with limited 
English proficiency of the relevant State or States. Accordingly, 
paragraphs (d)(1)-(2) of Sec.  92.8 refer to this State-based 
methodology rather than a national methodology. This threshold 
captures, on average, 90% of each State's LEP population.
    We adopt a State-based approach for three main reasons. First, a 
State-based methodology is more attuned to the diversity of languages 
spoken by individuals with limited English proficiency and thus 
provides notice to more individuals with limited English proficiency.
    Second, this State-wide approach better harmonizes with the number 
of languages in which taglines must be provided by Marketplaces and 
qualified health plan issuers under 45 CFR

[[Page 31400]]

155.205(c)(2)(iii)(A).\107\ Section 92.8 of this final rule applies to 
all entities covered by Section 1557, but for Marketplaces and 
qualified health plan issuers that are subject to the tagline 
requirements at 45 CFR 155.205(c)(2)(iii)(A) and Sec.  92.8 of this 
final rule, our State-wide methodology lessens the burden to which 
Marketplaces and qualified health plan issuers might otherwise be 
subject.
---------------------------------------------------------------------------

    \107\ Qualified health plan issuers are also bound by the 
tagline requirement in market-wide regulations at 45 CFR 147.136(e). 
Under Sec.  147.136(e), taglines must appear on certain notices and 
on a health plan or issuer's summary of benefits and coverage, in 
languages in which 10% of individuals with limited English 
proficiency county-wide are exclusively literate. See, e.g., 45 CFR 
147.136(e)(2)(iii), (e)(3). This methodology applies to a narrower 
set of documents than those to which the tagline requirement applies 
in Federal regulations governing Marketplaces and qualified health 
plan issuers. Compare 45 CFR 147.136(e)(2)(iii) (requiring taglines 
on internal claims and appeals notices) and 45 CFR 147.200(a)(5) 
(requiring taglines on summaries of benefits and coverage) with 45 
CFR 155.205(c)(2)(iii)(A) (requiring taglines on Web site content 
and documents that are critical for obtaining health insurance 
coverage or access to health care services through a qualified 
health plan). For CMS's most recent technical guidance on the 
tagline requirement at 45 CFR 155.205(c)(2)(iii)(A), see Guidance 
and Population Data for Exchanges, Qualified Health Plan Issuers, 
and Web-Brokers to Ensure Meaningful Access by Limited-English 
Proficient Speakers Under 45 CFR 155.205(c) and 156.250 (Mar. 30, 
2016), https://www.cms.gov/cciio/resources/regulations-and-guidance/#, Language Access Guide for Exchanges, Qualified Health 
Plan (QHP) Issuers, and Web-Brokers (last visited May 3, 2016).
---------------------------------------------------------------------------

    Third, a county-level approach is impractical because detailed 
language data are not available for counties with populations of less 
than 100,000. For counties with populations of at least 100,000 for 
which detailed language data are available, there are limited data for 
individuals who speak English less than ``very well'' and speak a non-
English language other than Spanish.\108\ For county-level data that 
are available, moreover, we are concerned that sampling error would 
render many estimates of small language populations unreliable when 
assessed within the small geographic area of a county.
---------------------------------------------------------------------------

    \108\ U.S. Census Bureau, ACS 2009-2013 Detailed Languages, 
supra note 104 (detailing data parameters in the user notes). At 
least 25,000 individuals who speak English less than ``very well'' 
must speak the same language for the ACS county-level data to 
identify such language speakers. Id.
---------------------------------------------------------------------------

    With regard to the data used to identify the languages under the 
State-based methodology in which the Director will translate the sample 
notice, sample nondiscrimination statement, and taglines, as required 
by Sec.  92.8(c) and (e) of the final rule, we rely on the most recent 
bundled and unbundled five-year \109\ data available from the U.S. 
Census Bureau. We rely on the data set that estimates the prevalence of 
foreign-language speakers who speak English less than ``very well,'' 
\110\ and we made technical adjustments, such as to remove any spoken 
languages that do not have a written equivalent in which the Director 
could translate a tagline.
---------------------------------------------------------------------------

    \109\ We rely on the American Community Survey (ACS) 5-year data 
set because its stability is superior to the 1-year data set, 
especially when analyzing small populations. U.S. Census Bureau, 
American Community Survey, When to Use 1-year, 3-year, or 5-year 
Estimates, https://www.census.gov/programs-surveys/acs/guidance/estimates.html (last visited May 3, 2016). The U.S. Census Bureau 
has discontinued the ACS 3-year data set, which is the data set on 
which we relied in the proposed rule. U.S. Census Bureau, Census 
Bureau Statement on the 3-Year American Community Survey Statistical 
Product (Feb. 2, 2015), https://content.govdelivery.com/accounts/USCENSUS/bulletins/eeb4af (last visited May 3, 2016).
    \110\ U.S. Dep't of Commerce, U.S. Census Bureau, American 
FactFinder, Language Spoken at Home by Ability to Speak English for 
the Population 5 Years and Older, ACS Estimates by State: 2010-2014 
(released Dec. 2015); U.S. Census Bureau, ACS 2009-2013 Detailed 
Languages, supra note 104. We are not aware of a public data source 
providing as robust data as the ACS that estimates the languages in 
which individuals with limited English proficiency read, understand, 
or speak. Thus, we are relying on a data set identifying individuals 
who have a limited ability to speak English as a proxy for limited 
English proficiency population.
---------------------------------------------------------------------------

    We intend the threshold's application in Sec.  92.8(d)(1)-(2), 
which applies to the ``relevant State or States,'' to permit covered 
entities that serve individuals in more than one State \111\ to 
aggregate the number of individuals with limited English proficiency in 
those States to determine the top 15 languages required by Sec.  
92.8(d)(1), or the top 2 languages required by Sec.  92.8(d)(2) where 
each respective provision applies.\112\ The languages produced from 
this aggregation are static with respect to the posting requirement in 
Sec.  92.8(f). Using one of the three posting methods as an example--
the posting of the taglines in a covered entity's physical locations 
required by Sec.  92.8(f)(1)(ii)--a covered entity that operates 
multiple health programs serving individuals within various States, or 
that operates a health program with a multi-State service area, 
complies with Sec.  92.8(f)(1)(ii) when it posts, in its physical 
locations across the States it serves, taglines in at least the top 15 
languages spoken by the aggregate limited English proficient 
populations of those States, rather than of each individual State. We 
do not intend to require a covered entity that operates health programs 
in multiple States (or in States nationwide), or that administers a 
health program with a multi-State service area (or even a nationwide 
service area), to tailor the taglines for the specific State in which 
the entity is physically located or in which an individual with limited 
English proficiency, with whom the entity communicates, lives. This 
interpretation best balances the burden on covered entities with the 
notification of language assistance services to individuals required by 
Sec.  92.8(d).\113\
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    \111\ This categorization includes covered entities that operate 
multiple health programs serving individuals within various States 
or that operate a health program with a multi-State service area.
    \112\ For a similar approach, see HHS Notice of Benefit and 
Payment Parameters for 2016; Final Rule, 80 FR 10750, 10788 (Feb. 
27, 2015) (describing the Department's interpretation of 45 CFR 
155.205(c)(2)(iii)(A) and (B) for entities with multi-State service 
areas).
    \113\ As newer ACS data become available with respect to the 
data sets on which we base our methodology, we will determine if and 
when the at least top 15 languages spoken by individuals with 
limited English proficiency State-wide change, warranting the 
Director to make available notices and taglines translated in 
additional non-English languages.
---------------------------------------------------------------------------

    We reiterate, however, that the requirements of Sec.  92.8(d)(1)-
(2) establish a floor; covered entities are free to include taglines in 
additional languages beyond 15 languages. For instance, a covered 
entity that has chosen to aggregate languages may choose to post 
taglines in all languages on the aggregated list rather than posting 
just the top 15 languages. Moreover, a covered entity that that 
operates health programs in multiple States or that administers a 
health program with a multi-State service area may decide not to 
aggregate. Instead, the entity may choose to tailor the taglines posted 
in its physical locations for the specific State in which the physical 
location exists; similarly, the entity may choose to tailor the 
taglines on a certain significant communication based on the State in 
which an individual with limited English proficiency, with whom the 
entity communicates, lives.
    In addition, we note that complying with Sec.  92.8(d)(1)-(2) is 
not a substitute for complying with the prohibition of national origin 
discrimination as it affects individuals with limited English 
proficiency under Section 1557 or this part, including the general 
nondiscrimination provisions in Sec.  92.101 and the meaningful access 
provisions in Sec.  92.201 of this final rule. Thus, although this 
section identifies the languages in which covered entities must post 
taglines, it does not relieve those entities of the separate obligation 
to take reasonable steps to provide meaningful access to individuals 
with limited English proficiency who communicate in other languages.
    Comment: One commenter recommended including American Sign

[[Page 31401]]

Language as a language for which a posted tagline be required in Sec.  
92.8(d). This commenter stated that taglines denoting the availability 
of American Sign Language Interpretation could communicate this message 
by displaying still images, rather than a written language.
    Response: We decline to include American Sign Language as a 
language for which a tagline is required in Sec.  92.8(d)(1)-(2) 
because the notice of individuals' rights in Sec.  92.8(a)(2), which 
must be posted in a conspicuously-visible font size and location just 
like taglines, addresses this issue. Specifically, paragraph (a)(2) 
requires that the notice of individuals' rights state that the covered 
entity provides auxiliary aids and services, which include sign 
language interpreters, to individuals with disabilities when necessary 
to provide such individuals an equal opportunity to benefit from the 
entity's health programs or activities.
    Comment: A few commenters recommended that the final rule prescribe 
the location of taglines at or near the beginning of significant 
publications and significant communications. These commenters provided 
anecdotal evidence that individuals with limited English proficiency 
who received multi-page English notices requiring time-sensitive 
responses failed to see taglines appearing on the last page. Commenters 
explained that to the individuals' detriment, they discarded the 
notices without responding, resulting in termination of health 
insurance coverage and other negative outcomes. A number of commenters 
recommended that covered entities be required to include the text of 
all required taglines, not just the in-language link, conspicuously on 
the homepage of their Web sites.
    Response: Although we encourage covered entities to include notices 
and taglines at the beginning of significant publications and 
significant communications to ensure that they are meaningfully 
accessible to the consumer, we decline to require this prescriptive 
approach as part of the final rule. In some circumstances, such as 
lengthy publications, it may be necessary to include the notice and 
taglines at the beginning of a document to meet the requirements of 
Sec.  92.8(f)(1)(i) and (g)(1)-(2); in others, posting elsewhere, 
including on a separate insert \114\ accompanying the English-language 
significant publication or significant communication, may be adequate. 
Furthermore, in today's increasingly electronic and digital age where 
covered entities may make their first impressions through Web content 
(often on small mobile devices), we are sensitive to covered entities' 
need for autonomy in designing and managing the appearance of their 
public internet home pages.
---------------------------------------------------------------------------

    \114\ For instance, Medicare Advantage Plans, Medicare Advantage 
Prescription Drug Plans, and Medicare Prescription Drug Plans must 
include a ``CMS Multi-Language Insert'' in the text of certain 
documents or as a separate page included with certain documents. 
U.S. Dep't of Health & Human Servs., Centers for Medicare & Medicaid 
Servs., Medicare Marketing Guidelines, Sec.  30.5.1, 7-8 (Jul. 2, 
2015), https://www.cms.gov/Medicare/Health-Plans/ManagedCareMarketing/FinalPartCMarketingGuidelines.html.
---------------------------------------------------------------------------

    Although the law requires that individuals receive sufficient 
notice of language assistance services available to assist individuals 
with limited English proficiency in understanding the content of a 
covered entity's Web site, we believe that the use of in-language links 
permitted under this provision of the proposed rule is the approach 
that best balances notice to individuals against burden to covered 
entities.
    Comment: Some commenters described the proposed requirement to post 
the notice in ``significant publications and significant 
communications'' as onerous. One commenter recommended that health 
plans provide the notice to individuals on an annual basis, along with 
individuals' annual enrollment package, instead of on each 
``significant publication and significant communication.'' Some 
commenters requested that OCR include, in regulation text, the examples 
of ``significant publications and significant communications'' we 
provided in the preamble to the proposed rule, specifically outreach 
publications and patient handbooks. A few commenters requested that OCR 
consult with other Federal agencies on the scope of ``significant 
publications and significant communications'' to establish a common 
understanding of this term so that covered entities whose publications 
and communications are regulated by more than one Federal agency are 
not subject to conflicting standards.
    Other commenters were concerned about OCR's statement in the 
preamble of the proposed rule that OCR intended the scope of 
``significant publications and significant communications'' to include 
not only documents meant for the public but also individual letters or 
notices to an individual, such as a letter to a consumer notifying the 
individual of a change in benefits. These commenters observed that, 
pursuant to existing Federal and State law, many letters already 
include disclosures and other legally mandated information; 
consequently, the requirement to post both the notice and taglines 
required in proposed Sec.  92.8(a) and (d), respectively, might dilute 
the primary message of the letter and confuse or frustrate consumers. 
Some commenters requested clarification on how ``vital documents'' as 
used in the Department's LEP Guidance relates to ``significant 
publications and significant communications'' in Sec.  92.8(f)(1)(i) of 
the proposed rule.
    Response: We disagree with commenters' characterization of Sec.  
92.8(f)(1)(iii) as ``onerous.'' We acknowledge that compliance with 
this subsection may impose some limited burdens on covered entities. 
However, these burdens are outweighed by the benefits that Sec.  
92.8(f)(1)(iii) will generate for individuals with limited English 
proficiency by making them aware, in their own languages, of the 
availability of language assistance services. Notifying individuals of 
their rights under Section 1557 and this part, including the 
availability of language assistance services for individuals with 
limited English proficiency and the availability of auxiliary aids and 
services for persons with disabilities, is critical to providing an 
equal opportunity to access health care and health coverage. For these 
reasons, OCR intends to interpret ``significant communications and 
significant publications'' broadly, which is consistent with the notice 
provisions of other Federal civil rights authorities, such as Section 
504 \115\ and Title IX.\116\
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    \115\ 45 CFR 84.8(a)-(b) (indicating that methods of notifying 
individuals' of their rights under Section 504 may include 
``publication in newspapers and magazines, placement of notices in 
[Federal financial assistance] recipients' publication[s], and 
distribution of memoranda or other written communications'' as well 
as ``recruitment materials or publications containing general 
information that . . .[the recipient] makes available to 
participants, beneficiaries, [and] applicants. . . .'').
    \116\ 45 CFR 86.9(a)(2)(i) (requiring initial notice of 
individuals' rights to appear in local newspapers, newspapers and 
magazines published by the recipient of Federal financial 
assistance, and ``memoranda or other written communications 
distributed to every student . . . of such recipient'') and 
86.9(b)(1) (requiring each recipient of Federal financial assistance 
to ``prominently include a statement of . . . [the recipient's 
nondiscrimination policy] in each announcement, bulletin, catalog, 
or application form which it makes available . . .'').
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    We decline to limit the posting requirement in Sec.  92.8(f)(iii) 
to an annual frequency. The notice requirements in other Federal civil 
rights laws on which we modeled Sec.  92.8 do not contain a similar 
limitation. Moreover we also note that not every covered entity sends 
annual notices.

[[Page 31402]]

    We also decline to enshrine a list of examples of ``significant 
publications and significant communications'' in regulation for two 
main reasons. First, the final rule applies to such a diverse range of 
covered entities that codifying examples likely would not provide 
meaningful guidance to the full spectrum of covered entities regulated. 
Second, we intend to maximize covered entities' flexibility, and each 
covered entity is in the best position to determine which of its 
communications and publications with respect to its health programs and 
activities are significant.
    In response to commenters who requested that ``significant 
publications and significant communications'' be limited to documents 
intended for the public, rather than those intended for specific 
individuals, we decline to limit the intended scope of such documents 
to those aimed only at the public at-large. We intend the scope of 
significant publications and significant communications to include not 
only documents intended for the public, such as outreach, education, 
and marketing materials, but also written notices requiring a response 
from an individual and written notices to an individual, such as those 
pertaining to rights or benefits. We have no reasoned basis to 
distinguish and exempt significant publications and significant 
communications intended for specific individuals from significant 
publications and significant communications intended for the public at-
large. Indeed, in some situations, a written notice with information 
tailored to a specific individual's benefits or participation may be 
even more important to that individual than a significant publication 
or significant communication conveying information to the public. 
Accordingly, an individual's awareness of his or her rights under 
Section 1557, such as the availability of auxiliary aids and services 
for persons with disabilities (required in Sec.  92.8(a)(2) to be in 
the nondiscrimination notice) is just as important as information 
communicated to the public at-large.\117\
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    \117\ For comparison, the meaningful access requirements of 
other Federal regulations governing qualified health plan issuers 
apply to all information that is critical for obtaining health 
insurance coverage or access to health services through the 
qualified health plan, including ``applications, forms, and 
notices'' and information is deemed to be critical for obtaining 
health insurance coverage or access to health care services if the 
issuer is ``required by law or regulation'' to provide the document 
to certain individuals. See 45 CFR 156.250. CMS's annual guidance to 
qualified health plan issuers lists examples of documents to which 
CMS interprets Sec.  156.250 to apply, such as certain 
correspondence and notifications, summary of benefits and coverage 
disclosures, formulary drug lists, provider directories, and a 
plan's explanation of benefits or similar claim processing 
information. U.S. Dep't of Health & Human Servs., Centers for 
Medicare & Medicaid Servs., Final 2017 Letter to Issuers in the 
Federally-facilitated Marketplaces, 80-81 (Feb. 29, 2016), https://www.cms.gov/CCIIO/Resources/Regulations-and-Guidance/Downloads/Final-2017-Letter-to-Issuers-2-29-16.pdf.
---------------------------------------------------------------------------

    The HHS LEP Guidance uses the term ``vital documents'' to refer to 
the documents for which covered entities should prioritize written 
translations for individuals with limited English proficiency.\118\ The 
HHS LEP Guidance does not define vital documents. Rather, the Guidance 
states that ``[w]hether or not a document (or the information it 
solicits) is `vital' may depend upon the importance of the program, 
information, encounter, or service involved, and the consequence to the 
LEP person if the information in question is not provided accurately or 
in a timely manner.'' \119\ The HHS LEP Guidance also provides examples 
of documents likely to be ``vital,'' such as ``consent and complaint 
forms, . . . [ ] written notices of eligibility criteria, rights, 
denial, loss, or decreases in benefits or services . . . [ ] [and] 
[a]pplications to participate in a recipient's program or activity or 
to receive recipient benefits or services.'' \120\
---------------------------------------------------------------------------

    \118\ HHS LEP Guidance, supra note 49, 68 FR at 47318-19.
    \119\ Id. at 47318.
    \120\ Id. at 47319.
---------------------------------------------------------------------------

    OCR intends for ``vital documents'' to represent a subset of 
``significant communications and significant publications'''' in which 
covered entities must post the notice (or nondiscrimination statement 
in Sec.  92.8(b), where applicable) and taglines required by Sec.  
92.8(d) and (f), among other electronic and physical locations. In 
clarifying this point, we emphasize that the HHS LEP Guidance uses the 
term ``vital documents'' to address how a covered entity should meet 
its Title VI obligations to translate entire documents. By contrast, we 
refer to ``significant communications and significant publications'' in 
this rule to identify the documents in which covered entities are 
required to post the notice of individuals' rights (or 
nondiscrimination statement, where applicable) and taglines. We are not 
adopting an across-the-board requirement for covered entities to 
translate certain written documents into a threshold number of 
languages.
    Comment: Some commenters recommended that OCR provide funding and 
other resources to non-profit organizations for the purpose of creating 
a national social media campaign to publicize the requirements of 
Section 1557.
    Response: It is beyond scope of the final rule for OCR to fund 
organizations' education and outreach efforts. OCR continues, however, 
to conduct outreach and provide technical assistance to inform covered 
entities of their obligations and individuals of their rights under 
Federal civil rights laws, including Section 1557 and this part. OCR 
will continue to disseminate, via web and social media platforms, fact 
sheets and other useful materials to covered entities and individuals.
    Comment: OCR received a number of comments suggesting revisions to 
the sample notice in Appendix A and the sample tagline in Appendix B to 
the proposed rule, such as revisions to improve adherence to plain 
language writing principles. For example, with respect to the sample 
notice, a few commenters recommended revisions with respect to the 
provision of language assistance services: Adding the word 
``qualified'' prior to the word ``interpreters,'' which is listed as a 
type of language assistance service; replacing ``first language'' with 
``primary language''; replacing ``translated into other languages'' 
with ``written in other languages''; and deleting ``when needed to 
communicate effectively with us.''
    One commenter objected to the conditional tense of the sample 
tagline in Appendix B, which stated that ``[i]f you speak [insert 
language], language assistance services may be available to you . . . 
,'' expressing concern that it might deter an individual from asking 
for or about language assistance services. In addition, commenters 
suggested that the conditional phrasing of ``may be available'' is 
inconsistent with covered entities' obligations under Sec.  92.201 to 
take reasonable steps to provide meaningful access to each individual 
with limited English proficiency.
    A few commenters recommended that the sample tagline in Appendix B 
be shortened but offered no specific recommendations on shorter 
language. Some commenters suggested that OCR consumer test the sample 
notice in Appendix A of the proposed rule before providing it as a 
sample in the final rule.
    Response: We share commenters' views that the sample notice should 
clearly convey civil rights information, which can often be complex. We 
agree with the specific revisions from commenters to improve the sample 
notice's statement about a covered entity's provision of language 
assistance services. We have modified Appendix A to the final rule to 
reflect these

[[Page 31403]]

revisions, and have made technical revisions to include OCR's contact 
information for filing a complaint. In our view, the sample notice, 
with these modifications, adequately apprises individuals of their 
civil rights under Section 1557 and this part without providing 
irrelevant or confusing information. We remind covered entities that 
nothing in the final rule prohibits covered entities from drafting 
their own notices to meet the requirements of Sec.  92.8(a)(1)-(7), 
which covered entities are free to consumer test.
    In addition, we have added a nondiscrimination statement to 
Appendix A that covered entities can post on significant publications 
and significant communications that are small-sized.
    We appreciate commenters' attention to the details of the sample 
tagline's phrasing. We have modified Appendix B to the final rule to 
address commenters' concerns that the tagline's conditional wording 
might deter an individual from asking for or about language assistance 
services. With technological advancements in language assistance 
services, we are confident that covered entities have the ability, at a 
minimum, to obtain qualified oral interpretation services in the 
languages in which covered entities will provide taglines, consistent 
with Sec.  92.8(d)(1)-(2); thus, the sample tagline as modified states 
that language services ``are'' available. In addition, we replaced the 
word ``contact'' with ``call'' to simplify the vocabulary used for 
average literacy levels. The modifications we have made amplify 
taglines' function as a critical gateway to language assistance 
services. Taglines derive value not only from informing individuals 
with limited English proficiency of language assistance services but 
also from prompting individuals to contact the covered entity to obtain 
language assistance. We decline to shorten the sample tagline because 
we are concerned that doing so would compromise the tagline's message 
and intent. We remind covered entities that Appendix B is a sample; 
covered entities are free to develop their own taglines as long as they 
provide taglines consistent with Sec.  92.8(d)(1)-(2) of this part.
Summary of Regulatory Changes
    For the reasons described in the proposed rule and considering the 
comments received, we have modified Sec.  92.8 and Appendices A and B 
to part 92 as follows:
    In Sec.  92.8(a), we made technical modifications to paragraph (a) 
and paragraphs (a)(1)-(3). In paragraph (a) we replaced the conjunction 
``or'' with ``and.'' In paragraph (a)(1), we clarified that the 
nondiscrimination statement of the notice applies to the health 
programs and activities of a covered entity. In paragraph (a)(2), we 
inserted the phrase ``for individuals with disabilities'' after 
``qualified interpreters'' because the final rule now defines qualified 
interpreters for individuals with disabilities separately from 
qualified interpreters for individuals with limited English 
proficiency. In paragraph (a)(3), we added examples of language 
assistance services to promote alignment with paragraph (a)(2), which 
provides examples of auxiliary aids and services.
    Most of the text in proposed Sec.  92.8(b) is now reflected in new 
paragraph (b)(1). We added paragraph (b)(2) that requires a covered 
entity to post a nondiscrimination statement consistent with newly-
designated paragraph (g)(1), which applies to significant publications 
and significant communications that are small-sized. In newly-
designated paragraph (b)(1) and (f)(1), we eliminated ``English-
language'' before ``notice'' to avoid the incongruous result that a 
significant publication or significant communication written in a non-
English language must include a notice written in English.
    In Sec.  92.8(c), we added language to convey OCR's plans to 
translate the sample nondiscrimination statement for covered entities 
to use at their discretion.
    In paragraph (d) of Sec.  92.8, we added paragraph designations (1) 
and (2) to distinguish the final rule's tagline requirements for 
significant publications and significant communications that are not 
small-sized from those that are small-sized. Most of the text in 
proposed paragraph (d) is now reflected in paragraph (d)(1). In newly-
designated (d)(1), we replaced the national threshold with a threshold 
requiring taglines in at least the top 15 languages spoken by the 
limited English proficient population of the relevant State or States. 
In addition, we added a reference to the posting requirement in 
paragraph (f)(1) of Sec.  92.8 for clarity. Paragraph (d)(2) identifies 
the tagline requirement for significant publications and significant 
communications that are small-sized. In paragraphs (c) and (e) of Sec.  
92.8, we replaced the national threshold with a reference to the 
languages triggered by the State-wide methodology described in 
paragraph (d)(1).
    In Sec.  92.8(f), we revised paragraph (f)(1) and paragraphs 
(f)(1)(i) and (iii). Specifically, in paragraph (f)(1), we made a 
technical revision to remove an errant reference to paragraph (b) and 
we replaced the reference to paragraph (d) with (d)(1) to conform to 
the new paragraph designations of the final rule. In Sec.  
92.8(f)(1)(i), we replaced the conjunction ``or'' with ``and'' as a 
technical revision to align the text with the same technical revision 
in Sec.  92.8(a). In addition, we excluded publications and significant 
communications that are small-sized from the requirement to post the 
notice conveying all content in Sec.  92.8(a)(1)-(7) and from the 
requirement to post all 15 taglines. In paragraph (f)(1)(iii), we 
clarified the location of the tagline when posted to the covered 
entity's Web site.
    We re-designated paragraph (g) in the proposed rule as paragraph 
(h) in this final rule. In the final rule, paragraph (g) addresses 
covered entities' requirements to post a nondiscrimination statement 
and taglines in significant publications and significant communications 
that are small-sized. Specifically, paragraph (g)(1) addresses the 
requirement to post a nondiscrimination statement and paragraph (g)(2) 
addresses the requirement to post taglines.
    Newly re-designated paragraph (h) no longer treats an entity's 
compliance with particular paragraphs of Sec.  92.8 as constituting 
compliance with the notice provisions of other Federal civil rights 
authorities. We revised the paragraph to address a covered entity's 
permissive authority to combine the content of the notice in paragraphs 
(a)(1)-(7) of this section with the content of other notices.
    In Appendix A to the final rule, we made the following changes to 
improve the plain language reading of the sample notice and to 
streamline the sample notice's messaging:
     Deleted ``sex stereotypes and gender identity'' from the 
end of the first sentence;
     Replaced ``worse'' with ``differently,'' and deleted the 
pronoun ``their'' prior to listing the bases on which the covered 
entity does not discriminate;
     Replaced ``first language'' with ``primary language'';
     Deleted ``when needed to communicate effectively with 
us'';
     Added ``qualified'' to modify ``interpreters'' with 
respect to serving individuals with limited English proficiency;
     Replaced ``translated into other languages'' with 
``written in other languages'';
     Added placeholders for a covered entity to provide not 
only the name of its civil rights coordinator but also the individual's 
title; and

[[Page 31404]]

     Added contact information for filing a complaint with OCR.
    In addition, we added a sample nondiscrimination statement in 
Appendix A for covered entities to post in significant publications and 
significant communications that are small-sized and accordingly 
broadened the title of Appendix A to reflect its revised scope.
    In Appendix B to the final rule, we modified the language by 
replacing ``may be available'' with ``are available'' and by adding 
language to improve the plain language reading of the sample tagline, 
by replacing ``[c]ontact'' with ``call.''
Subpart B--Nondiscrimination Provisions
    Subpart B of the final rule incorporates regulatory provisions 
implementing the application of the civil rights statutes referenced in 
Section 1557(a): Title VI, Title IX, the Age Act, and Section 504.
Discrimination Prohibited (Sec.  92.101)
    We proposed that Sec.  92.101 of subpart B prohibit discrimination 
on the basis of race, color, national origin, sex, age, or disability 
under any health program or activity to which Section 1557 or this part 
applies. We proposed that paragraphs (a) and (b) follow the structure 
of the implementing regulations for Title VI, Section 504, Title IX, 
and the Age Act by including a general nondiscrimination provision in 
paragraph (a) followed by a provision identifying specific 
discrimination prohibited in paragraph (b). In paragraph (c), we 
proposed to address exceptions to discrimination prohibited under the 
Title VI, Section 504, and Age Act regulations. We proposed that 
paragraph (d) effectuate technical changes in terminology to apply the 
provisions incorporated from other regulations to the covered entities 
obligated to comply with this proposed rule.
    In paragraph (a)(1) of Sec.  92.101 of the proposed rule, we 
restated the core objective of Section 1557(a), which prohibits 
discrimination on the grounds prohibited under Title VI (race, color, 
or national origin), Title IX (sex), the Age Act (age), or Section 504 
(disability) in any health program or activity to which this part 
applies.
    In paragraph (a)(2), we proposed to limit the ways in which the 
proposed rule applies to employment. We noted that except as provided 
in Sec.  92.208, which addresses employee health benefit programs, the 
proposed rule does not generally apply to discrimination by a covered 
entity against its own employees. Thus, the proposed rule would not 
extend to hiring, firing, promotions, or terms and conditions of 
employment outside of those identified in Sec.  92.208; such claims 
could continue to be brought under other laws, including Title VII, 
Title IX, Section 504, the ADA and the Age Discrimination in Employment 
Act,\121\ as appropriate. We invited comment on our proposal to exclude 
these forms of employment discrimination from the scope of the proposed 
rule.
---------------------------------------------------------------------------

    \121\ 29 U.S.C. 621-634.
---------------------------------------------------------------------------

    We proposed that paragraph (b) incorporate into the regulation the 
specific discriminatory actions prohibited by each civil rights statute 
which Section 1557 references. We considered harmonizing each of the 
specific discriminatory actions prohibited across each civil rights law 
addressed by Section 1557. We noted that although harmonization could 
reduce redundancy in the specific discriminatory actions incorporated 
that are similar to one another, harmonization would likely lead to 
confusion and unintended differences in interpretation that are subtle 
yet significant. We therefore proposed that paragraphs (b)(1)-(4) 
incorporate the specific discriminatory actions prohibited under each 
civil rights law on which Section 1557 is grounded. We sought comment 
on this proposed approach.
    We proposed that paragraph (b)(1) adopt the specific discriminatory 
actions prohibited by the Title VI implementing regulation, which 
appear at 45 CFR 80.3(b)(1)-(6).
    In paragraph (b)(2)(i), we proposed to address the specific 
prohibition of discrimination on the basis of disability with which 
recipients and State-based Marketplaces must comply. In paragraph 
(b)(2)(i), we proposed to adopt relevant provisions in the Section 504 
implementing regulation for federally assisted programs and activities 
at 45 CFR part 84. We provided that the provisions incorporated are the 
specific discriminatory actions prohibited at Sec.  84.4(b); the 
program accessibility provisions at Sec. Sec.  84.21 through 84.23(b); 
and the provisions governing education, health, welfare, and social 
services at Sec. Sec.  84.31, 84.34, 84.37, 84.38, and 84.41-84.55.
    We proposed that paragraph (b)(2)(ii) address the specific 
prohibitions of discrimination on the basis of disability with which 
the Department, including the Federally-facilitated Marketplaces, must 
comply. We proposed that this paragraph adopt relevant provisions in 
the Section 504 implementing regulation for federally administered 
programs and activities at 45 CFR part 85. We provided that the 
provisions adopted are the specific discriminatory actions prohibited 
at Sec.  85.21(b) and the program accessibility provisions at 
Sec. Sec.  85.41 through 85.42 and 84.44 through 84.51.
    We proposed that paragraph (b)(3) adopt the specific discriminatory 
actions prohibited by the Title IX implementing regulation, which 
appear at 45 CFR 86.3(b)(1) through (8).
    We also proposed that paragraph (b)(4) adopt the specific 
discriminatory actions prohibited by the Age Act implementing 
regulation, which appear at 45 CFR 91.11(b).
    In paragraph (b)(5), we proposed that the specific discriminatory 
actions prohibited in Sec.  92.101(b)(1) through (4) do not limit the 
general prohibition of discrimination in Sec.  92.101(a). We noted that 
this statement is consistent with regulatory provisions in the 
implementing regulations for Title VI at 45 CFR 80.3(b)(5) and the Age 
Act at 45 CFR 91.11(c).
    In paragraph (c), we proposed to incorporate the exceptions to the 
general prohibition of discrimination that appear in the implementing 
regulations for Title VI, Section 504, and the Age Act, as these 
exceptions have applied to health programs and activities for nearly 40 
years. We noted that, generally, the exceptions in the Title VI, 
Section 504, and Age Act implementing regulations provide that it is 
not discriminatory to exclude a person from the benefits of a program 
that Federal law limits to a protected class. We did not address the 
sex-based distinctions authorized in Title IX and its implementing 
regulation in the context of education programs or activities. We noted 
that these distinctions do not necessarily apply in the health care 
context. However, we also noted that Title IX and the Department of 
Education's Title IX regulations allow some single-sex education 
programs when certain requirements are met.\122\ We did not propose to 
prohibit separate toilet, locker room, and shower facilities where 
comparable facilities are provided to individuals, regardless of sex, 
but sought comment on what other sex-based distinctions, if any, should 
be permitted in the context of health programs and activities and the 
standards for permitting the distinctions.
---------------------------------------------------------------------------

    \122\ 34 CFR 106.34.
---------------------------------------------------------------------------

    Finally, we proposed that paragraph (d) effectuate technical 
changes to apply

[[Page 31405]]

the provisions incorporated in Sec.  92.101(b) and (c) to covered 
entities obligated to comply with the proposed rule by, among other 
things, replacing references to ``recipient'' in the incorporated 
provisions with ``covered entity.''
    The comments and our responses regarding Sec.  92.101 of subpart B 
are set forth below.
    Comment: A few commenters recommended that OCR add the words ``or 
deterred'' to the general prohibition of discrimination, so that it 
would read as follows: ``Except as provided in Title I of the ACA, an 
individual shall not, on the basis of race, color, national origin, 
sex, age, or disability, be excluded or deterred from participation in, 
be denied the benefits of, or otherwise be subjected to discrimination 
under any health program or activity to which this part applies.''
    Response: We believe the regulatory text, as it is currently 
written, conveys the intent to prohibit discriminatory deterrence from 
participation in a health program or activity. As OCR noted in the 
preamble to the proposed rule, paragraph (a)(1) of Sec.  92.101 
prohibits discrimination on the grounds prohibited under Title VI, 
Title IX, the Age Act, and Section 504 in any health program or 
activity to which this part applies. It is well established under these 
and other civil rights law that deterrence on the basis of a prohibited 
criterion is a form of discrimination. Similarly, discrimination on the 
basis of perceived race, color, national origin, sex, age, or 
disability is prohibited discrimination under the final rule, as it is 
under the authorities referenced in Section 1557.
    Comment: One commenter asked for clarification that, when 
scientific evidence supports differential treatment to ensure safe, 
high-quality care, such treatment would not be considered 
discriminatory. This commenter pointed out that the risks and benefits 
of treatments may differ due to characteristics such as age, gender, 
physical stature, and genetics. For example, based on the best 
available science, experts have judged that, for men and younger women, 
absent a known family history, the risks associated with radiation 
exposure from routine mammograms outweigh the benefits. Thus, practice 
guidelines suggest not administering screening mammograms to women 
under a certain age or to men.
    Response: Scientific or medical reasons can justify distinctions 
based on the grounds enumerated in Section 1557. We affirm this 
understanding of the final rule and believe that the regulatory text 
encompasses that approach.
    Comment: A few commenters asked that OCR prohibit discrimination in 
health programs or activities on the basis of ``health status, claims 
experience, medical history, or genetic information'' in addition to 
race, color, national origin, sex, age, and disability.
    Response: This rule implements Section 1557 of the ACA, which 
prohibits discrimination on the bases of race, color, national origin, 
sex, age, and disability. Accordingly, the commenters' request is 
beyond the scope of this rule. However, OCR recognizes that 
discrimination based on health status, claims experience, medical 
history, or genetic information can, depending on the facts, have a 
disparate impact that results in discrimination on a basis prohibited 
by Section 1557 and will process complaints alleging such 
discrimination accordingly. In addition, such discrimination also may 
violate other laws, such as other provisions of the ACA or the Genetic 
Information Nondiscrimination Act of 2008.\123\
---------------------------------------------------------------------------

    \123\ Supra note 3.
---------------------------------------------------------------------------

    Comment: Many commenters disagreed with the approach taken in the 
proposed rule to exclude discrimination in employment in areas other 
than employee health benefits. Commenters stated that the text of 
Section 1557 does not exclude employment discrimination; that Section 
1557 protects ``individuals,'' similar to Title IX's protection of 
``person[s];'' and that Title IX has been interpreted to protect not 
just students but employees of educational institutions. They also 
noted that Section 504 covers employment without exception and that 
Title VI covers employment discrimination when it affects beneficiaries 
of the covered program.\124\
---------------------------------------------------------------------------

    \124\ See North Haven Bd. of Educ. v. Bell, 456 U.S. 512 (1982).
---------------------------------------------------------------------------

    Response: For the reasons stated in the preamble to the proposed 
rule, OCR declines to interpret Section 1557 to grant itself 
jurisdiction (outside the context of employee health benefit plans 
under circumstances set out in Sec.  92.208) over claims of employment 
discrimination brought by employees against their employers that are 
covered entities. In holding that both Title IX and Section 504 broadly 
prohibit discrimination in employment, the Supreme Court relied heavily 
on the legislative history and underlying purpose of these 
statutes.\125\ By contrast, there is no indication that broadly 
prohibiting employment discrimination was a chief purpose of Section 
1557, which is focused on discrimination against participants in health 
programs and activities. To the extent that employees who are subject 
to discrimination are employed by entities that are covered under other 
employment discrimination laws, their complaints can be brought under 
those other laws. And as to employees of small employers, we do not 
believe that Congress in Section 1557 intended to alter, across the 
board, the longstanding exclusion of small employers from most 
employment discrimination laws. That said, nothing in this rule is 
intended to alter the established principles underlying the unlimited 
coverage of employment discrimination under both Title IX and Section 
504, and OCR will process such claims brought under these statutes 
under its longstanding procedures.\126\
---------------------------------------------------------------------------

    \125\ Id. at 522-30; Consolidated Rail v. Darrone, 465 U.S. 624, 
626 (1984).
    \126\ Moreover, nothing in this rule is intended to affect OCR's 
ability to address discrimination against patients on a prohibited 
basis, even where that discrimination is effectuated through actions 
against a covered entity's employee. If, for example, a medical 
practice that receives Federal financial assistance fired a Hispanic 
doctor because the practice no longer wished to serve the doctor's 
predominantly Hispanic, limited English proficient patients, OCR 
could pursue relief on behalf of affected patients to ensure that 
their access to the practice was not discriminatorily denied. Cf. 45 
CFR 80.3(c)(3) (Title VI applies where discrimination in employment 
tends to exclude individuals, on the basis of race, color, or 
national origin, from participation in a covered program).
---------------------------------------------------------------------------

    Comment: Some commenters asked that OCR clarify that Section 1557's 
prohibition of discrimination on the basis of race, color, national 
origin, sex, age, or disability includes intersectional discrimination 
that might affect persons who are part of multiple protected classes. 
For example, discrimination against an African-American woman could be 
discrimination on the basis of both race and sex.
    Response: OCR is clarifying here that Section 1557's prohibition of 
discrimination reaches intersectional discrimination. We believe that 
the regulatory text encompasses this approach.
    Comment: Commenters noted that various forms of harassment in 
health care can discourage individuals from seeking care and suggested 
that OCR include a separate provision that explicitly prohibits all 
forms of harassment based on protected characteristics, including 
sexual harassment and other forms of sex-based harassment.
    Response: OCR recognizes that various forms of harassment can 
impede an individual's ability to participate in

[[Page 31406]]

or benefit from a health program or activity and can thus constitute 
unlawful discrimination under Section 1557 and this part. Under Title 
IX, harassing conduct creates a hostile environment if the conduct is 
sufficiently serious to interfere with or limit an individual's ability 
to participate in or benefit from a program.\127\ For example, a 
provider's persistent and intentional refusal to use a transgender 
individual's preferred name and pronoun and insistence on using those 
corresponding to the individual's sex assigned at birth constitutes 
illegal sex discrimination if such conduct is sufficiently serious to 
create a hostile environment. Similarly, a provider using derogatory 
language because an individual is an unmarried sexually active or 
pregnant woman constitutes illegal sex-based harassment if such conduct 
is sufficiently serious to create a hostile environment. Consistent 
with the well-established interpretation of existing civil rights laws, 
OCR interprets the final rule to prohibit all forms of unlawful 
harassment based on a protected characteristic. Because it has been 
long-established that harassment is a form of prohibited discrimination 
under each of the laws cited in Section 1557 and this part, OCR does 
not believe a separate harassment provision is necessary and therefore 
declines to revise the proposed rule to include one.
---------------------------------------------------------------------------

    \127\ See, e.g., U.S. Dep't of Educ., Office for Civil Rights, 
Questions and Answers on Title IX and Sexual Violence (2014) at A-2, 
available at https://www2.ed.gov/about/offices/list/ocr/docs/qa-201404-title-ix.pdf.
---------------------------------------------------------------------------

    Comment: Many commenters recommended that OCR add regulation text 
stating that the Tri-Agency Guidance \128\ imposes legally enforceable 
obligations on entities covered by Section 1557 and that OCR has direct 
authority to enforce the Tri-Agency Guidance as well as the statutory 
and regulatory provisions therein articulated.\129\ The Tri-Agency 
Guidance describes how States can structure their application and 
enrollment processes in compliance with Title VI and program 
authorities to ensure that State agencies do not administer federally 
assisted public benefit programs in a manner that delays or denies 
services to eligible individuals, including children, living in mixed-
immigration status households.
---------------------------------------------------------------------------

    \128\ U.S. Dep't of Health & Human Servs. and U.S. Dep't of 
Agriculture, Policy Guidance Regarding Inquiries into Citizenship, 
Immigration Status and Social Security Numbers in State Applications 
for Medicaid, State Children's Health Insurance Program (SCHIP), 
Temporary Assistance for Needy Families (TANF), and Food Stamp 
Benefits (2000) [hereinafter Tri-Agency Guidance], https://www.hhs.gov/civil-rights/for-individuals/special-topics/national-origin/tri-agency/ (describing how States can structure 
their facially-neutral policies and practices to enroll eligible 
children and families of all national origins to reduce and 
eliminate access barriers).
    \129\ In addition to Title VI, the Tri-Agency Guidance addresses 
the Privacy Act of 1974 and program authorities authorizing and 
implementing Medicaid, CHIP, Temporary Assistance for Needy 
Families, and the Food Stamp Program. Id. at 1-2, Q2.
---------------------------------------------------------------------------

    Commenters asked for such regulatory language based on concerns 
that some covered entities administer their programs in a manner that 
discriminates based on national origin by delaying or denying access to 
public benefits based on practices such as: Erecting onerous 
documentation requirements; denying eligible applicants the opportunity 
to prove eligible income, identity, citizenship status, or immigration 
status; or making generalized assumptions about applicants' eligibility 
based on the actual or perceived immigration status or national origin 
of any family member.\130\ Commenters also expressed concern that some 
covered entities fail to understand the eligibility differences between 
various immigrant visa statuses and length of residency requirements, 
fail to distinguish between applicants and non-applicants in requests 
for Social Security numbers (SSNs), or require the disclosure of SSNs 
or immigration status without first explaining the use or 
confidentiality of this information.
---------------------------------------------------------------------------

    \130\ The Tri-Agency Guidance addresses the circumstances under 
which a State may not deny benefits when a non-applicant applying on 
behalf of a child, or a non-applicant household member, does not 
provide information regarding his or her citizenship status, 
immigration status or a Social Security number. The Guidance 
recommends that public benefits applications allow non-applicants to 
declare early in the process whether they are seeking benefits only 
on behalf of an eligible child or family member so that further 
inquiry is limited to factors necessary for determining the child's 
or family member's eligibility. Id. at 206, Q3-Q7.
---------------------------------------------------------------------------

    Response: OCR appreciates hearing from commenters on this important 
issue. However, we decline to explicitly reference, in regulation, the 
Tri-Agency Guidance and the authorities therein articulated for two 
main reasons. First, it is beyond the scope of this final rule to 
address program authorities over which OCR does not have enforcement 
authority.
    Second, regulatory modifications to the proposed rule are 
unnecessary to allow OCR to address a covered entity's policy or 
practice, such as requiring the disclosure of SSNs or certain 
citizenship or immigration status information, that raises compliance 
concerns under Section 1557's prohibition of national origin 
discrimination. OCR addresses such issues under Title VI.\131\ We 
similarly have authority to address such issues under Section 1557 and 
this part when, for example, an individual's complaint alleges that a 
covered entity has implemented a facially-neutral policy, such as 
requiring the disclosure of immigration status from applicants and non-
applicants, that has a disparate impact on individuals of a particular 
national origin group.
---------------------------------------------------------------------------

    \131\ See HHS OCR VRA with AZ Agencies, supra note 53, 
(resolving cognizable complaints of national origin discrimination 
under Title VI following implementation of an Arizona State law 
requiring State employees, in the administration of public benefits 
programs, to report ``discovered violations of federal immigration 
law'' to U.S. Immigrations and Customs Enforcement).
---------------------------------------------------------------------------

    Thus, to the extent that the Tri-Agency Guidance identifies 
situations that may raise Title VI compliance concerns and offers best 
practices for resolving those concerns, this information is equally 
applicable to health programs and activities covered under Section 1557 
as it is to the health and human service programs addressed in the Tri-
Agency Guidance. The Department continues to adhere to the principles 
set forth in the Tri-Agency Guidance in the implementation of the 
Department's programs \132\ and through OCR's enforcement of Title VI. 
OCR intends to apply these principles in our enforcement of Section 
1557 and this part and will continue to accept complaints alleging that 
covered entities' actions deter eligible individuals from applying for 
benefits offered by health programs and activities on the basis of 
their national origin. Section 1557 and this part, however, do not 
alter programmatic laws and regulations that restrict eligibility for 
particular health programs to persons of certain immigration or

[[Page 31407]]

citizenship statuses, and thus allow covered entities to make requests 
for that information when required by such authorities.\133\
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    \132\ See, e.g., 77 FR 18310, 18355 (Mar. 27, 2012) (applying 
the principles of the Tri-Agency Guidance to Marketplace \SM\ 
regulations on the health insurance application process); U.S. Dep't 
of Health & Human Servs., Office of Community Servs., Admin. on 
Children & Families, HHS Guidance on the Use of Social Security 
Numbers and Citizenship Status Verification for Assistance by LIHEAP 
Grantees' Programs, A6 (2014), https://www.acf.hhs.gov/programs/ocs/resource/liheap-im-hhs-guidance-on-the-use-of-social-security-numbers-ssns-and-citizenship-status-verification (strongly 
encouraging LIHEAP Grantees to structure their eligibility processes 
to avoid the delay or denial of benefits to eligible persons in 
mixed-immigration status households); U.S. Dep't of Health & Human 
Servs., Admin. on Children & Families, Office of Child Care, 
Clarifying Policy Regarding Limits On The Use Of Social Security 
Numbers Under the Child Care and Development Fund and the Privacy 
Act Of 1974, Program Instr. No. ACYF-PI-CC-00-04 (2000), https://www.acf.hhs.gov/programs/occ/law/guidance/current/pi0004/pi0004.htm 
(requiring States to make clear that the provision of a SSN is 
voluntary and child care benefits will not be denied or withheld for 
failure to provide a SSN).
    \133\ See, e.g., 45 CFR 155.305(f)(6) (in some cases, a 
Marketplace\SM\ must require the SSN of an individual who is not 
requesting coverage for himself or herself, but whose SSN could be 
used to verify eligibility information for a household member who is 
requesting Marketplace\SM\ coverage and financial assistance, such 
as a child).
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    Comment: A few commenters recommended that HHS clarify its 
longstanding position that the regulations implementing Section 504 
require health care entities with fewer than 15 employees to provide 
auxiliary aids and services to persons with impaired sensory, manual, 
or speaking skills, where necessary to afford such persons an equal 
opportunity to benefit from the service in question. These commenters 
pointed out that while 45 CFR 84.52(d)(1) requires the provision of 
auxiliary aids only by covered entities with 15 or more employees, 45 
CFR 84.52(d)(2) provides that the Director may require recipients with 
fewer than 15 employees to provide auxiliary aids where the provision 
of aids would not significantly impair the ability of the recipient to 
provide its benefits or services. The commenters recognized that in 
2000, HHS issued a notice in the Federal Register announcing that the 
Director had decided to require recipients with fewer than 15 employees 
to provide appropriate auxiliary aids pursuant to 42 CFR 
84.52(d)(2).\134\ However, the commenters also asserted that some 
judicial decisions have questioned whether the Director's notice 
constitutes a binding legislative rule or merely a policy statement by 
HHS.\135\ Accordingly, these commenters were concerned that the 
proposed rule's incorporation of 45 CFR 84.52(d) might not be clear 
enough to also incorporate the Director's notice that health care 
entities with fewer than 15 employees must provide auxiliary aids and 
services on the same basis as health care entities with 15 or more 
employees.
---------------------------------------------------------------------------

    \134\ See U.S. Dep't of Health & Human Servs., Office for Civil 
Rights; Section 504 of the Rehabilitation Act of 1973; Notice of 
Exercise of Authority Under 45 CFR 84.52(d)(2) Regarding Recipients 
With Fewer Than Fifteen Employees, 65 FR 79368 (Dec. 19, 2000).
    \135\ See, e.g., Columbia v. Gregory, Civ. No. 08-cv-98, 2008 WL 
4192437, *4 (D.N.H. Sep. 9, 2008).
---------------------------------------------------------------------------

    Response: To ensure clarity as to our intent, we have revised the 
language in Sec.  92.101(b)(2)(i) to delete the reference to 45 CFR 
84.52(d) and have added new language to that section requiring covered 
entities--regardless of the number of people they employ--to provide 
appropriate auxiliary aids and services to persons with impaired 
sensory, manual, or speaking skills where necessary to afford such 
persons an equal opportunity to benefit from the service in question.
    As explained in the Director's original notice adopting this 
policy, OCR believes that Section 504's auxiliary aids and services 
requirement should be applied to covered entities with fewer than 15 
employees in the interest of uniformity and consistent administration 
of law. Under Title III of the ADA, privately operated public 
accommodations are obligated to provide appropriate auxiliary aids and 
services, regardless of their size, where necessary to ensure effective 
communication with individuals with disabilities, unless they can 
demonstrate that taking such steps would fundamentally alter the nature 
of their program, services or activities, or would result in undue 
financial and administrative burdens.\136\ OCR's decision to require 
all entities, regardless of size, to provide auxiliary aids and 
services under Section 1557 and this part thus furthers consistency 
among disability discrimination laws; importantly, it also furthers the 
ACA's goal of improving access to health coverage and health care 
because requiring all entities to provide auxiliary aids and services 
will result in enhanced services for people with disabilities. 
Moreover, because this requirement has been OCR's policy for more than 
a decade, covered entities are familiar with the obligations it 
imposes.
---------------------------------------------------------------------------

    \136\ See 42 U.S.C. 12182(b)(2)(A)(iii).
---------------------------------------------------------------------------

    Comment: A few commenters asked that OCR add language to the rule 
declaring that medical treatment for individuals with disabilities must 
be as effective as treatment for individuals without disabilities.
    Response: At Sec.  92.101(b)(2)(i), the final rule incorporates 45 
CFR 84.4(b)(1)(iii) of the Section 504 implementing regulation, which 
states that recipients may not provide qualified individuals with 
disabilities ``with an aid, benefit, or service that is not as 
effective as that provided to others. . . .'' Such benefits include 
medical treatment, though recipients cannot, and are not required under 
the rule to, ensure equally effective outcomes.
    Comment: A number of commenters urged that OCR make clear that, 
consistent with the requirements of Title II of the ADA and Section 
504,\137\ disability-based discrimination under Section 1557 
encompasses the needless segregation of individuals with disabilities. 
They pointed, in particular, to the need to make clear that covered 
entities must make coverage and reimbursement decisions that support 
serving individuals with disabilities in integrated settings unless 
doing so would fundamentally alter the entities' service systems, 
citing to the HHS Guidance on Medicaid Managed Care.\138\
---------------------------------------------------------------------------

    \137\ See 28 CFR 35.130(b)(7) (requiring public entities to 
administer services to individuals with disabilities in the most 
integrated setting appropriate to their needs); 45 CFR 84.4(b)(2); 
Olmstead v. L.C., 527 U.S. 581 (1999).
    \138\ U.S. Dep't of Health & Human Servs., Centers for Medicare 
& Medicaid Services, Guidance to States Using 1115 Demonstrations or 
1915(b) Waivers for Managed Long Term Services and Supports Programs 
3 (May 20, 2013), https://www.medicaid.gov/medicaid-chip-program-information/by-topics/delivery-systems/downloads/1115-and-1915b-mltss-guidance.pdf.
---------------------------------------------------------------------------

    Response: We agree that since Section 1557 explicitly incorporates 
Section 504's prohibitions against disability-based discrimination, it 
therefore encompasses a ban on the unnecessary segregation of 
individuals with disabilities. As such, and as required by Title II of 
the ADA and Section 504 and interpreted in Olmstead v. L.C.\139\ and 
its progeny, public entities (State and local governments) must 
administer services to individuals with disabilities in the most 
integrated setting appropriate to their needs unless doing so is a 
fundamental alteration of the public entity's service delivery system. 
The ``most integrated setting'' mandate applies to the full spectrum of 
the public entity's service delivery system, including coverage and 
reimbursement decisions, when the entity ``(1) directly or indirectly 
operates facilities and or/programs that segregate individuals with 
disabilities; (2) finances the segregation of individuals with 
disabilities in private facilities; and/or (3) through its planning, 
service system design, funding choices, or service implementation 
practices, promotes or relies upon the segregation of individuals with 
disabilities in private facilities or programs.'' \140\ OCR will 
continue its ongoing Olmstead enforcement efforts under Section 504 and 
Title II of the ADA, as well as Section 1557 and this part, where 
appropriate.
---------------------------------------------------------------------------

    \139\ 527 U.S. 581 (1999).
    \140\ U.S. Dep't of Justice, Statement of the Department of 
Justice on Enforcement of the Integration Mandate of Title II of the 
Americans with Disabilities Act and Olmstead v. L.C., (June 21, 
2011), https://www.ada.gov/olmstead/q&a_olmstead.htm.
---------------------------------------------------------------------------

    Comment: Several commenters recommended that OCR specify that age-
related distinctions are prohibited, apart from exclusions in the Age 
Act for (1) age distinctions contained in a

[[Page 31408]]

Federal, State or local statute or ordinance that provide benefits 
based on age, establish criteria for participation in age-related 
terms, or describe intended beneficiaries to target groups in age-
related terms, and (2) actions that reasonably take into account age as 
a factor necessary to the normal operation or the achievement of any 
statutory objective of such program or activity. Under these comments, 
for example, a decision to limit coverage of a service to individuals 
in a particular age range, even though that service is also effective 
for individuals of other ages, would violate Section 1557 if the age 
limitation is not based on a statute or ordinance and is not necessary 
for the normal operation or achievement of the goals of the service.
    Response: OCR declines to adopt the standard recommended by the 
commenters. As noted elsewhere, the rule permits actions based on age 
to overcome the effects of conditions that resulted in limited 
participation in the covered entity's health program or activity based 
on age.\141\ We also note that other provisions of the rule incorporate 
provisions in the regulation implementing the Age Act that permit age 
distinctions in HHS regulations and a recipient's provision of special 
benefits to the elderly or children.\142\
---------------------------------------------------------------------------

    \141\ See Sec.  92.101(c).
    \142\ See Sec.  92.101(c) (incorporating 45 CFR 91.17).
---------------------------------------------------------------------------

    Comment: A few commenters asked that OCR clarify that State 
mandates that have age limits are exempt and that States are allowed to 
create new State mandates that have age distinctions if that is 
clinically appropriate.
    Response: As reflected in the provision of the final rule at Sec.  
92.2(b)(1), age distinctions contained in Federal, State, or local 
statutes or ordinances adopted by an elected, general purpose 
legislative body are not covered by the final rule. States may adopt 
new laws that contain age distinctions; those distinctions would not 
violate the final rule.\143\
---------------------------------------------------------------------------

    \143\ We note that age limits may violate CMS regulations under 
the ACA and covered entities are responsible for ensuring compliance 
with all applicable CMS regulations and other Federal laws.
---------------------------------------------------------------------------

    Comment: One commenter asked us to clarify the application of 
Section 1557 with respect to age rating in health insurance plans and 
related employer contributions.
    Response: As we noted above, OCR is incorporating in the final rule 
the exclusions found in the Age Act, such that the provisions of the 
proposed rule would not apply to any age distinction contained in that 
part of a Federal, State, or local statute or ordinance adopted by an 
elected, general purpose legislative body which provides any benefits 
or assistance to persons based on age, establishes criteria for 
participation in age-related terms, or describes intended beneficiaries 
to target groups in age-related terms.\144\ For instance, age rating in 
premium rates within a 3:1 ratio in Marketplace\SM\ plans would not 
violate Section 1557 because it is permitted under the ACA.\145\ 
Further, this rule would not prohibit a covered entity from 
establishing and applying, or offering a plan on a Marketplace\SM\ that 
establishes or applies, in a nondiscriminatory manner, neutral rules 
related to employer contribution amounts, such as contributing a fixed 
percentage or dollar amount of each employee's premium or placing a cap 
on the total amount of employer contributions, even though the dollar 
amount of the contribution or the employee's share of the premium may 
be smaller or greater for some employees than for others based on the 
permissible age rating of the employee's premium.
---------------------------------------------------------------------------

    \144\ See 42 U.S.C. 6103(b).
    \145\ 42 U.S.C. 300gg(a)(1)(A)(iii). See also 45 CFR 147.102.
---------------------------------------------------------------------------

    Comment: One commenter recommended that OCR clarify that in order 
to operate in a nondiscriminatory manner, issuers must ensure that 
their plans do not impose arbitrary age, visit, or coverage limits. 
This commenter pointed out that children often need more frequent 
preventive and supportive services than adults, including 
immunizations, developmental assessments and screenings, and 
nutritional counseling, to enable them to maintain or improve their 
health into adulthood. Furthermore, children with special health needs 
may need additional services, such as speech or physical therapy, on a 
more frequent basis than adults to enable them to develop specific 
skills or meet their developmental potential. Similarly, children will 
also require replacement of durable medical equipment or devices on a 
much more frequent schedule than is provided in an adult benefit 
package.
    Response: OCR agrees that arbitrary age, visit, or coverage 
limitations could constitute discrimination, including discrimination 
based on age, in certain cases, for example where consideration of age 
is not necessary to the normal operation of a health program. In 
addition, as noted above, where differential treatment is justified by 
scientific or medical evidence, such treatment will not be considered 
discriminatory. The general prohibition of discrimination in the rule 
applies to these issues.
    Comment: Commenters noted that due to the educational context for 
which they were created, Title IX regulations do not reach the full 
breadth of discriminatory actions on the basis of sex that are 
prohibited by Section 1557; these commenters recommended that the final 
regulation incorporate prohibitions from Title VI, Section 504, and the 
Age Act to more fully address discrimination on the basis of sex in 
health programs and activities. In addition, commenters stated that the 
final rule should make clear that in the absence of a finding of 
discrimination, a covered entity may take affirmative action to 
overcome the effects of conditions which resulted in limited 
participation by persons on the basis of sex.
    Response: OCR appreciates the concern raised by the commenters 
that, due to the fact that Title IX applies only to educational 
programs, the full range of specific discriminatory actions prohibited 
under other laws is not explicitly included in Title IX's regulations. 
OCR has revised the final regulation to incorporate additional language 
in Sec.  92.101(b)(3) to help clarify the full breadth of 
discriminatory actions that can constitute sex discrimination under 
Section 1557. Additionally, both the proposed and the final rule make 
clear in Sec.  92.6 (Remedial Action and Voluntary Action) that covered 
entities are permitted, but not required, to take voluntary action in 
the absence of a finding of discrimination to overcome the effects of 
conditions that result or resulted in limited participation by persons 
based on any prohibited ground covered under the regulation.
    Comment: Several commenters noted that although sex-specific 
programs may be clinically necessary in some instances, for example, in 
clinical trials that aim to determine whether sex differences exist in 
the manifestation or recommended treatment of certain diseases, the 
Department should clarify that sex-specific programs--i.e., those in 
which participation is limited to members of one sex only--are 
permissible only when they are narrowly tailored and necessary to 
accomplish an essential health purpose.
    Response: OCR agrees with commenters that sex-specific programs 
(programs limited exclusively to one sex) should be permitted only 
under limited circumstances. OCR believes that the constitutional 
standard established by the Supreme Court in

[[Page 31409]]

United States v. Virginia \146\ provides the most appropriate level of 
protection and thus has chosen to adapt this standard for application 
in evaluating the lawfulness of sex-specific health programs or 
activities under Section 1557 and this part. In Virginia, the Court 
stated that a governmental entity attempting to justify a sex-specific 
program must demonstrate an ``exceedingly persuasive justification'' 
for a sex-based classification in accordance with the U.S. 
Constitution's Equal Protection Clause.\147\ As the Court explained, 
this means that the governmental entity must show ``at least that the 
[challenged] classification serves important governmental objectives 
and that the discriminatory means employed are substantially related to 
the achievement of those objectives.'' \148\ In Virginia, which 
challenged Virginia Military Institute's male-only admissions policy, 
the Court found that the governmental entity had fallen ``far short of 
establishing the exceedingly persuasive justification'' necessary to 
sustain a sex-based classification.\149\ The Court made clear that 
proffered justifications cannot rely on overbroad generalizations and 
cannot be hypothesized or invented post hoc in response to 
litigation.\150\
---------------------------------------------------------------------------

    \146\ 518 U.S. 515 (1996).
    \147\ Id. at 531-32.
    \148\ Id. at 532-33 (internal citations omitted).
    \149\ Id. at 533-34.
    \150\ Id. at 533.
---------------------------------------------------------------------------

    Under this demanding standard, as adapted in this rule, a sex-
specific health program or activity classification is unlawful unless 
the covered entity can show an exceedingly persuasive justification for 
it, that is, that the sex-based classification is substantially related 
to the achievement of an important health-related or scientific 
objective. In evaluating a complaint of discrimination challenging a 
covered entity's sex-specific health program or activity, OCR may 
consider a variety of factors relevant to the particular program or 
activity. In all cases, however, OCR will expect a covered entity to 
supply objective evidence, and empirical data if available, to justify 
the need to restrict participation in the program to only one sex. In 
no case will OCR accept a justification that relies on overly broad 
generalizations about the sexes.
    Under this standard, OCR anticipates that most health researchers 
will be able to justify sex-specific clinical trials, such as those 
that test treatments for sex-specific conditions or that evaluate 
differences in responses to treatment regimens among the sexes, based 
upon the scientific purposes of the study. Where there is no clinical 
or scientific rationale for making a program sex-specific, by contrast, 
a covered entity that offers such a program would need to demonstrate, 
through such means as research literature, empirical data, accepted 
professional standards, and/or facts specific to participants in the 
program, that maintaining the sex segregation of the program is 
necessary for the program to achieve its purpose. Overly broad 
generalizations would not be sufficient.
    No commenters asked OCR to adopt the sex-specific standards 
authorized in Title IX or the Department of Education's Title IX 
regulations. OCR has chosen to apply an adapted constitutional standard 
under Section 1557 rather than the standard authorized in Title IX and 
the Department of Education's Title IX regulations because, as noted in 
the proposed rule, and by several commenters, the single-sex 
educational exceptions found in Title IX and the Department of 
Education's Title IX regulations--such as exceptions for some single-
sex education programs (e.g., contact sports in physical education 
classes; classes on human sexuality; and choruses) when certain 
requirements are met--do not readily apply in a context grounded in 
health care.
    In addition, we note that OCR's adaptation of the constitutional 
standard as the standard to be applied to sex-specific health programs 
or activities under Section 1557 is consistent with the constitutional 
standard that already applies to sex-specific public health programs 
and activities, which are covered entities under this rule if they 
receive Federal financial assistance. OCR has adapted the standard to 
use the term ``important health-related or scientific objective,'' in 
recognition of the fact that the rule's provision on sex-specific 
programs or activities applies to both private and public covered 
entities in the context of health programs and activities. The same 
Section 1557 nondiscrimination standards, including this adapted 
standard, apply to health programs or activities subject to this rule 
whether public or private covered entities operate them.
    Finally, as we initially noted in the proposed rule, we do not 
intend to prohibit separate toilet, locker room, and shower facilities 
where comparable facilities are provided to individuals, regardless of 
sex. OCR recognizes that under some existing Federal, State and local 
laws, rules or regulations, certain types of sex-specific facilities 
such as restrooms may be permitted. The approach taken by OCR is 
consistent with the long standing approach taken to these types of 
facilities.
    However as previously stated in the discussion of the definition of 
``on the basis of sex'' in Sec.  92.4, even where it is permissible to 
make sex-based distinctions, individuals may not be excluded from 
health programs and activities for which they are otherwise eligible 
based on their gender identity.\151\ Courts have rejected claims that 
any legal right to privacy is violated and that one person suffers any 
cognizable harm simply by permitting another person access to a sex-
specific program or facility which corresponds to their gender 
identity.\152\
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    \151\ See Lusardi v. McHugh, U.S. Equal Employment Opportunity 
Comm'n Appeal No. 0120133395, Agency No. ARREDSTON11SEP05574, 2015 
WL 1607756 (April 1, 2015) (finding Agency's denial of Complainant's 
access to the common women's restroom on account of her gender 
identity violated Title VII), https://www.eeoc.gov/decisions/0120133395.txt.
    \152\ See, e.g., Crosby, 763 F. Supp. 666; cf Cruzan, 294 F.3d 
981.
---------------------------------------------------------------------------

Summary of Regulatory Changes
    For the reasons set forth in the proposed rule and considering the 
comments received, we are finalizing the provisions as proposed in 
Sec.  92.101 with the following modifications:
    We have re-designated Sec.  92.101(b)(1) as Sec.  92.101(b)(1)(i), 
and added a new section Sec.  92.101(b)(1)(ii), which prohibits aiding 
or perpetuating discrimination against an individual by providing 
significant assistance to an entity or person that discriminates on the 
basis of race, color, or national origin against beneficiaries of the 
covered entity's health program or activity. Similarly, we have re-
designated Sec.  92.101(b)(4) as Sec.  92.101(b)(4)(i), and added a new 
section Sec.  92.101(b)(4)(ii), which prohibits aiding or perpetuating 
discrimination against an individual by providing significant 
assistance to an entity or person that discriminates on the basis of 
age against health program or activity beneficiaries. These provisions 
complement similar provisions incorporated in the final rule with 
respect to disability and sex discrimination and are included to ensure 
that we are providing the same protections from race, color, national 
origin, and age discrimination as are provided with respect to sex and 
disability discrimination.
    In addition, we have changed the language in Sec.  92.101(b)(2)(i) 
to exclude reference to 45 CFR 84.52(d). We are re-designating the 
existing regulation text at Sec.  92.202 as Sec.  92.202(a), and adding 
a

[[Page 31410]]

new subsection, Sec.  92.202(b) that requires covered entities--
regardless of the number of people they employ--to provide appropriate 
auxiliary aids and services to persons with impaired sensory, manual, 
or speaking skills, where necessary to afford such persons an equal 
opportunity to benefit from the service in question.
    We have re-designated the existing regulation text at Sec.  
92.101(b)(3) as Sec.  92.101(b)(3)(i). We have added new subsections, 
Sec.  92.101(b)(3)(ii) and Sec.  92.101(b)(3)(iii) to clarify the full 
breadth of discriminatory actions prohibited by Section 1557 on the 
basis of sex. Last, we have added a new subsection, Sec.  
92.101(b)(3)(iv) to clarify when covered entities may provide a sex-
specific health program or activity.
Subpart C--Specific Applications to Health Programs and Activities
    Section 1557 is unique among Federal civil rights laws in that it 
specifically addresses discrimination in health programs and 
activities. To provide additional specificity regarding 
nondiscrimination requirements in this setting, Subpart C builds upon 
pre-existing civil rights regulations referenced in Subpart B.
Meaningful Access for Individuals With Limited English Proficiency 
(Sec.  92.201)
Overview of Sec.  92.201
    In Sec.  92.201, OCR proposed to effectuate Section 1557's 
prohibition on national origin discrimination as it affects individuals 
with limited English proficiency in health programs and activities of 
covered entities.
    We explained that for individuals with limited English proficiency, 
lack of proficiency in English--and the use of non-English languages--
is a direct outgrowth of, and is integrally tied to, their national 
origins.\153\ It is well-established under Title VI and its 
implementing regulation that a prohibition on national origin 
discrimination requires covered entities to take reasonable steps to 
provide meaningful access to individuals with limited English 
proficiency.\154\ The U.S. Supreme Court has held that the provision of 
language assistance services is essential to ensure the equality of 
opportunity promised by nondiscrimination laws.\155\ As we stated in 
the Department's 2000 LEP Policy Guidance:
---------------------------------------------------------------------------

    \153\ See, e.g., 80 FR at 54182.
    \154\ See, e.g., Lau v. Nichols, 414 U.S. 563, 566 (1974) 
(interpreting Title VI and its implementing regulations to require a 
school district with students with limited English proficiency of 
Chinese origin to take affirmative steps to provide the students 
with a meaningful opportunity to participate in Federally funded 
educational programs); HHS LEP Guidance, supra note 49, 68 FR at 
47313 (``[T]he failure of a recipient of [F]ederal financial 
assistance from HHS to take reasonable steps to provide LEP persons 
with [a] meaningful opportunity to participate in HHS funded 
programs may constitute a violation of Title VI and HHS's 
implementing regulations''); U.S. Dep't of Health & Human Servs., 
Office for Civil Rights, Policy Guidance, Title VI Prohibition 
against National Origin Discrimination As It Affects Persons with 
Limited English Proficiency, 65 FR 52762, 52765 (August 30, 2000) 
(``The most important step in meeting this [meaningful access] 
obligation is for recipients of Federal financial assistance such as 
a grants, contracts, and subcontracts to provide the language 
assistance necessary to ensure such access, at no cost to the LEP 
person.''). See also Exec. Order No. 13166, Improving Access to 
Services for Persons with Limited English Proficiency, 65 FR 50121 
(Aug. 11, 2000) (requiring each Federal Department to improve access 
to Federally assisted programs and activities by persons with 
limited English proficiency and to implement a system by which 
individuals with limited English proficiency can meaningfully access 
the Departments' Federally conducted programs and activities).
    \155\ 80 FR at 54182 (citing Lau, 414 U.S. at 566) (reasoning 
that a federally funded educational program's failure to take 
affirmative steps to rectify the language deficiency of limited 
English proficient students of Chinese ancestry denies them a 
meaningful opportunity to participate in the educational program on 
the basis of their national origin).

    The key to providing meaningful access for LEP persons is to 
ensure that the recipient/covered entity and LEP person can 
communicate effectively. The steps taken by a covered entity must 
ensure that the LEP person is given adequate information, is able to 
understand the services and benefits available, and is able to 
receive those for which he or she is eligible. The covered entity 
must also ensure that the LEP person can effectively communicate the 
relevant circumstances of his or her situation to the service 
provider.\156\
---------------------------------------------------------------------------

    \156\ 65 FR at 52765.
---------------------------------------------------------------------------

General Requirements Sec.  92.201(a), (b) and (c)
    In Sec.  92.201(a), we proposed to adopt the well-established 
principle that covered entities must take reasonable steps to provide 
meaningful access to health programs and activities for all individuals 
with limited English proficiency whom the covered entities serve or 
encounter.\157\ We provided that, consistent with our longstanding 
enforcement of Title VI, we intended the general obligation in 
paragraph (a) to be a context-specific standard that the Director 
considers in light of the particular facts.\158\
---------------------------------------------------------------------------

    \157\ The Department's LEP Guidance provides an in-depth 
explanation of Title VI's prohibition against national origin 
discrimination as it affects limited English proficient populations 
and how recipients can determine what steps are reasonable to 
provide all individuals with limited English proficiency meaningful 
access. HHS LEP Guidance, supra note 49.
    \158\ Under Title VI, OCR investigates each complaint and 
conducts its compliance reviews on a case-by-case basis and tailors 
each case resolution to the particular facts of each case. For 
highlights of OCR's Title VI enforcement specific to the prohibition 
of national origin discrimination as it affects individuals with 
limited English proficiency, see Enforcement Success Stories 
Involving Individuals with Limited English Proficiency, U.S. Dep't 
of Health & Human Servs., Office for Civil Rights, https://www.hhs.gov/ocr/civilrights/activities/examples/LEP/ (last 
visited May 4, 2016).
---------------------------------------------------------------------------

    We stated that the proposed standard balances two core principles 
critical in effectuating Section 1557's prohibition of national origin 
discrimination. First, the Department must ``ensure that [health 
programs and activities] aimed at the American public do not leave some 
behind simply because they face challenges communicating in English.'' 
\159\ We noted that provider-patient communication is essential to the 
concept of patient centeredness, which is a core component of quality 
health care and has been shown to improve patients' health and health 
care.\160\ Second, we stated that the level, type and manner of 
language assistance services required under paragraph (a) should be 
assessed based on the relevant facts, which may include the operations 
and capacity of the covered entity.
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    \159\ 80 FR 54172, 54183 (quoting HHS LEP Guidance, supra note 
49, 68 FR at 47312).
    \160\ Id. (citing U.S. Dep't of Health & Human Servs., Agency 
for Health Care Research & Quality, Chapter 6, Patient Centeredness, 
National Healthcare Quality Report (2013), https://www.ahrq.gov/research/findings/nhqrdr/nhqr13/chap6.html). Person-centered and 
family centered care is one of the six priorities of the National 
Quality Strategy. Dep't. of Health & Human Servs., Agency for Health 
Care Research & Quality, 2014 National Healthcare Quality and 
Disparities Report, Person- and Family-Centered Care Chartbook, AHRQ 
Pub. No. 15-0007-14, at 3 (May 2015), https://www.ahrq.gov/sites/default/files/wysiwyg/research/findings/nhqrdr/2014chartbooks/personcentered/personcenteredcare-chartbook.pdf.
---------------------------------------------------------------------------

    For these reasons, proposed paragraph (b) identified how the 
Director will evaluate whether a covered entity has met the requirement 
in paragraph (a).\161\ In paragraph (b)(1), we proposed to require the 
Director to consider, and give substantial weight to, the nature and 
importance of the health program or activity, including the particular 
communication at issue. In paragraph (b)(2), we proposed to require the 
Director to take other relevant factors into account and identified 
some of those that might be relevant.
---------------------------------------------------------------------------

    \161\ Id. at 54183 n.53 (stating that the Department's LEP 
Guidance takes a similar approach by identifying the factors that 
OCR will consider, in determining the extent of a recipient's 
obligations to individuals with limited English proficiency). See 
HHS LEP Guidance, supra note 49, 68 FR at 47314-16.
---------------------------------------------------------------------------

    In paragraphs (b)(2)(i) and (ii), OCR proposed to identify the 
length, complexity, and context of the

[[Page 31411]]

communication as potentially relevant factors in a particular case. We 
noted that where a communication is particularly long or complex, a 
covered entity might be required to provide a means for an individual 
with limited English proficiency to be able to refer back to the 
information communicated by providing, for instance, a document written 
in the individual's primary language or an audio file of the 
information conveyed orally.
    In paragraph (b)(2)(iii), we provided that the prevalence of the 
primary language in which the individual with limited English 
proficiency communicates, among those eligible to be served or likely 
to be encountered by the health program or activity, might also be 
relevant.
    In paragraphs (iv) and (v) of proposed Sec.  92.201(b)(2)--the 
final illustrative factors listed--we noted that the resources 
available to the covered entity and the costs of language assistance 
services might also be relevant in a particular case.
    In proposed paragraph (c), we clarified that language assistance 
services required under paragraph (a) must be provided free of charge, 
be accurate and timely, and protect the privacy and independence of the 
individual with limited English proficiency.\162\
---------------------------------------------------------------------------

    \162\ 80 FR at 54183 (citing HHS LEP Guidance, supra note 49, 68 
FR at 47318, 47323 (with respect to privacy), 47316-17, 47322 (with 
respect to timeliness), and 47318-19, 47320, 47322 (with respect to 
services free of charge)).
---------------------------------------------------------------------------

Specific Requirements for Interpreter Services and Restricted Use of 
Certain Persons to Interpret or Facilitate Communication Sec.  
92.201(d) and (e)
    In paragraphs (d) and (e), OCR proposed to codify standards 
described in the Department's LEP Guidance regarding qualified 
interpreters for individuals with limited English proficiency and the 
use of family members or friends as interpreters or to facilitate 
communication.\163\ These proposed standards account for issues of 
competency, confidentiality, privacy, and conflict of interest that 
arise as a result of relying on informal (or ad hoc) interpreters. We 
noted that paragraphs (d) and (e) are consistent with oral 
interpretation standards that OCR has advanced through its resolution 
of Title VI cases and compliance reviews.\164\
---------------------------------------------------------------------------

    \163\ Id. at 54183-84 (citing HHS LEP Guidance, supra note 49, 
68 FR at 47317-18, 47323).
    \164\ See, e.g., HHS OCR VRA with Mee Memorial Hosp., supra note 
82, at pt. II.J (defining qualified interpreter); HHS OCR VRA with 
Montgomery County DSS, supra note 82, at pts. II.E (defining 
qualifications of an ``interpreter''), IV.H (requiring timely, 
competent language assistance), & IV.L (identifying interpreter 
standards).
---------------------------------------------------------------------------

    Specifically, in paragraph (d), OCR proposed to address standards 
applicable to oral interpretation. We provided that when a covered 
entity is required by paragraph (a) to provide oral interpretation as a 
reasonable step to provide meaningful access to an individual with 
limited English proficiency, the covered entity must offer that 
individual a qualified interpreter.
    In paragraph (e), we proposed restrictions on the use of certain 
persons to interpret or facilitate communication for an individual with 
limited English proficiency. We proposed that paragraph (e) apply in 
addition to, and regardless of, the appropriate level, type or manner 
of language assistance services a covered entity is required to 
provide. In paragraph (e)(1), we proposed to prohibit a covered entity 
from requiring an individual with limited English proficiency to 
provide his or her own interpreter. However, in paragraphs (e)(2)(i) 
and (ii), we proposed to identify narrow and finite situations in which 
a covered entity may rely on an adult accompanying an individual with 
limited English proficiency to interpret. In paragraph (e)(3), we 
proposed to prohibit a covered entity from relying on a minor child to 
interpret or facilitate communication and identified an exception to 
this prohibition that is narrower in scope than the exception 
identified in (e)(2)(i) and (ii).
    We explained that in lieu of the approach we proposed in paragraphs 
(d) and (e), we considered proposing that all covered entities have the 
capacity to provide, in their health programs or activities, qualified 
interpreters for individuals with limited English proficiency through 
telephonic oral interpretation services available in at least 150 non-
English languages. OCR invited comment on what oral interpretation 
services, if any, we should require and how such approaches 
appropriately balance the provision of meaningful access to individuals 
with limited English proficiency and covered entities' flexibility to 
identify the means of providing such access.
Acceptance of Language Assistance Services Not Required Sec.  92.201(f)
    In paragraph (f), we proposed that no individual with limited 
English proficiency should be required to accept language assistance 
services, consistent with an individual's right to self-determination. 
We provided that a covered entity cannot coerce an individual to 
decline language assistance services. We also provided that if an 
individual with limited English proficiency voluntarily declines an 
offer of language assistance services from the covered entity, a 
covered entity could denote, in the individual's file or records, the 
language assistance services offered and the declination.\165\
---------------------------------------------------------------------------

    \165\ 80 FR at 54184 (citing HHS LEP Guidance, supra note 49, 68 
FR at 47318, 47320 (suggesting that recipients consider whether to 
record the primary language of an individual with LEP or an 
individual's choice to provide his or her own interpreter)).
---------------------------------------------------------------------------

Alternative Approaches
    In the proposed rule, we described alternate approaches we 
considered and requested comment on these approaches and any others to 
effectuate Section 1557's prohibition of national origin discrimination 
as it affects individuals with limited English proficiency. For 
instance, we noted that independent of the proposed requirements of 
Sec.  92.201, covered entities, including Health Insurance 
Marketplaces, State agencies administering Medicaid and Children's 
Health Insurance Program (CHIP) programs, and qualified health plan 
issuers, must comply with any applicable language access requirements 
in other laws and regulations.\166\ We invited comment on whether the 
requirements under different authorities should be harmonized and if 
so, to what extent and how.
---------------------------------------------------------------------------

    \166\ The proposed rule discusses these entities' requirements 
at 80 FR at 54184-85.
---------------------------------------------------------------------------

    We also stated that we considered a regulatory scheme requiring 
covered entities to provide meaningful access to each individual with 
limited English proficiency by providing effective language assistance 
services, at no cost, unless such action would result in an undue 
burden or a fundamental alteration of the health program or 
activity.\167\
---------------------------------------------------------------------------

    \167\ Id. at 54185.
---------------------------------------------------------------------------

    We further noted that we considered a regulatory scheme requiring 
covered entities to provide a range of language assistance services in 
the non-English languages spoken by State-wide populations with limited 
English proficiency that meet defined thresholds. Such thresholds would 
provide a minimum number of non-English languages in which covered 
entities would be required to deliver oral interpretation services; to 
translate written vital documents and Web site content; and to include 
taglines on vital documents and on Web sites.\168\ We requested comment 
on whether OCR

[[Page 31412]]

should require thresholds, and if so, what thresholds should be 
required, and to what geographic areas or service areas the thresholds 
should apply. We also sought comment on whether OCR should permit 
covered entities to implement their obligations with a phased-in 
approach.
---------------------------------------------------------------------------

    \168\ See id.
---------------------------------------------------------------------------

    We also noted that we considered a regulatory scheme that would 
impose enhanced obligations on a subset of covered entities. We sought 
comment on what characteristics should define covered entities that 
could have enhanced obligations, such as whether the covered entity is 
of a certain type or size, has frequent contact with individuals with 
limited English proficiency, or operates particularly important health 
programs or activities, among other potential factors. We listed 
potential categories of covered entities that could have enhanced 
obligations, such as State agencies administering Medicaid or CHIP; 
Health Insurance Marketplaces; the Department in its operation of its 
health programs or activities; or covered entities that have a minimum 
number of beds, employees, or locations, such as hospitals, nursing 
homes or skilled nursing facilities, home health agencies, and retail 
pharmacies (including mail-order pharmacies).\169\ We described that 
under this alternate approach, instead of evaluating each case on its 
particular facts, the Director would evaluate a covered entity's 
compliance based on whether the entity provided the range of language 
assistance services in the non-English languages specified.\170\ We 
invited comment on this proposal.
---------------------------------------------------------------------------

    \169\ See id.
    \170\ See id.
---------------------------------------------------------------------------

    We further requested comment on whether covered entities should be 
required to systematically prepare to provide language assistance 
services in their health programs or activities, such as through the 
establishment of policies and procedures or through other advance 
planning mechanisms. We stated that in OCR's experience, covered 
entities are in a better position to meet their obligations to provide 
language assistance services in a timely manner to individuals with 
limited English proficiency when those entities identify, in advance, 
the types and levels of services that will be provided in each of the 
contexts in which the covered entity encounters individuals with 
limited English proficiency.
    OCR noted that an advance planning requirement could require each 
covered entity to identify all resources for providing language 
assistance services; annually assess the frequently-encountered or 
highly prevalent languages in the service area of the health program or 
activity; establish written procedures to which frontline staff could 
refer when encountering individuals with limited English proficiency; 
and monitor and oversee the quality of language assistance services 
provided. We also noted that an advance planning requirement could 
require each covered entity to build its capacity to provide language 
assistance services to meet the needs of the national origin 
populations that the entity serves. We requested comment on the types 
of advance planning mechanisms, if any, that should be required and 
why.
    In the proposed rule, OCR advised that covered entities that are 
already developing or implementing language access plans, or otherwise 
assessing their language assistance needs, should continue such 
efforts. However, OCR stated that engaging in such planning is not a 
defense for failing to provide language assistance services to any 
particular individual at all, or in an untimely manner, if such 
services are reasonable steps to provide meaningful access. We advised 
that covered entities that are conducting advance planning should 
consider how they can ensure that language assistance services are 
available in their health programs and activities as they 
simultaneously improve their operational capacities to provide 
effective language assistance services into the future.
    The comments and our responses regarding Sec.  92.201 are set forth 
below:
    Overall, commenters supported the proposed rule's inclusion of 
specific provisions addressing meaningful access for individuals with 
limited English proficiency. We received numerous comments written in 
non-English languages submitted by individuals with limited English 
proficiency who expressed how essential it is to have language 
assistance services, at no cost, to understand forms, invoices, and 
medication instructions. Many comments from the health care provider 
and insurance industry, as well as from organizations representing 
individuals with limited English proficiency, agreed that it is 
essential that individuals, regardless of national origin, be able to 
access covered entities' health programs and activities. We received 
many comments, however, regarding the scope and parameters of covered 
entities' obligations under the final rule.
    Comment: Many commenters recommended revising the categories of 
individuals to whom a covered entity has an obligation to take 
reasonable steps to provide meaningful access. Specifically, commenters 
recommended that a covered entity's obligation should apply to those 
``eligible to be served'' or ``likely to be affected by'' the covered 
entity's health programs and activities. Commenters suggested that 
proposed Sec.  92.201(a), which stated that the obligation of a covered 
entity runs to those who the entity ``serves or encounters in its 
health programs and activities,'' unduly narrowed the scope of the 
covered entity's obligation.
    Response: In response to commenters' recommendations, we have 
replaced the phrase ``that it serves or encounters'' with ``eligible to 
be served or likely to be encountered.'' We agree with commenters that 
a covered entity must be prepared to take reasonable steps to provide 
meaningful access to individuals beyond those who actually walk into, 
or contact, that entity. Where a covered entity is likely to encounter, 
but is unprepared to assist, individuals of particular national origin 
groups in the languages in which they communicate, those individuals 
are unlikely to seek services from, or participate in, the entity's 
health programs or activities, thereby perpetuating barriers to 
individuals' access to care.
    We chose the phrase ``eligible to be served or likely to be 
encountered'' because it is one of the formulations in the HHS LEP 
Guidance of the population to which a covered entity has an 
obligation.\171\ In addition, commenters' proposal that a covered 
entity's obligation applies to individuals ``likely to be affected by'' 
the covered entity's health programs and activities gave covered 
entities less concrete guidance about their obligations relative to the 
phrase ``likely to be encountered.''
---------------------------------------------------------------------------

    \171\ See HHS LEP Guidance, supra note 49, 68 FR at 47314, 
47320, 47322.
---------------------------------------------------------------------------

    Comment: Numerous commenters recommended that OCR revise the 
general obligation in Sec.  92.201(a) to require that covered entities 
``provide meaningful access'' to each individual with limited English 
proficiency rather than ``take reasonable steps to provide meaningful 
access.'' Commenters explained that because ``meaningful access'' is 
already a subjective standard, requiring ``reasonable steps to provide 
meaningful access'' substantially dilutes covered entities' obligations 
to provide language assistance services.
    These commenters suggested that language assistance should be 
provided in every situation and that oral interpretation, in 
particular, should be provided ``on demand.'' Commenters

[[Page 31413]]

suggested that the final rule make this basic obligation clear because 
some covered entities turn away individuals with limited English 
proficiency, stating that the entity does not provide language 
assistance services. For instance, one commenter shared that it is 
common for individuals with limited English proficiency to use a 
hospital emergency department as a source of primary care because the 
individuals' physicians do not offer qualified interpreters for 
individuals with limited English proficiency. Commenters also suggested 
that the Director's weighing of the illustrative factors set out in 
Sec.  92.201(b) should focus exclusively on whether the covered entity 
provided the appropriate type, form, and manner of language assistance.
    Response: We decline to modify the general obligation in Sec.  
92.201(a) because it reflects familiar and longstanding requirements 
applicable under Title VI.\172\ In addition, the regulatory scheme 
provides in 92.201(b)(1) that in assessing this standard, the Director 
will consider, and give substantial weight to, the nature and 
importance of the health program or activity and the particular 
communication at issue, which places covered entities on notice about 
the way in which we will evaluate the Title VI standard within the 
context of health programs and activities. OCR interprets the 
requirement that covered entities take ``reasonable steps to provide 
meaningful access'' to demand that each entity, as an initial step, 
assess the need to provide language assistance services to each 
individual with limited English proficiency and respond to that need by 
providing the appropriate language assistance services on a timely 
basis.
---------------------------------------------------------------------------

    \172\ See Lau v. Nichols, supra note 154 (interpreting Title VI 
to require the covered entity to take affirmative steps to provide 
students with limited English proficiency of Chinese origin with a 
meaningful opportunity to participate in Federally-funded 
educational programs); HHS LEP Guidance, supra note 49, 68 FR at 
47313 (``[T]he failure of a recipient of [F]ederal financial 
assistance from HHS to take reasonable steps to provide LEP persons 
with [a] meaningful opportunity to participate in HHS funded 
programs may constitute a violation of Title VI and HHS's 
implementing regulations'').
---------------------------------------------------------------------------

    As we stated in the proposed rule, safe and quality health care 
requires an exchange of information between the health care provider 
and patient for the purposes of diagnoses, treatment options, the 
proper use of medications, obtaining informed consent, and insurance 
coverage of health-related services, among other purposes.\173\ This 
exchange of information is jeopardized when the provider and the 
patient speak different languages and may result in adverse health 
consequences and even death.\174\ Indeed, the provision of health care 
services, by its ``very nature[,] requires the establishment of a close 
relationship with the client or patient that is based on sympathy, 
confidence and mutual trust,'' \175\ which cannot be established 
without effective communication.
---------------------------------------------------------------------------

    \173\ 80 FR at 54183 (citing to the 2000 HHS LEP Guidance, supra 
note 49, 65 FR at 52763). See generally Cindy Brach et al., Crossing 
the Language Chasm, Health Affairs, vol. 24, no.2 424, at 424-25 
(2005) (describing the impacts of language barriers in health care). 
In addition, the 2014 National Healthcare Quality and Disparities 
Report Chartbooks include metrics showing disparities between 
national origin groups, one of which expressly identifies trends of 
non-English speaking children who need health care for an illness, 
injury, or condition who sometimes or never got care as soon as 
wanted. See U.S. Dep't of Health & Human Servs., Agency for Health 
Care Research & Quality, 2014 National Healthcare Quality and 
Disparities Report, Chartbook on Health Care for Hispanics at 47, 57 
(May 2015), https://www.ahrq.gov/sites/default/files/wysiwyg/research/findings/nhqrdr/2014chartbooks/hispanichealth/2014nhqdr-hispanichealth.pdf; U.S. Dep't of Health & Human Servs., Agency for 
Health Care Research & Quality, Person- and Family-Centered Care 
Chartbook, supra note 160, at 12.
    \174\ 80 FR at 54183.
    \175\ Id.
---------------------------------------------------------------------------

    Comment: Some commenters expressed concern about the potential 
financial and administrative burden to provide language assistance 
services. Many of these commenters expressed support for the proposed 
rule's inclusion of specific provisions addressing access for 
individuals with limited English proficiency but also urged that public 
and private health insurance issuers update medical codes and fee 
schedules to allow providers to receive reimbursement for the provision 
of language assistance services.
    Some commenters offered proposals for minimizing the costs to 
covered entities for providing language assistance services--oral 
interpretation services in particular. These recommendations included 
that OCR facilitate access to telephonic oral interpretation, at no 
cost to covered entities, and that OCR ensure that covered entities 
have adequate funding to provide qualified interpreters for individuals 
with limited English proficiency.
    Response: We appreciate hearing commenters' concerns and having the 
benefit of commenters' recommendations to lessen potential cost and 
administrative barriers that covered entities may face. It is beyond 
the scope of this rulemaking to adopt recommendations that OCR fund 
qualified interpreters or direct issuers to modify medical codes and 
fee schedules to reimburse health care providers for their provision of 
language assistance services.\176\
---------------------------------------------------------------------------

    \176\ We note, however, that the Department's National 
Stakeholder Strategy for Achieving Health Equity identifies 
financing and reimbursement for ``health interpreting services'' as 
a strategy to achieve the goal of improving cultural and linguistic 
competency. See U.S. Dep't of Health & Human Servs., Office of 
Minority Health, National Partnership for Action to End Health 
Disparities. National Stakeholder Strategy for Achieving Health 
Equity, Section 3, 131 (2011), https://minorityhealth.hhs.gov/npa/files/Plans/NSS/NSS_07_Section3.pdf.
---------------------------------------------------------------------------

    OCR encourages covered entities to work together to leverage their 
ability to provide language assistance services in the most cost-
effective and efficient ways to meet their respective obligations under 
Sec.  92.201(a) before using costs as a reason to limit language 
assistance services.\177\ OCR also encourages professional associations 
and organizations to consider what role they can play in helping their 
members meet the requirements of Sec.  92.201; we provided similar 
encouragement in the HIPAA Privacy Rule.\178\
---------------------------------------------------------------------------

    \177\ We note, for example, that the Washington State Medicaid 
Interpreter Services Program centralizes the provision of language 
assistance services to achieve economies of scale. See Washington 
State Health Care Auth., Interpreter Services Program, 
www.hca.wa.gov/medicaid/interpreterservices (last visited May 4, 
2016). Similarly, through OCR's Effective Communication in Hospitals 
Initiative, the Kentucky Hospital Association built the capacity to 
offer its approximately 120 member hospitals access to a telephonic 
interpretation service contract that offers a volume-based discount 
rate. See Kentucky Hospital Association, Effective Communication in 
Hospitals, https://www.kyha.com/CM/Initiatives/Safety_and_Quality_Resources/Effective_Communication_in_Hospitals.aspx (last visited May 4, 
2016). Although OCR cannot certify that these approaches uniformly 
enable entities to meet the requirements of Section 1557, they do 
represent examples of the types of collaborative action that covered 
entities may consider.
    \178\ Standards for Privacy of Individually Identifiable Health 
Information, 65 FR 82462, 82749 (Dec. 28, 2000) (final rule) 
(codified at 45 CFR pts. 160 and 164) (encouraging professional 
associations to assist their members in developing policies and 
procedures required under the Privacy Rule); Standards for Privacy 
of Individually Identifiable Health Information, 64 FR 59918, 59992 
(Nov. 3, 1999) (proposed rule) (encouraging professional 
associations to assist their members in developing policies and 
procedures required under the Privacy Rule).
---------------------------------------------------------------------------

    We further remind State agencies receiving Federal financial 
assistance for Medicaid and the Children's Health Insurance Program 
that States may claim Federal matching funds for the costs of written 
translation and oral interpretation as administrative expenses or as 
medical assistance-related expenses.\179\ Further, increased

[[Page 31414]]

funding may be available when States claim the cost of written 
translation and oral interpretation as administrative expenses if such 
language assistance services are provided for the ``enrollment, 
retention, and use of services'' for individuals with limited English 
proficiency eligible for CHIP and for Medicaid-eligible children and 
their families.\180\ In addition, we remind qualified health plan 
issuers that the ACA requires, as a condition of an issuer's health 
plan receiving certification as a qualified health plan, that the 
issuer implement a quality improvement strategy for the qualified 
health plan that provides increased reimbursement or other incentives 
for the implementation of activities to reduce health and health care 
disparities, including through the use of language services.\181\ We 
encourage health insurance issuers to structure their health plan 
payment structures to consider health care providers' expenses in 
providing language assistance services.
---------------------------------------------------------------------------

    \179\ U.S. Dep't. of Health & Human Servs., Center for Medicare 
& Medicaid Servs., Increased Federal Matching Funds for Translation 
and Interpretation Services under Medicaid and CHIP 1 (Jul. 1, 
2010), https://www.medicaid.gov/Federal-Policy-Guidance/downloads/SHO10007.pdf [hereinafter CMS Increased Federal Matching Funds]; 
id., Recently Released Policy Guidance--CHIPRA and the ACA, 
Information Bulletin 1-2 (Jul. 9, 2010), https://www.medicaid.gov/Federal-Policy-Guidance/downloads/07-09-2010-CHIPRA-and-ACA.pdf 
[hereinafter CMS Information Bulletin 7/9/10].
    \180\ CMS Increased Federal Matching Funds, supra note 179, at 
1-2; CMS Information Bulletin 7/9/10, supra note 179, at 1-2; U.S. 
Dep't. of Health & Human Servs., Center for Medicare & Medicaid 
Servs., Information Bulletin 2 (Apr. 26, 2011), https://www.medicaid.gov/Federal-Policy-Guidance/downloads/Info-Bulletin-4-26-11.pdf.
    \181\ See 42 U.S.C. 18031(c)(1)(E), (g)(1)(E) (describing 
qualified health plan certification requirements in a quality 
improvement strategy).
---------------------------------------------------------------------------

    We decline to accept the recommendation that OCR facilitate access 
to telephonic oral interpretation services for all covered entities. 
Such facilitation is beyond the scope of the Federal government's role 
and is an impractical solution to address the needs of diverse Section 
1557 covered entities. However, OCR does share best practices and 
useful resources, such as through the Federal government's Interagency 
Working Group on Limited English Proficiency, at www.LEP.gov.
    Comment: We received numerous comments on whether the final rule 
should include an advance planning requirement for covered entities to 
be systematically prepared to provide language assistance services in 
their health programs and activities. The vast majority of these 
comments recommended that the final rule include such an advance 
planning requirement--specifically, the development and implementation 
of a language access plan that addresses the needs of the limited 
English proficient population in the service area of a covered entity's 
health program or activity. Commenters reasoned that a regulatory 
requirement is the most effective method of holding covered entities 
accountable for engaging in meaningful advance planning.
    One commenter observed that many covered entities already evaluate 
the type of language assistance services they are obligated to provide, 
pursuant to the current HHS LEP Guidance, and thus that codifying this 
requirement would not impose a significant additional burden on covered 
entities. This commenter also asserted that an advance planning 
requirement is analogous to the approach of Sec.  92.7, which requires 
certain covered entities to have a grievance procedure in place. 
Another commenter shared that in updating her employer's language 
access plan, the availability of online tools and resources greatly 
reduced the commenter's anticipated burden of what advance planning 
would require.
    We received many comments recommending that the final rule identify 
specific required components of a language access plan, including the 
types of language access services the covered entity will provide and 
in what languages, based on the languages spoken by eligible 
individuals with limited English proficiency in the covered entity's 
service area. One commenter underscored that to increase efficiency and 
maximize cost savings, a language access plan should identify multiple 
types of language assistance services that a covered entity can use for 
different situations or even within one encounter. This commenter 
asserted that relying on just one kind of language assistance service 
may not be appropriate for all communications.
    Another commenter recommended that the final rule mirror 
California's regulations on advance planning mechanisms for the 
provision of language assistance services.\182\ This commenter stated 
that, consistent with California's regulations, OCR should require that 
language access plans identify all points of contact with individuals 
with limited English proficiency; provide a procedure for recording 
individuals' primary language; identify vital documents; provide a 
procedure for the translation of vital documents; provide a procedure 
to request translation of specific other documents; require training on 
language access services for all staff likely to have contact with 
individuals with limited English proficiency; require the assessment of 
the qualifications of bilingual/multilingual staff; and adopt written 
policies and procedures regarding the provision of language assistance 
services, including a procedure for contracting with language service 
vendors. Other commenters agreed that prior to using individuals to 
provide interpretation or translation services, covered entities should 
be required to evaluate or verify the individuals' knowledge, skills 
and abilities to confirm that they meet the definition of a qualified 
interpreter or a qualified translator for an individual with limited 
English proficiency.
---------------------------------------------------------------------------

    \182\ See 28 CCR 1300.67.04(c) (requiring each health care 
service plan to develop and implement a language assistance program 
that contains standards for enrollee assessment; providing language 
assistance services; staff training; and compliance monitoring).
---------------------------------------------------------------------------

    We received a small number of comments opposing a requirement for 
advance planning. One commenter acknowledged that a language access 
plan is important in ensuring that covered entities are systematically 
prepared to provide language assistance services but recommended that 
OCR should merely encourage, not require, advance planning activities. 
The commenter observed that developing a language access plan may be 
too burdensome for small covered entities.
    Response: Based on the comments received, we have added a factor--
the only illustrative factor in Sec.  92.201(b)(2)--that requires the 
Director to consider, if relevant, whether the entity has developed and 
implemented an effective written language access plan, appropriate to 
its particular circumstances. The language ``appropriate to its 
particular circumstances'' conveys our recognition that the nature and 
extent of the voluntary planning in which a covered entity may choose 
to engage will vary depending on the entity's particular health 
programs and activities, its size, its geographic location, and other 
factors. A language access plan need not be long, complex, or 
burdensome.
    We note that a written language access plan has long been 
recognized as an essential tool to ensure adequate and timely provision 
of language assistance services, including compliance with the general 
obligation in Sec.  92.201(a) and the quality standards in Sec.  
92.201(d)-(f). For instance, for over 15 years, Executive Order 13166 
has required each Federal agency to create and implement a language 
access plan responsive to the needs of the limited English proficient 
population it serves.\183\ Moreover, the

[[Page 31415]]

development and implementation of a written language access plan is 
consistent with OCR's longstanding enforcement processes\184\ and 
resolution agreements regarding Title VI.\185\ Although we are not 
requiring language access plans, we encourage entities to consider 
whether and how they can engage in advance planning to facilitate their 
ability to meet their obligations under Sec.  92.201 to serve 
individuals with limited English proficiency on a timely basis.
---------------------------------------------------------------------------

    \183\ E.O. 13166, 65 FR 50121 (2000). In 2011, the U.S. 
Department of Justice renewed the Federal Government's commitment to 
the Executive Order. Office of the Att'y General, U.S. Dep't of 
Justice, Federal Government's Renewed Commitment to Language Access 
Obligations Under Executive Order 13166 (Feb. 17, 2011) https://www.justice.gov/crt/about/cor/AG_021711_EO_13166_Memo_to_Agencies_with_Supplement.pdf.
    \184\ For example, as part of the certification process to 
ensure that recipients of Medicare Part A are in compliance with 
Title VI, OCR requires Medicare Part A providers to document their 
written procedures on communicating effectively with individuals 
with limited English proficiency. U.S. Dep't of Health and Human 
Servs., Office for Civil Rights, Civil Rights Information Request 
for Medicare Certification, Form OMB No. 0945-0006, pt. II.7, https://www.hhs.gov/sites/default/files/ocr/civilrights/clearance/ocr_mctap.pdf (identifying written policies and procedures with 
respect to serving individuals with limited English proficiency as 
required in a provider's application for Medicare certification).
    \185\ See, e.g., HHS OCR VRA with Mee Memorial Hosp., supra note 
82, at pt. IV.B (requiring the development and implementation of a 
language access policy), pt. IV.C.1 (determining the language needs 
of the affected population), pt. IV.C.2 (determining the language 
needs of each individual with limited English proficiency); HHS OCR 
VRA with Montgomery County DSS, supra note 82, at pt. IV.B 
(requiring the development and implementation of a language access 
policy), pt. IV.C.1 (determining the language needs of the affected 
population), pt. IV.C.2 (determining the language needs of each 
individual with limited English proficiency).
---------------------------------------------------------------------------

    We decline to outline the minimum expectations for a language 
access plan, if a covered entity chooses to develop and implement one, 
because that approach would be too prescriptive. Nonetheless, in our 
experience, effective language access plans often, among other 
components, address how the entity will determine an individual's 
primary language, particularly if the language is an unfamiliar one; 
identify a telephonic oral interpretation service to be able to access 
qualified interpreters when the need arises; identify a translation 
service to be able to access qualified translators when the need 
arises; identify the types of language assistance services that may be 
required under particular circumstances; and identify any documents for 
which written translations should be routinely available. OCR remains 
available to covered entities as a resource for technical assistance in 
the development and implementation of language access plans in their 
health programs and activities. HHS offers helpful guidance on this 
subject,\186\ as does the U.S. Department of Justice.\187\ We encourage 
covered entities to refer to these materials to assist their advance 
planning activities.
---------------------------------------------------------------------------

    \186\ See HHS LEP Guidance, supra note 49, 68 FR at 47319-21 
(encouraging recipients to develop a language access plan [called an 
``LEP Plan'' in the Guidance]). HHS's updated language access plan 
may be a useful model for covered entities. See U.S. Dep't of Health 
& Human Servs., Language Access Plan (2013), https://www.hhs.gov/sites/default/files/open/pres-actions/2013-hhs-language-access-plan.pdf.
    \187\ See U.S. Dep't of Justice, Civil Rights Div., Language 
Access Assessment and Planning Tool for Federally Conducted and 
Federally Assisted Programs (May 2011), https://www.lep.gov/resources/2011_Language_Access_Assessment_and_Planning_Tool.pdf. See 
also the Federal government's Interagency Working Group on Limited 
English Proficiency, at www.LEP.gov.
---------------------------------------------------------------------------

    Comment: Many commenters recommended modifications to, and 
additional clarification regarding, the list of factors that the 
Director will take into account, if relevant, among other relevant 
factors in evaluating a covered entity's compliance with its general 
obligation in Sec.  92.201(a). These comments fall into four main 
categories. First, many commenters requested that we add additional 
factors to the list in Sec.  92.201(b)(2)(i)-(v). Commenters were 
concerned that absent explicit references to these factors, the 
Director would not, or could not, consider them. Examples of factors 
that commenters requested that we add include:
     The frequency with which a covered entity encounters, or 
is likely to encounter, a particular non-English language;
     the impact to the consumer if language assistance services 
are not provided;
     the extent to which covered entities can lessen their own 
cost burdens through technology and reasonable business practices, if 
the Director considers the costs of language assistance services; and
     if and when a covered entity is permitted to choose a less 
costly language assistance service than the one an individual may 
request.
    Second, many commenters recommended that we combine the ``costs of 
language assistance services'' in proposed Sec.  92.201(b)(2)(v) with 
``[a]ll resources available to the covered entity'' in proposed Sec.  
92.201(b)(2)(iv) into a single factor because the two are inherently 
intertwined.
    Third, some commenters requested that OCR clarify in the final rule 
how the factors in proposed Sec.  92.201(b)(2)(i)-(v) would be weighted 
relative to each other, if relevant and thus evaluated by the Director 
in a given case. Most commenters who requested clarification 
recommended that the costs of language assistance services and the 
resources available to the covered entity not be weighted more heavily 
than the other factors or become dispositive.
    Fourth, a number of commenters requested clarification on the 
function that the length and complexity of the communication in 
proposed Sec.  92.201(b)(2)(i) would have in the Director's evaluation 
of a particular case.
    Response: After considering the comments received, we have revised 
the final rule to eliminate the illustrative factors and to articulate 
only one factor: Whether a covered entity has developed and implemented 
an effective written language access plan appropriate to its 
circumstances. We agree with some commenters' concerns that including 
multiple illustrative factors in the regulatory text may create the 
erroneous impression that the Director will not consider relevant 
factors absent from Sec.  92.201(b)(2). Were OCR to modify Sec.  
92.201(b)(2) to include all factors suggested by commenters, however, 
the long list of factors might unintentionally create an unworkable 
regulatory scheme in the attempt to capture any possible factor that 
might be relevant in some circumstances.
    Given these concerns, Sec.  92.201(b)(1)-(2) of the final rule 
requires the Director to evaluate, and give substantial weight to, the 
nature and importance of the health program or activity and the 
particular communication at issue to the individual with limited 
English proficiency, and requires the Director to take into account all 
other relevant factors, including whether the entity has developed and 
implemented an effective language access plan. We have identified this 
factor in particular to provide a concrete reminder to covered entities 
that they may wish to take action to prepare to provide language 
assistance services to the individuals with limited English proficiency 
that they will serve or encounter. We reiterate, however, that adoption 
of a language access plan is a voluntary measure that is not required 
by the rule; we will continue to evaluate, on a case-by-case basis, 
whether entities have taken reasonable steps to provide meaningful 
access and will evaluate all relevant factors in making that 
assessment.
    We recognize that the absence of illustrative factors in regulation 
text may diminish clarity regarding the Director's evaluation of a 
covered entity's compliance with Sec.  92.201(a). To provide guidance 
to covered entities on our intended interpretation of Sec.  
92.201(b)(2) and to be responsive to

[[Page 31416]]

comments received on the illustrative factors proposed, the following 
preamble discussion sets forth a range of factors that may be relevant 
in any given case.\188\
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    \188\ Some of these factors were proposed in Sec.  
92.201(b)(2)(i)-(v), were suggested by commenters', are grounded in 
the HHS LEP Guidance, or are staples of the effective communication 
analysis in Sec.  92.202 of this final rule, consistent with Federal 
disability rights law.
---------------------------------------------------------------------------

    As an initial matter, we note that one of the factors commenters 
recommended we add, which is the impact to the individual of failing to 
provide language assistance services, is necessarily encompassed within 
Sec.  92.201(b)(1) regarding an evaluation of the nature and importance 
of the health program or activity and the particular communication at 
issue.\189\
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    \189\ See HHS LEP Guidance, supra note 49, 68 FR 47311, at 47315 
(describing how and why a recipient of Federal financial assistance 
should consider the nature and importance of the program or activity 
in determining the extent of its language access obligations under 
Title VI).
---------------------------------------------------------------------------

    Factors that may be relevant in a particular case for the Director 
to consider pursuant to Sec.  92.201(b)(2) include but are not limited 
to: the length, complexity, and context of the communication; the 
prevalence of the language in which the individual communicates among 
those eligible to be served or likely to be encountered by the health 
program or activity; the frequency with which a covered entity 
encounters the language in which the individual communicates; whether a 
covered entity has explored the individual's preference, if any, for a 
type of language assistance service, as not all types of language 
assistance services may work as well as others in providing an 
individual meaningful access to the covered entity's health program or 
activity; the cost of language assistance services and whether a 
covered entity has availed itself of cost-saving opportunities; and all 
resources available to the covered entity, including the entity's 
capacity to leverage resources among its partners or to use its 
negotiating power to lower the costs at which language assistance 
services could be obtained.
    We decline to adopt commenters' suggestions to create a regulatory 
scheme that assigns particular weight to any specific relevant factor 
because the Director will consider and weigh all relevant factors 
pursuant to Sec.  92.201(b)(2) on a case-by-case basis.
    Because we have eliminated the factors in proposed 92.201(b)(2)(i)-
(v), it is moot whether OCR should combine the proposed factor on the 
costs of language assistance services with the proposed factor on 
resources available to the covered entity. Nevertheless, costs and 
resources are intertwined, which is a principle reflected in the HHS 
LEP Guidance with respect to Title VI \190\ and a principle we 
reiterated with respect to Section 1557 in the proposed rule.\191\
---------------------------------------------------------------------------

    \190\ See HHS LEP Guidance, supra note 49, 68 FR at 47315 
(``Resource and cost issues, however, can often be reduced by 
technological advances; the sharing of language assistance materials 
and services among and between recipients, advocacy groups, and 
Federal grant agencies; and reasonable business practices.'' ``Large 
entities and those entities serving a significant number or 
proportion of LEP persons should ensure that their resource 
limitations are well-substantiated before using this factor as a 
reason to limit language assistance.'').
    \191\ See 80 FR at 54183.
---------------------------------------------------------------------------

    With respect to commenters' requests for clarification on the 
relevance that the length and complexity of a particular communication 
has on the type of language assistance a covered entity should provide, 
we note that this factor is emblematic of the fact-based nature of the 
inquiry described in Sec.  92.201(b)(1)-(2). Where a document is long 
and complex, it may in some cases be necessary for a covered entity to 
provide a written translation so that an individual with limited 
English proficiency can refer back to or study it at a later time. In 
other cases, however, a covered entity may meet the requirements of 
this section by summarizing the document orally for a qualified 
interpreter to then convey to the individual with limited English 
proficiency, if such approach is sufficient to provide the individual 
with limited English proficiency meaningful access to the 
information.\192\
---------------------------------------------------------------------------

    \192\ A third party to the communication, such as a qualified 
interpreter for an individual with limited English proficiency, 
would orally interpret the covered entity's oral summary from 
English to a non-English-language and would not alter, summarize, 
omit, or distort the oral summary that the covered entity provides 
or judge which information is relevant or important. See e.g., The 
Nat'l Council on Interpreting in Health Care, A National Code of 
Ethics for Interpreters in Health Care 8, 13 (2004), https://www.ncihc.org/assets/documents/publications/NCIHC%20National%20Code%20of%20Ethics.pdf (discussing the ethical 
principle of fidelity to the original message).
---------------------------------------------------------------------------

    Comment: Many commenters supported the requirement in proposed 
Sec.  92.201(c) that a covered entity provide language assistance 
services to an individual with limited English proficiency in a timely 
manner. Some commenters further suggested that the final rule set out 
specific time frames for the provision of oral interpretation, written 
translation, and taglines. For instance, some commenters recommended 
that we revise Sec.  92.201(c) to require oral interpretation 
immediately upon request, written translations within 30 days after the 
English version is finalized, and taglines simultaneously with English 
documents. These commenters asserted that oral telephonic 
interpretation services should be available, at a minimum, no more than 
30 minutes after a covered entity encounters an individual with limited 
English proficiency.
    Response: We decline to include prescriptive timeframes for the 
provision of language assistance services. There is no one definition 
of ``timely'' that applies to every type of interaction with every 
covered entity at all times. Consequently, consistent with the 
overarching framework of Sec.  92.201, a determination of whether 
language assistance services are timely will depend on the specific 
circumstances of each case. We reiterate our statement from the 
proposed rule that language assistance is timely when it is provided at 
a place and time that ensures meaningful access to persons of all 
national origins and avoids the delay or denial of the right, service, 
or benefit at issue.\193\
---------------------------------------------------------------------------

    \193\ 80 FR 54172, 54183. The National Standards for Culturally 
and Linguistically Appropriate Services in Health and Health Care 
(the National CLAS Standards) emphasize the importance of timely 
language assistance. U.S. Dep't of Health & Human Servs., Office of 
Minority Health, The National CLAS Standards, https://minorityhealth.hhs.gov/omh/browse.aspx?lvl=2&lvlid=53 (last visited 
May 4, 2016).
---------------------------------------------------------------------------

    Comment: Some commenters suggested that the final rule prohibit the 
use of computer-automated translation. These commenters suggested that 
reliance on automated translation is not accurate for the highly 
specialized vocabulary and terminology used in the health care and 
health insurance settings, especially for less common non-English 
languages.
    Response: We decline to codify a prohibition on the use of 
automated translation as part of the final rule because such a 
requirement may unintentionally stifle innovation in this rapidly 
developing area. Furthermore, depending on the language at issue as 
well as the content of the translation, some translation technologies 
are advantageous to facilitate the translation of written content when 
used along with a qualified translator who independently verifies the 
accuracy and quality of the translation.\194\ For

[[Page 31417]]

instance, translation memory software stores segments of previously 
translated phrases and can improve a qualified translator's efficiency, 
especially when updating documents.\195\
---------------------------------------------------------------------------

    \194\ Jessica Sperling, Migration Policy Institute, 
Communicating More for Less: Using Translation and Interpretation 
Technology to Serve Limited English Proficient Individuals (2011), 
12 https://www.migrationpolicy.org/research/communicating-more-less-using-translation-and-interpretation-technology-LEP (noting that 
translation memory programs are used in the public and private 
sector to increase the efficiency of translating a high-volume of 
documents and to assist a qualified translator in improving 
consistency among translated documents).
    \195\ Id.
---------------------------------------------------------------------------

    We do, however, agree with commenters' concerns regarding the use 
of some automatic translation technologies, which ``is particularly 
dangerous, and can lead to very serious misunderstandings and adverse 
consequences for medical documents.'' \196\ For example, machine 
translation programs translate text by performing simple substitution 
of words using statistical techniques, which may produce highly 
unreliable translations for certain languages and written content.\197\ 
As a result, using automated translation as the only tool for 
translating written documents would fulfill a covered entity's 
obligation under Sec.  92.201(a) only if a qualified translator 
reviewed the translation for accuracy and edited it as needed.\198\ OCR 
encourages covered entities to understand the strengths and weaknesses 
of the technology and software programs that qualified translators 
use.\199\
---------------------------------------------------------------------------

    \196\ Int'l Medical Interpreters Assoc., IMA Guide on Medical 
Translation, supra note 85, at 3.
    \197\ Id. at 3; EM Balk et al., Assessing the Accuracy of Google 
Translate To Allow Data Extraction From Trials Published in Non-
English Languages, (Prepared by the Tufts Evidence-based Practice 
Center for the Agency for Healthcare Research & Quality, U.S. Dep't 
of Health & Human Servs.), 12-15, 21- 24, Pub. No. 12(13)-EHC145-EF 
(2013), https://www.effectivehealthcare.ahrq.gov/ehc/products/329/1386/Methods_Paper-Google-Translate_1-17-13.pdf.
    \198\ This position is consistent with the position on this 
issue taken by the U.S. Department of Justice and the U.S. 
Department of Education. See U.S. Dep't of Justice & U.S. Dep't of 
Educ., Dear Colleague Letter: English Learner Students and Limited 
English Proficient Parents, 38 n.103 (Jan. 7, 2015), https://www2.ed.gov/about/offices/list/ocr/letters/colleague-el-201501.pdf.
    \199\ For considerations on ensuring the quality of 
translations, see Kleber Palma, Migration Policy Institute, 
Strategies to Help Covered Entities Ensure Quality of Translations, 
https://www.migrationpolicy.org/programs/language-access-translation-and-interpretation-policies-and-practices/practitioners-corner (last 
visited Mar. 23, 2016); Jessica Sperling, Migration Policy 
Institute, Practitioner's Corner: Drafting Request for Proposals and 
Contracts for Language Assistance Services, https://www.migrationpolicy.org/programs/language-access-translation-and-interpretation-policies-and-practices/practitioners-corner-drafting 
(last visited May 4, 2016).
---------------------------------------------------------------------------

    Comment: Commenters identified that some covered entities lack 
policies or practices to confirm or evaluate a staff member's skills as 
a qualified translator or to serve as a qualified interpreter for an 
individual with limited English proficiency. For instance, commenters 
stated that they are aware of situations where individuals who are 
qualified to interpret--but not translate--are nonetheless translating 
complex documents such as informed consent forms and discharge 
instructions. Comments recommended that the final rule require covered 
entities to evaluate staff members' non-English language proficiency 
and other skills to ensure that they are qualified before permitting 
them to interpret, translate, or communicate with individuals with 
limited English proficiency in the individuals' primary languages.
    Response: We share commenters' concerns and, in response, have 
modified the rule in two ways. First, the final rule requires a covered 
entity to use a qualified translator for translating written content 
with respect to its health programs and activities. As the Department 
stated in its LEP Guidance, ``[t]he permanent nature of written 
translations [ ] . . . imposes additional responsibility on the 
recipient to take reasonable steps to determine that the quality and 
accuracy of the translations permit meaningful access by LEP persons.'' 
\200\ We broadened the title of Sec.  92.201(d) to reflect that this 
paragraph now addresses specific requirements for written translation 
in addition to oral interpreter services. The text in proposed 
paragraph (d) addressing specific requirements for oral interpretation 
is now reflected as paragraph (d)(1); new paragraph (d)(2) addresses 
the use of qualified translators.
---------------------------------------------------------------------------

    \200\ HHS LEP Guidance, supra note 49, 68 FR at 47317.
---------------------------------------------------------------------------

    Second, we added a new paragraph (4) to Sec.  92.201(e) to restrict 
covered entities from relying on staff who do not meet the definition 
of ``qualified bilingual/multilingual staff'' in Sec.  92.4. In OCR's 
enforcement experience, covered entities too frequently rely on staff 
members who possess only a rudimentary familiarity speaking and 
understanding a non-English language (for example relying on their 
``high school'' level of language proficiency) to communicate with 
individuals with limited English proficiency. This can result in 
miscommunication and the omission of relevant information, which can in 
turn result in a lower standard of care and raise questions about 
whether consent provided by an individual with limited English 
proficiency was truly informed. Similarly, we have found that qualified 
bilingual staff members sometimes serve as interpreters even though 
they do not possess the non-verbal skills of interpreting nor adhere to 
generally accepted principles of interpreter ethics.
    Comment: Some commenters recommended that the final rule not 
restrict covered entities from relying on friends or family of 
individuals with limited English proficiency to provide oral 
interpretation, even when the companion is a minor. These commenters 
noted that some individuals with limited English proficiency prefer to 
use their companions to interpret; they also observed that minor 
children are frequently involved in many aspects of their parents' 
health care; accordingly, commenters stated that awareness of their 
parents' health care needs may equip children of individuals with 
limited English proficiency to act as patient advocates for their 
parents.
    In contrast, numerous commenters supported the proposed rule's 
standards for oral interpretation and the proposed restrictions on 
certain persons to interpret or facilitate communication. For instance, 
one health care provider shared that a high risk hospital was 
unprepared to provide oral interpretation to a woman in labor. The 
patient's child had to interpret what her mother was saying but the 
child did not know the proper terminology to understand the provider's 
medical questions about a fatal high risk condition.
    In addition, many commenters who are limited English proficient 
shared that some covered entities have required individuals to bring 
their own interpreters, at a cost to the individual. Others shared that 
family members and children have served as interpreters for them, which 
has been insufficient because such family members and children do not 
have the requisite skills to interpret accurately.
    Response: We decline to eliminate the specific requirements in 
Sec.  92.201(d)-(e) of the proposed rule regarding oral interpretation 
or the restrictions on certain persons to facilitate communication or 
interpret. Commenters' recommendations run contrary to HHS's 
longstanding guidance under Title VI \201\ and to OCR's experience and 
enforcement practices.\202\ In many circumstances,

[[Page 31418]]

family members, friends, and especially children, are not competent to 
provide quality, accurate oral interpretation. For communications of 
particularly sensitive information, oral interpretation by an 
individual's family or friend often also implicates issues of 
appropriateness, confidentiality, privacy, and conflict of interest. 
Thus, covered entities may not rely on family members, friends, or 
other informal interpreters to provide language access services unless 
the situation meets an applicable exception in Sec.  92.201(e)(2)-(3) 
of the final rule. This exception sufficiently balances an individual's 
preferences with an interest in ensuring competent language assistance 
services by allowing individuals to use accompanying adults to 
interpret in some circumstances.
---------------------------------------------------------------------------

    \201\ HHS LEP Guidance, supra note 49, 68 FR at 47317-18, 47323.
    \202\ See, e.g., Voluntary Resolution Agreement between U.S. 
Dep't of Health & Human Servs., Office for Civil Rights and the 
Rhode Island Department of Human Services, OCR Transaction No. 
0876828, pt. IV.K. (Jan. 19, 2011) https://www.hhs.gov/sites/default/files/ocr/civilrights/activities/agreements/ridhhsagreement.pdf 
(containing restrictions on the use of family members and friends as 
interpreters).
---------------------------------------------------------------------------

    Comment: One commenter suggested that entities should be exempt 
from complying with the HIPAA Privacy Rule when providing a qualified 
interpreter for an individual with limited English proficiency when 
required under Sec.  92.201(a) of this final rule. Specifically, the 
commenter was concerned that Section 1557 covered entities would be 
forced to use or disclose protected health information in violation of 
the Privacy Rule when engaging interpreter services.
    Response: OCR is responsible for enforcing the HIPAA Privacy Rule 
in addition to the rule implementing Section 1557. We note that, in 
most instances, a qualified interpreter will be a business associate or 
a workforce member of the covered entity. If a qualified interpreter is 
a business associate, a covered entity may disclose protected health 
information to the qualified interpreter if it obtains satisfactory 
assurances that the interpreter will use the information only for the 
purposes for which the interpreter was engaged and will safeguard the 
information from misuse. Such satisfactory assurances must be in 
writing and in the form of a contract between the covered entity and 
the qualified interpreter. If a qualified interpreter is a workforce 
member of the covered entity, a covered entity may share information 
with that interpreter as an employee or another type of agent of the 
entity (e.g., hired through a contract or on the covered entity's staff 
as a volunteer).
    Determining the relationship between the interpreter and the 
covered entity is a covered entity's HIPAA obligation and is unchanged 
by Section 1557 or this part. We encourage covered entities to review 
OCR's HIPAA Frequently Asked Questions (FAQ) regarding business 
associates at https://www.hhs.gov/ocr/privacy/hipaa/faq/business_associates/760.html, and OCR's HIPAA FAQ regarding 
interpreters at https://www.hhs.gov/hipaa/for-individuals/faq/528/can-my-health-care-provider-discuss-my-health-information-with-an-interpreter/.
    Comment: A few commenters suggested that the final rule urge 
covered entities to provide an in-person qualified interpreter for an 
individual with limited English proficiency as the default type of oral 
interpretation. These commenters explained that covered entities should 
rely on remote interpretation via telephone or video only in urgent 
situations or if an in-person interpreter is unavailable. These 
commenters reasoned that use of remote interpretation technologies may 
miss nuances of the communication and result in less accurate or less 
comprehensible communication. A few commenters recommended that a 
covered entity's use of remote interpretation services, via phone or 
video, be limited to administrative matters that can be addressed in 10 
minutes or less. Moreover, in response to comments received in 2013 on 
OCR's Request for Information on Section 1557, some commenters 
identified concerns with the use of video remote interpretation 
services because the video connections used often were of a poor 
quality.
    Response: We believe that commenters' recommendations regarding 
restrictions on remote oral interpretation are unnecessarily 
prescriptive and inconsistent with the fact-based, contextualized 
analysis under Title VI and this final rule. However, in situations 
where visual cues and other messages depend on physical as well as 
verbal communication, remote interpretation may not be adequate to 
provide meaningful access to an individual with limited English 
proficiency.
    To address concerns that video remote interpreting technologies may 
result in less comprehensible communication, we are setting performance 
standards in Sec.  92.201(f) of this final rule for video remote 
interpreting services \203\ used for oral interpretation for an 
individual with limited English proficiency. These standards are 
designed to achieve parity with the regulation in the disability rights 
context regarding video remote interpreting technologies. Thus, the 
standards in Sec.  92.201(f)(1)-(4) of the final rule closely parallel 
the standards on video remote interpreting services in Sec.  92.202 
regarding effective communication for individuals with disabilities, 
which in turn rely on the standards under Title II for the use of sign 
language interpreters.\204\
---------------------------------------------------------------------------

    \203\ We intend that ``video remote interpreting services'' used 
for oral interpretation for individuals with limited English 
proficiency means the same that it does when used to provide 
interpretation for individuals with disabilities as defined by 
reference in Sec.  92.4 of this final rule: ``an interpreting 
service that uses video conference technology over dedicated lines 
or wireless technology offering high-speed, wide-bandwidth video 
connection that delivers high-quality video images as provided in 
[28 CFR] 35.160(d).'' See infra Sec.  92.4 (defining ``auxiliary 
aids and services'' to include ``video remote interpreting 
services,'' as defined in Title II of the ADA, 28 CFR 35.104).
    \204\ 28 CFR 35.160(d)(1)-(4). In contrast to 28 CFR 
35.160(d)(2), which regulates the size of the video image to ensure 
that the screen shows one's face, arms, hands, and fingers, 
paragraph (f)(2) of Sec.  92.201 in this final rule does not 
regulate the size of the video image because this component is less 
relevant for oral interpretation between English and non-English 
languages.
---------------------------------------------------------------------------

    Comment: We received a few comments expressing concern about 
proposed Sec.  92.201(f), re-designated in the final as Sec.  
92.201(g), which provides that an individual with limited English 
proficiency shall not be required to accept language assistance 
services offered by a covered entity. Some commenters recommended that 
proposed Sec.  92.201(f) permit a covered entity to require the 
presence of a qualified interpreter, even if an individual with limited 
English proficiency has declined language assistance services.
    Commenters suggested that when the individual who declines language 
assistance services is a patient, the health care provider's ability to 
accurately diagnose medical conditions is undermined. Commenters 
similarly stated that when the individual who declines language 
assistance services is a limited English proficient health care 
decision-maker for a child, that decision-maker would not be able to 
appropriately consent to, or participate in, a child's treatment plan. 
These commenters recommended requiring that a covered entity's 
insistence on a qualified interpreter be made in a non-coercive and 
culturally-appropriate manner.
    Response: OCR interprets proposed Sec.  92.201(f), which this final 
rule re-designates as Sec.  92.201(g), to allow a covered entity to use 
a qualified interpreter when it is a reasonable step to provide an 
individual with limited English proficiency access to the covered 
entity's health program or activity. Although an individual with 
limited English proficiency can decline a qualified interpreter for 
herself, nothing in the rule is intended to bar a

[[Page 31419]]

provider from using a qualified interpreter to assist the provider in 
communicating with, and assuring appropriate treatment to, the 
individual.\205\ As a result, OCR does not intend for Sec.  92.201(g) 
of the final rule to restrict a covered entity from using a qualified 
interpreter in either of the situations commenters raised. We also 
remind covered entities that, as we stated in the proposed rule, they 
may not discourage individuals with limited English proficiency from 
accepting language assistance services.
---------------------------------------------------------------------------

    \205\ This understanding is consistent with the HHS LEP 
Guidance, supra note 49, 65 FR at 47318 (stating that even if an 
individual with limited English proficiency declines a qualified 
interpreter, where precise, complete, and accurate information is 
critical, or where the competency of the preferred interpreter that 
the individual desires to use is not established, ``a recipient may 
want to consider providing its own, independent interpreter, even if 
the LEP person wants to use his or her own interpreter as well.'').
---------------------------------------------------------------------------

    Comment: Some commenters proposed that OCR regulate the data 
sources to which covered entities may refer to assess the prevalence of 
languages spoken by individuals with limited English proficiency in 
their respective service areas. Commenters also recommended that OCR 
provide covered entities with resources, such as data-driven maps of 
languages spoken by limited English proficient populations in their 
respective service areas, to facilitate covered entities' assessments.
    Response: We decline to accept commenters' suggestions, but we 
support covered entities' efforts to assess the language needs of their 
respective service areas. An assessment is a foundational best practice 
for a language assistance services program.\206\ Data sources that may 
be useful include data from the United States Census Bureau, 
particularly the American Community Survey; utilization data from the 
covered entity's files for individuals with limited English 
proficiency; data from State and local governments; school system data; 
data from community agencies and organizations; and data from refugee 
or immigrant serving agencies.\207\ Covered entities, however, are in 
the best position to determine what local or regional data sources are 
best suited to their needs. When using any data source, covered 
entities should look at the reliability, stability, and currency of the 
data to understand its strengths and weaknesses.
---------------------------------------------------------------------------

    \206\ See HHS LEP Guidance, supra note 49, 68 FR at 47314, 
47320.
    \207\ See Voluntary Resolution Agreement between U.S. Dep't of 
Health & Human Servs., Office for Civil Rights and Memorial Health 
System, OCR Transaction No. 08-79513, pt. V.B.1.b, https://www.hhs.gov/sites/default/files/ocr/civilrights/activities/agreements/mhs_vra.pdf (last visited Mar. 11, 2016) (listing data 
sources for an assessment of language needs).
---------------------------------------------------------------------------

    Comment: Many commenters provided feedback on OCR's request for 
comments on whether the final rule should set thresholds for the non-
English languages in which covered entities must provide a range of 
language assistance services. The majority of comments on this issue 
focused on thresholds for the translation of vital documents.
    Commenters supporting thresholds for written translation suggested 
that this policy improves access for individuals with limited English 
proficiency; streamlines OCR's compliance determinations; eliminates 
ambiguity by providing clear, quantifiable standards for covered 
entities; is consistent with other Departmental regulations specifying 
thresholds for written translation; and mitigates the risk that covered 
entities forgo written translation entirely.
    Commenters recommended a variety of thresholds, such as those 
requiring translation based on the number of languages, percentage of 
language speakers, or the number of language speakers in a covered 
entity's service area, or composite thresholds mixing and matching 
these approaches. Some commenters simply stated that vital documents 
should be translated into the most commonly encountered languages in a 
covered entity's service area. Others suggested that OCR codify the 
threshold for translation of vital documents that is articulated as a 
safe harbor in the HHS LEP Guidance: translation into languages spoken 
by at least 1,000 persons or at least 5% of those present in the 
service area.\208\ Other commenters asserted that numeric thresholds 
for translation are too rigid to be applied universally, and 
recommended that the final rule focus on translating materials for 
certain health programs, such as clinical research or health insurance 
programs.
---------------------------------------------------------------------------

    \208\ The safe harbor further provides that if a language group 
with fewer than 50 individuals constitutes 5% of the recipient's 
service area, the recipient is not obligated to translate written 
materials but must provide written notice in the primary language of 
that language group of the right to receive oral interpretation, at 
no cost to the individual. HHS LEP Guidance, supra note 49, 68 FR at 
47319.
---------------------------------------------------------------------------

    Response: Although we have extensively considered whether to 
include thresholds for written translation and/or oral interpretation 
as either a safe harbor or as an across-the-board minimum requirement, 
we decline to set such thresholds in the final rule. First, although 
thresholds may improve access for some national origin populations, the 
approach does not comprehensively effectuate Section 1557's prohibition 
of national origin discrimination. Setting thresholds would be both 
under-inclusive and over-inclusive, given the diverse range, type, and 
sizes of entities covered by Section 1557 and the diverse national 
origin populations within the service areas of entities' respective 
health programs and activities.
    For instance, a threshold requiring all covered entities, 
regardless of type or size, to provide language assistance services in 
languages spoken by 5% of a county's limited English proficient 
population could result in the provision of language assistance 
services in more languages than the entity would otherwise be required 
to provide under its obligation in Sec.  92.201(a). This threshold 
would apply regardless of the number of individuals with limited 
English proficiency who are eligible to be served or likely to be 
encountered by the covered entity's health program or activity and 
regardless of the covered entity's operational capacity. Similarly, 
this threshold could leave behind significant numbers of individuals 
with limited English proficiency, served by a covered entity's health 
program or activity, who communicate in a language that constitutes 
less than 5% of the county's limited English proficient population.
    Although some Departmental regulations set thresholds, those 
regulations address entities or health programs of similar sizes and 
types, such as qualified health plan issuers, Marketplaces, Medicare 
Advantage, and Medicare Part D. In comparison, Section 1557 and this 
part regulate more diverse types of covered entities with potentially 
more diverse limited English proficient populations. We are concerned 
that significant limited English proficient populations might receive 
no or inadequate language assistance services under a threshold-based 
regulation. We are also concerned about the burden an across-the-board 
translation threshold might place on small covered entities.
    Moreover, we value the flexibility inherent in the contextualized 
approach we have chosen to assess compliance with the requirement to 
take reasonable steps to provide meaningful access. We thus decline to 
impose the prescriptive standards recommended by the commenters as 
inconsistent with this customized regulatory approach.
    Comment: We received many comments in response to whether the rule 
should require enhanced language access obligations for some types of

[[Page 31420]]

covered entities and if so, what types of entities should be subject to 
enhanced obligations. Some commenters suggested that enhanced 
obligations would be appropriate for certain covered entities that 
offer particularly significant or large health programs or activities, 
such as the Department, State agencies administering Medicaid or CHIP, 
Marketplaces, and qualified health plan issuers. These commenters 
asserted that these covered entities possess both the resources and the 
means to meet enhanced obligations and that they can leverage economies 
of scale. The commenters also asserted that imposing enhanced 
obligations on these entities would benefit smaller entities by making 
translated documents more widely available.
    Commenters also addressed the scope of enhanced language access 
obligations, suggesting that such obligations should include requiring 
oral interpretation in at least 150 languages and the translation of 
documents into languages spoken by individuals with limited English 
proficiency when such individuals constitute 5% of, or 500 people in, 
the State population or the covered entity's service area.
    A few commenters opposed enhanced language access obligations for 
certain types of covered entities. Specifically, one commenter asserted 
that there was no principled reason for retail pharmacies, which the 
proposed rule listed as an example of a covered entity that could have 
enhanced obligations under Sec.  92.201,\209\ to be subject to enhanced 
language access obligations.
---------------------------------------------------------------------------

    \209\ See 80 FR at 54185.
---------------------------------------------------------------------------

    Response: We reiterate our view that the contextualized approach in 
Sec.  92.201 best considers both the needs of individuals with limited 
English proficiency and the potential burden on covered entities. 
Creating uniform, across-the-board requirements for particular 
categories of covered entities is, like thresholds, both under-
inclusive and over-inclusive. For example, some smaller entities may 
operate in areas with significant concentrations of individuals with 
limited English proficiency; these entities may need to provide a 
broader scope of language assistance services to meet the requirements 
of Sec.  92.201 than do other entities of similar size in less diverse 
areas. Similarly, State agencies that administer Medicaid and CHIP 
programs will differ with respect to the size and diversity of the 
limited English proficient populations they serve and the resources 
available to them.
    Comment: Some commenters asserted that HHS, other Federal 
Departments, and States already heavily regulate health insurance 
issuers covered by Section 1557, thus subjecting them to multiple 
language access regulations at the State and Federal level. These 
commenters recommended two policy approaches to streamline Federal and 
State language access requirements: (1) Harmonize nondiscrimination 
rules across all Federal and HHS programs to create a national 
standard; and/or (2) permit a deeming approach that allows compliance 
with Federal or State language access laws to suffice for compliance 
with Section 1557, and similarly allow compliance with Section 1557 to 
suffice for compliance with other Departmental regulations addressing 
language access. In contrast, numerous commenters supported our fact-
specific, contextualized approach and urged consideration of additional 
factors (see discussion supra) that would require the more robust 
provision of language assistance services.
    Response: The Department understands the potential for confusion 
and burden that can be imposed where entities are subject to multiple 
sets of overlapping requirements. For this reason, we have harmonized, 
to the extent possible, the tagline requirement in Sec.  92.8(d)(1) 
with the tagline requirement applying to Marketplaces and qualified 
health plan issuers under 45 CFR 155.205(c)(2)(iii)(A).\210\ We will 
continue to coordinate as appropriate within HHS and with other Federal 
departments to ensure that the application and enforcement of 
requirements under Section 1557 is consistent with other provisions of 
Federal law or regulations.
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    \210\ Qualified health plan issuers are also bound by the 
tagline requirement in market-wide regulations at 45 CFR 147.136(e) 
(effective Jan. 19, 2016) described in the preamble to Sec.  92.8, 
supra note 107.
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    However, we decline to adopt an approach that otherwise 
automatically harmonizes nondiscrimination rules or deems compliance 
with other laws sufficient for compliance with Section 1557. As we 
noted above in the discussion of deeming in the General Comments, it is 
common for entities to be subject to multiple State and Federal 
regulations, even when some of those regulations have been adopted by a 
single Federal agency. Indeed, even under CMS regulations for instance, 
Health Insurance Marketplaces,\211\ State agencies administering 
Medicaid and CHIP programs,\212\ and qualified health plan 
issuers,\213\ are subject to multiple differing requirements with 
regard to language assistance services.
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    \211\ Health Insurance Marketplaces have language access 
obligations under laws independent of Federal civil rights laws 
requiring the following to be accessible to individuals with limited 
English proficiency: a Marketplace's toll-free call center, see 45 
CFR 155.205(a); a Marketplace's Web site, see id. 155.205(b); 
applications, forms, and notices required to be sent by a 
Marketplace\SM\; see id. 155.230(b); and a Marketplace's consumer 
assistance functions, including a Marketplace's outreach and 
education activities and a Marketplace's Navigator program 
authorized by 42 U.S.C. 18031(i) and regulated at 45 CFR 155.210, 
see id. 155.205(d) and (e). In making information accessible to 
individuals with limited English proficiency, Marketplaces must do 
so through a combination of written translation, oral 
interpretation, posting of taglines, and translation of certain Web 
site content. See 45 CFR 155.205(c)(2)(i)(A) (oral interpretation), 
(ii) (written translation), (iii)(A) (taglines), (iv)(A) 
(translation of certain Web site content). With respect to a 
Marketplace's Navigator program, Navigators are required to provide 
information in a manner that is culturally and linguistically 
appropriate to the needs of the population being served by the 
Marketplace\SM\, including individuals with LEP. See 42 U.S.C. 
18031(i)(3)(E) (statutory requirement); 45 CFR 155.210(e)(5) 
(regulatory requirement).
    \212\ State agencies administering Medicaid programs and CHIP 
have language access obligations under laws independent of Federal 
civil rights laws. See, e.g., 42 CFR 435.905(a)-(b)(1) (requiring 
State agencies administering Medicaid programs to provide language 
assistance services for applicants and beneficiaries who are limited 
English proficient); 457.340(a) (requiring State agencies 
administering CHIP to comply with certain regulatory requirements 
applicable to Medicaid, including 435.905(a)-(b)(1), which requires 
that program information be accessible to individuals with LEP); 
435.1200(f)(2) (requiring States to make their Medicaid Web sites 
accessible to individuals with limited English proficiency); 
438.10(c)(1)-(5) (specifying obligations for States delivering 
benefits and services through Medicaid managed care plans, including 
managed care organizations and certain plans themselves, to make 
written information available in certain non-English languages, to 
provide oral interpretation, and to notify individuals with limited 
English proficiency of the availability of language assistance).
    \213\ See, e.g., 42 U.S.C. 18031(e)(3)(B) (requiring health 
plans seeking certification as qualified health plans to provide 
certain information, including claims payment and rating practices, 
cost-sharing, and enrollee and participant rights in plain language, 
which means language that the intended audience, including 
individuals with limited English proficiency, can readily use and 
understand); 45 CFR 155.205(c)(2)(i)(A), (ii), (iii)(A), (iv)(B) 
(requiring telephonic interpreter services, written translation, 
taglines, and translations of certain Web site content, 
respectively, for information provided to individuals with limited 
English proficiency); 156.250 (requiring meaningful access to 
certain qualified health plan information in accordance with the 
standards described in 155.205(c)).
---------------------------------------------------------------------------

    With specific regard to language assistance services, there are 
likely numerous situations in which a qualified health plan issuer's 
compliance with the meaningful access provisions of 45 CFR 155.205(c) 
would suffice to meet the requirements of Section 1557; indeed, there 
are instances in which 45 CFR 155.205(c) (e.g., requiring that 
Marketplaces and qualified health plan issuers provide

[[Page 31421]]

telephonic oral interpretation in 150 languages \214\) might require 
more than would be required in a particular case under the fact-based 
analysis we adopt for Section 1557. However, we are concerned that 
there may be cases in which using CMS regulations alone to define a 
covered health insurance issuer's obligations could leave significant 
numbers of individuals with limited English proficiency without any, or 
adequate, access to language services.
---------------------------------------------------------------------------

    \214\ See 45 CFR 155.205(c)(2)(i)(A).
---------------------------------------------------------------------------

    In addition, automatically harmonizing requirements imposed on 
particular entities regulated by both Section 1557 and other laws that 
the Department enforces would undermine an equally important form of 
consistency: consistency in enforcement of the standards of Section 
1557 and this part across all of the diverse categories of entities 
covered under the law.
    For these reasons and the reasons discussed in the General Comments 
supra, we decline to adopt an approach that automatically deems 
compliance with CMS or other Federal regulations to be sufficient to 
demonstrate compliance with Section 1557. However, in circumstances 
where qualified health plan issuers' compliance with Sec.  92.201 
requires steps in addition to those required for compliance with 45 CFR 
147.136 or 155.205, OCR will work with qualified health plan issuers to 
bring them into compliance with Sec.  92.201. In addition, OCR will 
consider a qualified health plan issuer's compliance with other 
applicable regulations in determining the appropriate enforcement 
action.
Summary of Regulatory Changes
    For the reasons set forth in the proposed rule and considering the 
comments received, we are finalizing the provisions in Sec.  92.201 
with several modifications.
    In Sec.  92.201(a), we replaced the phrase ``that it serves or 
encounters'' with ``eligible to be served or likely to be 
encountered.''
    In Sec.  92.201(b), we implemented a technical revision in 
paragraph (b)(1) and we modified paragraph (b)(2). With respect to the 
technical revision in paragraph (b)(1), we modified this proposed 
phrase: ``the nature and importance of the health program or activity, 
including the particular communication at issue, to the individual with 
limited English proficiency'' by replacing ``including'' with the 
conjunction ``and.'' This technical revision clarifies OCR's intent 
that the particular communication at issue will routinely be a 
component of the Director's evaluation when the Director gives 
substantial weight to the nature and importance of the health program 
or activity. In addition, we modified Sec.  92.201(b)(2) to state that 
the Director, in evaluating compliance, will take into account all 
relevant factors, which includes whether a covered entity has developed 
and implemented an effective written language access plan, appropriate 
to its circumstances. We eliminated paragraphs (i) through (v) of Sec.  
92.201(b)(2).
    In Sec.  92.201(d), we broadened the title to reflect that this 
paragraph now addresses specific requirements for written translation 
in addition to oral interpretation services. The text in proposed 
paragraph (d) addressing specific requirements for oral interpretation 
is now reflected under a new paragraph (d)(1). We added paragraph 
(d)(2) to require covered entities to use a qualified translator when 
translating written content in paper or electronic form for its health 
programs or activities.
    In Sec.  92.201(e)(2)(i) and (e)(3), we added ``for the individual 
with limited English proficiency'' after ``qualified interpreter'' to 
conform to the revision of this term as defined in Sec.  92.4 of the 
final rule. In addition, we added a new paragraph (e)(4) to address 
restrictions on a covered entity's use of staff other than qualified 
bilingual/multilingual staff to communicate directly with individuals 
with limited English proficiency, in their primary languages.
    We re-designated paragraph (f) of Sec.  92.201 in the proposed rule 
as paragraph (g) of Sec.  92.201 in this final rule, and we added a new 
paragraph (f). New paragraph (f) provides that when a covered entity 
uses video remote interpreting services as the means to provide an 
individual with limited English proficiency oral language assistance, 
the video remote interpreting technology must meet the standards listed 
in Sec.  92.201(f)(1)-(4) of this final rule.
Effective Communication for Individuals With Disabilities (Sec.  
92.202)
    In Sec.  92.202 of the proposed rule, we proposed to incorporate 
the provisions governing effective communication with individuals with 
disabilities found in the regulation implementing Title II of the ADA, 
which applies to State and local government entities and requires 
covered entities to ensure that communications with individuals with 
disabilities are as effective as they are with individuals without 
disabilities. We noted that OCR typically looks to the ADA for guidance 
in interpreting Section 504 as the two laws contain very similar 
standards.
    In the proposed rule, OCR considered whether to incorporate the 
standards in the regulation implementing Title II of the ADA or in the 
regulation implementing Title III of the ADA, or the standards in both 
regulations. Standards regarding effective communication under both 
regulations are very similar. We noted that there are, however, limited 
differences between the Title II and Title III regulations, regarding 
limitations on the duty to provide a particular aid or service where 
doing so may impose undue financial and administrative burdens, and the 
obligation under the Title II regulation to give primary consideration 
to the choice of an aid or service requested by the individual with a 
disability.
    OCR proposed to apply the Title II standards to all entities 
covered under the proposed rule. We noted that although OCR could apply 
Title II standards to States and local government entities and Title 
III standards to private entities, we believe it is appropriate to hold 
all recipients of Federal financial assistance from HHS to the higher 
Title II standards as a condition of their receipt of that assistance. 
We also noted that it is appropriate to hold HHS itself to the same 
standards to which the Department subjects the recipients of its 
financial assistance.
    We also proposed that where the regulatory provisions referenced in 
Sec.  92.202 use the term ``public entity,'' that term shall be 
replaced with ``covered entity.''
    The comments and our responses regarding Sec.  92.202 are set forth 
below.
    Comment: A few commenters suggested that HHS urge covered entities 
to consider the gender preferences of patients for interpreters. These 
commenters suggested that patients may not be comfortable with 
interpreters of the opposite gender, particularly in settings that 
involve nudity such as in an obstetrics and gynecology appointment.
    Response: We recognize the commenters' privacy concern, but we 
decline to accept the commenters' suggestion. We believe that 
identification with a certain gender specified by the patient is not a 
characteristic necessary to interpret for an individual with a 
disability or an individual with limited English proficiency. The 
definitions of qualified interpreter for an individual with a 
disability and qualified interpreter for an individual with limited 
English proficiency set forth in Sec.  92.4 require an

[[Page 31422]]

interpreter who adheres to generally accepted interpreter ethics, which 
would include respecting a patient's privacy and comporting oneself 
with discretion and professionalism in sensitive situations such as the 
settings described by the commenters. We believe that an interpreter of 
any gender can display these qualities and thus adequately perform the 
interpretation duties required of him or her. In those cases where an 
interpreter is unable to provide interpretation consistent with these 
standards, the interpreter would be unqualified for those reasons. In 
addition, acceding to the commenter's request could result in gender 
discrimination, which contravenes the purpose of other provisions of 
this rule.
    Comment: A few commenters suggested that OCR apply cultural 
competency standards, such as the National Standards for Culturally and 
Linguistically Appropriate Services in Health and Health Care (CLAS), 
to entities serving people with disabilities.
    Response: Although OCR does not codify the CLAS standards as part 
of this regulation, OCR agrees that the CLAS standards provide valuable 
guidance to covered entities regarding the provision of services that 
are responsive to diverse cultural beliefs and practices, preferred 
languages, health literacy and other communication needs, and that 
promote compliance with the final rule. OCR encourages adoption of the 
CLAS standards by covered entities for interactions with all their 
patients and not simply for those with disabilities.
    Comment: Some commenters suggested that OCR strengthen effective 
communication regulations by including the proposed provision regarding 
the restricted use of certain persons to interpret or facilitate 
communication contained in Sec.  92.201(e) for individuals with limited 
English proficiency in Sec.  92.202 for individuals with disabilities.
    Response: We appreciate the commenters' suggestion, and note that 
Sec.  92.202 incorporates provisions of the ADA regarding the 
restricted use of certain persons to interpret or facilitate 
communication; it is comparable to the provision in the final rule 
regarding restrictions on the use of certain persons to interpret or 
facilitate communication with individuals with limited English 
proficiency.
Summary of Regulatory Changes
    For the reasons set forth in the proposed rule and considering the 
comments received, including comments regarding the auxiliary aids and 
services requirement in Sec.  92.101(b)(2)(i) (discussed above), we are 
finalizing the provisions proposed in Sec.  92.202 by re-designating 
the existing regulation text at Sec.  92.202 as Sec.  92.202(a), and 
adding a new subsection, Sec.  92.202(b) requiring covered entities--
regardless of the number of people they employ--to provide appropriate 
auxiliary aids and services to persons with impaired sensory, manual, 
or speaking skills, where necessary to afford such persons an equal 
opportunity to benefit from the service in question.
Accessibility Standards for Buildings and Facilities (Sec.  92.203)
    The Section 504 regulatory provisions incorporated into Subpart B 
in this regulation contain program accessibility requirements that 
apply to existing facilities as well as new construction and 
alterations. In Sec.  92.203 of the proposed rule, we proposed to 
establish specific accessibility standards for new construction and 
alterations. We noted that these standards are consistent with existing 
standards under the ADA.
    Under paragraph (a), we proposed that each facility or part of a 
facility in which health programs or activities are conducted that is 
constructed or altered by or on behalf of, or for the use of, a 
recipient or State-based Marketplace\SM\ shall comply with the 2010 ADA 
Standards for Accessible Design (2010 Standards), as defined in the ADA 
Title II regulations,\215\ if construction or alteration was commenced 
on or after January 18, 2018. We proposed that all newly constructed or 
altered buildings or facilities subject to this section shall comply 
with the requirements for a ``public building or facility'' as defined 
in Section 106.5 of the 2010 Standards.
---------------------------------------------------------------------------

    \215\ 28 CFR 35.104.
---------------------------------------------------------------------------

    We also proposed that new construction and alterations of such 
facilities would also be subject to the new construction standards 
found in the Section 504 implementing regulation at 45 CFR 84.23(a) and 
(b).
    Under paragraph (b), we proposed that each facility or part of a 
facility in which health programs or activities are conducted that is 
constructed or altered by or on behalf of, or for the use of, a 
recipient or State-based Marketplace\SM\ before January 18, 2018 in 
conformance with UFAS, the 1991 ADA Standards for Accessible Design 
(1991 Standards), or the 2010 Standards be deemed to comply with the 
requirements of this section and with 45 CFR 84.23 (a) and (b), cross 
referenced in Sec.  92.101(b)(2)(i) with respect to those facilities. 
Thus, we proposed that if the construction or alteration of facilities 
began prior to the effective date of paragraph (a) of this section, the 
facilities be deemed in compliance if they were constructed or altered 
in conformance with applicable standards at the time of their 
construction or alteration.
    In paragraph (c), we proposed that each building or part of a 
building that is constructed or altered by or on behalf of, or for the 
use of, the Department must be designed, constructed, or altered so as 
to be readily accessible to and usable by individuals with 
disabilities. We proposed that the definitions, requirements, and 
standards of the Architectural Barriers Act, as established in 
Appendices C and D to 36 CFR pt 1191, apply to buildings and facilities 
covered by this section.
    OCR considered adding specific language regarding accessibility 
standards for medical diagnostic equipment. However, we noted that the 
United States Access Board is currently developing standards for 
accessible medical diagnostic equipment and, therefore, we are 
deferring proposing specific accessibility standards for medical 
equipment. We further noted that a health program or activity's use of 
medical diagnostic equipment would be covered by Section 1557 under the 
general prohibition of discrimination on the basis of disability in 
Sec.  92.101.
    The comments and our responses regarding Sec.  92.203 are set forth 
below.
    Comment: Numerous comments supported requiring immediate compliance 
with the 2010 ADA Standards for new construction and alterations. 
Commenters urged that OCR not give covered entities an 18-month grace 
period for compliance because the 2010 Standards already apply to the 
vast majority of facilities covered by this proposed rule. They 
maintained that an approach which emphasizes the uniform application of 
the 2010 Standards upon publication of the 1557 rule will enable 
greater consistency among implementing agencies, given the overlapping 
jurisdiction that OCR has with the Department of Justice.
    Response: OCR agrees with the comments in part. Because the great 
majority of entities covered by the final rule are already subject to 
the 2010 Standards, the regulation has been revised to require covered 
entities that were covered by the 2010 Standards prior to the effective 
date of this final rule to comply with the 2010 Standards for new 
construction or alterations that commence on or after the effective 
date of the final rule. However, there may be some entities covered by 
the final rule that were not covered by the 2010 Standards prior to the 
effective date of the final rule. For those entities,

[[Page 31423]]

application of the 2010 Standards would be new; thus, these entities 
are given 18 months to comply with the final rule with respect to new 
construction and alterations. We anticipate that these changes will 
have only a de minimis impact on cost as nearly all of the entities 
affected are already subject to the 2010 Standards.
    Comment: Numerous commenters recommended that OCR not deem 
compliance with the UFAS as compliance with Section 1557 for facilities 
that were constructed or altered prior to 18 months after publication 
of the final rule. They stated that the UFAS is functionally deficient 
for people with disabilities; barriers are permitted under the old 
standard that negatively affect people with mobility and strength 
disabilities; and, as recognized in the preamble to the proposed rule, 
nearly all of the facilities covered under the proposed rule are 
already subject to the 2010 Standards.
    Response: OCR appreciates the concern raised by the commenters and 
agrees with the reasoning underlying the recommendation. OCR has thus 
modified the language in Sec.  92.203(b) to state that each facility or 
part of a facility in which health programs or activities are conducted 
that is constructed or altered by or on behalf of, or for the use of, a 
recipient or State-based Marketplace\SM\ in conformance with the 1991 
Standards or the 2010 Standards is deemed to comply with the 
requirements of the final rule with respect to those facilities, if the 
construction or alteration was commenced before the effective date of 
the final rule. Conformance with the UFAS will constitute compliance 
with the requirements of the final rule only with respect to facilities 
where construction or alteration was commenced before the effective 
date of the final rule and only where the facility or part of the 
facility was not covered by the 1991 Standards or 2010 Standards.
    Comment: One commenter recommended that OCR limit the facility 
accessibility requirements to areas of facilities that actually host 
consumers (patients of providers, in-person enrollees, etc.) and not 
apply them to covered entities' facilities more generally. The 
commenter observed that the ADA standards apply to places of public 
accommodation, and that if a facility is not public-facing, existing 
ADA requirements for employees already apply and do not need to be 
incorporated into this rule. The commenter believed that limiting these 
requirements to public-facing areas of entities would address consumer 
needs without creating undue financial and administrative burdens. As 
an example, the commenter stated that many issuers operate call centers 
that do not provide face-to-face services to their consumers; 
therefore, the commenter asserted, it is unclear why the call center 
would need to comply with physical facility accessibility standards.
    Response: OCR notes that applying the building accessibility 
requirement to facilities or parts of facilities not used in any manner 
by customers or other program beneficiaries in most cases would be 
inconsistent with the limited application of the final rule to 
employment and employees. Thus, this provision is interpreted in light 
of the limitations on coverage of employment in Sec.  92.101(a) (2); as 
such, the building accessibility requirement does not apply to 
facilities or parts of facilities that are visited only by employees of 
the covered entity except as provided in Sec.  92.208. We believe that 
this approach is consistent with the ACA's goal of increasing consumer 
access to health care services and with Section 1557's focus on 
discrimination against patients, enrollees and other beneficiaries in 
health programs and activities.
    However, we also note that the ADA applies to employment and, in 
addition, that nearly all of the entities subject to the facility 
access requirements in the final rule are also subject to facility 
access requirements under Section 504. Complaints of discrimination 
related to program accessibility can be brought by employees under the 
ADA and Section 504, and entities should ensure that they are in 
compliance with accessibility requirements, including the 2010 
Standards, under the ADA.
    Comment: Several commenters recommended that OCR require covered 
entities to make each of their existing facilities accessible to and 
usable by persons with disabilities. These commenters were concerned 
that if the accessibility requirement is not applied to each individual 
facility, then a large for-profit insurance carrier could decide that, 
among the great majority of its providers who operate in existing 
facilities, only a small percentage need to be physically accessible or 
have accessible equipment. Moreover, commenters expressed concern that 
those accessible providers could be clustered together in some central 
location, and whenever a member called member services and mentioned 
the need for accessibility, that member would be actively directed 
toward the more limited subset of accessible provider offices.
    Response: The change urged by the commenter would constitute a new 
requirement that is inconsistent with existing standards under Title II 
of the ADA and Section 504, neither of which has been interpreted to 
require each existing facility to be accessible; rather, they require 
that the recipient operate each program or activity so that, when 
viewed in its entirety, it is readily accessible to individuals with 
disabilities.\216\ Thus, we decline to accept the recommendation. We do 
note that issuers covered by this rule are responsible for ensuring 
that their health programs provide equal access to individuals without 
discrimination on the basis of disability. OCR also notes that most 
providers are recipients of Federal financial assistance from HHS and 
are themselves independently subject to the nondiscrimination 
requirements, including program accessibility requirements, in the 
final rule as well as under Title III of the ADA.
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    \216\ See 28 CFR 35.150(a); 45 CFR 84.22(a); Bird. v. Lewis and 
Clark Coll, 303 F.3d 1015, 1021 (9th Cir. 2002), cert. denied, 538 
U.S. 923 (2003) (``the central inquiry [under the ADA and Section 
504] is whether the program, when viewed in its entirety, is readily 
accessible to and usable by individuals with disabilities'').
---------------------------------------------------------------------------

    Comment: Some commenters urged that the requirement to comply with 
accessibility standards be primarily placed on the owners of buildings 
and facilities, rather than on the providers who rent space. One 
commenter said that OCR should provide resources and training to small 
business renters so that they understand what terms in their leases are 
necessary to ensure that landlords take reasonable responsibility for 
ensuring their facilities comply with Section 1557.
    Response: OCR declines to accept the recommendation to place 
primary responsibility for compliance with accessibility standards on 
building owners. Under longstanding legal interpretations of the ADA 
and Section 504, building owners and lessees each have obligations to 
refrain from discriminating with respect to program access. OCR also is 
declining to develop resources and training specifically for small 
business renters, but notes that the Department of Justice has 
materials on compliance with accessibility standards under the ADA that 
may be of use to these entities.\217\ In addition, the ADA National 
Network in HHS supports ten regional centers that provide information, 
guidance and training on the ADA through services tailored to meet the 
needs of business, government and individuals at local, regional and

[[Page 31424]]

national levels.\218\ OCR also will develop and make available, before 
the effective date of the final rule, training materials that cover 
requirements related to accessibility for individuals with 
disabilities.
---------------------------------------------------------------------------

    \217\ See U.S. Dep't of Justice, ADA Title III Technical 
Assistance Manual Covering Public Accommodations and Commercial 
Facilities (1993), Sec.  III-1.2000, https://www.ada.gov/taman3.html.
    \218\ For more information or to contact your regional center, 
please see https://adata.org/ and https://adata.org/national-network.
---------------------------------------------------------------------------

    Comment: Some commenters urged OCR to exempt entities that are 
places of public accommodation under Title III of the ADA from the 
requirements for physical accessibility under Section 1557, stating 
that additional requirements are confusing and burdensome for small 
providers. Another commenter recommended that if a health program or 
activity would not, under Title III of the ADA, be required to be in 
compliance with a given standard under the 2010 Standards, then the 
health program or activity should also be exempt from that standard for 
the purposes of Section 1557 enforcement.
    Response: While entities subject to Title III of the ADA include 
both entities that receive Federal financial assistance and those that 
do not, the final rule applies only to entities that receive Federal 
financial assistance, as well as the Department and entities 
established under Title I of the ACA. We believe it is reasonable to 
hold entities that receive Federal financial assistance to the 
accessibility requirements under the final rule, regardless of the 
standards to which they might be subject under Title III.
    Comment: Some commenters said that OCR should require covered 
entities to make publicly available information on whether medical 
diagnostic equipment is accessible, so that individuals with 
disabilities can make informed decisions when choosing a health care 
provider. A number of commenters recommended that new accessibility 
standards should be applicable only when physicians upgrade or replace 
their existing equipment.
    Response: As the preamble to the proposed rule noted, standards for 
accessible medical equipment are in development by the Access Board; 
thus, OCR is not requiring compliance with specific accessibility 
standards at this time. In the absence of such standards, covered 
entities are not in a position to advise or publicize whether their 
equipment complies with particular standards. Nonetheless, we noted and 
reiterate here that general accessibility standards that apply to 
health programs and activities apply to medical equipment, and health 
service providers must ensure that their health programs and activities 
offered through the use of medical equipment are accessible to 
individuals with disabilities.
Summary of Regulatory Changes
    For the reasons set forth above and considering the comments 
received, we have revised Sec.  92.203(a) to state that each covered 
facility must comply with the 2010 Standards, if the construction or 
alteration was commenced on or after the effective date of the final 
rule, except that if a covered facility was not covered by the 2010 
Standards prior to the effective date of the final rule, it must comply 
with the 2010 Standards if the construction was commenced after 18 
months after the effective date of the final rule.
    For the reasons set forth above and considering the comments 
received, we have also modified the language in Sec.  92.203(b) to 
state that each covered facility constructed or altered in conformance 
with the 1991 Standards or the 2010 Standards will be deemed to comply 
with the requirements of this section and with 45 CFR 84.23(a) and (b), 
cross-referenced in Sec.  92.101(b)(2)(i) with respect to those 
facilities, if the construction or alteration was commenced before the 
effective date of the final rule. Further, each covered facility that 
was constructed or altered in conformance with UFAS will be deemed to 
comply with the requirements of this section and with 45 CFR 84.23(a) 
and (b), cross-referenced in Sec.  92.101(b)(2)(i) with respect to 
those facilities, if the construction was commenced before the 
effective date of the final rule and the facility was not covered by 
the 1991 Standards or 2010 Standards.
Accessibility of Electronic and Information Technology (Sec.  92.204)
    In Sec.  92.204(a), we proposed to require covered entities to 
ensure that their health programs or activities provided through 
electronic and information technology are accessible to individuals 
with disabilities, unless doing so would impose undue financial and 
administrative burdens or would result in a fundamental alteration in 
the nature of an entity's health program or activity.\219\ For example, 
we stated that a Health Insurance Marketplace\SM\ creating a Web site 
for application for health insurance coverage must ensure that 
individuals with disabilities have an equal opportunity to benefit from 
the Web site's tool that allows comparison of health insurance coverage 
options, quick determination of eligibility, and facilitation of timely 
access to health insurance coverage by making its new Web site 
accessible to individuals who are blind or who have low vision.
---------------------------------------------------------------------------

    \219\ The terms ``undue financial and administrative burdens'' 
and ``fundamental alteration'' as used in this part have the same 
meaning that they have under the ADA.
---------------------------------------------------------------------------

    We noted that this provision is consistent with existing standards 
applicable to covered entities. Specifically, Section 508 of the 
Rehabilitation Act requires that electronic and information technology 
developed, procured, maintained, or used by Federal agencies be 
accessible for individuals with disabilities. Section 508 applies to 
HHS administered health programs or activities, including the 
Federally-facilitated Marketplaces. Section 504, which applies to 
recipients of Federal financial assistance, including issuers that 
receive Federal financial assistance, and Titles II and III of the ADA, 
which apply to State and local government entities and places of public 
accommodation, respectively, similarly have been interpreted to require 
that covered entities' programs, services, and benefits provided 
through electronic and information technology be accessible to 
individuals with disabilities.\220\ In addition, some States have 
adopted Section 508 or Web Content Accessibility Guidelines (WCAG) 
standards for State agency Web sites or electronic and information 
technology more broadly.
---------------------------------------------------------------------------

    \220\ See, e.g., discussion of case law in U.S. Dep't of 
Justice, Accessibility of Web Information and Services of State and 
Local Government Entities and Public Accommodations (Advanced Notice 
of Proposed Rulemaking), 75 FR 43460, 43463-(Jul. 26, 2010).
---------------------------------------------------------------------------

    In paragraph (b), we proposed to require State-based Marketplaces 
and recipients of Federal financial assistance to ensure that their 
health programs and activities provided through Web sites comply with 
the accessibility requirements of Title II of the ADA. We noted that 
our proposed regulatory text cross-references the Title II regulations 
as a whole, therefore incorporating any future changes to the Title II 
regulations. We also noted that these requirements are informed by the 
Department's extensive experience with web-based technology through 
Federal grant-making programs, including programs that provide funds 
for State infrastructure changes to allow electronic applications for 
coverage through the Medicaid program and the Health Insurance 
Marketplaces, provider adoption of electronic health records, and the 
development of web-based curricula for health care professionals.
    In the proposed rule, we explained that based on the Department's 
prior experience in this field, we believe that

[[Page 31425]]

including an explicit, rather than implicit, requirement for electronic 
and information technology is necessary to clarify the obligations of 
covered entities to make this technology accessible. In addition, we 
noted that absent an explicit requirement for accessible electronic and 
information technology, people with disabilities might not have 
opportunities to participate in services, programs, and activities that 
are equal to and as effective as those provided to others, further 
exacerbating existing health disparities for persons with disabilities.
    Given the existing requirements under Section 504, Section 508, and 
the ADA applicable to information provided through electronic and 
information technology as a whole, and given the importance of 
technologies, such as kiosks and applications, to access to health 
care, health-related insurance and other health-related coverage, we 
proposed to include an explicit accessibility requirement that applies 
to all of a covered entity's electronic and information technology, 
rather than to web access only. We sought comment on this proposal.
    We also proposed a general accessibility performance standard for 
electronic and information technology, rather than a requirement for 
conformance to a specific set of accessibility standards. We provided 
that the application of this general accessibility performance standard 
would be informed by future rulemaking by the Access Board and the 
Department of Justice. We sought comment on whether the regulation 
should impose a general accessibility performance standard for 
electronic and information technology or require that electronic and 
information technology comply with standards developed pursuant to 
Section 508 by the Access Board,\221\ or the Worldwide Web Consortium's 
Web Accessibility Initiative's WCAG 2.0 AA.
---------------------------------------------------------------------------

    \221\ 36 CFR pt. 1194.
---------------------------------------------------------------------------

    As noted above, we proposed that covered entities would have a 
defense to making their health programs and activities provided through 
electronic and information technology accessible if doing so would 
impose undue financial and administrative burdens or would result in a 
fundamental alteration in the nature of the health program or activity. 
In determining whether an action would impose such undue burdens, we 
proposed that a covered entity must consider all resources available 
for use in the funding or operation of the health program or activity.
    We noted that when undue financial and administrative burdens or a 
fundamental alteration are determined to exist, the covered entity is 
still required to provide information in a format other than an 
accessible electronic format that would not result in such undue 
financial and administrative burdens or a fundamental alteration, but 
would ensure, to the maximum extent possible, that individuals with 
disabilities receive the benefits or services of the health program or 
activity that are provided through electronic and information 
technology.
    The comments and our responses regarding Sec.  92.204 are set forth 
below.
    Comment: A few commenters objected to Sec.  92.204's focus on 
individuals with disabilities. These commenters noted that Section 
1557's nondiscrimination mandate guards against discrimination on the 
basis of race, color, national origin, sex, and age, as well as 
disability. Therefore, these commenters recommended that OCR state in 
Sec.  92.204 that covered entities must ensure that their health 
programs or activities provided through electronic information and 
technology are accessible to individuals in all protected classes, not 
just individuals with disabilities.
    Response: Section 92.204 addresses the unique accessibility issues 
for individuals with disabilities. However, Sec.  92.204's focus on 
disability does not limit the application of general nondiscrimination 
principles to the accessibility of health programs and activities 
offered through electronic and information technology to other groups. 
Thus, the general prohibition of discrimination set forth in Sec.  
92.101(a) requires the accessibility of health programs and activities 
offered through electronic and information technology, without 
discrimination on the basis of race, color, national origin, sex, age, 
or disability.
    Comment: One commenter expressed concern that many patients and 
clients lack internet connectivity in their homes and communities. This 
commenter stated that while providers should design web-based tools and 
resources that are user-friendly, appropriate, and effective for 
patients and clients with disabilities, the providers will need to use 
alternative creative means to meet the needs of those they serve who 
lack such connectivity in their homes or communities.
    Response: OCR recognizes that many persons lack internet 
connectivity in their homes and communities and may therefore be unable 
to access web-based tools and resources provided by covered entities, 
and encourages entities to develop creative means to meet the needs of 
these individuals.
    Comment: Several commenters asked that OCR clarify the scope of the 
electronic and information technology requirements. Specifically, these 
commenters asked OCR whether Sec.  92.204's requirements are limited to 
the provision of health services.
    Response: Section 92.204's requirements are coextensive with, and 
bounded by, the coverage of Section 1557. Thus, the rule requires 
covered entities to make all health programs and activities provided 
through electronic and information technology accessible. Accordingly, 
this requirement reaches activities such as an online appointment 
system, electronic billing, and comparison of health plans offered by a 
Health Insurance Marketplace \SM\. OCR believes that the regulatory 
text encompasses this approach.
    Comment: A few commenters asked OCR to clarify whether the general 
requirement under subsection (a) to make health programs and activities 
that are provided through electronic and information technology 
accessible applies only to health programs or activities provided 
through electronic and information technology that are accessed by 
consumers or also to a covered entity's internal facing electronic 
information technology. Other commenters urged OCR to limit the 
application of the general requirement under subsection (a) only to 
health programs or activities provided through electronic and 
information technology that are directly related to the activity that 
made the organization a covered entity and that are accessed by 
consumers. Conversely, several other commenters recommended that OCR 
extend the application of subsection (a) to employees of covered 
entities.
    Response: OCR addressed a similar issue in considering facility 
access requirements above. There, OCR noted that extending the facility 
accessibility requirement to facilities not used in any manner by 
customers or other program beneficiaries in most cases would be 
inconsistent with the limited application of the final rule to 
employment and employees. Thus, we noted that the facility 
accessibility requirement is interpreted in light of the limitations on 
coverage of employment in Sec.  92.101(a)(2).
    Similarly, in considering the application of the requirement in the 
final rule to accessibility of health programs and activities offered 
through electronic and information technology,

[[Page 31426]]

we are mindful that the final rule has limited application to 
employment and employees. In consideration of this limitation, we 
clarify that the accessibility requirements in the final rule are 
limited to health programs and activities offered through electronic 
and information technology that is used by consumers or other program 
beneficiaries and do not apply to electronic and information technology 
that is used only by employees of a covered entity and that does not 
affect or impact customers or program beneficiaries, except as provided 
in Sec.  92.208.
    We also note that the ADA and Section 504 apply to employment, and 
virtually all of the entities subject to the requirement for 
accessibility of health programs and activities offered through 
electronic and information technology in the final rule are also 
subject to similar general accessibility requirements in the ADA and 
Section 504. Entities covered by the final rule should be mindful of 
their obligations under these other laws.
    Comment: Some commenters recommended that OCR require different 
standards for accessibility of electronic and information technology 
for entities covered under Title II of the ADA, which applies to State 
and local government entities, and entities covered under Title III of 
the ADA, which applies to places of public accommodation and commercial 
facilities.
    Response: OCR declines to apply different standards under the final 
rule. As noted above, State or local government entities that are 
covered under Section 1557 are already subject to the Title II 
standards. In addition, the other entities covered under Section 1557 
are health programs and activities that either receive Federal 
financial assistance from HHS or are conducted directly by HHS. 
Although OCR could apply Title II standards to States and local 
entities and Title III standards to private entities, we believe it is 
appropriate to hold all recipients of Federal financial assistance from 
HHS to the higher Title II standards as a condition of their receipt of 
that assistance. As a result, OCR declines to impose different 
standards as recommended by the commenters. This approach is consistent 
with our approach to Sec.  92.202, in which we are applying Title II 
standards to all entities covered under Section 1557 with respect to 
effective communication.
    Comment: One commenter asked that OCR exempt places of public 
accommodation under the ADA from the requirements to make electronic 
and information technology accessible. Other commenters suggested that 
the electronic and information technology requirements in the proposed 
rule are too confusing and burdensome for small providers.
    Response: Places of public accommodation covered under the ADA 
already are required to make health programs and activities offered 
through electronic and information technology accessible to individuals 
with disabilities. The ADA does not exempt small providers from this 
requirement. Thus, the requirements under this final rule should be 
familiar to entities covered under the ADA.
    Comment: Many commenters recommended that OCR require compliance 
with the accessibility standards set forth in WCAG 2.0, with Level AA 
as the minimum benchmark. These commenters suggested that compliance 
with a specific standard would offer clarity to covered entities and 
consistency to consumers. These commenters also favored WCAG over 
Section 508 because WCAG is technology agnostic, meaning it is broken 
down by function rather than product-type, and can apply to future 
innovations as well as current uses of technology. These commenters 
also noted that the Access Board is modeling the refreshed Section 508 
standards on WCAG 2.0 Level AA, ensuring that HHS's adoption of such a 
technical standard guarantees that there will be one, universal set of 
accessibility benchmarks.
    Conversely, one commenter stated that OCR should not impose a 
specific accessibility standard for electronic and information 
technology, arguing that a specific standard may slow innovation and 
the establishment of potentially effective electronic information 
technology alternatives.
    Response: OCR has decided not to adopt specific accessibility 
standards at this time. Nonetheless, we are still requiring covered 
entities to ensure that health programs and activities provided through 
electronic and information technology are accessible to individuals 
with disabilities, unless doing so would impose undue financial and 
administrative burdens or would result in a fundamental alteration in 
the nature of an entity's health program or activity. Thus, when a 
covered entity chooses to provide a health program or activity through 
electronic and information technology, the entity must ensure that the 
technology is accessible as necessary for individuals with disabilities 
to have equal access to the health program or activity. In our 
experience, where a covered entity chooses to provide health programs 
and activities through electronic and information technology, it is 
difficult to ensure compliance with accessibility requirements without 
adherence to standards such as the WCAG 2.0 AA standards or the Section 
508 standards. Accordingly, OCR strongly encourages covered entities 
that offer health programs and activities through electronic and 
information technology to consider such standards as they take steps to 
ensure that those programs and activities comply with requirements of 
this regulation and other Federal civil rights laws. Due to the 
increasing importance of electronic and information technology in 
health care and health insurance coverage, OCR will continue to closely 
monitor this area, including developments in the standards developed by 
the Department of Justice and the Access Board.
    Comment: A few commenters asked that OCR give covered entities at 
least 24 months to come into compliance with the requirements of Sec.  
92.204 because they believe there is a significant shortage of 
available expertise on electronic and information technology. Other 
commenters recommended that physicians should not be required to comply 
with new standards until they are ready to upgrade or purchase a new 
technology product. Still others asked that OCR delay enforcement 
pertaining to electronic and information technology until health 
programs and activities can easily select appropriate accessible 
technology that has been certified by OCR to comply with established 
standards for accessible technology.
    However, many other commenters urged OCR to reject any requests to 
delay or phase-in the requirements of Sec.  92.204. These commenters 
pointed out that Sec.  92.204 builds on and reinforces other 
longstanding accessibility requirements in Federal law; accordingly, it 
should not be overly burdensome for covered entities to adjust to the 
requirements of this rule.
    Response: OCR is requiring compliance with the requirements of 
Sec.  92.204 as of the effective date of this regulation. Section 
92.204 largely reflects existing standards under the ADA and Section 
504, and accordingly, most covered entities are already required to 
meet Sec.  92.204's standards. Moreover, and with respect to those few 
covered entities that were not previously subject to the ADA and 
Section 504 standards, existing undue burden analysis provides adequate 
safeguards for covered entities that are unable to comply with the 
requirements of Sec.  92.204 by the effective date.

[[Page 31427]]

    Comment: One commenter suggested that the responsibility for 
redesigning health information and technology to improve accessibility 
should be placed on software vendors and developers rather than on 
issuers and providers.
    Response: The final rule applies to, among other entities, entities 
that conduct health programs or activities and that receive Federal 
financial assistance from HHS. Those entities, consistent with 
longstanding requirements under the ADA and Section 504, must make 
health programs and activities offered through electronic and 
information technology accessible to individuals with disabilities. 
This obligation is not new. Covered entities are not obligated to 
redesign health information and technology; accessible technology 
exists and is available to entities covered by the final rule. Thus, 
HHS is declining to make the change proposed.
    Comment: Several commenters suggested that OCR include a reference 
to specific ADA regulations requiring effective communication in Sec.  
92.204.\222\ These commenters noted that some of these regulations are 
the legal origin of the final rule's statement that covered entities 
must make health programs and activities provided through electronic 
and information technology accessible. Although these commenters 
acknowledged that not all of the regulations concerning auxiliary aids 
and services will apply in the electronic and information technology 
context, they believe that the explicit incorporation of relevant 
aspects of these ADA regulations would inform covered entities of other 
obligations that they might otherwise overlook, such as the obligation 
to consult and work with individuals with disabilities as part of the 
entity's effective communication obligation.
---------------------------------------------------------------------------

    \222\ Commenters wanted OCR to cite to 28 CFR 35.160(a)(1), (2); 
35.160(d); 35.163; and 35.164.
---------------------------------------------------------------------------

    Response: OCR believes that intent is clear in the regulation as 
written. Although OCR is declining to include a reference to 28 CFR 
35.160 and succeeding sections in Sec.  92.204, as proposed by the 
commenters, these sections are incorporated in Sec.  92.202 of the 
final rule, addressing effective communication with individuals with 
disabilities. Covered entities are required to comply with both 
sections of the final rule.
    Comment: A few commenters asked OCR to state that electronic 
information and technology must be functional so that a person with a 
disability can enjoy all of the same functionality in an equally 
effective manner and with substantially equivalent ease of use as a 
user without a disability.
    Response: OCR is clarifying here that a covered entity's electronic 
and information technology must be functional as necessary to ensure 
that an individual with a disability has equal access to a covered 
entity's health program and activity. We believe that the regulatory 
text encompasses this approach.
    Comment: Several commenters called attention to problems that 
persons with disabilities frequently encounter when attempting to 
access health care. For example, one commenter pointed out that health 
care service providers' Web sites often include content like videos 
with audio components. The commenter noted that these videos often lack 
closed captioning or American Sign Language (ASL) translations that 
would make the information provided in the video accessible to people 
with hearing-related disabilities. Accordingly, this commenter 
suggested that OCR modify Sec.  92.204 to require covered entities to 
caption or provide ASL translations of audio-based content on their Web 
sites so that all audio based content is accessible for deaf and hard 
of hearing individuals.
    Another commenter pointed out that, when blind patients seek 
treatment at a doctor's office, they are often expected to make 
appointments or fill out required documentation expected of new 
patients using an inaccessible online portal. In these situations, the 
blind patient is forced to rely on a third party for assistance and, 
regardless of their personal relationship, disclose confidential 
information to that person such as the patient's medical history, 
illnesses, medications, and history of disease or genetic patterns 
running in the patient's family. Accordingly, this commenter asked that 
OCR clarify that covered entities need to make online portals 
accessible so that blind individuals have the same level of privacy and 
confidentiality as other individuals.
    Response: Under the final rule, covered entities must ensure that 
the health programs and activities they offer through electronic and 
information technology are accessible to individuals with disabilities. 
OCR is not prescribing specific standards for ensuring accessibility 
and so declines to adopt the commenters' recommendation. However, OCR 
notes that under Sec.  92.202(a), which incorporates 28 CFR 
35.160(b)(2), ``[i]n order to be effective, auxiliary aids and services 
must be provided [to individuals with disabilities] . . . in such a way 
as to protect the privacy and independence of the individual with a 
disability.'' We further remind covered entities to consider the range 
of accessibility issues that arise for individuals with disabilities 
and the technology-based solutions that are available to address these 
issues. The confidentiality of health information is a critical issue, 
and covered entities must ensure that the private health information of 
individuals with disabilities is appropriately protected.
Summary of Regulatory Changes
    For the reasons set forth in the proposed rule and considering the 
comments received, we are finalizing the provisions proposed in Sec.  
92.204 without modification.
Requirement To Make Reasonable Modifications (Sec.  92.205)
    In Sec.  92.205, we proposed to require covered entities to make 
reasonable modifications in policies, practices, or procedures when 
necessary to avoid discrimination on the basis of disability, unless 
they can demonstrate that the modification would fundamentally alter 
the nature of the health program or activity.
    We did not receive any significant comments regarding Sec.  92.205. 
For the reasons set forth in the proposed rule, we are finalizing the 
provisions proposed in Sec.  92.205 without modification.
Equal Program Access on the Basis of Sex (Sec.  92.206)
    In Sec.  92.206, we proposed that covered entities be required to 
provide individuals equal access to their health programs or activities 
without discrimination on the basis of sex and to treat individuals 
consistent with their gender identity. We proposed that this provision 
applies to all covered health programs and activities, and prohibits, 
among other forms of adverse treatment, the discriminatory denial of 
access to facilities administered by a covered entity. We noted that 
this proposed approach is consistent with the principle that 
discrimination on the basis of sex includes discrimination on the basis 
of gender identity and that failure to treat individuals in accordance 
with their gender identity may constitute prohibited discrimination.
    We proposed one limited exception to the requirement that covered 
entities treat individuals consistent with their gender identity: That 
a covered entity may not deny or limit health services that are 
ordinarily or exclusively available to individuals of one gender based 
on the fact that the individual's

[[Page 31428]]

sex assigned at birth, gender identity, or gender otherwise recorded in 
a medical record or by a health insurance plan is different from the 
one to which such health services are ordinarily or exclusively 
available. For example, a covered entity may not deny, based on an 
individual's identification as a transgender male, treatment for 
ovarian cancer where the treatment is medically indicated.
    For clarity and consistency within the final rule, we have made 
some technical revisions to Sec.  92.206. First, regarding a covered 
entity being prohibited from denying or limiting health services, we 
are adding the words ``to a transgender individual'' after ``a covered 
entity shall treat individuals consistent with their gender identity, 
except that a covered entity may not deny or limit health services, 
that are ordinarily or exclusively available to individuals of one 
gender,'' to clarify that the exception is limited to transgender 
individuals. We note that similar to the discussion in Sec.  
92.207(b)(3), we recognize that not every health service that is 
typically or exclusively provided to individuals of one sex will be a 
health service that is appropriately provided to a transgender 
individual. Nothing in the rule would, for example, require a covered 
entity to provide a traditional prostate exam to an individual who does 
not have a prostate, regardless of that individual's gender identity. 
But for health services that are appropriately provided to an 
individual, the covered entity must provide coverage for those health 
services on the same terms regardless of an individual's sex assigned 
at birth, gender identity, or recorded gender. Second, we are deleting 
the phrase ``in a medical record'' to address concerns that ``medical 
records'' could be understood as referring only to clinical notes of a 
health care provider.
    The comments and our responses regarding Sec.  92.206 are set forth 
below:
    Comment: A majority of commenters strongly supported the 
requirement that covered entities provide equal access to health 
programs and activities without discrimination on the basis of sex and 
treat individuals consistent with their gender identity. Several 
commenters noted that discrimination in access to gender-specific 
facilities remains one of the most common and harmful forms of sex-
based discrimination against transgender people, singling them out for 
humiliation and causing them to avoid the use of such facilities and 
the associated medical care. Numerous commenters strongly encouraged 
OCR to strengthen Sec.  92.206 with explicit protections for 
individuals with non-binary gender identities who need access to 
gender-specific programs and facilities, and to affirm that individuals 
with non-binary gender identities should be permitted to determine 
which facilities are appropriate for them.
    Response: OCR recognizes the difficulty that individuals with non-
binary gender identities may face in accessing gender-specific programs 
and facilities. The rule makes clear that in order to meet their 
obligations under Sec.  92.206, covered entities must treat all 
individuals consistent with their gender identity, including with 
regard to access to facilities. OCR has revised the definition of 
``gender identity'' to clarify individuals with non-binary gender 
identities are protected under the rule from all forms of 
discrimination based on their gender identity. Thus, OCR does not 
believe that it is necessary to reiterate protections for non-binary 
individuals in this context.
    Comment: Commenters noted that because pregnant women have 
experienced considerable discrimination in accessing certain health 
care services such as mental health care and drug treatment services, 
the final rule should state that equal access without discrimination on 
the basis of sex includes equal access without discrimination on the 
basis of pregnancy.
    Response: OCR recognizes the difficulty many pregnant people 
experience in accessing certain health care services. In response to 
this concern, OCR is clarifying here that the equal program access 
provision under Sec.  92.206 is simply a specific application of the 
more general prohibition of discrimination under Sec.  92.101(a). Under 
both provisions, denial of program access on any of the prohibited 
bases, including pregnancy or related medical conditions, is 
prohibited.
Summary of Regulatory Changes
    For the reasons set forth in the proposed rule and considering the 
comments received, we are finalizing the provision as proposed in Sec.  
92.206 with technical revisions to clarify our intent and ensure 
consistency with other parts of the final rule.
Nondiscrimination in Health-Related Insurance and Other Health-Related 
Coverage (Sec.  92.207)
    In Sec.  92.207 of the proposed rule, we provided specific details 
regarding the prohibition of discrimination on the basis of race, 
color, national origin, sex, age, or disability in the provision and 
administration of health-related insurance or other health-related 
coverage. We proposed that this prohibition applies to all covered 
entities that provide or administer health-related insurance or other 
health-related coverage, including health insurance issuers and group 
health plans that are recipients of Federal financial assistance and 
the Department in the administration of its health-related coverage 
programs. We noted that this section is independent of, but 
complements, the nondiscrimination provisions that apply to the Health 
Insurance Marketplaces \223\ and to issuers of qualified health plans 
\224\ under other Departmental regulations, and that entities covered 
under those provisions and Section 1557 are obligated to comply with 
both sets of requirements.
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    \223\ 45 CFR 155.120(c).
    \224\ 45 CFR 156.200(e); 45 CFR 147.104(e); Public Health 
Service Act section 2705 (codified at 42 U.S.C. 300gg-4).
---------------------------------------------------------------------------

    Based on the longstanding civil rights principles discussed in 
connection with the definition of ``health program or activity'' in 
Sec.  92.4, we proposed to apply this part to all of the coverage and 
services of issuers that receive Federal financial assistance, whether 
those issuers' coverage is offered through the Marketplace \SM\, 
outside the Marketplace \SM\, in the individual or group health 
insurance markets, or as an employee health benefit program through an 
employer-sponsored group health plan.\225\ We provided an example 
illustrating that an issuer participating in the Marketplace \SM\, and 
thereby receiving Federal financial assistance, that also offers plans 
outside the Marketplace \SM\ would be covered by the regulation for all 
of its health plans, as well as when it acts as a third party 
administrator for an employer-sponsored group health plan.\226\
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    \225\ Like the proposed rule, the final rule separately 
addresses employer liability for discrimination in employee health 
benefit programs at Sec.  92.208.
    \226\ Where an entity that acts as a third party administrator 
for an employer's employee health benefit plan is legally separate 
from an issuer that receives Federal financial assistance for its 
insurance plans, we proposed to engage in a case-by-case inquiry to 
evaluate whether that entity is appropriately subject to Section 
1557. The final rule addresses this further in the discussions under 
Sec.  92.2 and Sec.  92.208.
---------------------------------------------------------------------------

    Paragraph (a) proposed a general nondiscrimination requirement, and 
paragraph (b) provided specific examples of prohibited actions. 
Paragraphs (b)(1) and (2) proposed to address the prohibition on 
denying, cancelling, limiting, or refusing to issue or renew a health-
related insurance plan or policy or other health-related coverage, 
denying or limiting coverage of a claim, or imposing additional cost 
sharing or other limitations or

[[Page 31429]]

restrictions, on the basis of an enrollee's or prospective enrollee's 
race, color, national origin, sex, age, or disability, and the use of 
marketing practices or benefit designs that discriminate on these 
bases.
    In the proposed rule, we did not propose to require plans to cover 
any particular benefit or service, but we provided that a covered 
entity cannot have coverage that operates in a discriminatory manner. 
For example, the preamble stated that a plan that covers inpatient 
treatment for eating disorders in men but not women would not be in 
compliance with the prohibition of discrimination based on sex. 
Similarly, a plan that covers bariatric surgery in adults but excludes 
such coverage for adults with particular developmental disabilities 
would not be in compliance with the prohibition on discrimination based 
on disability.
    In paragraphs (b)(3) through (5) of the proposed rule, we proposed 
to address discrimination faced by transgender individuals in accessing 
coverage of health services. We proposed in paragraph (b)(3) that to 
deny or limit coverage, deny a claim, or impose additional cost sharing 
or other limitations or restrictions on coverage of any health service 
is impermissible discrimination when the denial or limitation is due to 
the fact that the individual's sex assigned at birth, gender identity, 
or gender otherwise recorded by the plan or issuer is different from 
the one to which such services are ordinarily or exclusively 
available.\227\ Under the proposed rule, coverage for medically 
appropriate health services must be made available on the same terms 
and conditions under the plan or coverage for all individuals, 
regardless of sex assigned at birth, gender identity, or recorded 
gender.
---------------------------------------------------------------------------

    \227\ We note that under Sec.  92.207(a), a covered entity would 
be barred from denying coverage of any claim (not just sex-specific 
surgeries) on the basis that the enrollee is a transgender 
individual.
---------------------------------------------------------------------------

    In addition, we noted that many health-related insurance plans or 
other health-related coverage, including Medicaid programs, currently 
have explicit exclusions of coverage for all care related to gender 
dysphoria or associated with gender transition. Historically, covered 
entities have justified these blanket exclusions by categorizing all 
transition-related treatment as cosmetic or experimental.\228\ However, 
such across-the-board categorization is now recognized as outdated and 
not based on current standards of care.\229\
---------------------------------------------------------------------------

    \228\ Liza Khan, Transgender Health at the Crossroads, 11 Yale 
J. Health Pol'y L. & Ethics 375, 393 (2011).
    \229\ See infra note 263. See also discussion in the proposed 
rule at 80 FR at 54189-90.
---------------------------------------------------------------------------

    OCR proposed to apply basic nondiscrimination principles in 
evaluating whether a covered entity's denial of a claim for coverage 
for transition-related care is the product of discrimination. We noted 
that based on these principles, an explicit, categorical (or automatic) 
exclusion or limitation of coverage for all health services related to 
gender transition is unlawful on its face under paragraph (b)(4); in 
singling out the entire category of gender transition services, such an 
exclusion or limitation systematically denies services and treatments 
for transgender individuals and is prohibited discrimination on the 
basis of sex.
    Moreover, we proposed in Sec.  92.207(b)(5) to bar a covered entity 
from denying or limiting coverage, or denying a claim for coverage, for 
specific health services related to gender transition where such a 
denial or limitation results in discrimination against a transgender 
individual. In evaluating whether it is discriminatory to deny or limit 
a request for coverage for a particular service for an individual 
seeking the service as part of transition-related care, we provided 
that OCR will start by inquiring whether and to what extent coverage is 
available when the same service is not related to gender transition. 
If, for example, an issuer or State Medicaid agency denies a claim for 
coverage for a hysterectomy that a patient's provider says is medically 
necessary to treat gender dysphoria, OCR will evaluate the extent of 
the covered entity's coverage policy for hysterectomies under other 
circumstances. We noted that OCR will also carefully scrutinize whether 
the covered entity's explanation for the denial or limitation of 
coverage for transition-related care is legitimate and not a pretext 
for discrimination.
    We noted that these provisions do not, however, affirmatively 
require covered entities to cover any particular procedure or treatment 
for transition-related care; nor do they preclude a covered entity from 
applying neutral standards that govern the circumstances in which it 
will offer coverage to all its enrollees in a nondiscriminatory manner.
    We invited comment as to whether the approach of Sec.  
92.207(b)(1)-(5) is over- or underinclusive of the types of potentially 
discriminatory claims denials experienced by transgender individuals in 
their attempts to access coverage and care, as well as on how 
nondiscrimination principles apply in this context.
    Paragraph (c) of Sec.  92.207 of the proposed rule provided that 
the enumeration of specific forms of discrimination in paragraph (b) 
does not limit the general applicability of the prohibition in 
paragraph (a) of this section. Paragraph (d) of the proposed rule 
provided that nothing in Sec.  92.207 is intended to determine, or 
restrict a covered entity from determining, whether a particular health 
care service is medically necessary or otherwise meets applicable 
coverage requirements in any individual case.
    The comments and our responses regarding Sec.  92.207 are set forth 
below.
    Comment: Numerous commenters requested clarification regarding the 
rule's applicability to various health programs or activities that are 
regulated under other Federal requirements and recommended that OCR 
deem health programs and activities that comply with existing Federal 
regulations as in compliance with, or exempt from, Section 1557. For 
example, commenters requested that compliance with CMS regulations 
pertaining to qualified health plans or insurance benefit design, such 
as prescription drug formularies designed by a pharmacy and 
therapeutics committee,\230\ be deemed compliance with the final rule. 
Numerous commenters also requested that OCR harmonize its language 
access requirements with existing CMS regulations. This is addressed in 
the discussion of Sec.  92.201.
---------------------------------------------------------------------------

    \230\ 45 CFR 156.122(a)(3) (for plan years beginning on or after 
Jan. 1, 2017).
---------------------------------------------------------------------------

    In addition, other commenters sought clarification as to the 
applicability of the rule to wellness programs \231\ and value-based 
insurance designs \232\ that are regulated by other Federal departments 
and agencies, and similarly requested that compliance with other 
Federal laws regarding these programs be deemed compliance with this 
final rule. Conversely, regarding employer

[[Page 31430]]

wellness programs, one commenter wanted OCR to expressly prohibit 
covered entities from implementing outcomes-based employee wellness 
programs that base financial rewards or penalties on outcome standards 
that are coextensive with or directly related to a disability, such as 
an outcome standard related to high glucose levels, which are directly 
related to diabetes.
---------------------------------------------------------------------------

    \231\ U.S. Dep't of the Treasury, U.S. Dep't of Labor, and U.S. 
Dep't of Health & Human Servs., Incentives for Nondiscriminatory 
Wellness Programs in Group Health Plans (Final Rule), 78 FR 33158 
(June 3, 2013).
    \232\ For a discussion of Value-Based Insurance Design, see 
Affordable Care Act Implementation FAQs Set 5, Q1, https://www.cms.gov/CCIIO/Resources/Fact-Sheets-and-FAQs/aca_implementation_faqs5.html (last visited May 4, 2016); U.S. Dep't 
of the Treasury, Dep't of Labor, and U.S. Dep't of Health & Human 
Servs., Coverage of Certain Preventive Services Under the Affordable 
Care Act, Final Rule, 80 FR 41318, 41321 (July 1, 2015); and U.S. 
Dep't of Health & Human Servs., Center for Medicare & Medicaid 
Servs., Medicare Advantage Value-Based Insurance Design Model (Sept. 
1, 2015), https://www.cms.gov/Newsroom/MediaReleaseDatabase/Fact-sheets/2015-Fact-sheets-items/2015-09-01.html.
---------------------------------------------------------------------------

    Response: For the same reasons discussed in connection with the 
General Comments above,\233\ we reject the recommendation to deem 
health programs or activities that comply with other Federal 
regulations as automatically in compliance with, or exempt from, the 
final rule. As a general matter, OCR does not view a covered entity's 
compliance with other Federal regulations, adopted with different 
requirements and for different purposes, as determinative of a covered 
entity's compliance with Section 1557 or other Federal civil rights 
laws that we enforce. Moreover, deeming compliance in this context must 
be considered in light of the potential harmful consequences to 
consumers' health that may occur if covered entities do not adhere to 
civil rights obligations.
---------------------------------------------------------------------------

    \233\ See supra discussion on deeming compliance with other laws 
in the General Comments section.
---------------------------------------------------------------------------

    While we reject deeming, OCR will consider a covered entity's 
compliance with other applicable Federal laws in evaluating a covered 
entity's compliance with this final rule, and will continue to 
coordinate with other Federal agencies to promote consistency and avoid 
duplication in enforcement efforts.
    Further, we clarify that evidence-based insurance designs and 
wellness programs offered through covered entities, such as a health 
insurance issuer or a group health plan that receives Federal financial 
assistance, are health programs or activities that are subject to the 
final rule. We decline to expressly prohibit a particular type of 
practice by wellness programs in the final rule, as complaints will be 
reviewed on a case-by-case basis. We note that CMS has made clear that 
covered entities are responsible for ensuring compliance with other 
applicable Federal and State laws, including nondiscrimination 
obligations under Federal laws.\234\ We remind covered entities that 
employer-sponsored wellness programs are considered an employee health 
benefit program and that employers will be subject to liability for 
discrimination in such programs under the circumstances identified in 
Sec.  92.208.
---------------------------------------------------------------------------

    \234\ 78 FR at 33168; U.S. Dep't of Health & Human Servs., 
Center for Medicare & Medicaid Servs., Affordable Care Act 
Implementation FAQs Set 2, Q5, https://www.cms.gov/CCIIO/Resources/Fact-Sheets-and-FAQs/aca_implementation_faqs2.html (last visited May 
4, 2016).
---------------------------------------------------------------------------

    Comment: Several commenters expressed concern that covered entities 
would not be able to revise their health insurance coverage or other 
health coverage to comply with the regulation within 60 days after 
publication, and requested that the effective date of the final rule, 
in particular Sec.  92.207, be delayed until January 1, 2017 or 
2018.\235\ These commenters explained that health insurance plans are 
filed for review with CMS and State insurance regulators during the 
year before the calendar year in which the plan is offered for sale. 
Thus, depending on the publication date of the final rule, the 
commenters suggested that delaying the effective date to plan years (in 
the individual market, policy years) beginning in 2017 or 2018 would be 
necessary for issuers to avoid the administrative challenges associated 
with applying the final rule's requirements in the middle of a plan 
year or policy year, including amending benefit designs, revising 
premium rates if applicable, and refiling the products for review with 
CMS and State insurance regulators. In addition, the commenters noted 
that issuers are not permitted to adjust rates mid-year for some 
insurance products.
---------------------------------------------------------------------------

    \235\ The comments addressed in this section pertain to comments 
related to the implementation date of Sec.  92.207. OCR also 
received comments requesting a delayed effective date for the rule 
in general, which are discussed supra under Sec.  92.1 of this 
preamble.
---------------------------------------------------------------------------

    By contrast, one commenter supported maintaining the proposed 
effective date, arguing that the benefits of more immediate 
implementation of the final rule outweigh any expenses or confusion 
associated with mid-year policy revisions.
    Response: We appreciate the concerns expressed by the commenters 
but we are maintaining the effective date as 60 days after the date of 
publication of the final rule, except in the limited circumstances 
described below. Section 1557 has been in effect since its passage as 
part of the ACA in March 2010, and covered entities have been subject 
to its requirements since that time. To delay implementation of the 
final rule would delay the existing and ongoing protections that 
Section 1557 currently provides and has provided since enactment.\236\
---------------------------------------------------------------------------

    \236\ We note that issuers have been provided notice that they 
are subject to Section 1557 in other Departmental regulations (HHS's 
Notice of Benefit and Payment Parameters for 2017, Final Rule, 80 FR 
12204, 12312 (Mar. 8, 2016); HHS's Notice of Benefit and Payment 
Parameters for 2017, Proposed Rule, 80 FR 75488, 75553 (Dec. 2, 
2015); HHS's Notice of Benefit and Payment Parameters for 2016, 
Final Rule, 80 FR 10750, 10823 (Feb. 27, 2015)).
---------------------------------------------------------------------------

    That said, we recognize that some covered entities will have to 
make changes to their health insurance coverage or other health 
coverage to bring that coverage into compliance with this final rule. 
We are sensitive to the difficulties that making changes in the middle 
of a plan year could pose for some covered entities and are committed 
to working with covered entities to ensure that they can comply with 
the final rule without causing excessive disruption for the current 
plan year.
    Consequently, to the extent that provisions of this rule require 
changes to health insurance or group health plan benefit design 
(including covered benefits, benefits limitations or restrictions, and 
cost-sharing mechanisms, such as coinsurance, copayments, and 
deductibles), such provisions, as they apply to health insurance or 
group health plan benefit design, have an applicability date of the 
first day of the first plan year (in the individual market, policy 
year) beginning on or after January 1, 2017.
    Comment: Several commenters representing issuers and large 
employers recommended that the rule exempt from Section 1557 benefits 
that constitute excepted benefits under section 2791(c) of the Public 
Health Service Act (codified at 42 U.S.C. 300gg-91(c)), which generally 
are exempt from market reforms under the ACA and HIPAA portability 
requirements. Excepted benefits include, but are not limited to: 
limited scope dental and vision plans; coverage only for a specified 
disease or illness; and Medicare supplemental health insurance (also 
known as Medigap).\237\ Commenters suggested that being excepted from 
the ACA market reforms and HIPAA portability requirements should result 
in exemption from Section 1557. Others stated that covering excepted 
benefits under the rule would serve as a disincentive to employers to 
provide these benefits due to increased litigation risk.
---------------------------------------------------------------------------

    \237\ 42 U.S.C. 300gg-91(c).
---------------------------------------------------------------------------

    Response: We are not exempting benefits excepted from ACA market 
reforms and HIPAA portability requirements from the final rule. If an 
issuer providing these benefits receives Federal financial assistance 
and is principally engaged in providing health benefits, all of its 
operations will be covered by the rule; if it is not principally 
engaged, we will apply the rule to its federally funded health

[[Page 31431]]

programs and activities. Many of the benefits excepted from the ACA 
market reforms and HIPAA portability rules will meet the definition of 
``health program and activity.'' \238\
---------------------------------------------------------------------------

    \238\ We note that non-health-related excepted benefits would be 
covered under the rule if offered by a covered entity that is 
principally engaged in providing health care or health coverage.
---------------------------------------------------------------------------

    Nothing in the text of Section 1557 limits its coverage only to 
health programs and activities created or regulated by other provisions 
of the ACA. Indeed, Section 1557's incorporation of the four civil 
rights laws to which it refers, as those laws were amended by the CRRA, 
conclusively suggests otherwise. Moreover, Title VI, Section 504, and 
the Age Act independently apply to these benefits,\239\ and other civil 
rights laws, such as Title VII, apply to these benefits when they are 
provided as a fringe benefit of employment by employers covered by that 
law.
---------------------------------------------------------------------------

    \239\ Title IX applies to these benefits to the extent they are 
provided in connection with federally funded educational programs or 
activities.
---------------------------------------------------------------------------

    There are several statutorily-defined categories of excepted 
benefits that are exempt from the ACA market reforms and HIPAA 
portability requirements if certain conditions are satisfied, such as 
when medical benefits are incidental or secondary to other insurance 
benefits, when the benefits are limited in scope or supplemental, or 
when the benefits are provided as independent, non-coordinated 
benefits.\240\ Excepted benefits do not provide comprehensive medical 
coverage and do not satisfy the individual or employer responsibility 
provisions under the ACA. But these characteristics do not justify an 
exemption from the requirements of Section 1557, which reflects the 
fundamental policy that entities that operate health programs and 
activities, any part of which receives Federal funds, cannot use those 
funds to discriminate--however broad or narrow the scope of those 
health programs and activities may be.
---------------------------------------------------------------------------

    \240\ 42 U.S.C. 300gg-91(c).
---------------------------------------------------------------------------

    Comment: Some commenters requested that OCR address a number of 
issues that are not within the purview of OCR or Section 1557, 
including the scope of essential health benefit coverage and 
establishing minimum network adequacy requirements.
    Response: OCR appreciates the commenters' suggestions, but the 
commenters' requests are beyond the scope of this regulation. CMS is 
statutorily responsible for establishing and regulating the scope of 
essential health benefits and network adequacy requirements for health 
insurance issuers. Absent any allegation that a covered entity has 
discriminated on a basis prohibited by Section 1557, OCR lacks 
authority to address the terms of these CMS regulations.
    Comment: Several commenters asked that OCR exercise more stringent 
and consistent oversight over consumer access to a wide range of 
specialists and subspecialists. Commenters pointed out that many 
qualified health plans in the Marketplace\SM\ offer network-based 
plans, and enrollee cost-sharing can be substantially lower when care 
is delivered by an in-network provider. The commenters expressed 
concern that some issuers appear to systematically exclude from their 
provider networks high-cost providers or those in certain high-cost 
specialties. The commenters suggested that narrow networks could 
potentially be discriminatory if they deprive patients of reasonable 
access to a specialty provider or if they discourage enrollment by 
individuals with specific health needs.
    Response: OCR agrees that provider networks with a wide range of 
specialists and subspecialists are beneficial for consumers and 
appreciates the concerns expressed about the effect of the exclusion of 
certain specialists from an issuer's network. We clarify, however, that 
it is beyond the scope of this regulation to establish uniform or 
minimum network adequacy standards. Qualified health plan issuers are 
subject to network adequacy requirements under CMS regulations.\241\
---------------------------------------------------------------------------

    \241\ 45 CFR 156.230.
---------------------------------------------------------------------------

    Comment: Some commenters asked OCR to clarify that issuers cannot 
discriminate against providers based on a provider's protected status. 
That is, these commenters recommended that OCR make clear that Section 
1557's prohibition of discrimination is not limited in scope to the 
health care consumer and extends to other entities that may be engaged 
in health programs and activities.
    Response: OCR clarifies that covered entities providing or 
administering health-related insurance or other health-related coverage 
may not discriminate against or exclude health care providers they 
contract with on the basis of the provider's race, color, national 
origin, sex, age, or disability. OCR reminds covered entities that they 
may have obligations under other Federal laws prohibiting 
discrimination against providers \242\ or against employees.\243\
---------------------------------------------------------------------------

    \242\ See, e.g., 42 U.S.C. 300gg-5(a); 42 CFR 422.205(a).
    \243\ See, e.g., Title VII of the Civil Rights Act of 1964 (42 
U.S.C. 2000e-2000e-17), the ADA (42 U.S.C. 12101 et seq.), the Age 
Discrimination in Employment Act (29 U.S.C. 621-634); Executive 
Order 11246 (30 FR 12319, 12935, 3 CFR, 1964-1965, as amended), 
Section 503 of the Rehabilitation Act of 1973 (29 U.S.C. Sec. 793), 
and the Vietnam Veterans' Readjustment Assistance Act of 1974 (38 
U.S.C. Sec. 4212).
---------------------------------------------------------------------------

    Comment: A few commenters asked OCR to amend Sec.  92.207(a) so 
that it more clearly describes the various activities that a covered 
entity may perform that are considered ``administering'' health-related 
insurance or other health-related coverage. Specifically, these 
commenters asked that OCR add language to Sec.  92.207(a) explaining 
that administering health-related insurance or other health-related 
coverage may include claims processing, rental of a provider network, 
designing plan benefits or policies, drafting plan documents, 
processing or adjudicating appeals, administering disease management 
services, and pharmacy benefit management.
    Response: We appreciate the commenters' suggestion, but we believe 
the regulatory text is clear as written and does not require further 
clarification. The term ``administering'' is broad enough to 
encapsulate a variety of activities related to the administration of 
health-related insurance or other health-related coverage.
    Comment: We received a number of comments related to the proper 
handling of claims alleging discrimination in employee health benefit 
plans that are covered by both this rule and other Federal laws and 
regulations. For example, several commenters recommended that the rule 
not apply to the services of third party administrators providing 
administrative services to self-insured group health plans. These 
commenters asserted that Congress did not intend for third party 
administrators to be covered by Section 1557 and asserted that third 
party administrators do not design plans, are not responsible for 
determining the benefits covered under the plan, and are required by 
ERISA \244\ to administer plans as they are written. Commenters also 
asserted that coverage of third party administrators would indirectly 
subject self-insured group health plans to Section 1557 and create an 
unlevel playing field between third party administrators operated by 
issuers that receive Federal financial assistance and those that do 
not, thereby creating a disincentive for self-insured group health 
plans to contract with third party administrators that participate as 
issuers in the Marketplace\SM\ and a resulting

[[Page 31432]]

disincentive for issuers to offer qualified health plans on the 
Marketplace\SM\. These commenters also emphasized that self-insured 
group health plans are already subject to extensive Federal regulation 
under ERISA.
---------------------------------------------------------------------------

    \244\ 29 U.S.C. 1001 et seq.
---------------------------------------------------------------------------

    Some commenters representing issuers and larger employers also 
objected to language in footnote 73 \245\ in the preamble of the 
proposed rule stating that when an entity that acts as a third party 
administrator is legally separate from the issuer that receives Federal 
financial assistance, we will engage in a case-by-case analysis to 
determine whether the third party administrator is subject to the rule. 
These commenters stated that the rule should never extend beyond the 
legal entity that receives the Federal financial assistance.
---------------------------------------------------------------------------

    \245\ 80 FR at 54189 n.73.
---------------------------------------------------------------------------

    Response: We are not excluding third party administrator services 
from the final rule; however, we are adopting specific procedures to 
govern the processing of complaints against third party administrators.
    Third party administrator services are undeniably a health program 
or activity, as they involve the administration of health services. 
Under the final rule, if an entity that receives Federal financial 
assistance is principally engaged in providing or administering health 
services, health insurance coverage, or other health coverage, then, 
consistent with the approach taken under the civil rights laws 
referenced in Section 1557 and under the CRRA, as discussed supra,\246\ 
all of its operations are covered. Thus, if an issuer that receives 
Federal financial assistance is principally engaged in providing health 
insurance and also provides third party administrator services, there 
is no principled basis on which to exclude the law's application to the 
third party administrator services or to treat them differently from 
other entities and services covered by the rule.
---------------------------------------------------------------------------

    \246\ See supra discussion of the CRRA under the discussion of 
``health program or activity'' under Sec.  92.4.
---------------------------------------------------------------------------

    Commenters' assertion that employers or group health plans may have 
an incentive to contract with third party administrators that are 
operated by entities that do not receive Federal financial assistance 
does not justify exempting third party administrator services from the 
rule. Commenters' rationale would undermine the application of all of 
the civil rights laws that attach obligations to the receipt of Federal 
financial assistance; if any competitive disparity exists here, it is 
no different than in other types of businesses in which some entities 
receive Federal financial assistance and others do not.
    Moreover, the fact that third party administrators are governed by 
other Federal laws such as ERISA is not a reason to exempt them from 
Section 1557. ERISA itself explicitly preserves the independent 
operation of civil rights laws, by providing that nothing in ERISA 
``shall be construed to alter, amend, modify, invalidate, impair, or 
supersede any law of the United States . . . or any rule or regulation 
issued under any such law.'' \247\ And in any event, the fact that 
entities are subject to regulation under other Federal statutory 
schemes adopted for other purposes does not justify insulating them 
from the obligation to comply with civil rights requirements.\248\
---------------------------------------------------------------------------

    \247\ 29 U.S.C. 1144(d).
    \248\ See supra discussion on deeming compliance with other laws 
in the General Comments section.
---------------------------------------------------------------------------

    Commenters expressed a number of concerns related to the 
relationship between third party administrators and the employers whose 
self-insured group health plans they administer. OCR clarifies here 
that, contrary to the understanding of some commenters, Section 1557's 
coverage of a third party administrator under the rule does not extend 
to the coverage of an employer providing a group health plan that is 
being administered by the third party administrator. The rule addresses 
employer liability separately from that of issuers that receive Federal 
financial assistance; \249\ under Section 1557, an employer is liable 
for discrimination in its employee health benefit programs only if the 
employer is principally engaged in health services, health insurance 
coverage, or other health coverage, or otherwise satisfies one of the 
criteria set forth in Sec.  92.208. Whether an employer's group health 
plan is administered by a third party administrator that is a covered 
entity is not relevant in this analysis.
---------------------------------------------------------------------------

    \249\ See Sec.  92.208 and discussion of Sec.  92.208 infra.
---------------------------------------------------------------------------

    In response to commenters' arguments on this point, however, OCR 
recognizes that third party administrators are generally not 
responsible for the benefit design of the self-insured plans they 
administer and that ERISA (and likely the contracts into which third 
party administrators enter with the plan sponsors) requires plans to be 
administered consistent with their terms.\250\ Thus, if a plan has a 
discriminatory benefit design under Section 1557, a third party 
administrator could be held responsible for plan features over which it 
has no control.
---------------------------------------------------------------------------

    \250\ See 29 U.S.C. 1104(a)(1)(D).
---------------------------------------------------------------------------

    Based on these comments, OCR is adjusting the way in which it will 
process claims that involve alleged discrimination in self-insured 
group health plans administered by third party administrators that are 
covered entities. Fundamentally, OCR will determine whether 
responsibility for the decision or other action alleged to be 
discriminatory rests with the employer or with the third party 
administrator. Thus, where the alleged discrimination is related to the 
administration of the plan by a third party administrator that is a 
covered entity, OCR will process the complaint against the third party 
administrator because it is that entity that is responsible for the 
decision or other action being challenged in the complaint. Where, for 
example, a third party administrator denies a claim because the 
individual's last name suggests that she is of a certain national 
origin or threatens to expose an employee's transgender or disability 
status to the employee's employer, OCR will proceed against the third 
party administrator as the decision-making entity. Where, by contrast, 
the alleged discrimination relates to the benefit design of a self-
insured plan--for example, where a plan excludes coverage for all 
health services related to gender transition--and where OCR has 
jurisdiction over a claim against an employer under Section 1557 
because the employer falls under one of the categories in Sec.  92.208, 
OCR will typically address the complaint against that employer.
    As part of its enforcement authority, OCR may refer matters to 
other Federal agencies with jurisdiction over the entity. Where, for 
example, OCR lacks jurisdiction over an employer responsible for 
benefit design, OCR typically will refer or transfer the matter to the 
EEOC and allow that agency to address the matter. The EEOC has informed 
OCR that, provided the filing meets the requirements for an EEOC 
charge, the date a complaint was filed with OCR will be deemed the date 
it was filed with the EEOC (although any subsequent denial of a renewed 
coverage request could be separately challenged by a timely complaint).
    This approach is consistent with our efforts to ensure coordination 
with other Federal agencies that can also exercise jurisdiction over 
the subject of a particular complaint. Thus, we will also coordinate 
with the Office of Personnel Management (OPM) in the handling of claims 
alleging discrimination in the Federal Employees Health Benefits (FEHB) 
Program. OPM is charged by

[[Page 31433]]

Federal statute \251\ with offering FEHB plans as a fringe benefit of 
Federal employment and, in that role, approves benefit designs and 
premium rates, sets rules generally applicable to FEHB carriers, 
adjudicates and orders payment of disputed health claims, and adjusts 
policies as necessary to ensure compliance with nondiscrimination 
standards. As a result, OCR will refer to OPM complaints that allege 
discrimination in the FEHB Program where OPM is the entity with 
decision-making authority over the challenged action; OPM will treat 
these claims as complaints filed against OPM and will seek relief 
comparable to that available were these claims to be processed by OCR 
under Section 1557.
---------------------------------------------------------------------------

    \251\ 5 U.S.C. 8901 et seq.
---------------------------------------------------------------------------

    In response to the comments requesting additional clarification on 
footnote 73 in the proposed rule, we reiterate that we will engage in a 
case-by-case inquiry to evaluate whether a third party administrator is 
appropriately subject to Section 1557 as a recipient in situations in 
which the third party administrator is legally separate from an issuer 
that receives Federal financial assistance for its insurance plans. 
This analysis will rely on principles developed in longstanding civil 
rights case law, such as the degree of common ownership and control 
between the two entities,\252\ and will also examine whether the 
purpose of the legal separation is a subterfuge for discrimination--
that is, intended to allow the entity to continue to administer 
discriminatory health-related insurance or other health-related 
coverage.\253\ But we note that a third party administrator is unlikely 
to be covered by this final rule where it is a legal entity that is 
truly independent of an issuer's other, federally funded, activities.
---------------------------------------------------------------------------

    \252\ See, e.g., Papa v. Katy Indus., Inc., 166 F.3d 937, 939 
(7th Cir. 1999), cert. denied, 528 U.S. 1019 (1999) (ADA, ADEA); 
Arrowsmith v. Shelbourne, Inc., 69 F.3d 1235, 1240-42 (2d Cir. 1995) 
(Title VII).
    \253\ Papa v. Katy Indus., Inc., 166 F.3d at 941.
---------------------------------------------------------------------------

    Comment: Commenters requested clarification on OCR's approach when 
evaluating whether a prohibited discriminatory action occurred under 
Sec.  92.207(b).
    Response: We clarify that OCR's approach in applying basic 
nondiscrimination principles, as discussed in the proposed rule under 
Sec.  92.207(b)(5) \254\ relating to coverage for specific health 
services related to gender transition, is the same general approach 
that OCR will take when evaluating denials or limitations of coverage 
for other types of health services. In other words, OCR will evaluate 
whether a covered entity utilized, in a nondiscriminatory manner, a 
neutral rule or principle when deciding to adopt the design feature or 
take the challenged action or whether the reason for its coverage 
decision is a pretext for discrimination. For example, if a plan limits 
or denies coverage for certain services or treatment for a specific 
condition, OCR will evaluate whether coverage for the same or a similar 
service or treatment is available to individuals outside of that 
protected class or those with different health conditions and will 
evaluate the reasons for any differences in coverage. Covered entities 
will be expected to provide a neutral, nondiscriminatory reason for the 
denial or limitation that is not a pretext for discrimination.
---------------------------------------------------------------------------

    \254\ 80 FR at 54190.
---------------------------------------------------------------------------

    Comment: One commenter asked OCR to clarify that targeted marketing 
practices designed to reach certain populations to increase enrollment, 
such as specific segments of those who are uninsured or underserved, 
are not considered discriminatory. This commenter pointed out that some 
issuers sometimes launch targeted campaigns to reach a high number of 
uninsured in their service areas. In so doing, issuers may study the 
profile of uninsured populations, and based on the results of that 
study, may concentrate their marketing efforts on certain demographic 
groups that are disproportionately uninsured or underserved. The 
commenter cited a Gallup Poll that indicated that roughly one-third of 
Hispanics remain uninsured, which the commenter stated creates a 
particular need for issuers to help educate and expand coverage for 
this community. The commenter sought reassurance that OCR will not 
consider it discriminatory to target enrollment efforts where they will 
make the most difference.
    Response: Congress intended the ACA to help uninsured and 
underserved populations gain access to care. Nothing in this regulation 
is intended to limit targeted outreach efforts to reach underserved 
racial or ethnic populations or other underserved populations. Indeed, 
it is OCR's intention that this regulation will increase access for 
uninsured and underserved populations, much as other Departmental 
regulations implementing the ACA have strived to do.\255\
---------------------------------------------------------------------------

    \255\ See, e.g., 45 CFR 155.210(b)(2)(i) (requiring Exchanges to 
develop and publically disseminate Navigator training standards that 
ensures expertise in the needs of underserved and vulnerable 
populations); 81 FR 12204, 12338 (Mar. 8, 2016) (establishing new 
requirement at 45 CFR 155.210(e)(8) to require Navigators to provide 
targeted assistance to serve underserved or vulnerable populations).
---------------------------------------------------------------------------

    Comment: Several commenters recommended that we define ``marketing 
practices'' in the regulatory text of Sec.  92.207(b)(2). These 
commenters suggested that the inclusion of a precise definition for 
``marketing practices'' would serve to clarify the scope of Sec.  
92.207(b)(2).
    Response: We decline to define ``marketing practices'' in the final 
rule because to do so would be overly prescriptive. We emphasize, 
however, that we intend to interpret the term ``marketing practices'' 
broadly; such practices would include, for example, any activity of a 
covered entity that is designed to encourage individuals to participate 
or enroll in the covered entity's programs or services or to discourage 
them from doing so, and activities that steer or attempt to steer 
individuals towards or away from a particular plan or certain types of 
plans. We remind covered entities that other Departmental regulations 
address marketing practices,\256\ and covered entities are obligated to 
comply with all applicable Federal and State laws regarding such 
practices.
---------------------------------------------------------------------------

    \256\ 45 CFR 156.225(b) (prohibiting qualified health plans from 
employing marketing practices or benefit designs that will have the 
effect of discouraging the enrollment of individuals with 
significant health needs); 45 CFR 147.104(e) (prohibiting a health 
insurance issuer from employing marketing practices or benefit 
designs that have the effect of discouraging the enrollment of 
individuals with significant health needs in health insurance 
coverage or discriminate based on an individual's race, color, 
national origin, present or predicted disability, age, sex, gender 
identity, sexual orientation, expected length of life, degree of 
medical dependency, quality of life, or other health conditions); 42 
CFR 422.2260-422.2615 (establishing Part D marketing requirements).
---------------------------------------------------------------------------

    Comment: Many commenters recommended that we define ``benefit 
design'' in the regulatory text of the final rule. These commenters 
suggested that the inclusion of a precise definition of ``benefit 
design'' would serve to clarify the scope of Sec.  92.207(b)(2). In 
addition, numerous commenters requested that we codify or provide 
examples of benefit designs that discriminate on the basis of race, 
color, national origin, sex, age, or disability. A number of commenters 
urged OCR to consider specific types of benefit designs as constituting 
per se discrimination under Sec.  92.207(b)(2) of the final rule.
    Response: We appreciate commenters' requests for guidance and 
clarification regarding potentially discriminatory benefit designs and 
suggestions for scenarios that constitute per se discrimination. 
However, we decline to

[[Page 31434]]

define ``benefit design'' in the final rule because to do so would be 
overly prescriptive.\257\ We also decline to codify examples of 
discriminatory benefit designs because determining whether a particular 
benefit design results in discrimination will be a fact-specific 
inquiry that OCR will conduct through its enforcement of Section 1557. 
For the same reason, we avoid characterizing specific benefit design 
practices as per se discriminatory in the final rule.\258\
---------------------------------------------------------------------------

    \257\ We note that ``benefit design'' is a term of art used in 
other Departmental and Federal regulations governing the private 
health insurance industry. See e.g., 42 CFR 422.100(f)(3); 45 CFR 
156.225(b); 45 CFR 147.104(e); 29 CFR 2510.3-40(c)(1)(iv)(A).
    \258\ CMS has identified benefit design features that might be 
discriminatory. For example, placing most or all prescription 
medications that are used to treat a specific condition on the 
highest cost formulary tiers (U.S. Dep't of Health & Human Servs., 
Centers for Medicare & Medicare Servs., Patient Protection and 
Affordable Care Act: HHS Notice of Benefit and Payment Parameters 
Rule, (Final Rule), 80 FR 10750, 10822 (Feb. 27, 2015); U.S. Dep't 
of Health & Human Servs., Centers for Medicare and Medicaid Servs., 
Final 2016 Letter to Issuers in the Federally-facilitated 
Marketplace, 37 (Feb. 20, 2015)); applying age limits to services 
that have been found clinically effective at all ages (80 FR at 
10822 (Feb. 27, 2015); Final 2016 Letter to Issuers in the 
Federally-facilitated Marketplace, 36-37 (Feb. 20, 2015)); and 
requiring prior authorization and/or step therapy for most or all 
medications in drug classes such as anti-HIV protease inhibitors, 
and/or immune suppressants regardless of medical evidence (Centers 
for Medicare and Medicaid Servs., Qualified Health Plan Master 
Review Tool, Non-Discrimination in Benefit Design (2017), https://www.cms.gov/CCIIO/Programs-and-Initiatives/Health-Insurance-Marketplaces/Downloads/Master-Review-Tool_v1-1_03302016.zip (open 
``Master Review Tool_2017v1.0.xlsm'' document; then open ``Non-
Discrimination Guidance'' tab)).
---------------------------------------------------------------------------

    OCR will analyze whether a design feature is discriminatory on a 
case-by-case basis using the framework discussed above. We reiterate 
that our determination of whether a practice constitutes discrimination 
will depend on our careful analysis of the facts and circumstances of a 
given scenario. OCR recognizes that covered entities have discretion in 
developing benefit designs and determining what specific health 
services will be covered in their health insurance coverage or other 
health coverage. The final rule does not prevent covered entities from 
utilizing reasonable medical management techniques; nor does it require 
covered entities to cover any particular procedure or treatment. It 
also does not preclude a covered entity from applying neutral, 
nondiscriminatory standards that govern the circumstances in which it 
will offer coverage to all its enrollees in a nondiscriminatory manner. 
The rule prohibits a covered entity from employing benefit design or 
program administration practices that operate in a discriminatory 
manner.
    Comment: We received a number of comments requesting that OCR add 
language to Sec.  92.207(b) clarifying that categorical exclusions of 
certain conditions, such as coverage related to developmental 
disabilities or maternity care, are prohibited.
    Response: While categorical exclusions of all coverage related to 
certain conditions could raise significant compliance concerns under 
Section 1557, OCR believes that existing regulatory language is 
sufficient to address this scenario. For example, the law has long 
recognized that discrimination based on pregnancy is a form of sex 
discrimination,\259\ and OCR has interpreted Section 1557 in the same 
manner by defining the term ``on the basis of sex'' in this regulation 
to include ``discrimination on the basis of pregnancy, false pregnancy, 
termination of pregnancy, or recovery therefrom, childbirth or related 
medical conditions.'' As a result, it is unnecessary to add language in 
response to commenters' concerns.
---------------------------------------------------------------------------

    \259\ Title VII prohibits discrimination in employment practices 
``because of sex,'' 42 U.S.C. 2000e-2(a), which is defined to 
include ``because of or on the basis of pregnancy, childbirth, or 
related medical conditions. . . .'' 42 U.S.C. 2000e(k); Newport News 
Shipbuilding & Dry Dock Co. v. EEOC, 462 U.S. 669, 684 (1983) 
(``discrimination based on a woman's pregnancy is, on its face, 
discrimination because of her sex.'').
---------------------------------------------------------------------------

    We note that some products known as excepted benefits, which are 
subject to this final rule as discussed supra, provide limited scope 
benefits or coverage only for a specified disease or illness.\260\ It 
would not be discriminatory for such products to include exclusions of 
coverage for conditions that are outside the scope of the benefits 
provided in those products. Accordingly, the purpose and scope of the 
coverage provided under health-related insurance or health-related 
coverage are factors that OCR will consider in determining whether an 
exclusion of all coverage for a certain condition is discriminatory 
under this final rule.
---------------------------------------------------------------------------

    \260\ 42 U.S.C. 300gg-91(c).
---------------------------------------------------------------------------

    Comment: In light of OCR's statement in the preamble to the 
proposed rule that ``[t]he proposed rule does not require plans to 
cover any particular benefit or service, but a covered entity cannot 
have a coverage policy that operates in a discriminatory manner,'' 
\261\ a few commenters asked OCR to clarify that the solution to a 
potentially discriminatory benefit design could be addition of coverage 
for a benefit or service.
---------------------------------------------------------------------------

    \261\ 80 FR at 54189.
---------------------------------------------------------------------------

    Response: OCR agrees that the solution to a potentially 
discriminatory benefit design could be coverage, or added coverage, of 
a benefit or service.
    Comment: The proposed rule invited comment as to whether the 
approach of Sec.  92.207(b)(1)-(5) is over- or under-inclusive of the 
types of potentially discriminatory claim denials experienced by 
transgender individuals in their attempts to access coverage and care, 
as well as on how nondiscrimination principles apply in this 
context.\262\ Many commenters supported OCR's approach in prohibiting a 
range of practices that discriminate against transgender individuals by 
denying or limiting coverage for medically necessary and medically 
appropriate health services. Numerous commenters asserted that the 
protections at Sec.  92.207(b)(3)-(5) are vital to ensuring that 
transgender individuals are able to access the health coverage and care 
they need and urged OCR to preserve these provisions in the final rule.
---------------------------------------------------------------------------

    \262\ 80 FR at 54191.
---------------------------------------------------------------------------

    For instance, many commenters strongly supported the proposed 
rule's prohibition against categorical or automatic exclusions of 
coverage for all health services related to gender transition. These 
commenters further supported the proposed rule's prohibition against 
otherwise denying or limiting coverage, or denying a claim, for health 
services related to gender transition if such a denial or limitation 
results in discrimination against a transgender individual. These 
commenters expressed hope that these prohibitions will serve to 
eliminate the significant barriers that transgender individuals have 
faced in accessing coverage for transition-related care, such as 
counseling, hormone therapy, and surgical procedures that they said had 
previously been denied to them because they have been viewed as 
cosmetic or experimental. Many commenters also favored the prohibition 
against denying, limiting, or otherwise restricting coverage for health 
services that are ordinarily or exclusively available to individuals of 
one sex based on an individual's gender identity. Commenters indicated 
that the proposed rule's protections will help to resolve various 
health care disparities suffered by transgender individuals.
    Several commenters, however, opposed the protections that the 
proposed rule affords to transgender individuals. Some commenters 
suggested that covered entities should

[[Page 31435]]

be permitted to categorically exclude coverage for transition-related 
health services based on moral or religious convictions that an 
individual's biological sex, or sex assigned at birth, should not be 
altered. Other commenters suggested that OCR is exceeding its legal 
authority by addressing covered entities' provision of coverage to 
transgender individuals because discrimination based on gender identity 
should not be recognized as a form of sex discrimination.
    Response: We agree with the commenters who expressed their general 
support of the protections for transgender individuals afforded by the 
provisions at Sec.  92.207(b)(3)-(5), and therefore we are keeping the 
provisions as proposed. We believe that it is important to ensure that 
civil rights protections are extended to transgender individuals to 
afford them equal access to health coverage, including for health 
services related to gender transition. As we stated in the preamble to 
the proposed rule, the across-the-board categorization of all 
transition-related treatment, for example as experimental, is outdated 
and not based on current standards of care.\263\
---------------------------------------------------------------------------

    \263\ 80 FR at 54189 See e.g., World Professional Association 
for Transgender Health (WPATH), Standards of Care for the Health of 
Transsexual, Transgender, and Gender-Nonconforming People (7th ed. 
2011), https://www.wpath.org/uploaded_files/140/files/ Standards Of 
Care, V7 Full Book.pdf; Institute of Medicine of the National 
Academies, The Health of Lesbian, Gay, Bisexual and Transgender 
People: Building a Foundation for Better Understanding (2011); 
www.nationalacademies.org/hmd/Reports/2011/The-Health-of-Lesbian-Gay-Bisexual-and-Transgender-People.aspx. See also U.S. Dep't of 
Health & Human Servs., Departmental Appeals Bd., Appellate Division 
NCD 140.3, Docket No. A-13-87, Decision No. 2576, 22-24 (May 30, 
2014), https://www.hhs.gov/dab/decisions/dabdecisions/dab2576.pdf.
---------------------------------------------------------------------------

    Further, we disagree with commenters who asserted that sex-based 
discrimination does not include discrimination based on gender 
identity. As discussed previously,\264\ OCR's definition of 
discrimination ``on the basis of sex'' is consistent with the well-
accepted interpretations of other Federal agencies and courts. Further, 
as previously noted in this preamble,\265\ we decline to adopt a 
blanket religious exemption in the final rule as any religious concerns 
are appropriately addressed pursuant to pre-existing laws such as RFRA 
and provider conscience laws.
---------------------------------------------------------------------------

    \264\ See supra discussion of the definition ``on the basis of 
sex'' under Sec.  92.4.
    \265\ See supra discussion on including a religious exemption 
under Sec.  92.2.
---------------------------------------------------------------------------

    Comment: A significant number of commenters recommended that OCR 
revise the language in Sec.  92.207(b)(4) that prohibits categorical 
exclusions or limitations of ``all health services related to gender 
transition'' to remove the word ``all,'' and proposed modifications to 
Sec.  92.207(b)(3)-(5) relating to the medical necessity or medical 
appropriateness of coverage for health services related to gender 
transition and sex-specific services. Other commenters, concerned that 
the rule may be too broadly interpreted, requested clarification as to 
when gender transition services or sex-specific services must be 
provided and recommended that the rule specify that such health 
services are to be provided only when medically necessary or medically 
appropriate. These commenters also requested that OCR clarify that the 
rule's intent is not to require covered entities to cover elective 
services or mandate that it cover certain services. Conversely, other 
commenters specifically requested that the rule clarify that covered 
entities cannot deny medically necessary services for gender 
transition-related care because such treatment is medically necessary 
for transgender individuals. Further, some commenters suggested that 
covered entities must provide coverage for procedures or services to 
treat gender dysphoria or associated with gender transition when 
substantially similar procedures or services are covered for other 
conditions. For example, commenters observed that a hysterectomy to 
treat gender dysphoria is substantially similar to a hysterectomy 
performed for cancer treatment or prevention in a cisgender woman 
(i.e., a woman whose gender identity is consistent with her sex 
assigned at birth).
    Response: OCR appreciates the array of comments provided but does 
not believe it is necessary to revise the regulatory text. As noted in 
the preamble to the proposed rule, we will evaluate whether a 
particular exclusion is discriminatory based on the application of 
longstanding nondiscrimination principles to the facts of the 
particular plan or coverage. Under these principles, issuers are not 
required to cover all medically necessary services. Moreover, we do not 
affirmatively require covered entities to cover any particular 
treatment, as long as the basis for exclusion is evidence-based and 
nondiscriminatory.
    Thus, we reject commenters' suggestion that the rule require 
covered entities to provide coverage for all medically necessary health 
services related to gender transition regardless of the scope of their 
coverage for other conditions.
    At the same time, the rule does require that a covered entity apply 
the same neutral, nondiscriminatory criteria that it uses for other 
conditions when the coverage determination is related to gender 
transition. Thus, if a covered entity covers certain types of elective 
procedures that are beyond those strictly identified as medically 
necessary or appropriate, it must apply the same standards to its 
coverage of comparable procedures related to gender transition. As a 
result, we decline to limit application of the rule by specifying that 
coverage for the health services addressed in Sec.  92.207(b)(3)-(5) 
must be provided only when the services are medically necessary or 
medically appropriate.
    With regard to Sec.  92.207(b)(3), we recognize that not every 
health service that is typically or exclusively provided to individuals 
of one sex will be a health service that is appropriately provided to a 
transgender individual. Nothing in the rule would, for example, require 
an issuer to cover a traditional prostate exam for an individual who 
does not have a prostate, regardless of that individual's gender 
identity. However, the issuer must cover the health services that are 
appropriately provided to an individual by applying the same terms and 
conditions, regardless of an individual's sex assigned at birth, gender 
identity, or recorded gender.
    We also clarify that the prohibition in Sec.  92.207(b)(4) on 
categorically limiting coverage for all health services related to 
gender transition is intended to prevent issuers from placing 
categorical, arbitrary limitations or restrictions on coverage for all 
gender transition-related services, such as by singling out services 
related to gender transition for higher co-pays; it is not intended to 
prevent issuers from placing nondiscriminatory limitations or 
restrictions on coverage under the plan. We have revised the language 
of the provision to clarify that intent.
    Comment: Some commenters requested that the final rule define 
``health services related to gender transition.''
    Response: We decline to include a definition of ``health services 
related to gender transition.'' OCR intends to interpret these services 
broadly and recognizes that health services related to gender 
transition may change as standards of medical care continue to evolve.
    The range of transition-related services, which includes treatment 
for gender dysphoria, is not limited to surgical treatments and may 
include, but is not limited to, services such as

[[Page 31436]]

hormone therapy and psychotherapy, which may occur over the lifetime of 
the individual. We believe the flexibility of the general language in 
the final rule best serves transgender individuals and covered 
entities.
    Comment: Several commenters expressed concern that some issuers do 
not yet have the technological capability to avoid initial denials of 
coverage for sex-specific services for transgender individuals due to 
their computer systems flagging a mismatch between the gender of the 
individual identified at enrollment and the billing code associated 
with the biological sex that typically receives the health service. The 
commenters explained that issuers' computer systems accommodate only 
binary gender billing codes (e.g., ``male'' or ``female'') and cannot 
accommodate descriptions of an enrollee's gender identity. Further, 
commenters observed that the Health Insurance Marketplace\SM\ 
enrollment application available through HealthCare.gov permits 
applicants to identify themselves only as male or female and does not 
currently allow applicants to denote their gender identity. These 
commenters noted that, as a result, qualified health plan issuers 
receive incomplete information about an enrollee's gender identity and 
biological sex. Moreover, these commenters requested that OCR clarify 
that an initial denial of a transgender enrollee's claim due to the 
discrepancy between the enrollee's recorded gender and the sex with 
which the health service is generally associated does not constitute 
discrimination if the enrollee is able to reverse the denial through an 
internal appeals process.
    Response: As we indicated in the proposed rule,\266\ we recognize 
that some issuers use computer systems that accommodate only binary 
gender billing codes that flag a gender mismatch for coverage of 
certain sex-specific services. We noted that such flagging, by itself, 
would not be impermissible if it does not result in a delay or denial 
of services or a claim for services. We reject, however, the 
commenters' suggestion that an initial denial of a transgender 
enrollee's claim should never be considered discriminatory as long as 
the enrollee is able to correct the denial through the internal appeals 
process. Requiring transgender enrollees to repeatedly go through the 
internal appeals process to obtain coverage for certain services would 
subject these enrollees to a burdensome process that is likely to delay 
their receipt of coverage.
---------------------------------------------------------------------------

    \266\ 80 FR at 54189 n.75.
---------------------------------------------------------------------------

    Moreover, there are available interim methods for correcting 
initial coverage denials due to computer systems flagging a gender 
mismatch that issuers can use as their computer systems are updated. 
For instance, we understand that current billing code practices include 
general billing code modifiers that are used to identify situations in 
which issuers need to evaluate further claims that might otherwise be 
automatically rejected. As a result, issuers could advise health care 
providers to submit an existing billing code modifier along with a 
claim for sex-specific services for a transgender patient to flag the 
billing for the issuer's further review.\267\ Issuers are free to 
develop another method of processing claims for sex-specific services 
by transgender individuals as long as the process is not overly 
burdensome and provides timely access to care. We note that commenters 
have raised concerns about the Health Insurance Marketplace\SM\ 
enrollment application and will address these concerns as appropriate.
---------------------------------------------------------------------------

    \267\ The Medicare program already directs providers to use this 
approach. See Dep't of Health & Human Servs., Centers for Medicare & 
Medicaid Servs., Medicare Claims Processing Manual, Chapter 32, 
Transmittal 240: Special Instructions for Certain Claims with a 
Gender/Procedure Conflict (last revised Jan. 20, 2015), (directing 
providers to use an approved national billing code for sex-specific 
services for transgender patients to alert the contractor that it is 
not an error and to allow the claim to continue with normal 
processing), https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Downloads/clm104c32.pdf.
---------------------------------------------------------------------------

    Comment: One commenter recommended that we extend a safe harbor 
protection to issuers who demonstrate their good faith compliance with 
Sec.  92.207(b)(3) for the time period during which they update their 
computer systems and operations to prevent inappropriate denials of 
coverage for sex-specific services for transgender enrollees.
    Response: While we reject the commenter's recommendation of a safe 
harbor protection, OCR is willing to work with issuers to help identify 
potential interim solutions and to come into compliance.
    Comment: One commenter requested clarification regarding whether an 
issuer may require transgender enrollees to provide additional 
information related to their biological sex to enable the issuer to 
override inappropriate denials of coverage for sex-specific health 
services. Another commenter inquired as to whether an issuer is 
permitted to request information about an applicant's biological sex on 
an insurance application form.
    Response: We understand that, in some instances, a covered entity 
may need to ask transgender enrollees for additional information, 
including information related to their biological sex or sex assigned 
at birth, to facilitate overriding denials of coverage for sex-specific 
health services due to gender billing code mismatches in their computer 
systems. We clarify in this preamble that a covered entity is permitted 
to ask transgender enrollees to provide such additional information, as 
long as the covered entity does not unduly burden enrollees or make 
unreasonable inquiries that serve to delay their receipt of coverage. 
In addition, we clarify that it is permissible for a covered entity to 
request information about the biological sex of the applicant on an 
insurance application form to assist the covered entity in identifying 
the medical appropriateness of sex-specific health services, as long as 
the information requested is not used in a discriminatory manner, and 
the collection and use of the information is otherwise lawful and 
complies with applicable HIPAA privacy requirements.
    Comment: Many commenters recommended revisions to Sec.  92.207(d), 
which provides that nothing in this section is intended to determine, 
or restrict a covered entity from determining, whether a particular 
health service is medically necessary or otherwise meets applicable 
coverage requirements in any individual case. Some commenters requested 
that we revise this provision to ensure that a covered entity does not 
use criteria that lead to a discriminatory result in its medical 
necessity or coverage determinations. For example, some commenters 
suggested that we require covered entities to use certain treatment 
guidelines when determining medical necessity or coverage for 
transgender-related health services, such as those published by the 
WPATH. Conversely, other commenters expressed concern that Section 1557 
may unduly restrict a covered entity's ability to evaluate medical 
necessity in its coverage determinations and requested clarification 
that covered entities are permitted to require certain treatment, such 
as mental health services for gender dysphoria, as part of their 
medical necessity or coverage determinations.
    Response: We appreciate the concerns raised by commenters, but we 
are maintaining the language in Sec.  92.207(d) without revision. OCR 
will not second-guess a covered entity's neutral

[[Page 31437]]

nondiscriminatory application of evidence-based criteria used to make 
medical necessity or coverage determinations. Therefore, we refrain 
from adding any regulatory text that establishes or limits the criteria 
that covered entities may utilize when determining whether a health 
service is medically necessary or otherwise meets applicable coverage 
requirements. Nevertheless, we caution covered entities that, although 
Sec.  92.207(d) does not dictate the criteria that a covered entity 
must use, a covered entity must use a nondiscriminatory process to 
determine whether a particular health service is medically necessary or 
otherwise meets applicable coverage requirements.
Summary of Regulatory Changes
    For the reasons set forth in the proposed rule and considering the 
comments received, we are finalizing the provisions proposed in Sec.  
92.207 with minor technical revisions for clarity, to make our intent 
clear, and to ensure consistency with other parts of the final rule. We 
are making technical corrections to paragraphs (b)(1), (b)(3) and 
(b)(5) to add the word ``coverage'' where appropriate to reconcile with 
other parts of the rule. In (b)(1), we are making two modifications to 
the language. We are reconciling the usage of ``health-related 
insurance'' and ``other health-related coverage'' by adding ``related'' 
to those terms in (b)(1). We are also removing reference to 
``enrollees'' as it unintentionally limited application of the 
paragraph. In (b)(2), we are replacing text that prohibited employing 
discriminatory marketing practices or benefit designs with text that 
prohibits having or implementing discriminatory marketing practices or 
benefit designs to clarify our intent that both having and applying 
discriminatory marketing practices and benefit design are prohibited. 
This clarification does not substantively modify the prohibition set 
forth in the proposed rule. In (b)(3), we are adding the words ``to a 
transgender individual'' for clarity, and are deleting the words ``by 
the plan or issuer'' for consistency with other parts of the rule. In 
(b)(4), we are revising the language to be clear that our intent was to 
prohibit categorical exclusions or limitations in both benefit design 
and administration; thus, we are replacing language prohibiting 
categorical or automatic exclusions or limitations of coverage with 
language that prohibits having or implementing a categorical exclusion 
or limitation of coverage. This clarification does not substantively 
modify the prohibition set forth in the proposed rule. In (b)(5), we 
also are revising the description of the prohibited actions to 
reconcile the language with other paragraphs in Sec.  92.207(b).
Employer Liability for Discrimination in Employee Health Benefit 
Programs (Sec.  92.208)
    In Sec.  92.208, we proposed to address the application of Section 
1557 to employers that offer health benefit programs to their 
employees. Under our proposed approach, where an entity that receives 
Federal financial assistance provides an employee health benefit 
program to its employees, it will be liable for discrimination in that 
employee health benefit program under this part only in three defined 
circumstances.\268\ In paragraph (a), we proposed that where an 
employer is principally engaged in providing or administering health 
services or health coverage and receives Federal financial assistance, 
the employer would be subject to Section 1557 in its provision or 
administration of employee health benefit programs to its employees. 
Thus, if a hospital provides health benefits to its employees, it will 
be covered by Section 1557 not only for the services it offers to its 
patients or other beneficiaries but also for the health benefits it 
provides to its employees.\269\
---------------------------------------------------------------------------

    \268\ As reflected in Sec.  92.101(a)(2) and as discussed in the 
preamble of the proposed rule, 80 FR at 54180, except as provided 
here, the proposed rule does not generally apply to discrimination 
by a covered entity against its own employees. Thus, the rule does 
not generally extend to hiring, firing, promotions, or terms and 
conditions of employment outside of those identified in Sec.  
92.208; such claims would continue to be brought under other laws, 
including Title VII, Title IX, Section 504, the ADA and the Age 
Discrimination in Employment Act, as appropriate.
    \269\ This approach is consistent with the basic principle 
underlying the rule and derived from longstanding civil rights 
interpretations: Where an entity that receives Federal financial 
assistance is principally engaged in providing or administering 
health services, health insurance coverage, or other health 
coverage, all of its operations are covered by Section 1557. See 
discussion supra of Sec.  92.2.
---------------------------------------------------------------------------

    In paragraph (b), we proposed that where an entity receives Federal 
financial assistance the primary objective of which is to fund an 
employee health benefit program, that entity's provision or 
administration of the health benefit program will be covered by Section 
1557 regardless of the business in which the entity is engaged.
    In paragraph (c), we proposed that an employer that is not 
principally engaged in providing or administering health services or 
health insurance coverage, but that operates a health program or 
activity (that is not an employee health benefit program) that receives 
Federal financial assistance, will be covered for its provision or 
administration of an employee health benefit program, but only with 
regard to employees in the health program or activity. Thus, we noted 
that when a State receives Federal financial assistance for its 
Medicaid program, the State will be governed by Section 1557 in the 
provision of employee health benefits for its Medicaid employees, but 
not for its transportation department employees, assuming no part of 
the State transportation department operates a health program or 
activity.
    In summary, unless the primary purpose of the Federal financial 
assistance is to fund employee health benefits, we proposed that 
Section 1557 would not apply to an employer's provision of employee 
health benefits where the provision of those benefits is the only 
health program or activity operated by the employer.
    We explained that absent the limitations in Sec.  92.208, employers 
that receive Federal financial assistance for any purpose could be held 
liable for discrimination in the employee health benefit programs they 
provide or administer, even where those employers are not otherwise 
engaged in a health program or activity and where the use of Federal 
funds for employee health benefits is merely incidental to the purpose 
of the assistance. We noted that claims of discrimination in such 
benefits, brought against employers that do not operate other health 
programs or activities, could be better addressed under other 
applicable laws. For example, Title VII of the Civil Rights Act of 
1964,\270\ the ADA,\271\ and the Age Discrimination in Employment Act 
\272\ address claims that an employer has discriminated in the 
provision of benefits, including health benefits, to its employees.
---------------------------------------------------------------------------

    \270\ 42 U.S.C. 2000e-2000e-17.
    \271\ 42 U.S.C. 12101 et seq.
    \272\ 29 U.S.C. 621-634.
---------------------------------------------------------------------------

    We proposed to apply the same analysis of employer liability under 
Section 1557 whether the employee health benefit program is self-
insured or fully-insured by the employer. We provided that where an 
employer that would otherwise be covered under this section creates a 
separate legal entity to administer its employee health benefit plan, 
the employer would continue to be liable for the nondiscriminatory 
provision of employee health benefits to its employees; the employer, 
as a recipient, may not, through contractual or other arrangements, 
discriminate on

[[Page 31438]]

a prohibited basis against its employees.\273\
---------------------------------------------------------------------------

    \273\ By contrast, with regard to the liability of the legal 
entity that an employer creates to administer its employee health 
benefit plan, i.e., a group health plan, we proposed to analyze 
questions related to the application of Section 1557 on a case-by-
case basis consistent with longstanding principles of 
nondiscrimination law. We will ask, for example, whether the group 
health plan itself receives Federal financial assistance, such as 
through receipt of Medicare Part D payments. If it does not, we will 
evaluate the group health plan's relationship with the employer in 
assessing whether Section 1557 applies to the group health plan. 80 
FR at 54191 n. 94. We noted that a group health plan may be a 
covered entity under this rule if the group health plan receives 
Federal financial assistance, as it operates a health program or 
activity by virtue of its provision or administration of the 
employee health benefit program. 80 FR at 54191 n. 93.
---------------------------------------------------------------------------

    The comments and our responses regarding Sec.  92.208 are set forth 
below.
    Comment: One commenter expressed the view that while most churches 
or church boards providing employee health benefits through a church 
plan would not be covered under Sec.  92.208, some might be covered 
under Sec.  92.208(c). The commenter expressed the concern that 
churches that sponsor plans on behalf of numerous employers would not 
know whether any of those employers operated a health program or 
activity and received Federal financial assistance and thus would be 
required to either comply with Section 1557 requirements, even though 
most or all of the participating employers do not receive Federal 
financial assistance, or exclude the employer that receives Federal 
financial assistance from the plan.
    Response: The comment reflects a misunderstanding about the 
application of Sec.  92.208. This section of the regulation applies to 
employers, not to plan sponsors. In a church plan with multiple 
participating employers, the plan sponsor will be an entity other than 
the employer.\274\ In this scenario, when an employer is covered under 
Sec.  92.208(c) and the plan sponsor is a different entity that does 
not receive Federal financial assistance, it is the employer's 
obligation, not the plan sponsor's, to ensure that the benefits it 
provides to employees of its health program or activity do not violate 
Section 1557. We note that a plan sponsor will be separately covered 
under Section 1557 if it receives Federal financial assistance and is 
considered a covered entity under this rule.
---------------------------------------------------------------------------

    \274\ Under ERISA, when a group health plan is established or 
maintained by a single employer, the plan sponsor is the employer, 
but when a group health plan is established or maintained by two or 
more employers, the plan sponsor is the association, committee, 
joint board of trustees, or other similar group of representatives 
of the parties who establishes or maintains the plan. In the case of 
a plan established or maintained by an employee organization, the 
plan sponsor is the employee organization. 29 U.S.C. 1002(16)(B).
---------------------------------------------------------------------------

    Comment: One commenter expressed the view that treating a group 
health plan as an entity principally engaged in health coverage--and 
thereby subjecting all of its operations to Section 1557--undermines 
the limitations on employer liability under Sec.  92.208. The commenter 
expressed concern that any employer that offers a self-insured group 
health plan to its employees would be accountable under Section 1557 
for any discrimination by that group health plan.
    Response: The commenter has misunderstood the relationship between 
the obligations of an employer and the application of the rule to a 
separate group health plan providing the employer's employee health 
benefit program. The fact that a group health plan is principally 
engaged in providing health services, health insurance coverage, or 
other health coverage, and therefore must comply with Section 1557 in 
all of its operations does not necessarily mean that an employer 
offering an employee health benefit program will be liable for a 
Section 1557 violation by the group health plan.\275\ Employers will be 
liable under Section 1557 only under the circumstances set forth in 
92.208.
    Comment: Two commenters requested clarification of whether tax 
credits claimed by an employer that purchases health insurance coverage 
through the Small Business Health Options Program (SHOP) 
Marketplace\SM\ and the health insurance plan purchased through a SHOP 
are covered by the rule.
---------------------------------------------------------------------------

    \275\ However, under employment discrimination laws like TItle 
VII, the employer may be liable for the health plan's 
discrimination. See, e.g., Los Angeles Dept. of Water and Power v. 
Manhart, 435 U.S. 702 (1978).
---------------------------------------------------------------------------

    Response: The tax credit to a small employer participating in the 
SHOP Marketplace\SM\ is not considered Federal financial assistance 
from the Department under this rule because the tax credit is not 
administered by the Department.
    Comment: Some comments suggested eliminating or drastically 
revising Sec.  92.208 to make clear that all covered entities are 
covered in their provision of employee health benefits. One commenter 
suggested adding ``employee health benefits plan'' to the definition of 
``health program or activity.'' Another asserted that Sec.  92.208 is 
unnecessary because all group health plans are health programs or 
activities. One commenter recommended that OCR include in the 
regulatory text the substance of footnote 93 from the preamble of the 
proposed rule,\276\ which clarifies that, regardless of whether an 
employer is liable for a discriminatory employee health benefit plan, 
an issuer that is a covered entity will be liable for discrimination in 
the health insurance coverage it offers to employers.
---------------------------------------------------------------------------

    \276\ 80 FR at 54191 n. 93.
---------------------------------------------------------------------------

    Response: We decline to eliminate or revise Sec.  92.208 in the 
manner proposed by these commenters. As we explained in the preamble to 
the proposed rule,\277\ absent the limitations in Sec.  92.208, 
employers that receive Federal financial assistance for any purpose 
could be held liable for discrimination in the employee health benefits 
they provide or administer, even where those employers are not 
otherwise engaged in a health program or activity and where the use of 
Federal funds for employee health benefits is merely incidental to the 
purpose of the Federal assistance. We do not believe that Congress 
intended for Section 1557 to apply in such circumstances. We reiterate 
that issuers that receive Federal financial assistance and are 
principally engaged in providing or administering health services, 
health insurance coverage, or other health coverage are liable for the 
health insurance coverage offered to employers in connection with a 
group health plan.
---------------------------------------------------------------------------

    \277\ Id.
---------------------------------------------------------------------------

    Comment: Some commenters asked us to make clear that employer-
provided benefits are covered by the rule even if the employer does not 
contribute to the cost of these benefits and the entire cost is borne 
by the employee or other beneficiary.
    Response: The rule does not limit employer liability for 
discrimination in employee health benefit programs to those benefits 
for which the employer pays for part or all of the cost. Thus, if an 
employer would otherwise be liable for discrimination in an employee 
health benefit program, the fact that the employer did not pay for part 
of the cost of these benefits does not remove it from the reach of 
92.208.
Summary of Regulatory Changes
    For the reasons set forth in the proposed rule and considering the 
comments received, we are finalizing the provisions proposed in Sec.  
92.208 with minor technical revisions to ensure consistency with other 
parts of the final rule by adding the words ``or other health 
coverage.''
Nondiscrimination on the Basis of Association (Sec.  92.209)
    In Sec.  92.209 of the proposed rule, we specifically addressed 
discrimination

[[Page 31439]]

faced by an individual or an entity on the basis of the race, color, 
national origin, age, disability, or sex of an individual with whom the 
individual or entity is known or is believed to have a relationship or 
association. We explained that the language of Section 1557 makes clear 
that individuals may not be subject to any form of discrimination ``on 
the grounds prohibited by'' Title VI and other civil rights laws; the 
statute does not restrict that prohibition to discrimination based on 
the individual's own race, color, national origin, age, disability or 
sex. Further, we noted that a prohibition on associational 
discrimination is consistent with longstanding interpretations of 
existing anti-discrimination laws, whether the basis of discrimination 
is a characteristic of the harmed individual or an individual who is 
associated with the harmed individual.\278\ A prohibition on 
associational discrimination is also consistent with the approach taken 
in the ADA, which includes a specific prohibition of discrimination 
based on association with an individual with a disability.\279\
---------------------------------------------------------------------------

    \278\ See, e.g., McGinest v. GTE Service Corp., 360 F. 3d 1103, 
1118 (9th Cir. 2004), cert. denied, 552 U.S. 1180 2008) (holding 
that harassment of white employee who associated with African 
American employees was discrimination under Title VII); Tetro v. 
Elliot Popham Pontiac,Oldsmobile, Buick & GMC Trucks Inc., 173 F.3d 
988, 993-96 (6th Cir. 1999) (holding that white plaintiff with 
biracial child stated a claim under Title VII based on his own race 
because Title VII protects victims of discriminatory animus towards 
third persons with whom one associates); Parr v. Woodmen of the 
World Life Ins., 791 F.2d 888, 892 (11th Cir. 1986)
    (``Where a plaintiff claims discrimination based upon an 
interracial marriage or association, he alleges by definition that 
he has been discriminated against because of his race.'')
    \279\ 42 U.S.C. 12182(b)(1)(E)(Title III); 28 CFR 35.130(g) 
(Title II). See generally https://www.eeoc.gov/facts/association_ada.html. Cf. Loeffler v. Staten Island Univ. Hosp., 582 
F.3d 268, 277 (2d Cir. 2009) (permitting associational 
discrimination claim under Section 504); Falls v. Prince George's 
Hosp. Ctr., No. Civ. A 97-1545, 1999 WL 33485550 at * 11 (D. Md. 
Mar. 16, 1999) (holding that parent had an associational 
discrimination claim under Section 504 when hospital required 
hearing parent to act as interpreter for child who was deaf). Cf. 
Questions and Answers About the Americans with Disabilities Act's 
Association Provision.
---------------------------------------------------------------------------

    The comments and our responses regarding Sec.  92.209 are set forth 
below.
    Comment: A few commenters recommended that OCR add the words ``or 
deter'' to the prohibition on associational discrimination, so that 
Sec.  92.209 would read as follows: ``A covered entity shall not 
exclude or deter from participation in, deny the benefits of, or 
otherwise discriminate against an individual or entity in its health 
programs or activities on the basis of the race, color, national 
origin, age, disability, or sex of an individual with whom the 
individual or entity is known or believed to have a relationship or 
association.''
    Response: We believe the regulatory text, as it is currently 
written, encompasses this approach. It is well established in civil 
rights law that deterrence is a form of exclusion.\280\
---------------------------------------------------------------------------

    \280\ See discussion of Sec.  92.101(a) supra.
---------------------------------------------------------------------------

    Comment: Several comments recommended that the rule state that 
unlawful discrimination based on association occurs when a provider is 
subject to adverse treatment because the provider is known or believed 
to furnish, refer or support services that are medically appropriate 
for, ordinarily available to, or otherwise associated with a patient 
population protected by Section 1557.
    Response: To clarify, the rule prohibits covered entities from 
discriminating against any individual or entity on the basis of a 
relationship or association with a member of a protected class. The 
term ``individual or entity'' includes providers. Thus, for example, an 
issuer covered by the rule may not use the fact that a provider's 
clientele is primarily composed of individuals with limited English 
proficiency to disqualify an otherwise eligible and qualified provider 
from participation in the issuer's network; such a decision would 
discriminate against the provider on the basis of the provider's 
association with a national origin group. We believe that the 
regulatory text encompasses this approach.
    Comment: Commenters asked OCR to clarify whether Sec.  92.209's 
prohibition of discrimination on the basis of association prohibits 
discrimination against individuals in same sex relationships.
    Response: We will interpret the language of Sec.  92.209 consistent 
with our interpretation of the term ``on the basis of sex,'' as 
described in Sec.  92.4 above.
Summary of Regulatory Changes
    For the reasons set forth in the proposed rule and considering the 
comments received, we are finalizing the provisions proposed in Sec.  
92.209 as proposed without modification.
Subpart D--Procedures
Enforcement Mechanisms (Sec.  92.301)
    In proposed Sec.  92.301, we restated the language of Section 1557 
regarding enforcement, which provides that the enforcement mechanisms 
under Title VI, Title IX, the Age Act, or Section 504 apply for 
violations of Section 1557. We noted that these existing enforcement 
mechanisms include requiring covered entities to keep records and 
submit compliance reports to OCR, conducting compliance reviews and 
complaint investigations, and providing technical assistance and 
guidance. We further noted that where noncompliance or threatened 
noncompliance cannot be corrected by informal means, the enforcement 
mechanisms provided for and available under the civil rights laws 
referenced in Section 1557 include suspension of, termination of, or 
refusal to grant or continue Federal financial assistance; referral to 
the Department of Justice with a recommendation to bring proceedings to 
enforce any rights of the United States; and any other means authorized 
by law.\281\ In addition, we provided that based on the statutory 
language, a private right of action and damages for violations of 
Section 1557 are available to the same extent that such enforcement 
mechanisms are provided for and available under Title VI, Title IX, 
Section 504, or the Age Act with respect to recipients of Federal 
financial assistance. We further provided that a private right of 
action and damages are available for violations of Section 1557 by 
Title I entities. We invited comment on these positions.
---------------------------------------------------------------------------

    \281\ See 45 CFR 80.8(a).
---------------------------------------------------------------------------

    The comments and our responses regarding Sec.  92.301 are set forth 
below.
    Comment: Many commenters requested that OCR clarify that all 
enforcement mechanisms available under the statutes listed in Section 
1557 are available to each Section 1557 plaintiff, regardless of the 
plaintiff's protected class. Thus, for example, an individual could 
bring a race claim under the Age Act procedure and an age claim under 
the Title VI procedure.
    Under this approach, given that the Age Act authorizes a private 
right of action for disparate impact claims, a private right of action 
would exist for disparate impact claims of discrimination on the basis 
of race, color, or national origin.
    The commenters primarily rely on reasoning in Rumble v. Fairview 
Health Services,\282\ in which the U.S. District Court for the District 
of Minnesota discussed the standards to be applied to Section 1557 
private right of action claims and stated: ``It appears Congress 
intended to create a new, health-specific, anti-discrimination cause of 
action that is subject to a singular standard, regardless of 
plaintiff's protected class status. Reading Section 1557 otherwise 
would lead to an illogical result, as different enforcement

[[Page 31440]]

mechanisms and standards would apply to a Section 1557 plaintiff 
depending on whether plaintiff's claim is based on her race, sex, age, 
or disability. For example, it would not make sense for a Section 1557 
plaintiff claiming race discrimination to be barred from bringing a 
claim using a disparate impact theory but then allow a Section 1557 
plaintiff alleging disability discrimination to do so.'' \283\
---------------------------------------------------------------------------

    \282\ No. 14-CV-2037 2015 WL 1197415 (D. Minn. Mar. 16, 2015).
    \283\ Id. at *11.
---------------------------------------------------------------------------

    Similarly, many commenters requested that the regulation clarify 
that a private right of action exists for disparate impact claims, 
arguing, like commenters discussed above, that all enforcement 
mechanisms should be available to all Section 1557 complainants. A few 
commenters requested that the availability of a private right of action 
be addressed in the final rule itself, rather than in the preamble.
    Response: OCR interprets Section 1557 as authorizing a private 
right of action for claims of disparate impact discrimination on the 
basis of any of the criteria enumerated in the legislation. At the same 
time, OCR is incorporating its existing procedures for its 
administrative processing of complaints; thus, we will use our current 
processes to address age discrimination on the one hand and race, 
color, national origin, sex, or disability on the other hand. This 
approach will enable us to be consistent in our processing of 
complaints under OCR's other authorities in instances where we have 
concurrent jurisdiction under Section 1557 and the other civil rights 
laws it references. This approach is not intended to limit the 
availability of judicial enforcement mechanisms. We note as well that 
both the proposed and the final rule specify that a private right of 
action is available under Section 1557.
    Comment: A few commenters suggested that the text of the regulation 
specifically mention the availability of compensatory damages. Although 
OCR discussed the availability of compensatory damages in the preamble 
of the NPRM, commenters recommended that explicit authorization for 
compensatory damages in the regulation would strengthen the enforcement 
of Section 1557.
    Response: OCR has added a provision to Sec.  92.301 to make clear 
in the regulation that compensatory damages are available. Our 
interpretation of Section 1557 as authorizing compensatory damages is 
consistent with our interpretations of Title VI, Section 504, and Title 
IX.
    Comment: Many commenters requested that OCR involve the Department 
of Justice (DOJ) in all Section 1557 investigations and compliance 
reviews where DOJ has concurrent jurisdiction, and that OCR refer cases 
to DOJ for litigation, where appropriate.
    Response: Although OCR recognizes the importance of working with 
DOJ and other agencies, it would not be a productive use of resources 
to include DOJ in every case in which it has concurrent jurisdiction. 
OCR has been enforcing Section 1557 since it became effective in 2010 
and continues to investigate and resolve Section 1557 cases over which 
it has jurisdiction. OCR involves DOJ in investigations where 
appropriate and will continue to do so. And, as Sec.  92.209 makes 
clear, OCR has the authority to refer cases to DOJ for litigation where 
efforts at compliance have been unsuccessful.
    Comment: Some commenters recommended that HHS agreements with State 
agencies and State contracts with Medicaid managed care organizations 
include nondiscrimination provisions that obligate the State agencies 
to ensure compliance with nondiscrimination requirements.
    Response: OCR agrees that nondiscrimination provisions in contracts 
help covered entities to ensure that contractors do not discriminate 
against program beneficiaries. Although this rule does not require such 
provisions in contracts, OCR has worked with HHS entities to include 
such language in their contracts in the past, and OCR will continue to 
look for opportunities to promote compliance with civil rights laws 
through nondiscrimination provisions in contracting in the future.
    Comment: Several commenters recommended that the regulatory text 
specifically provide that OCR will conduct compliance reviews and 
perform outreach. These commenters expressed concern that individual 
complaint resolution, as an enforcement mechanism, will be inadequate 
to achieve widespread compliance with the Section 1557 final rule.
    Response: We recognize the need for OCR to employ the full range of 
enforcement tools in order to ensure compliance with the law, and we 
intend to continue in our robust enforcement of Section 1557. We do not 
believe that any changes to regulatory text are necessary, since the 
rule contemplates and authorizes the suite of enforcement mechanisms 
that OCR has long employed.
    Comment: Some commenters recommended that HHS, and not States, 
should be the primary enforcement agency for benefit design issues. 
These commenters asserted that State enforcement would lead to 
inconsistent results.
    Response: OCR is responsible for enforcement with respect to 
benefit design issues under Section 1557. States have an important role 
in ensuring compliance with nondiscrimination requirements respecting 
insurance, including benefit design, under CMS regulations and 
applicable State laws. It is beyond the scope of this rulemaking to 
change State obligations under those laws.
    Comment: Some commenters recommended that OCR be required to 
publish the outcomes of all resolved Section 1557 complaints and 
statistics regarding Section 1557 complaints received by OCR.
    Response: We decline to accept this recommendation, but OCR will 
continue to include information and corrective action plans and 
resolution agreements on the OCR Web site.
    Comment: Some commenters recommended that OCR allow at least a one-
year period with no administrative sanctions if a covered entity can 
demonstrate good faith compliance. These commenters suggested that this 
approach will promote compliance while covered entities, OCR, and 
consumers become familiar with the requirements of the regulation.
    Response: We appreciate the commenters' recommendation, but we 
decline to accept it because, while good faith is relevant under 
certain CMS regulations with which covered entities may be familiar, 
courts have not treated good faith as a consideration in assessing 
whether a covered entity is in compliance with the civil rights laws 
referenced in Section 1557. We are retaining this principle in 
interpreting whether a covered entity is in compliance with Section 
1557. That said, OCR has the authority and discretion to consider a 
range of factors when reviewing cases and determining appropriate 
remedies, including consideration of steps taken by covered entities to 
ensure compliance with the law, compliance with other Federal 
regulations regarding the issue, timeframes for implementation of 
corrective action and resources to facilitate compliance.
    Comment: Some commenters suggested that the final rule mandate 
training for employees of entities required to comply with the 
requirements of Section 1557.

[[Page 31441]]

    Response: Although OCR encourages covered entities to train 
employees on compliance with Section 1557 periodically, OCR does not 
believe it is necessary for the final rule to mandate training. 
However, to facilitate training that covered entities choose to 
provide, we are preparing and will make available a training curriculum 
for their use in advance of the effective date of the rule. We also 
expect to engage in outreach and technical assistance to promote 
understanding of and compliance with the final rule.
    Comment: Several commenters stated that the final rule should 
require OCR to perform unannounced, onsite reviews of covered entities 
to ensure compliance with Section 1557.
    Response: While OCR may consider performing unannounced, onsite 
reviews where appropriate, OCR does not believe it is necessary to 
include a requirement to do so in the final rule.
    Comment: Some commenters recommended that the regulation permit 
class actions and third party complaints in court. Other commenters 
recommended that the regulation provide for the availability of 
attorneys' fees in successful private suits. These commenters pointed 
out that many individuals who are subject to discrimination will be 
unable to afford a retainer for an attorney. Some commenters 
recommended that suits be allowed only in the State where the 
Marketplace\SM\ is located, not any Federal district court in a 
district in which a complainant resides.
    Response: Although these issues are outside the scope of this 
regulation, nothing in Section 1557 changes the laws that otherwise 
would govern eligibility for attorneys' fees, including the Civil 
Rights Attorney's Fees Award Act of 1976,\284\ laws that otherwise 
would govern venue,\285\ or laws that otherwise would govern initiation 
of class action lawsuits.\286\
---------------------------------------------------------------------------

    \284\ 42 U.S.C. 1988.
    \285\ See, e.g., 28 U.S.C. 1391.
    \286\  See, e.g., 28 U.S.C. 1332.
---------------------------------------------------------------------------

    Comment: Some commenters suggested that the regulation prohibit 
issuers from including clauses requiring mandatory binding arbitration 
of Section 1557 complaints. These commenters asserted that such 
arbitration is unfair to consumers.
    Response: We decline to accept the commenters' suggestion because 
it is outside the scope of this regulation.
Summary of Regulatory Changes
    For the reasons set forth above and in the proposed rule and 
considering the comments received, we have revised Sec.  92.301 to re-
designate existing text as Sec.  92.301(a) and add a new subsection (b) 
stating that compensatory damages for violations of Section 1557 are 
available in administrative and judicial actions, as they are under 
authorities referenced in Section 1557.
Procedures for Health Programs and Activities Conducted by Recipients 
and State-Based Marketplaces (Sec.  92.302)
    In Sec.  92.302, we proposed the procedures that will apply to 
enforcement of Section 1557 in health programs and activities conducted 
by recipients and State-based Marketplaces. We noted that the 
administrative procedures provided for and available under Title VI are 
found in the regulation implementing Title VI.\287\ We explained that 
these administrative procedures are incorporated into the regulation 
implementing Title IX \288\ and Section 504 with respect to 
recipients.\289\ In paragraph (a), we proposed to incorporate these 
procedures into Section 1557 with respect to race, color, national 
origin, sex, and disability discrimination.
---------------------------------------------------------------------------

    \287\ 45 CFR 80.6-.11; 45 CFR pt. 81.
    \288\ 45 CFR 86.71.
    \289\ 45 CFR 84.61.
---------------------------------------------------------------------------

    We also explained that the administrative procedures provided for 
and available under the Age Act are found in the regulation 
implementing the Age Act.\290\ In paragraph (b), we proposed to 
incorporate these procedures into Section 1557 with respect to age 
discrimination.
---------------------------------------------------------------------------

    \290\ 45 CFR 91.41-.50.
---------------------------------------------------------------------------

    In paragraph (c), we provided that an individual may bring a civil 
action in a United States District Court in which a recipient or State-
based Marketplace\SM\ is located or does business, as provided for and 
available under Section 1557.
    The comments and our responses regarding Sec.  92.302 are set forth 
below.
    Comment: A few commenters asserted that any enforcement provisions 
that apply to Health Insurance Marketplaces should apply whether the 
Marketplace\SM\ is operated by the State or Federal government.
    Response: OCR declines to incorporate the commenter's request that 
Marketplaces operated by the Federal government be subject to the same 
enforcement provisions as Marketplaces operated by State governments. 
Under the regulations implementing Section 504, federally assisted 
programs, including federally assisted programs operated by States, and 
federally conducted programs are subject to separate enforcement 
procedures.\291\ OCR believes that this approach has worked 
successfully in the past and has decided to retain separate procedures 
for federally conducted health programs and activities, including 
Health Insurance Marketplaces operated by HHS, and other health 
programs and activities, including Health Insurance Marketplaces 
operated by States.
---------------------------------------------------------------------------

    \291\ Compare 45 CFR 84.61 with 45 CFR 85.61-.62.
---------------------------------------------------------------------------

    Comment: Some commenters suggested that OCR use the enforcement 
scheme of Title VI for all discrimination under Section 1557. By 
contrast, some commenters recommended that the final rule should 
require mediation for all Section 1557 complaints. A few commenters 
requested that OCR require exhaustion of administrative remedies before 
individuals could pursue a private right of action.
    Response: OCR declines to adopt these recommendations. OCR has 
decided to retain administrative procedures and application of the 
procedures consistent with OCR's existing procedures for complaints. 
Mediation and exhaustion of administrative remedies will still be 
required for age discrimination allegations in complaints, but not for 
allegations of other covered types of discrimination.
Summary of Regulatory Changes
    For the reasons set forth in the proposed rule and considering the 
comments received, we are finalizing the provisions proposed in Sec.  
92.302 with two modifications. As addressed previously in the 
discussion of the comments on Sec.  92.5 (Assurances), the text that 
was previously found at Sec.  92.302(c) has been moved to Sec.  
92.302(d), and Sec.  92.302(c) now clarifies OCR's ability to initiate 
enforcement procedures where a recipient or State-based Marketplace 
\SM\ fails to provide OCR with requested information.
Procedures for Health Programs and Activities Administered by the 
Department (Sec.  92.303)
    In the proposed rule, we noted that Section 1557 expressly states 
that the enforcement mechanisms provided for and available under Title 
VI, Title IX, Section 504, or the Age Act shall apply for purposes of 
violations of Section 1557. We also noted that the administrative 
procedures provided for and available under Section 504--the only one 
of these statutes that applies to federally conducted, as well as 
federally assisted, programs--for programs and activities administered 
by the

[[Page 31442]]

Department are found in the regulation implementing Section 504.\292\ 
We provided that these procedures shall apply with respect to 
complaints and compliance reviews of health programs or activities 
administered by the Department, including the Federally-facilitated 
Marketplaces, concerning discrimination on the basis of race, color, 
national origin, sex, age, or disability.
---------------------------------------------------------------------------

    \292\ 45 CFR 85.61-.62.
---------------------------------------------------------------------------

    In the proposed rule, we proposed to add two provisions that are 
not found in Section 504 enforcement procedures for programs conducted 
by the Department. We proposed that the first provision, which reflects 
OCR's practice under Section 504 and mirrors similar requirements under 
the Title VI regulation with regard to access to information, is 
designed to ensure that OCR has the ability to obtain all of the 
relevant information needed to investigate a complaint or determine 
compliance in a particular health program or activity administered by 
the Department.
    We further proposed language prohibiting the Department, including 
Federally-facilitated Marketplaces, from retaliating against any 
individual for the purpose of interfering with any right or privilege 
under Section 1557 or the proposed rule or because the individual has 
made a complaint, testified, assisted, or participated in any manner in 
an investigation, proceeding, or hearing under Section 1557 or this 
proposed rule. We explained that Section 504 of the Rehabilitation Act, 
to which the Department is already subject, provides that the 
procedures, rights, and remedies under Title VI are available to any 
individual aggrieved by an act or failure to act by any recipient of 
Federal financial assistance or Federal provider of such financial 
assistance under Section 504. Thus, we noted that the prohibition on 
retaliation under Title VI \293\ would apply to the Department under 
Section 504. We noted that the retaliation provision in the proposed 
rule is simply an extension of this existing prohibition. We further 
noted that this provision is also in accordance with a similar 
requirement for recipients under the Title VI regulations. The 
Department should hold itself to the same standards to which it holds 
recipients of Federal financial assistance.\294\
---------------------------------------------------------------------------

    \293\ 45 CFR 80.7(e).
    \294\ Further, as the U.S. Supreme Court observed in Jackson v. 
Birmingham Bd. of Educ., 544 U.S. 167, 180 (2005), protecting 
individuals from discrimination under Title IX ``would be difficult, 
if not impossible, to achieve if persons who complain about sex 
discrimination did not have effective protection against 
retaliation.'' (citing to the brief of the United States as Amicus 
Curiae). The same principle is true for discrimination under Section 
1557.
---------------------------------------------------------------------------

Summary of Regulatory Changes
    We did not receive any significant comments regarding Sec.  92.303. 
For the reasons set forth in the proposed rule, we are finalizing the 
provisions proposed in Sec.  92.303 without modification.
Information Collection Requirements
    The notice of proposed rulemaking called for new collections of 
information under the Paperwork Reduction Act of 1995.\295\ As defined 
in implementing regulations,\296\ ``collection of information'' 
comprises reporting, recordkeeping, monitoring, posting, labeling and 
other similar actions. In this section, we first identify and describe 
the entities that must collect the information, and then we provide an 
estimate of the total annual burden. The estimate covers the employees' 
time for reviewing and posting the collections required.
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    \295\ 44 U.S.C. 3501-3520.
    \296\ 5 CFR 1320.3(c).
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    The final rule calls for the same collections of information as the 
notice of proposed rulemaking, with one addition: The cost estimates 
for covered entities to develop and implement a language access plan, 
should the covered entities choose to do so, given that development and 
implementation of a language access plan is one of the factors that the 
Director will consider, if relevant, in assessing whether a covered 
entity has met its obligation to take reasonable steps to provide 
meaningful access to each individual with limited English proficiency.
    Title: Nondiscrimination in Health Programs and Activities.
    OMB Control Number: XXXX-XXXX.
    Summary of the Collection of Information: The final rule estimates 
four categories of information collection: (1) Submission of an 
assurance of compliance form, per Sec.  92.5; (2) posting of a 
nondiscrimination notice and posting of taglines, under Sec.  92.8; (3) 
development and implementation of a language access plan, anticipated 
per Sec.  92.201; and (4) designation of a compliance coordinator and 
adoption of grievance procedures for covered entities with 15 or more 
employees, per Sec.  92.7. Each category is described in the following 
analysis.
    Under the final rule, each entity applying for Federal financial 
assistance, each health insurance issuer seeking certification to 
participate in a Marketplace\SM\, and each entity seeking approval to 
operate a Title I entity is required to submit an assurance that its 
health programs and activities will be operated in compliance with 
Section 1557.
    In addition, each covered entity subject to the final rule is 
required to post a notice of individuals' civil rights and covered 
entities' obligations, including acknowledging that the covered entity 
provides auxiliary aids and services, free of charge, in a timely 
manner, to individuals with disabilities, when such aids and services 
are necessary to provide an individual with a disability an equal 
opportunity to benefit from the entity's health programs or activities; 
and language assistance services, free of charge, in a timely manner, 
to individuals with limited English proficiency, when those services 
are necessary to provide an individual with limited English proficiency 
meaningful access to a covered entity's health programs or activities. 
Furthermore, each covered entity is required to post taglines in the 
top 15 languages spoken by individuals with limited English proficiency 
by relevant State or States, informing individuals with limited English 
proficiency that language assistance services are available.
    Although the final rule does not require covered entities to 
develop a language access plan, the development and implementation of a 
language access plan is one factor that the Director will consider when 
evaluating a covered entity's compliance with this rule. We anticipate 
that some proportion of covered entities will develop and implement a 
language access plan following issuance of the rule.
    Additionally, each covered entity that employs 15 or more persons 
is required to adopt grievance procedures that incorporate appropriate 
due process standards and that provide for the prompt and equitable 
resolution of grievances alleging any action that would be prohibited 
by Section 1557. Each covered entity is also required to designate at 
least one individual to coordinate its efforts to comply with and carry 
out its responsibilities under Section 1557, including the 
investigation of any grievance communicated to it alleging 
noncompliance with Section 1557.
    Need for Information: The requirement that every entity applying 
for Federal financial assistance, seeking certification to participate 
in a Health Insurance Marketplace\SM\, or seeking approval to operate a 
Title I entity, submit an assurance of compliance, is similar to the 
current regulatory

[[Page 31443]]

requirements under Title VI,\297\ Section 504,\298\ and the Age 
Act.\299\ These requirements protect individuals by assuring that 
covered entities will comply with all applicable nondiscrimination 
statutes and their implementing regulations.
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    \297\ 45 CFR 80.4(a).
    \298\ 45 CFR 80.5.
    \299\ 45 CFR 91.33.
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    The posting of a notice of individuals' rights and covered 
entities' obligations and the posting of taglines in the top 15 
languages spoken by individuals with limited English proficiency by 
relevant State or States are necessary to ensure that individuals are 
aware of their protections under the law, and are grounded in OCR's 
experience that failures of communication based on the absence of 
auxiliary aids and services and language assistance services raise 
particularly significant compliance concerns under Section 1557, as 
well as Section 504 and Title VI.
    The development and implementation of a language access plan helps 
ensure meaningful access to persons with limited English proficiency to 
a covered entity's health programs and activities. While Title VI has 
long required covered entities to take reasonable steps to provide 
persons with limited English proficiency meaningful access, the 
addition of a language access plan brings specificity and increased 
probability of implementation of the requirement. Although the final 
rule does not require development and implementation of a language 
access plan, covered entities may choose to develop and implement a 
language access plan because the Director will consider, if relevant, 
the language access plan as one factor when assessing a covered 
entity's compliance with this rule.
    The requirements that every covered entity that employs 15 or more 
persons adopt grievance procedures and designate at least one 
individual to coordinate its efforts to comply with and carry out its 
responsibilities under Section 1557 are similar to requirements 
included in the Title IX and Section 504 implementing regulations. 
Through its case investigation experience, OCR has observed that the 
presence of a coordinator and grievance procedures helps to bring 
concerns to prompt resolution within an entity, leading to lower 
compliance costs and more efficient outcomes.
    Use of Information: OCR will use this information to ensure covered 
entities' adherence to the statutory requirements imposed under Section 
1557 and this final rule. OCR will enforce the requirements by 
verifying during investigations of covered entities that an entity has 
submitted an assurance of compliance and posted the notice and taglines 
and, for each covered entity that employs 15 or more persons, that an 
individual has been designated to coordinate its compliance efforts and 
that appropriate grievance procedures have been adopted, as required.
    Description of the Respondents: The respondents are: the 
Department, each entity that operates a health program or activity, any 
part of which receives Federal financial assistance, and each entity 
established under Title I of the ACA that administers a health program 
or activity. These include such entities as hospitals, home health 
agencies, community mental health centers, skilled nursing facilities, 
and health insurance issuers.
    Number of Respondents: The number of respondents is estimated to 
include the 275,002 covered entities affected by the final rule.
    Burden of Response: Because the Department provides the assurance 
of compliance and the final rule provides a sample Notice, sample 
taglines in 64 languages, and sample grievance procedures, the burden 
on respondents is minimal. Additionally, because all recipients of 
Federal financial assistance with 15 or more employees are already 
expected under other laws to have in place grievance procedures and a 
designated individual to coordinate their compliance responsibilities, 
the burden to comply with this requirement will be minimal for most 
respondents.
    The requirement to sign and submit an assurance of compliance 
exists under other civil rights regulations (Title VI, Section 504, 
Title IX, the Age Act), and since the Department provides a copy of the 
Assurance of Compliance form to covered entities, OCR believes this 
requirement adds no extra burden. OCR believes that the time, effort, 
and financial resources necessary to comply with this requirement are 
considered part of the usual and customary business practice and would 
be incurred by covered entities during their ordinary course of 
business.
    OCR estimates that the burden for responding to the proposed notice 
requirement is an average of 17 minutes to download and post the notice 
and that the burden to download and post taglines in the top 15 
languages by relevant State or States is also an average of 17 minutes, 
for a burden total of 34 minutes on average at each of the 405,534 
affected establishments (associated with the affected covered entities) 
in the first year following publication of the final rule. (See 
Regulatory Impact Analysis, II. Costs, B.2.for a more detailed 
explanation of the differences between ``firm'' and ``establishment.'') 
We estimate that administrative or clerical support personnel would 
perform these functions. Based on the wage rate for a Clerical Support 
Worker ($15.52) we estimate the annual burden for these two 
requirements to be approximately $7.1 million after adjusting for 
overhead and benefits by adjusting the wage rate upward by 100%.
    OCR estimates that the burden for developing a language access plan 
is approximately three hours of medical and health service manager 
staff time in the first year, and an average of one hour of medical and 
health service manager staff time per year to update the plan in 
subsequent years. The value of an hour of time for people in this 
occupation category, after adjusting for overhead and benefits, is 
estimated to be $89.24 based on Bureau of Labor Statistics (BLS) data. 
As discussed later in this analysis, we estimate that approximately 
135,000 entities will develop and implement language access plans, as 
part of the requirement to take reasonable steps to provide meaningful 
communication with persons with limited English proficiency. These 
assumptions imply that the total cost of the development of language 
access plans will be approximately $36.0 million (269,141 entities x 
50% of entities x 3 hours per entity x $89.24 per hour) in the first 
year and approximately $12.0 million (269,141 entities x 50% of 
entities x 1 hour per entity x $89.24 per hour) per year in subsequent 
years.
    Regarding the requirement that every covered entity that employs 15 
or more persons adopt grievance procedures and designate at least one 
individual to coordinate its efforts to comply with and carry out its 
responsibilities under Section 1557, based on OCR's complaint workload 
increase since the enactment of Section 1557, we anticipate that within 
the first five years following the rule's enactment, complaints will 
increase approximately 0.5% in the first year, 0.75% in the second 
year, and 1% in years three through five, but eventually will drop off 
as covered entities modify their policies and practices in response to 
this final rule. We estimate that medical and health service managers 
will handle the grievances, and that a 1% increase in complaints will 
require 1% of an FTE at each covered entity. Using the annual wage rate 
for medical and health service managers ($103,680), adjusting for 
fringe benefits and overhead, and multiplying by the 41,250 entities

[[Page 31444]]

affected by this requirement, we estimate the annual burden for this 
requirement to be approximately $42.8 million in year one, $64.2 
million in year two, and $85.5 million for each year in years three, 
four, and five following publication.
    Thus, the total estimated annual burden cost for the proposed 
information collection requirements will be approximately $86.0 million 
in the first year, $76.2 million in the second year, and $97.5 million 
per year in years three through five following publication of the final 
rule.
    We asked for public comment on the proposed information collection 
to help us determine:
    1. Whether the proposed collection of information is necessary for 
the proper performance of the functions of OCR, including whether the 
information will have practical utility;
    2. The accuracy of the estimated burden associated with the 
proposed collection of information;
    3. How the quality, utility, and clarity of the information to be 
collected may be enhanced; and
    4. How the burden of complying with the proposed collection of 
information may be minimized, including through the application of 
automated collection techniques or other forms of information 
technology.
    We received no comments with specific data in response to numbers 
one, two, or three above. With regard to question four, we received 
comments asking that the proposed collection of information be 
minimized and stating that it is burdensome for covered entities to 
develop notices to put in several locations in all their facilities. 
OCR responded by proposing that OCR develop a model notice of important 
information and model taglines, to minimize the burden on covered 
entities. The new cost analysis is included above, in this Information 
Collection section, as well as in the Regulatory Impact Analysis.

Regulatory Impact Analysis

I. Introduction

A. Executive Orders 12866 and 13563

    Executive Order 12866 \300\ directs agencies to assess all costs 
and benefits of available regulatory alternatives and, if regulation is 
necessary, to select regulatory approaches that maximize net benefits 
(including potential economic, environmental, public health and safety 
effects; distributive impacts; and equity). Executive Order 13563 \301\ 
is supplemental to and reaffirms the principles, structures, and 
definitions governing regulatory review as established in Executive 
Order 12866. OMB has determined that this final rule is a ``significant 
regulatory action'' under Executive Order 12866. Accordingly, OMB 
reviewed this final rule.
---------------------------------------------------------------------------

    \300\ Exec. Order No. 12866, 58 FR 51735 (1993).
    \301\ Exec. Order No. 13563, 76 FR 3821 (2011).
---------------------------------------------------------------------------

    In general, we received few comments with regard to the Regulatory 
Impact Analysis (RIA), and thus the analysis in the final rule remains 
fairly similar to the proposed rule, although there are some changes. 
The comments will be addressed in each section below, as appropriate.

B. The Need for a Regulation

    Section 1557 of the ACA prohibits an individual from being excluded 
from participation in, denied the benefits of, or otherwise subjected 
to discrimination on the basis of race, color, national origin, sex, 
age or disability in certain health programs and activities. It applies 
to any health program or activity, any part of which is receiving 
Federal financial assistance, and to any program or activity that is 
administered by an Executive Agency or any entity established under 
Title I of the ACA.\302\ The Secretary of the Department is authorized 
to promulgate regulations to implement Section 1557 under the statute 
and 5 U.S.C. 301. The purpose of this regulatory action is to implement 
Section 1557 of the ACA.\303\
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    \302\ Patient Protection and Affordable Care Act, Public Law 
111-148, 1557, 124 Stat. 119, 260, (2010) (codified at 42 U.S.C. 
18116).
    \303\ 42 U.S.C. 18116(c).
---------------------------------------------------------------------------

    One of the central aims of the ACA is to expand access to health 
care and health coverage for all individuals. Equal access for all 
individuals without discrimination is essential to achieving this goal. 
Discrimination in the health care context can often lead to poor and 
inadequate health care or health insurance or other coverage for 
individuals and exacerbate existing health disparities in underserved 
communities. Individuals who have experienced discrimination in the 
health care context often postpone or do not seek needed health care; 
individuals who are subject to discrimination are denied opportunities 
to obtain health care services provided to others, with resulting 
adverse effects on their health status. Moreover, discrimination in 
health care can lead to poor and ineffective distribution of health 
care resources, as needed resources fail to reach many who need them. 
The result is a marketplace comprised of higher medical costs due to 
delayed treatment, lost wages, lost productivity, and the misuse of 
people's talent and energy.\304\
---------------------------------------------------------------------------

    \304\ Kristen Suthers, American Public Health Association: Issue 
Brief: Evaluating the Economic Causes and Consequences of Racial and 
Health Disparities (2008), https://hospitals.unm.edu/dei/documents/eval_cause_conse_apha.pdf; Timothy Waldmann, Urban Institute, 
Estimating the Cost of Racial and Ethnic Health Disparities (2009), 
https://www.urban.org/sites/default/files/alfresco/publication-pdfs/411962-Estimating-the-Cost-of-Racial-and-Ethnic-Health-Disparities.PDF; LaVera M. Crawley, David K. Ahn, and Marilyn A. 
Winkleby, Perceived Medical Discrimination and Cancer Screening 
Behaviors of Racial and Ethnic Minority Adults, 17(8), Cancer 
Epidemiol Biomarkers Prev., 1937-1944 (2008), https://www.ncbi.nlm.nih.gov/pmc/articles/PMC2526181/.
---------------------------------------------------------------------------

    We received comments suggesting that we consider either writing a 
more informative than prescriptive regulation or delaying the 
regulation. The Department's current experience, however, points to the 
importance of a regulation that is prescriptive in the sense that it 
provides concrete guidance. The Department continues to receive many 
complaints of discrimination and continues to provide technical 
assistance and outreach in order to promote compliance. In addition, 
the majority of the comments from the public in response to the 
proposed rule favored speedy issuance of a strong regulation.
    To help address the issues of nondiscrimination in health programs 
and activities, this regulation seeks to clarify the application of the 
nondiscrimination provision in the ACA to any health program or 
activity receiving Federal financial assistance from or administered by 
HHS or any entity established under Title I. Such clarity will promote 
understanding of and compliance with Section 1557 by covered entities 
and the ability of individuals to assert and protect their rights under 
the law.
    In addition, Executive Order 13563 directs Federal agencies to 
improve regulations and regulatory review by promoting the 
simplification and harmonization of regulations and to ensure that 
regulations are accessible, consistent, and easy to understand. 
Regulations implementing the civil rights laws referenced in Section 
1557 contain certain inconsistencies across common areas and subject 
matters, reflecting, among other things, differences in time and 
experience when the regulations were issued. The regulation attempts to 
harmonize these variations where possible.
    We received comments asking that the regulation be written in plain 
language. The approach we adopt in the final rule is to simplify and 
make uniform, consistent, and easy to understand the various 
nondiscrimination requirements

[[Page 31445]]

and rights available under Section 1557, as appropriate.
    The analysis that follows is similar to the analysis set forth in 
the proposed rule, except as specified in each of the sections that 
follow.

C. Examples of Covered Entities and Health Programs or Activities Under 
the Final Regulation

    This final rule applies to any entity that has a health program or 
activity, any part of which receives Federal financial assistance from 
the Department, any health program or activity administered by the 
Department, or any health program or activity administered by an entity 
created under Title I of the ACA. The following are examples of covered 
entities as well as health programs or activities under the final rule.
1. Examples of Covered Entities With a Health Program or Activity, Any 
Part of Which Receives Federal Financial Assistance From the Department
    This Department, through agencies such as the Health Resources and 
Services Administration (HRSA), the Substance Abuse and Mental Health 
Services Administration (SAMHSA), the Centers for Disease Control and 
Prevention (CDC), and the Centers for Medicare and Medicaid Services 
(CMS), provides Federal financial assistance through various mechanisms 
to health programs and activities of local governments, State 
governments, and the private sector. An entity may receive Federal 
financial assistance from more than one component in the Department. 
For instance, federally qualified health centers receive Federal 
financial assistance from CMS by participating in the Medicare or 
Medicaid programs and also receive Federal financial assistance from 
HRSA through grant awards. Because more than one funding stream may 
provide Federal financial assistance to an entity, the examples we 
provide may not uniquely receive Federal financial assistance from only 
one HHS component.
    (1) Entities receiving Federal financial assistance through their 
participation in Medicare (excluding Medicare Part B) or Medicaid 
(about 133,343 facilities).\305\ Examples of these entities include:
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    \305\ U.S. Dep't of Health & Human Servs., Center for Medicare & 
Medicaid Servs., CMS Provider of Service file, June 2014, https://www.cms.gov/Research-Statistics-Data-and-Systems/Files-for-Order/NonIdentifiableDataFiles/ProviderofServicesFile.html.

Hospitals (includes short-term, rehabilitation, psychiatric, and 
long-term)
Skilled nursing facilities/nursing facilities--facility-based
Skilled nursing facilities/nursing facilities--freestanding
Home health agencies
Physical therapy/speech pathology programs
End stage renal disease dialysis centers
Intermediate care facilities for individuals with intellectual 
disabilities
Rural health clinics
Physical therapy--independent practice
Comprehensive outpatient rehabilitation facilities
Ambulatory surgical centers
Hospices
Organ procurement organizations
Community mental health centers
Federally qualified health centers

    (2) Laboratories that are hospital-based, office-based, or 
freestanding that receive Federal financial assistance through Medicaid 
payments for covered laboratory tests (about 445,657 laboratories with 
Clinical Laboratory Improvement Act certification).
    (3) Community health centers receiving Federal financial assistance 
through grant awards from HRSA (1,300 community health centers).\306\
---------------------------------------------------------------------------

    \306\ U.S. Dep't of Health & Human Servs., Health Res. & Servs. 
Admin., Justification of Estimates for Appropriation Committee For 
Fiscal Year 2016, 53, https://www.hrsa.gov/about/budget/budgetjustification2016.pdf.
---------------------------------------------------------------------------

    (4) Health-related schools in the United States and other health 
education entities receiving Federal financial assistance through grant 
awards to support 40 health professional training programs that include 
oral health, behavioral health, medicine, geriatric, and physician's 
assistant programs.\307\
---------------------------------------------------------------------------

    \307\ Id. at 69.
---------------------------------------------------------------------------

    (5) State Medicaid agencies receiving Federal financial assistance 
from CMS to operate CHIP (includes every State, the District of 
Columbia, Puerto Rico, Guam, the Northern Marianas, U.S. Virgin 
Islands, and American Samoa).
    (6) State public health agencies receiving Federal financial 
assistance from CDC, SAMHSA, and other HHS components (includes each 
State, the District of Columbia, Puerto Rico, Guam, the Northern 
Marianas, U.S. Virgin Islands, and American Samoa).
    (7) Qualified health plan issuers receiving Federal financial 
assistance through advance payments of premium tax credits and cost-
sharing reductions (which include at least the 169 health insurance 
issuers in the Federally-facilitated Marketplaces receiving Federal 
financial assistance through advance payments of premium tax credits 
and cost sharing reductions and at least 11 issuers operating in the 
State-Based Marketplaces that we were able to identify).\308\
---------------------------------------------------------------------------

    \308\ Qualified Health Plans Landscape Individual Market 
Medical, Data.HealthCare.gov (2015), https://data.healthcare.gov/dataset/2015-QHP-Landscape-Individual-Market-Medical/mp8z-jtg7 (last 
visited May 3, 2016).
---------------------------------------------------------------------------

    (8) Physicians receiving Federal financial assistance through 
Medicaid payments, ``meaningful use'' payments, and other sources, but 
not Medicare Part B payments, as the Department does not consider 
Medicare Part B payments to physicians to be Federal financial 
assistance. The Medicare Access and CHIP Reauthorization Act amended 
Section 1848 of the Act to sunset ``meaningful use'' payment 
adjustments for Medicare physicians after the 2018 payment adjustment.
    In the proposed rule, we estimated that the regulation would likely 
cover almost all licensed physicians because they accept Federal 
financial assistance from sources other than Medicare Part B. We noted 
that most physicians participate in more than one Federal, State, or 
local health program that receives Federal financial assistance, and 
many practice in several different settings, e.g., they may practice in 
a hospital but also practice privately and develop nursing home plans 
of care at the local nursing home. We noted that although we have data, 
by program, for the number of physicians receiving payment from each 
program, there is no single, unduplicated count of physicians across 
multiple programs.\309\
---------------------------------------------------------------------------

    \309\ 80 FR at 54195.
---------------------------------------------------------------------------

    In the proposed rule, we provided our best estimate of the number 
of physicians receiving Federal financial assistance by analyzing and 
comparing different data sources and drawing conclusions from this 
analysis. We noted that, based on 2010 Medicaid Statistical Information 
System data, about 614,000 physicians accept Medicaid payments and are 
covered under Section 1557 as a result.\310\ This figure represents 
about 72% of licensed physicians in the United States when compared to 
the 850,000 in 2010.\311\ In addition, we noted that physicians 
receiving Federal payments from non-Part B Medicare sources would also 
come under Section 1557.\312\
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    \310\ John Holahan and Irene Headen, Kaiser Commission on 
Medicaid and the Uninsured, Medicaid Coverage and Spending in Health 
Reform: National and State-by-State Results for Adults at or Below 
133% FPL (2010), https://kff.org/health-reform/report/report-and-briefing-on-medicaid-coverage-and/. Estimates are based on data from 
FY 2010 Medicaid Statistical Information System.
    \311\ Aaron Young, Humayun J. Chaudhry, Jon V. Thomas, & Michael 
Dugan, A Census of Actively Licensed Physicians in the United 
States, 2012, 99 no.2 J. Med. Reg. 11 (2013), https://www.fsmb.org/Media/Default/PDF/Census/census.pdf.
    \312\ 80 FR at 54195.
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    Earlier, before issuing the proposed rule, we identified several 
grant programs from various Department

[[Page 31446]]

agencies that fund a variety of health programs in which physicians 
participate and thus come under Section 1557, such as the National 
Health Service Corps, HRSA-funded community health centers, programs 
receiving National Institutes of Health (NIH) research grants, and 
SAMHSA-funded programs. In the proposed rule, we noted that physicians 
participating in a CMS gain-sharing demonstration project who receive 
gain-sharing payments would be covered under Section 1557 even if they 
did not participate in Medicare and Medicaid or any other health 
program or activity that receives Federal financial assistance. We also 
noted that there will be duplication and overlap with physicians who 
accept Medicaid or Medicare meaningful use payments, or other payments 
apart from Medicare Part B payments. Nevertheless, we noted that at 
least some of these physicians add to the total number of physicians 
reached under Section 1557 because some of them are not duplicates and 
do not accept Medicaid or Medicare meaningful use payments. We noted 
that although we do not have an exact number, adding these physicians 
may bring the total participating in Federal programs other than 
Medicare Part B to over 900,000.
    In the proposed rule, when we compared the upper bound estimated 
number of physicians participating in Federal programs other than 
Medicare Part B (over 900,000) to the number of licensed physicians 
counted in HRSA's Area Health Resource File (approximately 890,000), we 
concluded that almost all practicing physicians in the United States 
are reached by Section 1557 because they accept some form of Federal 
remuneration or reimbursement apart from Medicare Part B.\313\
---------------------------------------------------------------------------

    \313\ The Area Health Resource File itself double counts 
physicians who are licensed in more than one state. See infra 
discussion below at II.C.1.a.
---------------------------------------------------------------------------

    We invited the public to submit information regarding physician 
participation in health programs and activities that receive Federal 
financial assistance. We received no comments that would change the 
estimates that we provided; thus, the analysis in this final rule 
includes the same numbers of physicians as in the proposed rule.
2. Examples of Health Programs or Activities Conducted by the 
Department
    This final rule applies to the Department's health programs and 
activities, such as those administered by CMS, HRSA, CDC, Indian Health 
Service (IHS), and SAMHSA. Examples include the IHS tribal hospitals 
and clinics operated by the Department and the National Health Service 
Corps.
 3. Examples of Entities Established Under Title I of the ACA
    This final rule applies to entities established under Title I of 
the ACA. According to the CMS Center for Consumer Information and 
Insurance Oversight (CCIIO), there are Health Insurance Marketplaces 
covering 51 jurisdictions: (17 State-based-Marketplaces and 34 
Federally-facilitated Marketplaces). The final rule covers these Health 
Insurance Marketplaces.

II. Costs

    It is important to recognize that this final rule, except in the 
area of sex discrimination, applies pre-existing requirements in 
Federal civil rights laws to various entities, the great majority of 
which have been covered by these requirements for years. Because 
Section 1557 restates existing requirements, we do not anticipate that 
covered entities will undertake new actions or bear any additional 
costs in response to the issuance of the regulation with respect to the 
prohibition of race, color, national origin, age, or disability 
discrimination, except with respect to the voluntary development of a 
language access plan. However, we also note that the prohibition of sex 
discrimination is new for many covered entities, and we anticipate that 
the enactment of the regulation will result in changes in action and 
behavior by covered entities to comply with this new prohibition. We 
note that some of these actions will impose costs and others will not.
    Section 1557 applies to the Health Insurance Marketplaces. We note 
that these entities, along with the qualified health plan issuers 
participating in the Health Insurance Marketplaces, are already covered 
by regulations issued by CMS that prohibit discrimination on the basis 
of race, color, national origin, sex, gender identity, sexual 
orientation, age, or disability. Thus, we note that the impact of 
Section 1557 on these entities is limited.
    We received a few comments that indicated that the costs of 
compliance may be more than anticipated in the proposed rule. We have 
revised the analysis in this final rule based upon the comments and 
upon an updated statistical review of the health programs and 
activities.
    The following regulatory analysis examines the costs and benefits 
that are attributable to this regulation only.
    We first analyze the costs we expect the final rule to create for 
covered entities. We anticipate that the final rule will place costs on 
the covered entities in the areas of: (1) Training and familiarization, 
(2) enforcement, (3) posting of the nondiscrimination notice and 
taglines, and (4) revisions in policies and procedures, and may place 
costs on covered entities in the voluntary area of development of a 
language access plan. Then we examine the potential benefits the rule 
is likely to produce. In the subsequent analyses of costs in this RIA 
and the Regulatory Flexibility Act (RFA), we use data sets from the 
Census Bureau \314\ and BLS \315\ for estimating burdens.
---------------------------------------------------------------------------

    \314\ U.S. Census Bureau, Statistics of U.S. Businesses, https://www.census.gov/econ/susb/ (last visited May 3, 2016).
    \315\ U.S. Dep't of Labor, Bureau of Labor Statistics, May 2015 
National Occupational Employment and Wage Estimates, https://www.bls.gov/oes/2014/may/oes_nat.htm (last visited May 3, 2016).
---------------------------------------------------------------------------

A. Assumptions

    In the proposed rule, we made the following cost assessment based 
on certain key assumptions, which include: (1) We assume that 
promulgation of this regulation will trigger voluntary activity on the 
part of covered entities that would not have occurred absent the 
promulgation of the regulation--which generates both costs and 
corresponding benefits; (2) to the extent that certain actions are 
required under the final rule where the same actions are already 
required by prior existing civil rights regulations, we assume that the 
actions are already taking place and thus that they are not a burden 
imposed by the rule; (3) although the regulation does not require 
training at any specific time, we assume that covered entities may 
voluntarily provide one-time training to some employees on the 
requirements of the regulation at the time that the regulation is 
published; and (4) we assume that employers are most likely to train 
employees who interact with the public and will therefore likely train 
between 40% and 60% of their employees, as the percentage of employees 
that interact with patients and the public varies by covered entity. 
For purposes of the analysis, we assume that 50% of the covered 
entity's staff will receive one-time training on the requirements of 
the regulation. We use the 50% estimate as a proxy, given the lack of 
certain information as described below. For the purposes of the 
analysis, we do not distinguish between employees whom covered entities 
will train and those who obtain training independently of a covered 
entity.

B. Training and Familiarization

    In the proposed rule, we counted the cost of training on all 
aspects of the

[[Page 31447]]

regulation, not only on the new responsibilities under the regulation, 
as we believe covered entities will want to offer comprehensive 
training to employees, recognizing that refresher training can provide 
value. We invited comment on whether we should count only the cost of 
training on new responsibilities under the regulation. The comments we 
received supported our assumption regarding training on all aspects of 
the regulation, and therefore the final rule keeps this assumption.
    In the proposed rule, we also assumed that covered entities will 
provide some workers (not all workers) a one-time awareness or 
familiarization training regarding the requirements in the regulation 
at the time of its issuance. We noted that many employees may work 
``behind the scenes'' at large entities, and may not have contact with 
patients or the general public or otherwise have duties impacted by the 
final rule's requirements and therefore may have little need for 
training. However, we noted that we are uncertain which employees those 
are. Furthermore, we noted that we do not know whether an entity 
rotates employees into different positions that may have patient 
contact or relevant duties, or whether, over time, an employee will 
switch to a position that places him or her in such a position, which 
may create a need for training. Although we received one comment 
suggesting that we include all employees in the training, the comment 
did not provide evidence or data to support including all employees. 
Otherwise, we received no comments to the contrary; therefore, the 
final rule makes the same assumption that the proposed rule did, that 
covered entities will provide some (not all) workers a one-time 
familiarization training.
    In the proposed rule, we also noted that we lack information on 
State and local regulations that may require employees to receive 
training on civil rights provisions and whether those provisions are 
more or less rigorous than the ones we propose. Thus, workers in 
covered entities in State and local jurisdictions with civil rights 
provisions more robust than the ones we propose may need only minimal 
training. In State and local jurisdictions where civil rights 
provisions are not more robust, workers may need more training. As 
stated above, because we lack data on covered entities' training 
practices, we are assuming that covered entities will voluntarily 
provide training on the final rule for between 40% and 60% of their 
staffs. Further analysis of state requirements revealed that the states 
do vary in the robustness of their civil rights requirements, as we 
assumed in the proposed rule. Therefore, we chose 50% of the employees, 
the average between 40% and 60%.
    Based on comments we received, we added a category of training, for 
a one-time familiarization by a manager, after the final rule has been 
published. The manager will need to study and understand the regulation 
well enough to make assessments of how the entity will promote 
compliance with the rule, including assessing the training needs of the 
staff and the costs associated with the training.
    In the following section, we identify the pool of workers and staff 
that we anticipate may need education about the final rule. Next, we 
identify the covered entities that may choose to train their staffs to 
provide this knowledge. Last, we estimate the costs of the training 
materials and the worker time that will be spent in training.
1. Number of Individuals Who Will Receive Training
a. Health Care Staffs and Managers
    The first category of health care staff that may receive training 
is comprised of health diagnosing and treating practitioners. This 
category includes physicians, dentists, optometrists, physician 
assistants, occupational, physical, speech and other therapists, 
audiologists, pharmacists, registered nurses, and nurse practitioners. 
The BLS occupational code for this grouping is 29-1000 and the 2014 
reported count for this occupational group is approximately 4.8 
million.
    The second category of health care staff that we assume will 
receive training is comprised of degreed technical staff (Occupation 
code 29-2000) and accounts for 2.9 million workers. Technicians work in 
almost every area of health care: From x-ray to physical, speech, 
psychiatric, dietetic, laboratory, nursing, and records technicians, to 
name but a few areas.
    The third category of health care staff that we assume will receive 
training is comprised of non-degreed medical assistants (Occupation 
code 31-0000), and includes psychiatric and home health aides, 
orderlies, dental assistants, and phlebotomists. Health care support 
staffs (technical assistants) operate in the same medical disciplines 
as technicians, but often lack professional degrees or certificates. We 
refer to this workforce as non-degreed compared to medical technicians 
who generally have degrees or certificates. There are approximately 3.9 
million individuals employed in these occupations.
    The fourth category of health care staff that we assume will 
receive training is health care managers (approximately 0.3 million 
based on BLS data for occupation code 11-9111). Because we assess costs 
of familiarization with the regulation for one manager at each entity, 
we assume that those managers will have already become familiar with 
the regulation and will not need additional training.
    The fifth category of health care staff that we assume will receive 
training is office and administrative assistants--Office and 
Administrative Support Occupation (Occupation code 43-0000). These 
workers are often the first staff patients encounter in a health 
facility and, because of this, covered entities might find it important 
that staff, such as receptionists and assistants, receive training on 
the regulatory requirements. Approximately 2.7 million individuals were 
employed in these occupations in health facilities in 2014.\316\
---------------------------------------------------------------------------

    \316\ U.S. Dep't of Labor, Bureau of Labor Statistics, 
Occupational Employment Statistics, May 2014 National Occupational 
Employment and Wage Estimates, United States, https://www.bls.gov/oes/2014/may/oes_nat.htm (last visited May 3, 2016). This code 
includes health care sector data for health care and social 
assistance (including private, State and local government 
hospitals).
---------------------------------------------------------------------------

    One comment asked that outreach workers be explicitly included as a 
category to be trained. We assume that outreach workers are included in 
the five categories listed above, especially in the manager category.
    Below is a summary table of individuals employed in the health care 
sector.

          Table 1--Health Care Employees Who May Need Training
------------------------------------------------------------------------
 
------------------------------------------------------------------------
Health diagnosing and treating practitioners............       4,833,840
Degreed technicians.....................................       2,876,000
Non-degreed technicians.................................       3,940,500
Medical and health services managers....................         310,320
Office and administrative support staff.................       2,747,330
                                                         ---------------
  Total.................................................      14,707,990
------------------------------------------------------------------------

b. Employees Working for the Federally-Facilitated Marketplaces and 
State-Based Marketplaces and Issuers in Those Marketplaces
    We have data from CMS/CCIIO on the number of issuers offering 
qualified health plans in the Federally-facilitated Marketplaces.\317\ 
We assume that many issuers that operate in the Federally-facilitated 
Marketplaces also operate in the State-based Marketplaces. However, to 
the extent there are issuers who operate in a State-based 
Marketplace\SM\

[[Page 31448]]

only, an estimate of their employees will not be included in our count 
of issuers (derived from the CCIIO tables of issuers participating only 
in the 34 jurisdictions with Federally-facilitated Marketplaces). We 
are basing our calculations on the number of employees working for 
those issuers participating in the Federally-facilitated Marketplaces 
and we assume, as noted above, that some of the same issuers and 
employees serve the State-based Marketplaces. Determining the number of 
employees working for issuers participating in the Health Insurance 
Marketplaces is challenging because we have no data directly linking 
the number of employees to our data on participating issuers in the 
Federally-facilitated Marketplaces. Consequently, we must impute the 
number of employees working for issuers participating in the Federally-
facilitated Marketplaces and, by extension, employees working for 
issuers in State-based Marketplaces.
---------------------------------------------------------------------------

    \317\ Qualified Health Plans Landscape Individual Market Medical 
(2015), supra note 308.
---------------------------------------------------------------------------

    We performed this imputation by first identifying the number of 
issuers offering qualified health plans in the Federally-facilitated 
Marketplaces. To determine the number of issuers offering qualified 
health plans in the Federally-facilitated Marketplaces, we looked at 
the 2015 Qualified Health Plan Landscape Individual and Small Business 
Health Options Program Market Medical files.\318\ The Qualified Health 
Plan Landscape Individual Market Medical file contains over 100,000 
line items, and the Small Business Health Options Program Market 
Medical file contains over 50,000 line items listing each Federally-
facilitated Marketplace\SM\ plan for each county by metal level 
(bronze, silver, gold, and platinum) and catastrophic plans provided by 
each issuer. To determine the number of issuers in the individual and 
Small Business Health Options Program Marketplaces, we removed all plan 
line items to reduce the count to an unduplicated count of the issuers 
in the Federally-facilitated Marketplaces. We identified 155 individual 
plan issuers and 14 issuers in the Small Business Health Options 
Program that only issued group plans to employees of employers 
participating in the Small Business Health Options Program. Our total 
count of 169 issuers differs from the CCIIO sources, which counted 
issuers in each State in which they operated. For example, a national 
issuer such as Aetna that offers coverage through Federally-facilitated 
Marketplaces operating in several States was counted separately by 
CCIIO for each State in which it was qualified, whereas we counted it 
only once.\319\
---------------------------------------------------------------------------

    \318\ Id.
    \319\ We count the issuer only once because we assume the same 
enterprise will minimize training costs by preparing the same 
training materials for all its employees nationally.
---------------------------------------------------------------------------

    In addition to 169 issuers participating in Federally-facilitated 
Marketplaces, we are aware of 11 issuers participating only in the 
State-based Marketplaces. Thus, we calculated that the total number of 
issuers included in the analysis of covered issuers equals 180.
    We next analyzed the number of employees working in the health 
insurance industry in the following way. Using Census Bureau 2011 
payroll and employment data (the latest data available) for North 
American Industry Classification System 524114--Direct Health 
Insurance,\320\ we attempted to match the number of employees to the 
health insurance entities. The Census data permitted us to divide all 
health insurance issuers into ``large'' (500 or more employees) and 
``small'' (fewer than 500 employees) issuers, and from that we were 
able to estimate the number of employees for large and small issuers.
---------------------------------------------------------------------------

    \320\ U.S. Census Bureau, Statistics of U.S. Businesses (SUSB) 
(2011), https://www.census.gov/econ/susb/.
---------------------------------------------------------------------------

    The Census data shows 805 small issuers and 180 large issuers. The 
ratio of small to large issuers is about 4.5 small issuers for every 
large issuer. We assume the ratio of small to large issuers in the 
Health Insurance Marketplaces is approximately the same as the ratio in 
the Census table. We asked for public comment on this assumption, and 
we received no comments to the contrary.
    Applying this ratio to the issuers in the Federally-facilitated 
Marketplaces, we get 131 small issuers and 38 large issuers. We assume 
that the 11 issuers (for which we have data and have thus identified) 
operating in the State-based Marketplaces are likely to be classified 
as small, based on Census workforce data. Therefore, we are adding them 
to the 131 small issuers identified above, bringing the total number of 
small issuers to 142.
    Based on the Census data, the average number of employees in a 
small issuer is 34 and the average number of employees in a large 
issuer is 2,300. If we multiply the number of issuers by the number of 
employees, there are 4,828 employees of the 142 small issuers and 
87,400 employees of the 38 large issuers. The combined total number of 
employees for small and large issuers in the Marketplaces is estimated 
to be 92,228 employees.
    With respect to the majority of issuers operating in a State-based 
Marketplace\SM\ that we have not been able to identify but would also 
be subject to the regulation, we do not have any direct data. However, 
the workforce data we have from the Census tables covers employees 
regardless of their work site. If any of the 169 issuers identified 
above operating in the Federally-facilitated Marketplaces also operate 
in the State-based Marketplaces, then some portion of the nearly 92,000 
employees imputed to be working for the issuers in the Federally-
facilitated Marketplaces may also be working for issuers operating in 
the State-based Marketplaces. Thus, in effect, we are including 
employees working for issuers that operate in both the State-based 
Marketplaces and the Federally-facilitated Marketplaces in our count of 
employees who likely will receive training on the regulation.
    At the same time that we include employees who work for issuers 
operating in both the Federally-facilitated Marketplaces and State-
based Marketplaces, we lack direct data on issuers participating only 
in State-based Marketplaces. We are not able to include employees that 
work for insurance issuers that operate only in State-based 
Marketplaces, such as New York or California, which would be subject to 
the proposed rule. We invited public comment on ways we could identify 
issuers that participate only in State-based Marketplaces and the 
number of employees they employ. We did not receive any comments that 
identified ways we can better identify these issuers.
    A third category of workers who may need to be trained are 
navigators receiving Federal financial assistance to support the 
functions they perform in Federally-facilitated Marketplaces, such as 
assisting applicants to enroll in qualified health plans through the 
Marketplace\SM\. CMS has awarded grant funding to 100 Navigator 
entities.\321\ In the proposed rule, we estimated that 2,797 navigators 
worked for 92 Navigator entities, which implies 30.4 employees per 
entity. We lacked data on the number of employees of these Navigator 
entities, and we thus applied the previous estimate of 30.4 employees 
per Navigator entity to estimate in the

[[Page 31449]]

final rule that 3,040 employees work for these entities.
---------------------------------------------------------------------------

    \321\ CMS awards $67 million in Affordable Care Act funding to 
help consumers sign-up for affordable Health Insurance 
Marketplace\SM\ coverage in 2016, https://www.cms.gov/Newsroom/MediaReleaseDatabase/Press-releases/2015-Press-releases-items/2015-09-02.html (last visited May 3, 2016).
---------------------------------------------------------------------------

    We invited public comment on our approach to estimating the number 
of employees per issuer based on the Census data and sought any public 
information on issuers who operate only in State-based Marketplaces. We 
did not receive comments that changed our assumptions regarding types 
and numbers of employees working for Marketplaces. Thus, the final rule 
applies the estimate of the number of navigators per Navigator entity 
to the most recent number of Navigator grantees.
c. Medicaid and State and Local Health Department Employees
    The Census Bureau State government payroll and employment data for 
2012 shows the number of full-time employees working in State hospitals 
and departments of health as 531,251.\322\ The State Medicaid 
Operations Survey: Fourth Annual Survey of Medicaid Directors reports 
that State Medicaid agencies employed between 27 and 3,853 full-time 
employees with a median workforce level of 455 employees.\323\ 
Multiplying the median level of workers by 56 Medicaid agencies adds 
25,480 workers to the number of State health and hospital workers in 
health departments, bringing the total to 556,731 employees. (Although 
a more appropriate method of calculating the total would be to use the 
mean as the multiplier, OCR used the median because the mean was 
unavailable.) However, this number double counts medical personnel that 
were previously counted as discussed in part I.C.1.a (regarding health 
care staffs and managers who will receive training) in this RIA.
---------------------------------------------------------------------------

    \322\ U.S. Census Bureau, Government Employment & Payroll 
(2013), https://www.census.gov/govs/apes/ apes/.
    \323\ Nat'l Ass'n of State Medicaid Dirs, State Medicaid 
Operations Survey: Fourth Annual Survey of Medicaid Directors, at 5 
(Nov. 2015) https://medicaiddirectors.org/wp-content/uploads/2015/11/namd_4th_annual_operations_survey_report_-_november_2_2015.pdf.
---------------------------------------------------------------------------

    To address this problem, we looked at the BLS industry data for 
North American Industry Classification System code 999201: State 
government, including schools and hospitals, we identified 442,680 
personnel employed by State governments.\324\ Subtracting this number 
from the 556,731 employees we identified employed in State government 
health services and Medicaid programs, results in 114,051 additional 
State employees who may obtain training on the provisions of the 
regulation.
---------------------------------------------------------------------------

    \324\ U.S. Dep't of Labor, Bureau of Labor Statistics, May 2015 
National Occupational Employment and Wage Estimates by ownership, 
https://www.bls.gov/oes/2014/may/oes_nat.htm (last visited May 3, 
2016).
---------------------------------------------------------------------------

d. Non-Health Care Personnel in Pharmacies
    The 2012 Census data for all U.S. industries identifies 43,343 
pharmacy establishments. The number of employees presented in the 
Census data includes both pharmacists and non-pharmacist personnel. At 
this point, we must refer back to the BLS data on the number of health 
care workers reported for 2014 because the BLS data divides the 
pharmacy workforce by occupation. The number of employees that BLS 
reports were employed in pharmacies for 2014 is 708,660. The number of 
health care workers discussed in subsection II.C.1.a. above includes 
348,190 individuals counted above in occupation codes 11-9111, 29-0000 
and 31-0000 reported to be working in pharmacies.\325\ Because we 
already counted the costs of health care workers employed in pharmacies 
in the analysis of health care staff, to achieve a more accurate 
estimate of the number of non-health care pharmacy workers, we must 
subtract the 348,190 health care staff from the total workforce BLS 
reports. Removing health care staff from the BLS data yields a net of 
360,470 non-health care pharmacy workers in pharmacies who may receive 
training on the final rule.
---------------------------------------------------------------------------

    \325\ U.S. Dep't of Health & Human Servs., Health Res. & Servs. 
Admin., Area Health Resource Files, https://ahrf.hrsa.gov/ (last 
visited May 3, 2016). The Area Health Resource File reports 272,022 
pharmacists licensed in 2014.
---------------------------------------------------------------------------

    The following table shows the total number of employees whom we 
estimate will receive training; that is, the table shows the 50% of 
total workers whom we estimate may receive training. The table does not 
include HHS employees conducting HHS health programs or activities 
because there are roughly 65,000 HHS total employees and many of these 
employees do not work in health programs or activities administered by 
HHS. For those employees who do work in health programs or activities 
administered by HHS, many may not have direct beneficiary contact. 
Given these limitations, we estimate the number of employees added 
would be small and have little impact on overall cost.

       Table 2--Workers Who May Receive Training on the Regulation
------------------------------------------------------------------------
 
------------------------------------------------------------------------
Medical health staffs and managers......................       7,216,494
Employees working for 180 issuers in the Health                   46,114
 Insurance Marketplaces.................................
State health employees..................................          55,442
Navigators..............................................           1,520
Pharmacy workers (excluding health care personnel)......         180,235
  Total.................................................       7,637,306
------------------------------------------------------------------------

2. Number of Covered Entities That May Train Workers
    Just as there are a number of data sources for counting workforce, 
there are various sources for counting the number of health care 
entities. Many covered entities are controlled or owned by a single 
corporate entity, and one can count each individual entity separately 
or count only the single corporate enterprise. For example, a multi-
campus facility or vertically integrated entity that owns a hospital, a 
nursing home, and a home health agency and also operates an accountable 
care organization could count each of these entities separately--as 
does Medicare--or count them only once, with each entity treated as 
part of the corporate entity. At this point, we make two assumptions: 
(1) Albeit not required to do so by the regulation, each covered entity 
will provide some training to its staff on the requirements of the 
regulation; and (2) when entities are controlled or owned by a 
corporate entity, the corporate entity will supplement or make any 
desired modification to the OCR training materials and distribute the 
training materials. We believe this last point to be especially true 
because rather than have each entity prepare its own training 
materials, the corporate entity is more likely to prepare one set of 
training materials and distribute the materials to its individual 
entities. This is because the corporate entity saves money by preparing 
a limited set of training materials and assures uniform quality and 
consistency in its policies across all its entities. It is also 
possible that some local health centers in a State may be managed from 
a central location that handles logistics and training materials. 
Therefore, we propose using the 2012 Census table that presents the 
number of entities, referred to as firms in the Census tables, to count 
the number of health care entities. In the Census data, a corporate 
entity is referred to as a ``firm'' and the corporation's facilities 
are ``establishments.'' When a firm has one

[[Page 31450]]

establishment, the establishment is the firm.
    Another difficulty we face in using these data sources is that the 
Census data captures all entity types that fit the definition of a 
health care service entity, including entities such as private 
retirement communities that are unlikely to receive Federal financial 
assistance and thus would not be covered by Section 1557. In our use of 
the Census data, we attempted to exclude types of entities that are not 
likely to receive Federal financial assistance by excluding retirement 
communities and other similar type entities in the file, but we have 
included entities that may receive Federal financial assistance, such 
as community health centers and residential centers for individuals 
with intellectual disabilities.
    To test our success in producing a list of covered entities from 
the Census data, we compared the number of entities we selected from 
the Census data and the number of entities included in the CMS Provider 
of Service file. However, to make the lists comparable, we had to 
remove the count of Clinical Laboratory Improvement Act laboratories 
from the CMS Provider of Service data files. There are close to 450,000 
Clinical Laboratory Improvement Act laboratories located in hospitals, 
clinics, outpatient centers, and doctors' offices. Only a few thousand 
of these laboratories serve the public. The majority of laboratories 
serve the facility in which they are housed--including them in our 
comparison would grossly distort this comparison.
    If we add the entities in the Provider of Service file (excluding 
Clinical Laboratory Improvement Act laboratories) and the number of 
community health centers to our list of affected entities that are not 
included in the Provider of Service file, we get a total of 134,543 
entities. Using the Census data, minus the categories for medical 
laboratories, we obtain a total of 139,164 covered entities. It is 
evident that these numbers are very similar. However, as discussed 
earlier, we propose using only the number of firms for the analysis of 
the number of entities possibly conducting training, that is, 70,384 
firms. As noted, we believe firms and not establishments will modify or 
supplement materials and train employees.
    In addition to the firms we include from the Census file, we must 
add physicians' office firms and pharmacy firms because they may also 
need to train some workers. Physicians' office firms and pharmacy firms 
are generally referred to as physician group practices and pharmacy 
chains.
    Below we present the types and number of firms that we estimate 
will take part in the training for the regulation.

  Table 3--Number of Health Care Entity Firms Expected To Take Part in
                                Training
------------------------------------------------------------------------
                                                             Number of
            NAIC                     Entity type               firms
------------------------------------------------------------------------
62142......................  Outpatient mental health              4,987
                              and substance abuse
                              centers.
621491.....................  HMO medical centers........             104
621492.....................  Kidney dialysis centers....             492
621493.....................  Freestanding ambulatory               4,121
                              surgical and emergency
                              centers.
621498.....................  All other outpatient care             5,399
                              centers.
6215.......................  Medical and diagnostic                7,958
                              laboratories.
6216.......................  Home health care services..          21,668
6219.......................  All other ambulatory health           6,956
                              care services.
62321......................  Residential intellectual              6,225
                              and developmental
                              disability facilities.
6221.......................  General medical and                   2,904
                              surgical hospitals.
6222.......................  Psychiatric and substance               411
                              abuse hospitals.
6223.......................  Specialty (except                       373
                              psychiatric and substance
                              abuse) hospitals.
6231.......................  Nursing care facilities               8,623
                              (skilled nursing
                              facilities).
44611......................  Pharmacies and drug stores.          18,852
6211.......................  Offices of physicians......         185,649
524114.....................  Insurance Issuers..........             180
                             Navigator grantees.........             100
                            --------------------------------------------
    Total Entities......................................         275,002
------------------------------------------------------------------------

3. Training and Familiarization Costs
a. Cost of Training Materials and Presentations
    There are two components to the cost of training the workers we 
identified in the previous section: (1) The cost of training materials 
that is based on the number of covered entities identified in the 
previous section; and (2) the cost of employee time spent in training.
    OCR estimates, based on its experience of training employees on 
other regulations it enforces, that training employees on this 
regulation will take about one hour of an employee's time. Based on 
discussions with firms that develop training materials, we estimate 
that developing or presenting materials for a one-hour course would 
cost about $500. However, before the effective date of the rule, OCR 
will provide covered entities with training materials that will cover 
the key provisions of the regulation that can be used by entities in 
conjunction with their own training materials. We estimate that OCR 
preparing the training materials on the regulation will substantially 
reduce the material preparation burden to covered entities and reduce 
the cost by about three quarters, or about $375 per entity. Therefore, 
the costs to entities will equal $125 multiplied by the number of 
entities that will prepare and present training materials. Based on its 
experience in preparing training materials for other civil rights and 
HIPAA regulations, OCR expects to spend $10,000 to develop training 
materials that will prepare health care workers and managers to 
effectively implement the Section 1557 regulation.
    Training materials can be presented in a number of ways. A common 
method for offering training materials is through e-courses that are 
distributed over an entity's computer network. Another method is to 
offer lectures to selected employees/staff and then have attendees 
present the materials to their co-workers as part of train-the-trainer 
programs. For small entities, one lecture session may be given to all 
employees. Regardless of presentation mode, we estimate that the cost 
of training via an e-course will be

[[Page 31451]]

the same as the cost of training through a lecturer for a train-the-
training approach: $125 per entity.
    Applying the $125 per course materials to the number of firms ($125 
x 275,002)--including the 169 health insurance issuers--equals $34.4 
million for the cost of developing training materials.
b. Cost of Employee Time
    The next step is to compute the cost of employee time for training 
and familiarization. This involves taking the hourly wage rate times 
the amount of time that a new activity will require, times the number 
of employees expected to undertake the activity as a result of the 
rule. We use data from the BLS on median wage rates by occupation to 
estimate wages throughout this analysis. We are uncertain about how 
many employees identified in the workforce above will actually seek and 
obtain training and how many firms in the health sector will offer 
training. However, for the purposes of this analysis we assume that all 
firms may offer some training to their staffs, but because the training 
is voluntary, and because only a portion of employees who have direct 
patient contact or otherwise have duties impacted by the regulation may 
require or take training, we assume that 50% of employees will receive 
training. We assume that training will require an average of one hour 
of time for each participating employee.
    The occupation code 29-1000 (health care practitioners) applies to 
the 4.8 million professional staff and degreed technical staffs we 
discussed above. The BLS reports the median hourly wage for this code 
as $36.26. We estimate one hour of a worker's time would be required 
for training. To this amount we must add 100% for fringe benefits and 
overhead, which yields an adjusted hourly wage per employee of $72.52. 
Assuming that half of the 4.8 million health care practitioners 
identified earlier receive or obtain training (2.4 million workers), 
and multiplying this number by the hourly employee wage plus fringe 
benefits and overhead for one hour equals slightly more than $175.3 
million in training costs for practitioners.
    We note that one commenter suggested that we use a factor higher 
than 100% to adjust wages for overhead and benefits. However, the 
commenter's argument is based on Federal overhead rates for contracts, 
and not evidence of the resource costs associated with reallocating 
employee time. As a result, we do not adopt the commenter's 
recommendation, and we continue to use the Department's standard of 
100% for overhead and fringe benefits.
    For the degreed health care work force in occupation 29-2000, the 
median hourly wage is $19.92. Adding 100% for fringe benefits and 
overhead equals $39.84. The total training cost for one hour of 
training for half of the 2.9 million degreed technical staff (1.44 
million workers) is about $57.3 million. In addition, we must add the 
cost of training non-degreed staff (reported in occupation 31-0000) who 
earn a median hourly wage of $12.71. Adding 100% for fringe benefits 
and overhead to the $12.71 median hourly wage rate yields an adjusted 
wage of $25.42. Multiplying this amount by half of the 3.9 million 
workforce yields a cost of $50.1 million.
    To these amounts we must add the cost associated with 
familiarization and training for the medical and health service 
managerial staff, of which there are 300,320 individuals with a median 
hourly pay rate of $44.62. Adding 100% for fringe benefits and overhead 
gives us an adjusted hourly wage of $89.24. We assume that an average 
of one person in this occupation will spend an average of two hours 
becoming familiar with the final rule's requirements upon its 
publication at each of the 275,002 entities covered by the rule. These 
assumptions imply familiarization costs of $49.1 million. We assume 
that half of the remaining managers receive training. This implies that 
12,659 managerial staff will receive an hour of training, which results 
in a cost of $1.1 million. This implies that total costs for training 
and familiarization for this occupation category comes to $50.2 
million.
    The cost of training occupation code 43-0000, office and 
administrative support workers employed in covered health care 
entities, is the product of the median hourly rate of $15.52 adjusted 
for fringe benefits and overhead multiplied by the 2.7 million workers 
reported for North American Industry Classification System code 62: 
Health Care and Social Assistance (including private, State, and local 
government hospitals). Adding 100% for fringe benefits and overhead to 
the $15.52 equals $31.04. Multiplying the pay rate by half the number 
of support and administrative personnel equals $42.6 million.
    The 2013 BLS data for North American Industry Classification System 
pharmacies and drugstores reports a total workforce of 708,660 workers. 
As with the analysis for State employees, we must remove the 348,190 
health care workers who are already counted in our training costs 
analysis of the health care workforce. To avoid double counting 
training costs for these occupations, we removed them from the count of 
the pharmacy workforce. (The entities that employ these workers will 
still bear the cost for training them.) Their median weighted wage is 
$17.22, which is derived from BLS data for medical pharmacy personnel, 
and the cost associated with an hour of their time is $34.44 after 
adjusting for overhead and benefits. We estimate $6.0 million in costs 
for training half of these medical pharmacy personnel.\326\
---------------------------------------------------------------------------

    \326\ Determining the cost to train employees other than 
pharmacists and medical staff who work in pharmacies requires use of 
the Bureau of Labor Statistics industry data for North American 
Industry Classification System. These data show that for 2013, 
348,380 medical practitioners, technologists and medical support 
staff were employed in pharmacies and drug stores. U.S. Dep't of 
Labor, Bureau of Statistics, Occupational Employment Statistics, 
supra note 316.
---------------------------------------------------------------------------

    For the 360,470 non-medical pharmacy personnel, their weighted 
median hourly rate for pharmacy employees is $11.87, which is derived 
from BLS data for non-medical pharmacy personnel. After adjusting for 
overhead and benefits, the cost of one hour of time in this category is 
$23.74. We estimate $4.3 million in costs for training half of these 
non-medical pharmacy personnel.
    For the 3,040 navigators, we lack data to determine their wages. As 
a proxy, we use the wage rate for medical and health service managerial 
staff, with a median hourly pay rate of $44.62. Adding 100% for fringe 
benefits and overhead gives us an adjusted hourly wage of $89.24. We 
estimate $0.1 million in costs for training half of these navigators.
    For the remaining entities for which we cannot use BLS data, we 
must use the industry payroll and employment Census data. To arrive at 
an estimate of the cost of time for training employees of health 
insurance issuers and State health and Medicaid agencies, we must 
divide the total annual payroll reported for these entities by the 
total number of employees and divide that number by the annual hours 
paid (2,080 hours), adjusted for fringe benefits and overhead.
    For workers employed by the issuers participating in the Health 
Insurance Marketplaces, it was necessary to determine the hourly wage 
rate for workers employed in small and large issuers as we have 
described them above. The total number of workers in small entities 
(fewer than 500 workers) is 27,269 and the annual payroll is $1.68 
billion. The average wage per employee is $61,895. Using the 2,080 
hours for the annual number of work hours, we obtain an hourly rate of 
$29.76.

[[Page 31452]]

Assuming that the payroll amounts reported in the Census data do not 
include fringe benefits and overhead, we add 100% to the hourly rate to 
yield $59.51 per hour. Multiplying this amount by half of the 4,454 
employees in small issuers equals $132,540 in training costs.
    The total number of employees employed by large issuers (500 or 
more) is 415,017 and the annual payroll is $30.8 billion. The average 
annual wage is $74,219. Dividing this figure by 2,080 hours yields an 
hourly wage rate of $35.68. Multiplying by 100% for fringe benefits and 
overhead yields $71.36. Multiplying this amount by 50% of the 87,400 
workers equals slightly more than $3.12 million in training costs.
    For State government workers employed in welfare, health, and 
hospital services, we divided the total number of workers the 2012 
Annual Census Bureau reported (873,289 employees) into the monthly 
payroll reported for the period ($3,774,775,691).\327\ On an annual 
basis, the average salary per employee equals $51,870. The hourly rate 
equals $24.94 and multiplied by 100% for fringe benefits and overhead 
yields $49.87 per worker for training costs.
---------------------------------------------------------------------------

    \327\ U.S. Census Bureau, Government Employment & Payroll, 
https://www.census.gov/govs/apes/ (last visited May 3, 2016).
---------------------------------------------------------------------------

    In the State Medicaid Operations Survey: Second Annual Survey of 
Medicaid Directors, States reported the median number of full-time 
Medicaid employees is 421. Using this number multiplied by the 53 
Medicaid agencies in the 50 States, the District of Columbia, Puerto 
Rico, Guam, and the other territories, we added 22,313 workers to the 
total of health and hospital workers reported in the Census data, 
bringing the total number of workers in covered State government 
entities to 553,564. We then subtracted the 442,680 medical personnel 
we accounted for in the training costs for all health care personnel 
and therefore were considered to be duplicative of the medical 
personnel previously counted in our analysis of medical staff workforce 
(occupations 29-1000, 29-2000 and 31-0000). This left a net of 110,884 
State employees receiving training. Taking half of this number and 
multiplying it by $49.87 equals a training cost of slightly more than 
$2.76 million.
    Although we removed the cost of training the 442,680 medical 
personnel from the State training cost analysis to avoid double 
counting training costs, the cost of training half the medical staff 
may still fall to the States where they are employed. We estimate the 
cost to train State medical personnel to be approximately $11.1 
million.\328\
---------------------------------------------------------------------------

    \328\ We calculated the cost of training the medical personal 
using the weighted median hourly rate, $47.22, multiplied by the 
446,210 medical staff identified as employed in State governments.
---------------------------------------------------------------------------

    As noted above, total familiarization costs are estimated to be 
$49.1 million. The following table summarizes the training costs we 
estimate for this rule.

                      Table 4--Total Training Costs
------------------------------------------------------------------------
                                        Number of
                                     entities/workers   Cost  (millions)
------------------------------------------------------------------------
Training preparation costs ($125/           * 275,002              $34.4
 entity)/entity...................
Health care staff and managers            * 7,214,862              326.9
 training.........................
Small Issuers in the Health                     2,414                0.1
 Insurance Marketplace\SM\
 training.........................
Large issuers in the Health                    43,700                3.1
 Insurance Marketplace\SM\
 training.........................
Navigators........................              1,399                0.1
State health, hospital and                     55,442                2.8
 Medicaid worker training.........
Pharmacy worker training..........            180,235                4.3
                                   -------------------------------------
    Total.........................          7,498,052              371.7
------------------------------------------------------------------------
* Not included in column total.

C. Notification and Other Procedural Requirements

1. Designation of Responsible Employee and Adoption of Grievance 
Procedures
    Pursuant to the regulations implementing Section 504, recipients of 
Federal financial assistance with 15 or more employees are required to 
designate a responsible employee to coordinate compliance with respect 
to nondiscrimination requirements and to have grievance procedures to 
address complaints of discrimination under this law. Of the 275,002 
covered entities, approximately 15% employ more than 15 employees, 
resulting in approximately only slightly more than 41,250 covered 
entities being required to have grievance procedures and designate a 
responsible official. Thus, all recipients of Federal financial 
assistance with 15 or more employees are already expected to have in 
place grievance procedures and a designated employee to coordinate 
their compliance responsibilities. The rule standardizes the 
requirement to designate a responsible employee and adopt grievance 
procedures across all bases of discrimination prohibited under Section 
1557.
    To implement the rule, a recipient of Federal financial assistance 
could increase the responsibilities of an already-designated employee 
to handle compliance with the rule's nondiscrimination requirements. In 
addition, a recipient of Federal financial assistance could increase 
the scope of existing grievance procedures to accommodate complaints of 
discrimination under all bases prohibited under Section 1557. The costs 
associated with these requirements are the costs of training the 
designated employee on the employee's increased responsibilities and 
the costs associated with modifying the existing grievance procedures 
to reflect the additional bases of race, color, national origin, sex, 
and age. Here we are referring to employee training to perform their 
specific enforcement responsibilities, not one-time training in the 
provisions of the final rule described in the training section above. 
We also note that grievance officials will probably receive specific 
training on their new responsibilities and that covered entities will 
probably provide this additional training and absorb the costs, which 
are expected to be de minimis. Many covered entities already may be 
using their existing grievance procedures to address the additional 
cases covered under Section 1557.
    State-based Marketplaces are required to designate an employee to 
handle compliance responsibilities and to adopt grievance procedures 
under the ADA. The duties of the employee and

[[Page 31453]]

the grievance procedures could be modified to reflect all the bases 
covered under Section 1557.
    We have not estimated the additional costs of training grievance 
officials on their individual enforcement responsibilities, but we 
believe such cost would be absorbed in general training costs of all 
employees on their job responsibilities. Costs associated with 
modifying existing grievance procedures are covered in the section of 
the analysis on enforcement.
2. Notice Requirement
    The implementing regulations of Title VI, Section 504, Title IX, 
and the Age Act require recipients of Federal financial assistance and, 
in the case of Section 504, the Department, to notify individuals that 
recipients (and, under Section 504, the Department) do not 
discriminate. The content of the nondiscrimination notices varies based 
on the applicable civil rights law.
    The final rule harmonizes notification requirements under Title VI, 
Section 504, Title IX and the Age Act, and standardizes the minimum 
information for a notice. The final rule also requires initial and 
continuing notification of individuals. OCR drafted a sample notice 
(located in Appendix A to Part 92) in English that meets the 
requirements and will translate that notice into 64 additional 
languages, in advance of the effective date of this rule. Covered 
entities have discretion to use the OCR sample notice or their own 
notice, if preferred, and to post the notice in non-English languages.
    As all Section 1557 covered entities will need to create or update 
an existing notice of nondiscrimination, all covered entities can 
discharge their responsibilities under Sec.  92.8(a) by replacing their 
current notices with the sample notice developed by OCR (found in 
Appendix A), available to all covered entities pursuant to Sec.  
92.8(c). Using the sample OCR notice means that covered entities will 
not have to compose their own notices; we expect nearly all covered 
entities will use the sample OCR notice.
    All covered entities will incur costs, however, to implement Sec.  
92.8(a) of the final rule, which requires ``initial and continuing'' 
notification. Such notification is expected to involve:
     Downloading the notice from the OCR Web site;
     Printing copies of the notice for posting;
     Posting hard copies of the notice in public spaces of the 
office or facility; and
     Posting the notice on the entity's Web site, if it has 
one.
    While many costs to comply with this rule are incurred at the 
entity level, the costs of downloading, printing, and posting the 
notice are incurred at the establishment level. There are approximately 
275,000 covered entities covered by this final rule. According to 2012 
Census data, these covered entities are associated with 405,534 
establishments. We estimate that a clerical worker at each 
establishment would spend an average of one minute downloading the 
notice from the OCR Web site, an average of one minute printing copies 
of the notice for posting, an average of five minutes posting hard 
copies of the notice in public areas, and an average of ten minutes 
total between preparing the OCR notice for posting on the facility's 
Web site and posting the notice on the Web site. This implies that the 
estimated cost associated with posting is $8.79 ($31.04 per hour x 17 
minutes x 1 hour per 60 minutes) per establishment, which implies that 
the total estimated cost associated with this requirement is $3.6 
million ($8.79 per establishment x 405,534 establishments).
    Covered entities will need to update their significant publications 
and significant communications to include the new notice. However, as 
noted above, OCR is allowing entities to exhaust their current 
publications, rather than do a special printing of the publications to 
include the new notice. When covered entities restock their printed 
materials, they will be expected to include in those printed materials 
the notice that OCR will provide with this final rule.
    Because we are permitting covered entities to exhaust their 
existing stock of publications with the current notices before using 
the new notice, we conclude that the notice requirement imposes no 
resource costs related to including updated notices in the 
publications.
    Section 92.8 provides covered entities discretion to post the OCR 
sample notice of nondiscrimination in non-English languages, which can 
include languages that differ from OCR's list. In addition, covered 
entities can draft and translate their own notice in however many 
languages they choose, if they prefer.
    We examined CMS contractual cost for translating a one page notice 
into 13 languages. It was $1,000 per page. Based on this figure, we 
expect total costs to the government to be limited to $64,000 to 
translate the notice into 64 languages and place the translated notices 
on OCR's Web site. The sample notice is one page long. In addition, we 
expect total costs to the government for translating the statement of 
nondiscrimination for small-size publications to be $50 for each of the 
64 languages. We count the nondiscrimination statement as .05 pages 
long.
    Although not required, we expect that many covered entities would 
choose to post the OCR-provided notice in one or more non-English 
languages on their Web sites, in their physical office space, and in 
certain publications they may have. We do not know how many covered 
entities would take this action or how many non-English language 
versions of the notice they would choose to post, or where they would 
make the non-English versions of the notice available.
    Section 92.8 requires covered entities to publish taglines 
indicating the availability of language assistance services in the top 
15 languages of the relevant State or States. Before the effective date 
of the rule, OCR will make these taglines available electronically in 
64 languages; therefore, there will be no burden to the covered entity 
other than the cost of printing and posting these taglines, as 
described above with respect to the notice. We are uncertain of the 
exact volume of taglines that will be printed or posted, but we 
estimate that covered entities will print and post the same number of 
taglines as notices and therefore the costs would be comparable to the 
costs for printing and disseminating the notice, or $3.6 million. The 
costs to the Federal government for translating the taglines will be 
approximately $50, based on counting each tagline as being .05 pages 
long. We estimate that the combined costs of printing and distributing 
notices, nondiscrimination statements, and taglines will be $7.1 
million for entities and $70,400 for the Federal government.

D. Meaningful Access for Individuals With Limited English Proficiency

    In the proposed rule, we said that Sec.  92.201, which effectuates 
Section 1557's prohibition of national origin discrimination as it 
affects individuals with limited English proficiency, does not pose any 
new burden on covered entities. This is because, with regard to 
recipients of Federal financial assistance, the proposed rule adopted 
recipients' existing obligations under Title VI to take reasonable 
steps to provide meaningful access to individuals with limited English 
proficiency and codified the standards consistent with long-standing 
principles from the HHS LEP Guidance regarding the provision of oral 
interpretation and written translation services. However,

[[Page 31454]]

we anticipate that, as a result of issuance of the final rule, covered 
entities may choose to take one extra step: To develop and implement a 
language access plan, in order to ensure that they provide meaningful 
access to individuals with limited English proficiency. We have thus 
revised our cost estimates, for the final rule, as shown below, to 
reflect our assumption that 50% of the covered entities will choose to 
develop a language access plan.
    Although Title VI does not apply to the Department, Executive Order 
13166 ``Improving Access to Services for Persons with Limited English 
Proficiency'' has applied to HHS for nearly 15 years.\329\ This 
Executive Order requires Federal departments to develop and implement a 
plan, consistent with the HHS LEP Guidance, to ensure that persons with 
limited English proficiency can meaningfully access the Department's 
programs and activities. HHS adopted a Language Access Plan in 2000, 
and updated it in 2013, to provide individuals with limited English 
proficiency meaningful access to HHS-conducted programs and activities, 
including Federally-facilitated Health Insurance Marketplaces.\330\ 
Because the final rule does not impose duties beyond the Department's 
existing obligation under the Executive Order, the rule imposes no new 
burden on the Department.
---------------------------------------------------------------------------

    \329\ Exec. Order No. 13166, 65 FR 50121 (2000).
    \330\ U.S. Dep't of Health & Human Servs., Language Access Plan, 
supra note 186.
---------------------------------------------------------------------------

    In order to estimate the costs of developing a language access plan 
for recipients of Federal financial assistance, we assume that 
developing a plan requires approximately three hours of medical and 
health service managers staff time for the first year, and then an 
average of one hour of medical and health service managers staff time 
per year to update the plan in subsequent years. We based our 
assumption of three hours on feedback from covered entities included in 
our pre-award compliance review program. This program reviews civil 
rights compliance of 2,000 to 3,000 health care provider applicants for 
Medicare Part A per year.
    The health care providers that receive Medicare Part A funds 
already have to develop a written language access plan as a requirement 
of participation in the Medicare Part A program. Thus, we can reduce 
the number of covered entities from having a new burden of developing a 
language access plan. CMS reports data on Medicare hospital spending 
per claim which identifies 3,209 unique hospitals, which suggests that 
at least 3,209 hospitals participate in Medicare Part A. As discussed 
previously, Census data reports that there are a total of 3,688 
hospital firms in the United States. Census data reports that there are 
6,741 establishments associated with these firms, which in turn 
suggests that at least 47.6% (3,209/6,741) participate in Medicare Part 
A. Census data also reports that there are 8,623 nursing care facility 
entities in the United States. For the purpose of this analysis, we 
assume that 47.6% of hospitals and nursing care facilities participate 
in Medicare Part A. Applying 47.6% to all hospitals and nursing care 
facilities, we estimate that 5,861 entities (47.6% x 3,688 hospital 
entities (firms) + 47.6% x 8,623 nursing care facility entities) 
covered by this rule participate in Medicare Part A. This implies that 
269,141 entities (firms) will potentially make changes and develop a 
language access plan as a response to the rule. We arrived at the 
269,141 number by subtracting the number of entities participating in 
Medicare Part A (5,861) from the total number of entities (275,002). We 
estimate that 50% of these entities will make these changes. Taken 
together, these assumptions imply that the total cost of the 
development of language access plans will be approximately $36.0 
million (269,141 entities x 50% of entities x 3 hours per entity x 
$89.24 per hour) in the first year and approximately $12.0 million 
(269,141 entities x 50% of entities x 1 hour per entity x $89.24 per 
hour) per year in subsequent years.
    We received a number of comments stating that developing a language 
access plan imposes a cost burden on covered entities. We revised the 
proposed rule to include cost estimates, in this final rule, for the 
development of language access plans, as outlined in the paragraph 
above. We also received comments that providing interpreters imposes a 
heavy burden on covered entities. The obligation to provide 
interpreters as part of taking reasonable steps to provide meaningful 
communication with individuals with limited English proficiency has 
been a requirement under Title VI for many years. As a result of 
developing a language access plan, a covered entity might find 
increased efficiencies in providing language assistance services. 
Another covered entity might incur extra costs for the provision of 
language assistance services on more occasions. We are unable to 
estimate at this point how many covered entities will incur extra costs 
or the extent of such costs or the savings realized in increased 
efficiencies. We anticipate that the potential increased efficiencies 
and increased costs may offset each other to some degree. Thus, we do 
not believe this rule will impose a greater burden regarding the costs 
of language assistance services than exist under Title VI.

E. Nondiscrimination on the Basis of Sex

    Section 1557 prohibits discrimination on the basis of sex in 
certain health programs and activities. When providing services, 
including access to facilities, covered entities must provide 
individuals with equal program access on the basis of sex, and covered 
entities are required to treat individuals in a manner consistent with 
their gender identity.
    Title IX applies to educational institutions. Therefore, medical 
schools, nursing programs, and other health education programs were 
already prohibited from discriminating on the basis of sex prior to the 
enactment of Section 1557. Under Section 1557 and this regulation, 
health insurance issuers receiving Federal financial assistance, 
hospitals, clinics and other health facilities, HHS health programs and 
activities, and Title I entities, along with the staff and 
practitioners working in these health programs, are now similarly 
prohibited from discriminating on the basis of sex.\331\ This section 
discusses the costs associated with the prohibition of discrimination 
on the basis of sex in the rule, taking into account the existing 
environment, including legal authorities, that addresses equal access 
on the basis of sex.
---------------------------------------------------------------------------

    \331\ Consistent with OCR's enforcement of other civil rights 
authorities, the proposed definition of ``Federal financial 
assistance'' under the regulation does not include Medicare Part B, 
which means that physicians receiving only Medicare Part B payments 
are not covered under the regulation. However, because almost all 
physicians receive payments from other Department programs such as 
Medicaid or Medicare meaningful use payments, we believe that there 
are very few physicians excluded from these provisions. See supra 
pt. I. C. 1.
---------------------------------------------------------------------------

    Covered entities that provide or administer health services or 
health insurance coverage are covered by the prohibition of 
discrimination on the basis of sex. The costs that we anticipate that 
covered entities would incur relate to: (1) Training; (2) enforcement; 
(3) the posting of the notice; (4) the revision of policies and 
procedures; and (5) some costs associated with changes in 
discriminatory practices. This section discusses costs related to 
changes in policy and procedures and potential changes in 
discriminatory practices.

[[Page 31455]]

1. Costs for Entities Providing or Administering Health Services
    The rule would not invalidate specialties that focus on men or 
women, e.g., gynecology, urology, etc. Nor would providers have to 
fundamentally change the nature of their operations to comply with the 
regulation. For example, the rule would not require a provider that 
operates a gynecological practice to add to or change the types of 
services offered in the practice.
    Under the sex discrimination prohibition, however, providers of 
health services may no longer deny or limit services based on an 
individual's sex, without a legitimate nondiscriminatory reason. 
Although a large number of providers may already be subject to state 
laws or institutional policies that prohibit discrimination on the 
basis of sex in the provision of health services, the clarification of 
the prohibition of sex discrimination in this regulation, particularly 
as it relates to discrimination on the basis of sex stereotyping and 
gender identity, may be new. We anticipate that a large number of 
providers may need to develop or revise policies or procedures to 
incorporate this prohibition. For example, if a hospital or other 
provider has specific protocols in place for domestic violence victims, 
but engages that protocol only for women, the provider would have to 
revise its procedures to require that protocol for all domestic 
violence victims regardless of sex. A provider specializing in 
gynecological services that previously declined to provide a medically 
necessary hysterectomy for a transgender man would have to revise its 
policy to provide the procedure for transgender individuals in the same 
manner it provides the procedure for other individuals.
a. Developing or Revising Policies and Procedures
    We assume that it will take, on average, three to five hours for a 
provider to develop or modify policies and procedures concerning sex 
discrimination. We are selecting four hours, or the midpoint of this 
range, for our analysis. We further assume that an average of three of 
the hours will be spent by a mid-level manager equivalent to a front-
line supervisor (Occupation code 43-1011), at a cost of $48.84 per hour 
after adjusting for overhead and benefits, and an average of one hour 
will be spent by executive staff equivalent to a general and operations 
manager (Occupation code 11-1021), at a cost of $93.54 per hour after 
adjusting for overhead and benefits. We further assume that 75% of 
covered entities will need to develop or modify policies and 
procedures, given that some proportion of health care providers already 
prohibit sex discrimination based on State law or institutional 
policies prohibiting discrimination generally. The total cost for the 
estimated 206,252 covered entities to make their policies and 
procedures consistent with the regulatory prohibition on discrimination 
on the basis of sex is estimated to be approximately $49.5 million, 
which we assume is divided evenly between the first two years of 
compliance.
    The above estimates of time and number of entities that would have 
to revise their policies under the regulation is an approximate 
estimate based on general BLS data. Due to the wide range of types and 
sizes of covered entities, from complex multi-divisional hospitals to 
small neighborhood clinics and physician offices, the above estimates 
of time and number of entities that would have to revise their policies 
under the regulation is difficult to calculate.
b. Ending Discriminatory Practices
    For providers that discriminate on the basis of sex in violation of 
the rule, some changes in behavior or action would be necessary to come 
into compliance. We anticipate some change in the patient population 
for which a particular provider provides care or the extent of services 
provided. However, the infrastructure and protocols for providing 
services or treatment are already in place; providers would simply have 
to start providing those existing services in a nondiscriminatory 
manner to individuals regardless of sex. For example, a provider could 
not refuse to treat a patient for a cold or a broken arm based on the 
patient's gender identity. Similarly, if the provider is accepting new 
patients, it must accept a new patient request from a transgender 
individual and cannot decline to accept a transgender individual in 
favor of a person who is not transgender.
    However, the rule does not impose a burden on covered entities with 
respect to the number of patients treated. The rule does not require a 
covered entity to change the total number of patients it sees or to 
treat more patients than it currently accepts. Providers may continue 
to treat the same number of patients that were accepted prior to the 
issuance of this final rule, but they must do so in a nondiscriminatory 
manner. Thus, for example, if a provider is not accepting new patients, 
the provider does not have to accept a new patient request from a 
transgender individual. We anticipate that the costs associated with 
these types of changes would be de minimis.
    Moreover, costs associated with administering care or treating a 
new patient generally would be offset by the reimbursement received by 
the provider for providing the care, in the same way the provider gets 
paid for existing care or treatment of patients. Thus, for example, for 
the hospital or other provider that needs to revise its protocol for 
domestic violence to require that protocol for all domestic violence 
victims regardless of sex, rather than just women, there would be 
little to no net increase in costs for treating men because the 
hospital or provider would be paid for its services in the same way it 
is paid to treat women.
2. Costs for Entities Providing or Administering Health Insurance 
Coverage
    The ACA, including Section 1557, changed the health care landscape 
for millions of people by instituting protections against sex 
discrimination in the provision of health care and health insurance 
coverage. Prior to the ACA, it was standard health insurance practice 
to treat women differently in premium pricing and coverage of 
benefits,\332\ while transgender individuals frequently experienced 
discrimination when seeking coverage for treatment.\333\
---------------------------------------------------------------------------

    \332\ See Adelle Simmons, Katherine Warren, & Kellyann McClain, 
U.S. Dep't of Health & Human Servs., Office of the Assistant Sec'y 
for Planning and Eval., ASPE Issue Brief, The Affordable Care Act: 
Advancing the Health of Women and Children (Jan. 2015), https://aspe.hhs.gov/pdf-report/affordable-care-act-advancing-health-women-and-children; U.S. Dep't of Health & Human Servs., Women and The 
Affordable Care Act, https://www.hhs.gov/healthcare/facts-and-features/fact-sheets/women-and-aca/ (last visited May 3, 
2016).
    \333\ See Lambda Legal, When Health Care Isn't Caring: Lambda 
Legal's Survey on Discrimination Against LGBT People and People 
Living with HIV (2010), https://www.lambdalegal.org/publications/when-health-care-isnt-caring.
---------------------------------------------------------------------------

    The ACA addresses inequitable treatment by health plans based on 
sex in multiple ways. The regulations from CMS implementing the ACA 
prohibit Title I entities \334\ and most health insurance issuers \335\ 
from

[[Page 31456]]

discriminating based on sex, sexual orientation, and gender identity, 
in addition to other bases. These market-wide provisions are applicable 
to health insurance issuers both on and off the Health Insurance 
Marketplace \SM\, which includes qualified health plan issuers \336\ 
and health insurance issuers providing non-grandfathered coverage in 
the individual and group markets outside of the Health Insurance 
Marketplace \SM\.\337\
---------------------------------------------------------------------------

    \334\ 45 CFR 155.120(c)(1)(ii) prohibits a Health Insurance 
Marketplace\SM\ from discriminating based on race, color, national 
origin, disability, age, sex, gender identity, or sexual 
orientation.
    \335\ 45 CFR 147.104(e) prohibits health insurance issuers in 
non-grandfathered individual, small and large group markets from 
employing benefit designs that will have the effect of discouraging 
the enrollment of individuals with significant health needs in 
health insurance coverage or discriminate based on an individual's 
race, color, national origin, present or predicted disability, age, 
sex, gender identity, sexual orientation, expected length of life, 
degree of medical dependency, quality of life, or other health 
conditions. 45 CFR 156.200(e) prohibits a qualified health plan 
issuer from discriminating on the basis of race, color, national 
origin, disability, age, sex, gender identity, or sexual 
orientation. 45 CFR 156.125(a) prohibits issuers that provide 
essential health benefits from using benefit designs that 
discriminate based on an individual's age, expected length of life, 
present or predicted disability, degree of medical dependency, 
quality of life, or other health conditions. 45 CFR 156.125(b) 
requires issuers that provide essential health benefits to comply 
with 45 CFR 156.200(e).
    \336\ 45 CFR 147.104(e), 156.200(e) and 156.125(a)-(b) are 
applicable to qualified health plan issuers.
    \337\ 45 CFR 147.104(e) is applicable to non-grandfathered 
coverage in the individual, small and large group markets. 45 CFR 
147.150(a) incorporates essential health benefits requirements (and 
implementing regulations at 45 CFR 156.200(e) and 156.125(a)-(b)) 
for non-grandfathered coverage in the individual and small group 
markets.
---------------------------------------------------------------------------

    In addition, the ACA prohibits many health insurance issuers from 
charging higher premiums based on sex; \338\ failing to provide 
essential health benefits that greatly impact women, such as maternity 
care; \339\ failing to cover preventive services that are necessary for 
women's health, such as mammograms; \340\ and denying benefits based on 
pre-existing conditions \341\ or health factors,\342\ many of which 
affect women's health, such as a history of a Caesarian section or a 
history of domestic violence.\343\ Thus, health insurance issuers and 
the Health Insurance Marketplaces have already had to expand access to 
women and lesbian, gay, bisexual and transgender (LGBT) individuals 
under these health insurance market reforms, independent of Section 
1557. The existence of these other provisions circumscribes cost 
burdens on Health Insurance Marketplaces and issuers in the ACA-
compliant individual and small group markets that are recipients of 
Federal financial assistance that are imposed by the prohibition of sex 
discrimination in the rule.
---------------------------------------------------------------------------

    \338\ 42 U.S.C.300gg.
    \339\ Id. 18022 (b).
    \340\ Id. 300gg-13 (a)(4).
    \341\ Id. 18001.
    \342\ Id. 300gg-4.
    \343\ Id. 300gg-4(a)(7); ASPE Issue Brief, supra note 332.
---------------------------------------------------------------------------

    Section 92.207 (Nondiscrimination in health insurance and other 
health coverage) of the rule prohibits discrimination on the basis of 
sex by a covered entity providing or administering health insurance or 
other health coverage. As noted, many of the same covered entities 
subject to Section 1557, including Health Insurance Marketplaces and 
health insurance issuers in the individual and small group markets that 
are recipients of Federal financial assistance, are also subject to 
existing nondiscrimination provisions in CMS regulations. Although the 
CMS regulations complement and do not replace Section 1557 or this 
part, the existing nondiscrimination requirements applicable to health 
insurance issuers and Health Insurance Marketplaces have made these 
entities aware that they are not permitted to discriminate on the basis 
of sex, sexual orientation, or gender identity, and thus they are 
familiar with their nondiscrimination obligations under the law. We 
assume that these covered entities have already taken steps to comply 
with CMS regulations and so instituted changes in their policies and 
actions. To the extent these existing obligations overlap with Section 
1557 and covered entities have complied with the CMS regulations that 
prohibit discrimination on the basis of sex, sexual orientation, and 
gender identity, this rule will impose little or no burden on health 
insurance issuers and Title I entities to comply with Section 1557's 
and this part's prohibition on sex discrimination. However, the rule 
nonetheless imposes some costs.
a. Developing or Revising Policies and Procedures
    There may be some incremental burden on issuers and Title I 
entities in terms of the additional guidance that this rule provides 
related to sex discrimination, because, in some circumstances, it 
provides more detail than CMS regulations or guidance. Therefore, 
covered entities may have an increased burden when incorporating this 
rule into their existing nondiscrimination policies and procedures. For 
example, this rule specifies that a categorical coverage exclusion or 
limitation for all health care services related to gender transition is 
discriminatory on its face. If a covered entity had not previously 
understood sex discrimination on the basis of gender identity in this 
way, the covered entity would have to revise its policies and 
procedures to provide coverage consistent with this final rule's 
parameters, which might include revising policies to include gender 
transition-related care.
    However, we note that the number of major U.S. employers providing 
transgender-inclusive health care coverage has been increasing, from 0 
in 2002, to 49 in 2009, 278 in 2013, 336 in 2014, 418 in 2015, and at 
least 511 in 2016.\344\ This indicates that plans that offer 
transgender-inclusive health care are becoming readily available as 
models for issuers that may not offer such care, limiting their costs 
in developing or revising policies and procedures for compliance.
---------------------------------------------------------------------------

    \344\ Human Rights Campaign, Corporate Equality Index, Rating 
American Workplaces on Lesbian, Gay, Bisexual and Transgender 
Equality, https://www.hrc.org/campaigns/corporate-equality-index 
(last visited May 3, 2016).
---------------------------------------------------------------------------

    Similar to the estimate for providers of health services, we assume 
that it will take, on average, three to five hours for issuers of 
health insurance coverage to develop or modify policies and procedures 
concerning sex discrimination. We are selecting four hours, or the 
midpoint of this range, for our analysis. We further assume that three 
of the hours will be spent by a mid-level manager, at a salary, with 
fringe benefits and overhead of $57.60 per hour,\345\ and one hour will 
be spent by executive staff, at a salary, with fringe benefits and 
overhead of $122.15 per hour. Based on our best estimate of industry 
compliance with CMS regulations, we further assume that one-third or 
33% of health insurance issuers will need to develop or modify policies 
and procedures. Based on an unduplicated count of issuers, we 
previously identified 180 issuers in the Marketplaces (including 
Federally-facilitated Marketplaces). One third of this number equals 60 
issuers that we estimate would need to revise policies to address the 
prohibition of sex discrimination in this regulation. The costs to 
issuers to revise policies and procedures to provide coverage 
consistent with this rule's parameters equal 60 issuers multiplied by 
$295 for a one-time cost of $17,700.
---------------------------------------------------------------------------

    \345\ U.S. Dep't of Labor, Bureau of Labor Statistics, 
Occupational Employment Statistics, May 2015 National Occupational 
Employment and Wage Estimates by ownership, https://www.bls.gov/oes/2014/may/oes_nat.htm (last visited May 3, 2016) (using data for 
First-Line Supervisors of Office and Administrative Support Workers 
and General and Operations Managers for the health insurance 
industry).
---------------------------------------------------------------------------

b. Ending Discriminatory Practices
    In addition to the cost some covered health insurance providers may 
have for revising policies and procedures to comply with the rule, such 
providers may also incur a de minimis cost related to the cost of 
coverage. In this regard, we note that the April 2012 California

[[Page 31457]]

Department of Insurance Economic Impact Assessment on Gender 
Nondiscrimination in Health Insurance found that covering transgender 
individuals under California's private and public health insurance 
plans would have an ``insignificant and immaterial'' impact on 
costs.\346\ This conclusion was based on evidence of low utilization 
and the estimated number of transgender individuals in California. The 
transgender population of California was estimated to range between 
0.0022% and 0.0173%.\347\ The study revealed that, contrary to common 
assumptions, not all transgender individuals seek surgical 
intervention, and that gender-confirming health care differs according 
to the needs and pre-existing conditions of each individual.\348\ 
Despite expecting a possible spike in demand for benefits due to former 
or current unmet demand, the California Insurance Department concluded 
that any increased utilization that might occur over time is likely to 
be so low that any resulting costs remain actuarially immaterial.\349\ 
Additionally, issuers in California that established premium surcharges 
after enactment of California's Gender Nondiscrimination in Health 
Insurance Law subsequently eliminated them because they found they did 
not spend the extra funds generated.\350\
---------------------------------------------------------------------------

    \346\ State of Cal., Dep't of Ins., Economic Impact Assessment 
Gender Nondiscrimination in Health Insurance. (Apr. 13, 2012). 
https://translaw.wpengine.com/wp-content/uploads/2013/04/Economic-Impact-Assessment-Gender-Nondiscrimination-In-Health-Insurance.pdf.
    \347\ Id.
    \348\ Id. at 8.
    \349\ Id. at 9.
    \350\ Id. at 6-7.
---------------------------------------------------------------------------

    Two other studies also support the conclusion that the cost is de 
minimis for entities providing or administering health insurance 
coverage to come into compliance with this rule's provision of 
nondiscrimination on the basis of sex. One is a 2013 Williams Institute 
study of 34 public and private employers, and the second consists of 
cost projections of providing transition-related health-care benefits 
to members of the military.
    The first of these two studies, a 2013 study of 34 employers that 
provided nondiscriminatory health care coverage, found that providing 
transition-related benefits to treat gender dysphoria had ``zero to 
very low costs.'' \351\
---------------------------------------------------------------------------

    \351\ The Williams Inst., Cost and Benefits of Providing 
Transition-Related Health Care Coverage in Employee Health Benefits 
Plans: Findings from a Survey of Employers, at 2 (Sept. 2013), 
https://williamsinstitute.law.ucla.edu/wp-content/uploads/Herman-Cost-Benefit-of-Trans-Health-Benefits-Sept-2013.pdf
---------------------------------------------------------------------------

    The second study, published in the New England Journal of Medicine, 
projected that the cost for providing transition-related health care 
benefits to members of the military would result in an annual increase 
of 0.012% of health care costs, ``little more than a rounding error in 
the military's $47.8 billion annual health care budget.'' \352\ Based 
on the California and two other studies discussed above, we estimate 
that providing transgender individuals nondiscriminatory insurance 
coverage and treatment will impact a very small segment of the 
population due to the fact that the number of transgender individuals 
(and particularly those who seek surgical procedures in connection with 
their gender transition) in the general population is small, and 
consequently will have de minimis impact on the overall cost of care 
and on health insurance premiums.\353\
---------------------------------------------------------------------------

    \352\ A. Belkin, ``Caring for Our Transgender Troops -- The 
Negligible Cost of Transition-Related Care,'' 373 New Eng. J. Med. 
1089 (Sept. 15, 2015).
    \353\ State of Cal., Dep't of Ins., supra note 346, at 2, 5. 
Issuers in California that established a premium surcharge to cover 
the City of San Francisco's expected claim costs eventually 
eliminated the additional premium because they found their cost 
assumptions were 15 times higher than actual claims generated.
---------------------------------------------------------------------------

F. Accessibility of Electronic and Information Technology

    Although Section 1557 requires covered entities to ensure that the 
health programs, services, and activities provided through electronic 
and information technology are accessible to individuals with 
disabilities, all covered entities affected by Section 1557 already 
have these obligations under Section 508, Section 504 or the ADA.
1. HHS Health Programs and Activities, Including the Federally-
Facilitated Marketplaces
    Section 508 requires that electronic and information technology 
developed, procured, maintained, or used by Federal agencies be 
accessible for individuals with disabilities (both members of the 
public and Federal employees). Section 504 also establishes general 
obligations for Federal agencies to make their programs that are 
provided through electronic and information technology accessible to 
individuals with disabilities. Both Section 504 and Section 508 were in 
place before the passage of the ACA. There is, therefore, no additional 
burden under Section 1557 for HHS health programs, including the 
Federally-facilitated Marketplaces, as the Section 1557 requirements 
are consistent with the obligations these programs already have under 
Section 504 and Section 508.
2. Recipients of Federal Financial Assistance From HHS and Title I 
Entities
    Section 504 also establishes general obligations for entities 
receiving Federal financial assistance to make their programs, 
services, and activities provided through electronic and information 
technology accessible to individuals with disabilities. The ADA imposes 
similar accessibility requirements on covered entities. This rule thus 
imposes no additional burden on recipients of Federal financial 
assistance from HHS because Section 1557 is consistent with existing 
standards these entities are already obligated to meet under the ADA 
and Section 504. Title I entities have no Section 1557 burden with 
respect to this proposed requirement, as the Title I entities must 
already be compliant with the ADA, which is consistent with the Section 
1557 accessibility standards.

G. Enforcing the Rule

    After grievances are filed with covered entities or complaints are 
filed with OCR, there are associated costs to investigate and resolve 
those grievances and complaints. We believe the following costs result 
from enforcement of the Section 1557 regulation:
     Costs to covered entities for modifying and implementing 
grievance procedures to cover grievances filed under Section 1557.
     Costs to OCR for reviewing and investigating complaints, 
monitoring corrective action plans, and taking other enforcement 
actions against covered entities.
    In the analysis below, we estimate the aggregate costs of these 
enforcement procedures, and analyze the costs to covered entities 
separately from the costs to OCR.
1. Costs to Covered Entities
    Federal civil rights laws that were in place before the enactment 
of Section 1557 apply to entities that receive Federal financial 
assistance. Entities subject to those laws are already required to have 
in place established grievance procedures to address complaints of 
disability discrimination and complaints of sex discrimination in 
education programs. We anticipated that additional costs arising from 
the expansion of the grievance process to cover all bases included in 
Section 1557, including race, color, national origin, and age, as well 
as sex discrimination in health care, could impose additional costs on 
covered entities. We assumed a slight increase in the number of 
grievances filed, and a

[[Page 31458]]

corresponding increase in time to investigate and resolve these 
additional grievances.
    To compute the anticipated costs for covered entities to enforce 
the regulation, we looked to OCR data. The current number of civil 
rights complaints filed annually with OCR is approximately 3,000. Since 
the passage of Section 1557, OCR's complaint workload has increased 
slightly, with approximately 15 to 20 unique Section 1557 cases filed 
each year. If we include another ten cases per year as a result of the 
promulgation of the regulation, we calculate an increase of 30 cases 
per year or 1% of the annual caseload of 3,000. We assume the 
incremental workload will be similar for affected entities and thus 
will be approximately 1%. We anticipate that within the first five 
years following the promulgation of the regulation, complaints will 
initially increase, but then will eventually drop off as covered 
entities modify their policies and practices in response to the rule. 
Due to the likelihood that applicable changes will need to be phased 
in, we assume one half of the annual projected costs for investigating 
discrimination complaints will be incurred during the first year and 
three quarters of the annual projected enforcement costs will be spent 
in the second year and the full amounts in the third through fifth 
years. Although we have data on OCR's caseload, we have no data on the 
caseload of affected covered entities.
    We assume that as a result of promulgating the regulation, the 
41,250 covered entities with 15 or more employees will require an 
average of an additional 1% of a Full Time Equivalent (FTE) for 
designated grievance officials to investigate discrimination grievances 
in years three through five following publication of the final rule, 
with costs half as large in the first year and costs three quarters as 
large in the second year. We assume the grievance official's salary is 
equivalent to that of medical and health service managers (occupation 
code 11-9111), who have annual median wages of $103,680. These 
assumptions imply costs, after adjusting for fringe benefits and 
overhead, of $42.8 million in the first year, $64.2 million in the 
second year, and $85.5 million in years three through five following 
publication of the final rule.
    One comment suggested that litigation costs may also rise as a 
result of issuance. We assume that the costs of litigation are included 
in the costs listed in the paragraph above.
    The same incremental calculations apply to the workloads of State 
agencies and the officials working in these agencies. If we assume the 
same increases in workload at each State agency as discussed 
previously, and the average mid-level State official salary is $94,580 
(including fringe benefits and overhead), we must multiply $94,580 by 
the number of State covered entities.\354\ To arrive at the number of 
State covered entities we make the following assumptions:
---------------------------------------------------------------------------

    \354\ Based on the annual salary of Executive Secretary and 
Executive Administrative Assistant.
---------------------------------------------------------------------------

     We assume that there are 56 Medicaid State agencies;
     We assume that there are 56 State health departments;
     We assume that there are 1,003 State and local government 
community hospitals; \355\ and
---------------------------------------------------------------------------

    \355\ American Hospital Ass'n: Fast Facts on US Hospitals, (Jan. 
2016), https://www.aha.org/research/rc/stat-studies/101207fastfacts.pdf.
---------------------------------------------------------------------------

     We assume that each of 3,143 counties has a county health 
department that provides direct health services (e.g., immunization 
clinics) and is accountable to the State Health Department. We assume 
that each of the county health departments has a designated official 
for handling grievances.
    The total number of State covered entities is 4,252. Multiplying 
$94,580 by 4,252 equals $402.2 million. One percent of this value 
equals $4.0 million. This implies costs of $2.0 million in the first 
year, $3.0 million in the second year and $4.0 million in subsequent 
years following the publication of the final rule.
2. Costs to OCR
    We considered the various OCR enforcement costs together, based on 
OCR average salary data presented in its annual budgets. According to 
the FY 2016 President's Budget, $28,400,000 and 137 FTEs were requested 
for Enforcement and Regional Operations, at a cost of approximately 
$201,000 per FTE. Of the 137 FTEs, approximately 40 FTEs spend 100% of 
their investigative time enforcing the civil rights laws.\356\ If we 
make the same assumption we did above and assume the same increase in 
caseload from the issuance of Section 1557 as discussed above, the 
anticipated increase in number of staff necessary would be 
approximately 0.4 of an FTE (1% of 40) and would cost approximately 
$40,200 in the first year, $60,300 in the second year, and $80,400 in 
subsequent years following the publication of the final rule.
---------------------------------------------------------------------------

    \356\ This is based on an informal staff estimate.
---------------------------------------------------------------------------

3. Summary of Cost and Phase-In
    The table below summarizes the costs attributable to the regulation 
that covered entities may incur following enactment of the final 
regulation. We assume that half of the training costs and changes to 
policies and procedures on the prohibition of discrimination on the 
basis of sex will be incurred in the first year and the second half 
will be expended in the second year. For covered entities that will be 
printing and distributing notices to their patients and policy holders, 
we assume that all of the estimated printing and distribution costs 
will be expended in the first year after the effective date of the 
rule. Familiarization costs, information collection requirements and 
paperwork burden costs would be incurred within the first year after 
the effective date of the final regulation. Cost of enforcement, by 
contrast, will increase over the course of the first five years.

                 Table 5--Cost Summary of the Regulation Following Enactment of This Final Rule
                                       [Discounted 3% and 7% in millions]
----------------------------------------------------------------------------------------------------------------
                                                                                                        Total/
                                       Year 1       Year 2       Year 3       Year 4       Year 5     annualized
----------------------------------------------------------------------------------------------------------------
Training and Familiarization              234.9        185.8          0.0          0.0          0.0        420.8
 (undiscounted)...................
Training and Familiarization (3%).        228.1        175.2          0.0          0.0          0.0         88.1
Training and Familiarization (7%).        219.6        162.3          0.0          0.0          0.0         93.1
Enforcement (undiscounted)........         44.8         67.2         89.6         89.6         89.6        381.0
Enforcement (3%)..................         43.5         63.4         82.0         79.6         77.3         75.5
Enforcement (7%)..................         41.9         58.7         73.2         68.4         63.9         74.6
Notice Publication (undiscounted).          7.2          0.0          0.0          0.0          0.0          7.2

[[Page 31459]]

 
Notice Publication (3%)...........          7.0          0.0          0.0          0.0          0.0          1.5
Notice Publication (7%)...........          6.7          0.0          0.0          0.0          0.0          1.6
Sex discrimination................         24.8         24.8          0.0          0.0          0.0         49.5
Policy and Procedure Changes
 (undiscounted):
Sex discrimination................         24.0         23.3          0.0          0.0          0.0         10.3
Policy and Procedure Changes (3%):
Sex discrimination................         23.1         21.6          0.0          0.0          0.0         10.9
Policy and Procedure Changes (7%):
Language Access Plan                       36.0         12.0         12.0         12.0         12.0         84.1
 (undiscounted)...................
Language Access Plan (3%).........         35.0         11.3         11.0         10.7         10.4         17.1
Language Access Plan (7%).........         33.7         10.5          9.8          9.2          8.6         17.5
    Total (undiscounted)..........        347.7        289.8        101.6        101.6        101.6        942.5
    Total (3%)....................        337.6        273.2         93.0         90.3         87.7        192.5
    Total (7%)....................        325.0        253.2         83.0         77.5         72.5        197.8
----------------------------------------------------------------------------------------------------------------
Note: Discounted and annualized values take into account the cost of borrowing and paying back funds at
  hypothetical interest rates to simulate opportunity costs.

    This completes our analysis of the costs of the final rule. Next, 
we examine the benefits that can be expected to accrue as a result of 
the final rule.

III. Benefits & Transfers

    In enacting Section 1557 of the ACA, Congress recognized the 
benefits of equal access to health services and health insurance that 
all individuals should have, regardless of their race, color, national 
origin, age, or disability. Section 1557 brought together the rights to 
equal access that had been guaranteed under Title VI, the Age Act and 
Section 504. At the same time, Congress extended these protections and 
rights to individuals seeking access to health services and health 
insurance without discrimination on the basis of sex.
    This rule implements the provisions of Section 1557. In most 
respects, the rule clarifies existing obligations under existing 
authorities, and we have noted in the cost analysis that we do not 
expect that covered entities will incur costs related to the 
clarification of those existing obligations in the final rule. As the 
HHS LEP Guidance \357\ and regulation implementing Title VI \358\ 
indicate, recipients are already required to take reasonable steps to 
ensure meaningful access to their programs and activities by persons 
with limited English proficiency. We note that the additional 
provisions related to serving individuals with limited English 
proficiency in the final rule may create some additional costs but will 
also create substantial benefits to patients and providers by improving 
access to quality care.\359\
---------------------------------------------------------------------------

    \357\ 68 FR 47311, 47313 (Aug. 8, 2003).
    \358\ 45 CFR 80.3.
    \359\ Report to Congress. Assessment of the Total Benefits and 
Costs of Implementing Executive Order No. 13166: Improving Access to 
Services for Persons with Limited English Proficiency (Mar. 2002), 
p. 20, https://www.justice.gov/sites/default/files/crt/legacy/2010/12/14/omb-lepreport.pdf.
---------------------------------------------------------------------------

    Studies show that individuals with limited English proficiency 
experience barriers to receiving regular and adequate health care. 
However, according to the Institute of Medicine, when reliable language 
assistance services are utilized, patients experience treatment-related 
benefits, such as enhanced understanding of physician instruction, 
shared decision-making, provision of informed consent, adherence with 
medication regimes, preventive testing, appointment attendance, and 
follow-up compliance.\360\ Additional intangible benefits may include 
retention of cultural information, exchange of information, greater 
satisfaction with care,\361\ and enhanced privacy and autonomy of 
individuals with limited English proficiency who may have previously 
had to rely on family members for language assistance.\362\
---------------------------------------------------------------------------

    \360\ Brian D. Smedley, Adrienne Y. Stith, Alan R. Nelson, eds., 
Institute of Medicine, Unequal Treatment: Confronting Racial and 
Ethnic Disparities in Health Care, Committee on Understanding and 
Eliminating Racial and Ethnic Disparities in Health Care, Board on 
Health Science Policy, (2003), pp.142, 191; Report to Congress, 
supra note 359 at 20-22.
    \361\ Id.
    \362\ Kelvin Quan & Jessica Lynch, The High Costs of Language 
Barriers in Medical Malpractice (2010), p.17, https://www.healthlaw.org/images/stories/High_Costs_of_Language_Barriers_in_Malpractice.pdf.
---------------------------------------------------------------------------

    Health service providers also benefit from providing language 
assistance services for individuals with limited English proficiency. 
Providers can more confidently make diagnoses, prescribe medications, 
reach treatment decisions, and ensure that treatment plans are 
understood by patients.\363\ ``Language is also an important tool for 
clinicians to establish an empathic connection with patients[;]'' 
accordingly, language assistance services benefit both patients and 
providers alike.\364\ One study states that ensuring effective 
communication can also help providers avoid costs associated with 
``damages paid to patients, legal fees, the time lost when defending a 
lawsuit, the loss of reputation and patients, the fear of possible 
monetary loss, and the stress and distraction of litigation.'' \365\ 
Another study of malpractice claims found that a malpractice carrier 
insuring in four states paid over $2 million in damages or settlements 
as well as over $2 million in legal fees over a four year period for 
claims arising from failure to use an appropriate interpreter.\366\
---------------------------------------------------------------------------

    \363\ ASPE, Caring for Immigrants: Health Care Safety Nets in 
Los Angeles, New York, Miami and Houston, (2001), https://aspe.hhs.gov/execsum/caring-immigrants-health-care-safety-nets-los-angeles-new-york-miami-and-houston; Elizabeth A. Jacobs, Donald S. 
Shepard, Jose A. Suaya and Esta-Lee Stone, Overcoming Language 
Barriers in Health Care: Costs and Benefits of Interpreter Services, 
Am. J. Public Health (2004), https://www.ncbi.nlm.nih.gov/pmc/articles/PMC1448350/; Unequal Treatment, supra note 360 at 141.
    \364\ Unequal Treatment, supra note 360 at 141.
    \365\ The High Costs of Language Barriers in Medical 
Malpractice, supra note 362 at 15.
    \366\ Agency for Healthcare Research and Quality, Improving 
Patient Safety Systems for Patients With Limited English 
Proficiency: A Guide for Hospitals (2012), https://www.ahrq.gov/sites/default/files/publications/files/lepguide.pdf.
---------------------------------------------------------------------------

    We have also noted that we expect that the prohibition of sex 
discrimination in the final rule will generate certain actions and 
other changes in behavior by covered entities and that these actions 
and changes will impose costs. These actions and other

[[Page 31460]]

changes in behavior will also result in benefits.
    The provisions prohibiting sex discrimination in the ACA increase 
the affordability and accessibility of health care for women and 
transgender individuals. However, despite the ACA improving access to 
health services and health insurance, many women and transgender 
individuals continue to experience discrimination in the health care 
context, which can lead to denials of adequate health care and 
increases in existing health disparities in underserved communities. 
This continued discrimination demonstrates the need for further 
clarification regarding the prohibition of discrimination on the basis 
of sex.
    Prior to the enactment of the ACA, insurance companies were allowed 
to impose higher premiums on women or deny women coverage altogether. 
If issuers did cover women, they frequently did not cover a number of 
women's health services, including routine preventive services, such as 
pap smears or mammograms. Insurance premiums previously could differ by 
sex, and were often higher for females relative to males. The ACA 
prohibits differential treatment based on sex, includes maternity 
coverage in essential health benefits, and requires non-grandfathered 
plans to cover women's preventive services without copays, among other 
benefits.
    For transgender individuals, a major barrier to receiving care is a 
concern over being refused medical treatment based on bias against 
them.\367\ In a 2010 report, 26.7% of transgender respondents reported 
that they were refused needed health care.\368\ A 2011 survey revealed 
that 25% of transgender individuals reported being subject to 
harassment in medical settings, and 50% reported having to teach their 
medical providers about transgender care.\369\ We received many 
comments expressing anecdotal evidence of these statistics.
---------------------------------------------------------------------------

    \367\ Lambda Legal, supra note 333 at 12-13.
    \368\ Id. at 10.
    \369\ National Center for Transgender Equality and National Gay 
and Lesbian Task Force, Injustice at Every Turn: A Report of the 
National Transgender Discrimination Survey, 5-6 (2011), https://www.thetaskforce.org/.
---------------------------------------------------------------------------

    Another potential barrier for transgender individuals to care is 
covered entities' nondiscrimination policies, which often do not 
include gender identity. The 2014 Human Rights Campaign Healthcare 
Equality Index, which evaluates health care facilities' LGBT policies 
and practices, found that among the 640 hospitals it evaluated, 501 had 
patient nondiscrimination policies but of those only 257 had a patient 
nondiscrimination policy that included both the terms ``sexual 
orientation'' and ``gender identity.'' \370\
---------------------------------------------------------------------------

    \370\ Human Rights Campaign, Healthcare Equality Index 2014, 
https://www.hrc.org/reports/hei.
---------------------------------------------------------------------------

    Yet another barrier to care for transgender individuals is the 
process of obtaining health insurance coverage. A study by the Center 
for American Progress found that transgender individuals have often 
experienced difficulties when seeking insurance coverage.\371\ 
Similarly, in 2014, Out2Enroll, a national campaign that serves as a 
key link between LGBT communities and the ACA by connecting LGBT people 
with information about their new coverage options, issued findings in a 
report entitled ``Key Lessons for LGBT Outreach and Enrollment under 
the Affordable Care Act.'' \372\ The report focuses on the lack of 
adequate training of Navigator staff when encountering LGBT individuals 
seeking access to the Health Insurance Marketplaces. A major complaint 
was that Navigator staff was unaware of the multitude of discriminatory 
practices and policy restrictions in which issuers engage to deny or 
restrict coverage of transgender individuals, and that Navigator staff 
lacked basic knowledge of health issues that are unique to transgender 
individuals.\373\
---------------------------------------------------------------------------

    \371\ Laura E. Durso, Kellan Baker, and Andrew Cray, Center for 
American Progress Issue Brief: LGBT Communities and the Affordable 
Care Act Findings from a National Survey, (Oct. 10, 2013), https://www.preventionjustice.org/wp-content/uploads/2013/10/CAP-LGBT-Messaging-Research.pdf.
    \372\ Out2Enroll, Key Lessons for LGBT Outreach and Enrollment 
under the Affordable Care Act (July 24, 2014), https://out2enroll.org/lgbthealthcare/wp-content/uploads/2014/07/O2E_KeyLessons_FINAL.pdf.
    \373\ Id. at 24.
---------------------------------------------------------------------------

    Ultimately, transgender individuals who have experienced 
discrimination in the health care context often postpone or do not seek 
needed health care, which may lead to negative health 
consequences.\374\ A study by the National Center for Transgender 
Equality and the National Gay and Lesbian Task Force found that ``one-
quarter of the more than 6,400 transgender and gender-nonconforming 
respondents reported . . . being denied needed treatment[,] . . . being 
harassed in health care settings[,] . . . [and] postponing medical care 
because of discrimination by providers.'' \375\ We received several 
comments echoing these statements, both from individuals citing 
personal experiences and from entities citing data. This kind of 
discrimination exacerbates health disparities experienced by the LGBT 
population, including: higher rates of mental health issues, including 
depression and suicide attempts; higher risk of HIV/AIDS; higher use of 
tobacco and other drugs; and higher risk of certain cancers, such as 
breast cancer, with some portion of the differential potentially 
attributable to barriers to health care.\376\
---------------------------------------------------------------------------

    \374\ Kellan E, Baker, Center for American Progress, Open Doors 
for All, Sexual Orientation and Gender Identity Protections in 
Health Care (Apr. 30, 2015), https://www.americanprogress.org/issues/lgbt/report/2015/04/30/112169/open-doors-for-all/.
    \375\ Id.
    \376\ Id.
---------------------------------------------------------------------------

    By prohibiting discrimination on the basis of sex, Section 1557 
would result in more women and transgender individuals obtaining 
coverage and accessing health services. Since 2013, the uninsured rate 
for women has declined, with nearly 9.5 million women gaining health 
coverage as of 2016.\377\ Similarly, uninsured rates for LGBT 
individuals dropped from 34% in 2013 to 26% in 2014.\378\ While these 
declines in the rates of the uninsured are attributable to many 
factors, among these factors may be provisions in the ACA prohibiting 
discriminatory practices in insurance. We expect that the Section 1557 
regulation may contribute to a continued reduction in the number of 
individuals who are uninsured, although the reduction would be much 
more modest.
---------------------------------------------------------------------------

    \377\ U.S. Dep't of Health & Human Servs., Office of the 
Assistant Secretary for Planning and Eval., ASPE Issue Brief: Health 
Insurance Coverage and the Affordable Care Act 201-2016, 2 (Mar. 3, 
2016) https://aspe/hhs.gov.
    \378\ Kellan Baker, Laura E. Durso, and Andrew Cray, Center for 
American Progress, Moving the Needle, The Impact of the Affordable 
Care Act on LGBT Communities, 3 (Nov. 2014), https://www.americanprogress.org/issues/lgbt/report/2014/11/17/101575/moving-the-needle/.
---------------------------------------------------------------------------

    For a representative example, we look to a State of California 
economic impact assessment of State practices prohibiting gender 
discrimination in health care, which cites the following benefits: 
\379\
---------------------------------------------------------------------------

    \379\ California Department of Insurance, supra note 346, at 10-
12.
---------------------------------------------------------------------------

    1. Reduced violence against affected individuals;
    2. Reduced depression and suicide attempts among the affected 
population; and
    3. Overall declines in substance abuse, smoking and alcohol abuse 
rates, and improvements in mental health among treated individuals in 
LGBT populations who receive appropriate medical treatment.
    Moreover, because discrimination contributes to health disparities, 
the prohibition of sex discrimination in health care under Section 1557 
can help

[[Page 31461]]

reduce health disparities. While it is not possible to quantify the 
benefits of the reduction in health disparities, the benefits would 
include more people receiving adequate health care, regardless of their 
sex, including gender identity.
    The health and longevity benefits discussed above as potential 
effects of this rule assume additional or higher-quality medical 
services are provided to affected individuals. These services would be 
associated with costs (which we lack data to estimate). As mentioned in 
the earlier discussion of actuarial risk, to the extent that changes in 
insurance premiums do not alter how society uses its resources, the 
final rule would result in transfers between members of society, rather 
than social costs or benefits. In addition to women and transgender 
individuals, health service providers and the Federal government could 
also be recipients of these transfers. For example, in 2013, $53.3 
billion was paid to offset uncompensated care, of which the Federal 
government paid for approximately $32.8 billion.\380\ Based on 
estimated coverage gains in 2014, uncompensated care costs are expected 
to continue to fall substantially following continued major insurance 
coverage expansions, including coverage expansions through the Health 
Insurance Marketplace\SM\.\381\ While issuance of the Section 1557 
regulation is not a factor in this projection, we believe that the 
Section 1557 regulation will likewise contribute to a decrease in 
payments by the Federal government for uncompensated care by promoting 
an increase in the number of individuals who have coverage when they 
receive care.
---------------------------------------------------------------------------

    \380\ Teresa A. Coughlin, John Holahan, Kyle Caswell, and Megan 
McGrath, The Henry J. Kaiser Family Foundation, Uncompensated Care 
for the Uninsured in 2013: A Detailed Examination (May 30, 2014), p. 
4. https://kaiserfamilyfoundation.files.wordpress.com/2014/05/8596-uncompensated-care-for-the-uninsured-in-2013.pdf.
    \381\ U.S. Dep't of Health & Human Servs., Office of the 
Assistant Sec'y for Planning and Eval., Thomas DeLeire, Karen Joynt, 
and Ruth McDonald, ASPE Issue Brief, Impact of Insurance Expansion 
on Hospital Uncompensated Care Costs in 2014 (Sept. 24, 2015) 
https://aspe.hhs.gov/sites/default/files/pdf/77061/ib_UncompensatedCare.pdf.
---------------------------------------------------------------------------

    Aside from the specific benefits and transfers that women and 
transgender individuals, and the health care community can be expected 
to gain from the enactment of the regulation, there are additional 
benefits that are intangible and unquantifiable that derive from 
providing equal access to health care for all.

IV. Alternatives Considered

    In the course of developing this regulation, OCR considered various 
alternatives. Some of those alternatives are discussed in the preamble. 
A discussion of alternatives cannot cover all alternatives considered 
by OCR. The following alternatives are meant to be a representative 
sample to show how burden reduction was a major consideration in 
constructing the standards in this regulation.
    The first option is no new regulatory action. We did not select 
this option because we believe the regulation provides substantial 
benefits to society, net of the costs. We received a comment suggesting 
that we consider either writing a more informative than prescriptive 
regulation or delaying the regulation, based on a possible trend of 
increased voluntary compliance by health care agencies with 
nondiscrimination statutes. OCR's current experience, however, points 
to the importance of and need for a prescriptive regulation. OCR 
provides education and information on the civil rights statutes and 
regulations, conducts technical assistance and outreach to promote 
compliance, and is developing training materials to provide information 
and technical assistance on this rule. However, OCR has found that 
providing information and outreach is not sufficient to ensure 
nondiscrimination in health care programs and activities. OCR continues 
to receive and resolve many complaints of discrimination and to hear of 
ongoing discrimination through outreach and communications with 
stakeholders. The regulation will inform stakeholders of their rights 
so that affected individuals know that they can seek OCR's assistance, 
and will provide clarity for covered entities, limiting uncertainty and 
promoting compliance. In addition, the majority of the comments from 
the public in response to the proposed rule favored issuance of a 
regulation.
    OCR considered requiring covered entities to provide separate 
notices, covering separate content, e.g., separate notices on the 
requirements concerning the provision of meaningful access for 
individuals with limited English proficiency, requirements concerning 
effective communication for individuals with disabilities, and policies 
on nondiscrimination. To reduce the burden on covered entities, OCR 
rejected this option in favor of a comprehensive single-notice 
requirement. We are also permitting entities to combine the Section 
1557 notice with other notices that the entities may be required to 
post.
    OCR decided to further reduce the burden imposed on covered 
entities by the notice requirement by making available a sample notice, 
located in Appendix A. OCR allows covered entities flexibility in 
complying with the notice requirement by giving covered entities the 
option of using the sample notice or developing their own notice. 
Although OCR considered requiring covered entities to post the notice 
in 15 languages (Spanish (or Spanish Creole), Chinese, Vietnamese, 
Korean, Tagalog, Russian, Arabic, French Creole, French (including 
Patois, Cajun), Portuguese (or Portuguese Creole), Polish, Japanese, 
Italian, German, and Persian (Farsi)), we rejected that option. 
Instead, we are providing the notice translated into 64 languages, and 
are allowing covered entities the discretion to post one or more of the 
translated notices. We believe that making translated notices readily 
available to covered entities maximizes efficiency and economies of 
scale, provides flexibility while minimizing burden, and helps provide 
greater access for beneficiaries and consumers. Additionally, although 
OCR considered requiring covered entities to create their own taglines 
in the top 15 national languages spoken by individuals with limited 
English proficiency, we rejected that option. Instead, OCR is making 
available to covered entities the taglines in 64 languages. As the 
tagline requirement for the covered entities only requires the cost of 
printing and posting, this burden is expected to be minimal.
    OCR considered not providing training materials to covered entities 
on the requirements of the regulation. However, in order to reduce 
costs and burden, OCR is providing these materials, which will reduce 
covered entities' costs of developing training materials from $500 per 
entity to $125 per entity, resulting in a savings of approximately $104 
million. Entities are assumed to bear one quarter of the total costs. 
These costs result from paying the presenters who will run the training 
sessions, providing classroom space, and supplementing the training 
materials that OCR is making available (should they choose to do so).
    OCR considered remaining silent on covered entities' obligations to 
comply with Section 1557's prohibition of national origin 
discrimination as it affects individuals with limited English 
proficiency. We rejected this approach because we were concerned that 
OCR's silence would create ambiguity about covered entities' 
obligations to individuals with limited English proficiency and could 
jeopardize the access of individuals with limited

[[Page 31462]]

English proficiency to covered entities' health programs and 
activities. Clearly explaining the standards also promotes compliance 
and reduces enforcement costs. Options for addressing the prohibition 
of national origin discrimination as it affects individuals with 
limited English proficiency are discussed in the preamble to the 
proposed rule.
    OCR considered a regulatory scheme requiring covered entities to 
provide meaningful access to each individual with limited English 
proficiency by providing effective language assistance services, at no 
cost, unless such action would result in an undue burden or fundamental 
alteration. OCR also considered requiring covered entities of a certain 
type or size to have enhanced obligations to provide language 
assistance services. Such enhanced obligations would include providing 
a predetermined range of language assistance services in certain non-
English languages that met defined thresholds. A covered entity that 
was not of a certain type or size still would be required to provide 
meaningful access to each individual with limited English proficiency 
in its health programs and activities, but the covered entity would not 
have to provide a predetermined range of language assistance services 
in certain non-English languages. OCR also explored applying the 
threshold requirement to standardized vital documents on a national, 
State, or county level, as well as specific to a covered entity's 
geographic service area.
    The strengths of these alternate regulatory schemes included 
limited obligations for small businesses providing health programs or 
activities and defined standards for larger entities. The costs of 
these approaches included the complexity of the regulatory scheme and 
the potential burden on the covered entities of a certain type or size 
that would have enhanced applications. OCR determined these costs 
outweigh the benefits.
    OCR considered drafting new provisions addressing effective 
communication (apart from communication through electronic and 
information technology) with individuals with disabilities, but instead 
is incorporating provisions of the regulation implementing Title II of 
the ADA to ensure consistency for covered entities and potentially 
reduce burden by limiting resources spent on training and modification 
of policies and procedures.
    Options regarding communication through electronic and information 
technology are discussed in the preamble to the regulation. Regarding 
the accessibility requirements under the proposed regulation, OCR at 
first considered a narrower interpretation that the rule applied only 
to access to health programs and activities provided through covered 
entities' Web sites. However, we chose a broader interpretation, to 
include both Web sites and other means of electronic and information 
technology. While this could potentially increase the burden on 
recipients of Federal financial assistance and State-based 
Marketplaces, this would offer clarity to covered entities, increase 
the benefit of the rule, and help enhance access for individuals with 
disabilities.
    In the area of compliance, OCR considered having one set of 
procedures for all compliance activities involving recipients of 
Federal financial assistance and State-based Marketplace\SM\ entities. 
Instead, OCR decided to adopt the unique Age Act procedures \382\ for 
age-related compliance activities under Section 1557 because Age Act 
compliance activities and Section 1557 compliance activities regarding 
age discrimination are likely to substantially overlap.
---------------------------------------------------------------------------

    \382\ The Age Act procedures, for example, require mediation of 
all age discrimination complaints, and exhaustion of administrative 
remedies prior to the filing of a civil lawsuit. 45 CFR 91.43, 
91.50.
---------------------------------------------------------------------------

    With regard to other areas of compliance, OCR considered developing 
a separate set of procedures for Section 1557 compliance activities 
involving HHS health programs and activities, but decided to largely 
adopt the existing procedures for disability compliance activities 
involving HHS health programs and activities (with some enhancement) to 
improve efficiencies for OCR and the HHS health programs and activities 
covered by Section 1557.

V. Unfunded Mandates Reform Act of 1995

    Section 202 of the Unfunded Mandates Reform Act of 1995 requires 
that agencies assess anticipated costs and benefits before issuing any 
rule that includes a Federal mandate that could result in expenditure 
in any one year by State, local, or tribal governments, in the 
aggregate, or by the private sector, of $100 million in 1995 dollars, 
updated annually for inflation. In 2016, that threshold level is 
approximately $146 million.
    The Unfunded Mandates Reform Act does not address the total cost of 
a final rule. Rather, it focuses on certain categories of cost, mainly 
those ``Federal mandate'' costs resulting from: (1) Imposing 
enforceable duties on State, local, or tribal governments, or on the 
private sector; or (2) increasing the stringency of conditions in, or 
decreasing the funding of, State, local, or tribal governments under 
entitlement programs.
    Our impact analysis shows that burden associated with training 
staff working for covered entities will be spread widely across health 
care entities, State and local governmental entities, and a substantial 
number of health insurance issuers. The analysis estimates the unfunded 
burden will be about $422 million in training and familiarization 
costs. We project that for the first few years following promulgation 
of the final rule, private sector costs for investigating 
discrimination complaints may amount to $87 million per year. Within 
the first five years following the final rule's promulgation, we 
anticipate complaints will increase, and then eventually drop off as 
covered entities modify their policies and practices in response to the 
final rule.
    As we explain in the RIA, we believe there will be benefits gained 
from the promulgation of this regulation in the form of reduction in 
discrimination based on race, color, national origin, sex, age, and 
disability, and the corresponding improvement in the quality of care to 
underserved communities. In response to comments concerning the costs 
to covered entities, we note that we have not included some changes 
that would have been beneficial to individuals because we recognize 
that they would be costly for covered entities.

VI. Executive Order 13132: Federalism

    As required by Executive Order 13132 \383\ on Federalism, OCR 
examined the effects of provisions in the regulation on the 
relationship between the Federal government and the States. OCR has 
concluded that the regulation does have Federalism implications but 
preempts State law only where the exercise of State authority directly 
conflicts with the exercise of Federal authority under the Federal 
statute.
---------------------------------------------------------------------------

    \383\ Exec. Order No. 13132, 64 FR 43255 (1999).
---------------------------------------------------------------------------

    The regulation attempts to balance State autonomy with the 
necessity of creating a Federal floor that will provide a uniform level 
of nondiscrimination protection across the country. The regulation 
restricts regulatory preemption of State law to the minimum level 
necessary to achieve the objectives of the underlying Federal statute, 
Section 1557 of the ACA.

[[Page 31463]]

    It is recognized that the States generally have laws that relate to 
nondiscrimination against individuals on a variety of bases. State laws 
continue to be enforceable, unless they prevent application of the 
final rule. The final rule explicitly provides that it is not to be 
construed to supersede State or local laws that provide additional 
protections against discrimination on any basis articulated under the 
regulation. Provisions of State law relating to nondiscrimination that 
is ``more stringent'' than the proposed Federal regulatory requirements 
or implementation specifications will continue to be enforceable.
    Section 3(b) of Executive Order 13132 recognizes that national 
action limiting the policymaking discretion of States will be imposed 
only where there is constitutional and statutory authority for the 
action and the national activity is appropriate in light of the 
presence of a problem of national significance. Discrimination issues 
in relation to health care are of national concern by virtue of the 
scope of interstate health commerce. The ACA's provisions reflect this 
position.
    Section 3(d)(2) of Executive Order 13132 requires that where 
possible, the Federal government defer to the States to establish 
standards. Title I of the ACA authorized the Secretary to promulgate 
regulations to implement Section 1557, and we have done so accordingly.
    Section 4(a) of Executive Order 13132 expressly contemplates 
preemption when there is a conflict between exercising State and 
Federal authority under a Federal statute. Section 4(b) of the 
Executive Order authorizes preemption of State law in the Federal 
rulemaking context when ``the exercise of State authority directly 
conflicts with the exercise of Federal authority under the Federal 
statute.'' The approach in this regulation is consistent with these 
standards in the Executive Order in superseding State authority only 
when such authority is inconsistent with standards established pursuant 
to the grant of Federal authority under the statute.
    Section 6(b) of Executive Order 13132 includes some qualitative 
discussion of substantial direct compliance costs that State and local 
governments could incur as a result of a proposed regulation. We have 
determined that the costs of the final rule will not impose substantial 
direct compliance costs on State or local governments. We have 
considered the cost burden that this rule will impose on State and 
local health care and benefit programs, and estimate State and local 
government costs will be in the order of $17.8 million in the first two 
years of implementation. The $17.8 million represents the sum of the 
costs of training State workers and enforcement costs attributable to 
State agencies analyzed above.

VII. Regulatory Flexibility Act (RFA)

    The RFA requires agencies that issue a regulation to analyze 
options for regulatory relief of small businesses if a rule will have a 
significant impact on a substantial number of small entities. The RFA 
generally defines a ``small entity'' as:
    (1) A proprietary firm meeting the size standards of the Small 
Business Administration (SBA);
    (2) A nonprofit organization that is not dominant in its field; or
    (3) A small government jurisdiction with a population of less than 
50,000 (States and individuals are not included in the definition of 
``small entity'').
    HHS uses as its measure of significant economic impact on a 
substantial number of small entities a change in revenues of more than 
3% for 5% or more of affected small entities.
    In instances where OCR judged that the final rule would have a 
significant impact on a substantial number of small entities, we 
considered alternatives to reduce the burden. To accomplish our task, 
we first identified all the small entities that may be impacted, and 
then evaluated whether the economic burden we determined in the RIA 
represents a significant economic impact.

A. Entities That Will Be Affected

    HHS has traditionally classified most health care providers as 
small entities even though some nonprofit providers would not meet the 
definition of ``small entity'' were they proprietary firms. Nonprofit 
entities are small if they are independently owned and operated and are 
not dominant in their fields.
    The CMS Provider of Service file has indicators for profit and 
nonprofit entities, but these have proven to be unreliable. The Census 
data identifies firms' tax status by profit and non-profit status but 
only reports revenues and does not report them by the profit and non-
profit status of the entity.
1. Physicians
    One class of providers we do not automatically classify as small 
businesses is physician practices. Physician practices are businesses 
and therefore are ``small'' if they meet the SBA's definition. The 
current size standard for physicians (excluding mental health 
specialists) (North American Industry Classification System code 62111) 
is annual receipts of less than $11 million.\384\ Using the Census data 
showing the number of firms, employees and payroll, we selected 
physicians that reported fewer than 20 employees as the top end for 
small physician offices. This equaled 17,835 entities or 9.6% of all 
physician offices defined as ``large.'' This left 167,814 offices or 
90.4% as ``small.'' \385\
---------------------------------------------------------------------------

    \384\ U.S. Small Business Administration, Table of Small 
Business Size Standards Matched to North American Industry 
Classification System Codes. Small Business Administration, (June, 
2016), https://www.sba.gov/sites/default/files/Size5FStandards5FTable.pdf.
    \385\ Physician practices may earn more than $11 million per 
year and that would reduce the number of ``large'' practices to be 
excluded from the analysis. But as we will later show, large 
practices will have proportionally larger workforce staff that must 
be excluded from the analysis.
---------------------------------------------------------------------------

2. Pharmacies
    Pharmacies also are businesses, and the size standard for them is 
annual receipts of less than $27.5 million. According to Census 
Statistics of U.S. Businesses, there are 18,852 pharmacy and drug store 
firms (North American Industry Classification System code 44611). 
Because of the lack of revenue or receipt data for pharmacies, we are 
unable to estimate the number of small pharmacies based on the SBA size 
standard. However, using the number of employees taken from the 
Statistics of U.S. Businesses as a proxy for revenues, the data is 
divided by number of employees per firm and shows the number of 
employers with fewer than 20 employees and those with more than 20 
employees.\386\ The number of firms with fewer than 20 employees is 
16,520 and represents 88% of the total number of pharmacy firms. It 
seemed reasonable to assume that firms with fewer than 20 employees 
satisfy the SBA size standard and thus we accepted that the number of 
small pharmacy firms equaled 16,520. As with the number of small 
physician offices, our method can only identify the minimum number of 
``small'' pharmacies that meet the SBA size standard. We cannot 
determine the actual number of ``small'' pharmacies.
---------------------------------------------------------------------------

    \386\ U.S. Census Bureau, Statistics of U.S. Businesses, supra 
note 314.
---------------------------------------------------------------------------

3. Health Insurance Issuers
    Another class of covered entities that are business enterprises is 
health insurance issuers. The SBA size standard for health insurance 
issuers is annual receipts of $38.5 million. Although the Blue Cross/
Blue Shield companies that operate in some markets are organized as 
nonprofit entities, they often are large enough so as to not meet the 
definition of ``small entity.''

[[Page 31464]]

    Unfortunately, we cannot use the Census revenue data for estimating 
the number of small health insurance issuers because the Census data 
combines life and health insurance. Substituting costs for revenues 
allows us to obtain a rough estimate of the number of large insurance 
issuers, realizing that cost will probably be less than revenues, thus 
giving us a lower count of large issuers. Using the National Health 
Expenditure for 2013, net cost of health insurance equaled $173.6 
billion. However, the 2012 Census data report a total of 815 health 
insurance issuers. Dividing the $174 billion in costs by the number of 
insurance issuers reported in the census tables yields average costs of 
over $213 million, which means that average annual revenues per issuer 
exceeds $213 million. We concluded, therefore, that there are almost no 
small insurance issuers. The above analysis comports with the 
conclusion CMS published in the Health Insurance Web Portal 
Requirements.\387\
---------------------------------------------------------------------------

    \387\ 75 CFR 24481, May 5, 2010.
---------------------------------------------------------------------------

4. Local Government Entities
    We also excluded local governmental entities from our count of 
small entities because we lack the data to classify them by populations 
of fewer than 50,000. The following table shows the number of small 
covered entities we estimated could be affected by the proposed rule.

                     Table 6--Small Covered Entities
------------------------------------------------------------------------
                                                             Number of
            NAIC                     Entity type               firms
------------------------------------------------------------------------
62142......................  Outpatient mental health              4,987
                              and substance abuse
                              centers.
62141......................  HMO medical centers........             104
62142......................  Kidney dialysis centers....             492
62143......................  Freestanding ambulatory               4,121
                              surgical and emergency
                              centers.
621498.....................  All other outpatient care             5,399
                              centers.
6215.......................  Medical and diagnostic                7,958
                              laboratories.
6216.......................  Home health care services..          21,668
6219.......................  All other ambulatory health           6,956
                              care services.
62321......................  Residential mental                    6,225
                              retardation facilities.
62199......................  General medical and                   3,067
                              surgical hospitals.
621991.....................  Psychiatric and substance               411
                              abuse hospitals.
6221.......................  Specialty (except                       373
                              psychiatric and substance
                              abuse) hospitals.
6231.......................  Nursing care facilities               8,623
                              (skilled nursing
                              facilities).
44611......................  Pharmacies and drug stores.          16,520
6211.......................  Offices of physicians......         167,814
                             Navigator grantees.........             100
                            --------------------------------------------
                             Total small entities.......         254,998
------------------------------------------------------------------------

B. Whether the Rule Will Have a Significant Economic Impact on Covered 
Small Entities

    Total undiscounted costs associated with the final rule are an 
average of $189 million per year over a five year period. If all of 
those costs are borne by small entities, this amounts to an average of 
$739 each year over that five year period. As a result, we believe that 
fewer than 5% of all small entities will experience a burden of greater 
than 3% of their revenues. Ambulatory health care services facilities 
(North American Industry Classification System 621), for example, are 
small entities with an average of 13 employees and revenue of $1.7 
million based on 2012 reported data for employees of 6.4 million and 
total revenues of $825.7 million for 485,235 firms.\388\ In addition, 
the majority of the costs associated with this final rule are 
proportional to the size of entities, meaning that even the smallest of 
the affected entities are unlikely to face a substantial impact. Thus, 
we would not consider this regulation a significant burden on a 
substantial number of small entities, and, therefore, the Secretary 
certifies that the final rule will not have a significant impact on a 
substantial number of small entities.
---------------------------------------------------------------------------

    \388\ U.S. Dep't of Labor, Bureau of Labor Statistics, 
Industries at a Glance, https://www.bls.gov/iag/tgs/iag621.htm (last 
visited Mar. 26, 2016).
---------------------------------------------------------------------------

VIII. Conclusion

    For the most part, because this regulation is consistent with 
existing standards applicable to the covered entities, the new burdens 
created by its issuance are minimal. The major impacts are in the areas 
of voluntary training, posting of notices, enforcement (where increased 
caseloads pose incremental costs on covered entities), voluntary 
development of language access plans, and revisions or development of 
new policies and procedures. The final rule does not include broad 
expansions of existing civil rights requirements on covered entities, 
and therefore minimizes the imposition of new burdens. Nevertheless, it 
is still a major rule with economically significant costs. The 
annualized cost of this rule over the first five years following its 
publication is $192.5 million using a discount rate of 3%, and $197.8 
million using a discount rate of 7%. This RIA was organized and 
designed to explain the origin of these cost impacts and to incorporate 
relevant public comments.

[[Page 31465]]



                                          Table 7--Accounting statement
----------------------------------------------------------------------------------------------------------------
                                              Accounting statement
-----------------------------------------------------------------------------------------------------------------
                                               Primary
                Category                      estimate        Low estimate      High estimate        Source
----------------------------------------------------------------------------------------------------------------
                                                    BENEFITS
----------------------------------------------------------------------------------------------------------------
Qualitative Benefits (02)...............   Potential health           ................              RIA
                                          improvements and longevity
                                          extensions as a result of reduced
                                          barriers to medical care for
                                          transgender individuals.
----------------------------------------------------------------------------------------------------------------
                                                COSTS (millions)
----------------------------------------------------------------------------------------------------------------
Annualized monetized....................  Covered entities                 Cov................
                                            train 40% of       train 60% of
                                           their employees  their employees
                                             on the new          on the new
                                             regulations        regulations
                                         ------------------------------------------------------
3%......................................            192.5             177.0             208.1               RIA
7%......................................            197.8             181.4             214.2               RIA
                                         ------------------------------------------------------
Non-quantified costs (02)...............  Costs of increased provision of     ................              RIA
                                          health care services as a result
                                          of reduced barriers to access for
                                          transgender individuals.
----------------------------------------------------------------------------------------------------------------
Transfers (02)..........................  Health insurance premium            ................              RIA
                                          reductions for affected women,
                                          with offsetting increases for
                                          other premium payers in affected
                                          plans.
----------------------------------------------------------------------------------------------------------------
Effects on State and Local Governments                                        ................              RIA
 (02)...................................  $17.8 million costs in the first 2
                                          years (training + enforcement)
----------------------------------------------------------------------------------------------------------------
Effects on Small Entities (02)..........  Average of less than $1,000 per     ................              RFA
                                          small entity per year
----------------------------------------------------------------------------------------------------------------

List of Subjects in 45 CFR Part 92

    Administrative practice and procedure, Civil rights, 
Discrimination, Elderly, Health care, Health facilities, Health 
insurance, Health programs and activities, Individuals with 
disabilities, Nondiscrimination, Reporting and recordkeeping 
requirements, Sex discrimination.

    For the reasons set forth in the preamble, the Department of Health 
and Human Services adds 45 CFR part 92 as follows:

PART 92--NONDISCRIMINATION ON THE BASIS OF RACE, COLOR, NATIONAL 
ORIGIN, SEX, AGE, OR DISABILITY IN HEALTH PROGRAMS OR ACTIVITIES 
RECEIVING FEDERAL FINANCIAL ASSISTANCE AND HEALTH PROGRAMS OR 
ACTIVITIES ADMINISTERED BY THE DEPARTMENT OF HEALTH AND HUMAN 
SERVICES OR ENTITIES ESTABLISHED UNDER TITLE I OF THE PATIENT 
PROTECTION AND AFFORDABLE CARE ACT

Subpart A--General Provisions
92.1 Purpose and effective date.
92.2 Application.
92.3 Relationship to other laws.
92.4 Definitions.
92.5 Assurances required.
92.6 Remedial action and voluntary action.
92.7 Designation of responsible employee and adoption of grievance 
procedures.
92.8 Notice requirement.
Subpart B--Nondiscrimination Provisions
92.101 Discrimination prohibited.
Subpart C--Specific Applications to Health Programs and Activities
92.201 Meaningful access for individuals with limited English 
proficiency.
92.202 Effective communication for individuals with disabilities.
92.203 Accessibility standards for buildings and facilities.
92.204 Accessibility of electronic and information technology.
92.205 Requirement to make reasonable modifications.
92.206 Equal program access on the basis of sex.
92.207 Nondiscrimination in health-related insurance and other 
health-related coverage.
92.208 Employer liability for discrimination in employee health 
benefit programs.
92.209 Nondiscrimination on the basis of association.
Subpart D--Procedures
92.301 Enforcement mechanisms.
92.302 Procedures for health programs and activities conducted by 
recipients and State-based Marketplaces.
92.303 Procedures for health programs and activities administered by 
the Department.
Appendix A to Part 92--Sample Notice Informing Individuals About 
Nondiscrimination and Accessibility

[[Page 31466]]

Requirements and Sample Nondiscrimination Statement
Appendix B to Part 92--Sample Tagline Informing Individuals With 
Limited English Proficiency of Language Assistance Services
Appendix C to Part 92--Sample Section 1557 of the Affordable Care 
Act Grievance Procedure

    Authority:  42 U.S.C. 18116, 5 U.S.C. 301.

Subpart A--General Provisions


Sec.  92.1  Purpose and effective date.

    The purpose of this part is to implement Section 1557 of the 
Patient Protection and Affordable Care Act (ACA) (42 U.S.C. 18116), 
which prohibits discrimination on the basis of race, color, national 
origin, sex, age, or disability in certain health programs and 
activities. Section 1557 provides that, except as provided in Title I 
of the ACA, 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 504 
of the Rehabilitation Act of 1973, 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 or under any program or activity that is 
administered by an Executive Agency or any entity established under 
Title I of the ACA. This part applies to health programs or activities 
administered by recipients of Federal financial assistance from the 
Department, Title I entities that administer health programs or 
activities, and Department-administered health programs or activities. 
The effective date of this part shall be July 18, 2016, except to the 
extent that provisions of this part require changes to health insurance 
or group health plan benefit design (including covered benefits, 
benefits limitations or restrictions, and cost-sharing mechanisms, such 
as coinsurance, copayments, and deductibles), such provisions, as they 
apply to health insurance or group health plan benefit design, have an 
applicability date of the first day of the first plan year (in the 
individual market, policy year) beginning on or after January 1, 2017.


Sec.  92.2  Application.

    (a) Except as provided otherwise in this part, this part applies to 
every health program or activity, any part of which receives Federal 
financial assistance provided or made available by the Department; 
every health program or activity administered by the Department; and 
every health program or activity administered by a Title I entity.
    (b)(1) Exclusions to the application of the Age Discrimination Act 
of 1975, as set forth at 45 CFR 91.3(b)(1), apply to claims of 
discrimination based on age under Section 1557 or this part.
    (2) Insofar as the application of any requirement under this part 
would violate applicable Federal statutory protections for religious 
freedom and conscience, such application shall not be required.
    (c) Any provision of this part held to be invalid or unenforceable 
by its terms, or as applied to any person or circumstance, shall be 
construed so as to continue to give maximum effect to the provision 
permitted by law, unless such holding shall be one of utter invalidity 
or unenforceability, in which event the provision shall be severable 
from this part and shall not affect the remainder thereof or the 
application of the provision to other persons not similarly situated or 
to other, dissimilar circumstances.


Sec.  92.3  Relationship to other laws.

    (a) Rule of interpretation. Neither Section 1557 nor this part 
shall be construed to apply a lesser standard for the protection of 
individuals from discrimination than the standards applied under Title 
VI of the Civil Rights Act of 1964, Title IX of the Education 
Amendments of 1972, Section 504 of the Rehabilitation Act of 1973, the 
Age Discrimination Act of 1975, or the regulations issued pursuant to 
those laws.
    (b) Other laws. Nothing in this part shall be construed to 
invalidate or limit the rights, remedies, procedures, or legal 
standards available to individuals under Title VI of the Civil Rights 
Act of 1964, Title VII of the Civil Rights Act of 1964, the 
Architectural Barriers Act of 1968, Title IX of the Education 
Amendments of 1972, Sections 504 or 508 of the Rehabilitation Act of 
1973, the Age Discrimination Act of 1975, the Americans with 
Disabilities Act of 1990, as amended by the Americans with Disabilities 
Act Amendments Act of 2008, or other Federal laws or to supersede State 
or local laws that provide additional protections against 
discrimination on any basis described in Sec.  92.1.


Sec.  92.4  Definitions.

    As used in this part, the term--
    1991 Standards means the 1991 ADA Standards for Accessible Design, 
published at Appendix A to 28 CFR part 36 on July 26, 1991, and 
republished as Appendix D to 28 CFR part 36 on September 15, 2010.
    2010 Standards means the 2010 ADA Standards for Accessible Design, 
as defined at 28 CFR 35.104.
    ACA means the Patient Protection and Affordable Care Act (Pub. L. 
111-148, 124 Stat. 119 (2010) as amended by the Health Care and 
Education Reconciliation Act of 2010, Pub. L. 111-152, 124 Stat. 1029 
(codified in scattered sections of U.S.C.)).
    ADA means the Americans with Disabilities Act of 1990 (42 U.S.C. 
12101 et seq.), as amended.
    Age means how old an individual is, or the number of elapsed years 
from the date of an individual's birth.
    Age Act means the Age Discrimination Act of 1975 (42 U.S.C. 6101 et 
seq.), as amended.
    Applicant means an individual who applies to participate in a 
health program or activity.
    Auxiliary aids and services include:
    (1) Qualified interpreters on-site or through video remote 
interpreting (VRI) services, as defined in 28 CFR 35.104 and 36.303(b); 
note takers; real-time computer-aided transcription services; written 
materials; exchange of written notes; telephone handset amplifiers; 
assistive listening devices; assistive listening systems; telephones 
compatible with hearing aids; closed caption decoders; open and closed 
captioning, including real-time captioning; voice, text, and video-
based telecommunication products and systems, text telephones (TTYs), 
videophones, and captioned telephones, or equally effective 
telecommunications devices; videotext displays; accessible electronic 
and information technology; or other effective methods of making 
aurally delivered information available to individuals who are deaf or 
hard of hearing;
    (2) Qualified readers; taped texts; audio recordings; Braille 
materials and displays; screen reader software; magnification software; 
optical readers; secondary auditory programs; large print materials; 
accessible electronic and information technology; or other effective 
methods of making visually delivered materials available to individuals 
who are blind or have low vision;
    (3) Acquisition or modification of equipment and devices; and
    (4) Other similar services and actions.
    Covered entity means:
    (1) An entity that operates a health program or activity, any part 
of which receives Federal financial assistance;
    (2) An entity established under Title I of the ACA that administers 
a health program or activity; and
    (3) The Department.

[[Page 31467]]

    Department means the U.S. Department of Health and Human Services.
    Director means the Director of the Office for Civil Rights (OCR) of 
the Department.
    Disability means, with respect to an individual, a physical or 
mental impairment that substantially limits one or more major life 
activities of such individual; a record of such an impairment; or being 
regarded as having such an impairment, as defined and construed in the 
Rehabilitation Act, 29 U.S.C. 705(9)(B), which incorporates the 
definition of disability in the ADA, 42 U.S.C. 12102, as amended. Where 
this part cross-references regulatory provisions that use the term 
``handicap,'' ``handicap'' means ``disability'' as defined in this 
section.
    Electronic and information technology means the same as 
``electronic and information technology,'' or any term that replaces 
``electronic and information technology,'' as it is defined in 36 CFR 
1194.4.
    Employee health benefit program means:
    (1) Health benefits coverage or health insurance coverage provided 
to employees and/or their dependents established, operated, sponsored 
or administered by, for, or on behalf of one or more employers, whether 
provided or administered by entities including but not limited to an 
employer, group health plan (as defined in the Employee Retirement 
Income Security Act of 1974 (ERISA), 29 U.S.C. 1191b(a)(1)), third 
party administrator, or health insurance issuer.
    (2) An employer-provided or employer-sponsored wellness program;
    (3) An employer-provided health clinic; or
    (4) Long term care coverage or insurance provided or administered 
by an employer, group health plan, third party administrator, or health 
insurance issuer for the benefit of an employer's employees.
    Federal financial assistance. (1) Federal financial assistance 
means any grant, loan, credit, subsidy, contract (other than a 
procurement contract but including a contract of insurance), or any 
other arrangement by which the Federal government provides or otherwise 
makes available assistance in the form of:
    (i) Funds;
    (ii) Services of Federal personnel; or
    (iii) Real and personal property or any interest in or use of such 
property, including:
    (A) Transfers or leases of such property for less than fair market 
value or for reduced consideration; and
    (B) Proceeds from a subsequent transfer or lease of such property 
if the Federal share of its fair market value is not returned to the 
Federal government.
    (2) Federal financial assistance the Department provides or 
otherwise makes available includes Federal financial assistance that 
the Department plays a role in providing or administering, including 
all tax credits under Title I of the ACA, as well as payments, 
subsidies, or other funds extended by the Department to any entity 
providing health-related insurance coverage for payment to or on behalf 
of an individual obtaining health-related insurance coverage from that 
entity or extended by the Department directly to such individual for 
payment to any entity providing health-related insurance coverage.
    Federally-facilitated Marketplace\SM\ means the same as 
``Federally-facilitated Exchange'' defined in 45 CFR 155.20.
    Gender identity means an individual's internal sense of gender, 
which may be male, female, neither, or a combination of male and 
female, and which may be different from an individual's sex assigned at 
birth. The way an individual expresses gender identity is frequently 
called ``gender expression,'' and may or may not conform to social 
stereotypes associated with a particular gender. A transgender 
individual is an individual whose gender identity is different from the 
sex assigned to that person at birth.
    Health Insurance Marketplace\SM\ means the same as ``Exchange'' 
defined in 45 CFR 155.20.
    Health program or activity means the provision or administration of 
health-related services, health-related insurance coverage, or other 
health-related coverage, and the provision of assistance to individuals 
in obtaining health-related services or health-related insurance 
coverage. For an entity principally engaged in providing or 
administering health services or health insurance coverage or other 
health coverage, all of its operations are considered part of the 
health program or activity, except as specifically set forth otherwise 
in this part. Such entities include a hospital, health clinic, group 
health plan, health insurance issuer, physician's practice, community 
health center, nursing facility, residential or community-based 
treatment facility, or other similar entity. A health program or 
activity also includes all of the operations of a State Medicaid 
program, a Children's Health Insurance Program, and the Basic Health 
Program.
    HHS means the U.S. Department of Health and Human Services.
    Individual with a disability means any individual who has a 
disability as defined for the purpose of Section 504 of the 
Rehabilitation Act of 1973, 29 U.S.C. 705(20)(B)-(F), as amended. Where 
this part cross-references regulatory provisions applicable to a 
``handicapped individual,'' ``handicapped individual'' means 
``individual with a disability'' as defined in this section.
    Individual with limited English proficiency means an individual 
whose primary language for communication is not English and who has a 
limited ability to read, write, speak, or understand English.
    Language assistance services may include, but are not limited to:
    (1) Oral language assistance, including interpretation in non-
English languages provided in-person or remotely by a qualified 
interpreter for an individual with limited English proficiency, and the 
use of qualified bilingual or multilingual staff to communicate 
directly with individuals with limited English proficiency;
    (2) Written translation, performed by a qualified translator, of 
written content in paper or electronic form into languages other than 
English; and
    (3) Taglines.
    National origin includes, but is not limited to, an individual's, 
or his or her ancestor's, place of origin (such as country or world 
region) or an individual's manifestation of the physical, cultural, or 
linguistic characteristics of a national origin group.
    On the basis of sex includes, but is not limited to, discrimination 
on the basis of pregnancy, false pregnancy, termination of pregnancy, 
or recovery therefrom, childbirth or related medical conditions, sex 
stereotyping, and gender identity.
    Qualified bilingual/multilingual staff means a member of a covered 
entity's workforce who is designated by the covered entity to provide 
oral language assistance as part of the individual's current, assigned 
job responsibilities and who has demonstrated to the covered entity 
that he or she:
    (1) Is proficient in speaking and understanding both spoken English 
and at least one other spoken language, including any necessary 
specialized vocabulary, terminology and phraseology, and
    (2) is able to effectively, accurately, and impartially communicate 
directly with individuals with limited English proficiency in their 
primary languages.

[[Page 31468]]

    Qualified individual with a disability means, with respect to a 
health program or activity, an individual with a disability who, with 
or without reasonable modifications to policies, practices, or 
procedures, the removal of architectural, communication, or 
transportation barriers, or the provision of auxiliary aids and 
services, meets the essential eligibility requirements for the receipt 
of aids, benefits, or services offered or provided by the health 
program or activity.
    Qualified interpreter for an individual with a disability. (1) A 
qualified interpreter for an individual with a disability means an 
interpreter who via a remote interpreting service or an on-site 
appearance:
    (i) Adheres to generally accepted interpreter ethics principles, 
including client confidentiality; and
    (ii) is able to interpret effectively, accurately, and impartially, 
both receptively and expressively, using any necessary specialized 
vocabulary, terminology and phraseology.
    (2) For an individual with a disability, qualified interpreters can 
include, for example, sign language interpreters, oral transliterators 
(individuals who represent or spell in the characters of another 
alphabet), and cued language transliterators (individuals who represent 
or spell by using a small number of handshapes).
    Qualified interpreter for an individual with limited English 
proficiency means an interpreter who via a remote interpreting service 
or an on-site appearance:
    (1) Adheres to generally accepted interpreter ethics principles, 
including client confidentiality;
    (2) has demonstrated proficiency in speaking and understanding both 
spoken English and at least one other spoken language; and
    (3) is able to interpret effectively, accurately, and impartially, 
both receptively and expressly, to and from such language(s) and 
English, using any necessary specialized vocabulary, terminology and 
phraseology.
    Qualified translator means a translator who:
    (1) Adheres to generally accepted translator ethics principles, 
including client confidentiality;
    (2) has demonstrated proficiency in writing and understanding both 
written English and at least one other written non-English language; 
and
    (3) is able to translate effectively, accurately, and impartially 
to and from such language(s) and English, using any necessary 
specialized vocabulary, terminology and phraseology.
    Recipient means any State or its political subdivision, or any 
instrumentality of a State or its political subdivision, any public or 
private agency, institution, or organization, or other entity, or any 
individual, to whom Federal financial assistance is extended directly 
or through another recipient and which operates a health program or 
activity, including any subunit, successor, assignee, or transferee of 
a recipient.
    Section 504 means Section 504 of the Rehabilitation Act of 1973 
(Pub. L. 93-112; 29 U.S.C. 794), as amended.
    Section 1557 means Section 1557 of the ACA (42 U.S.C. 18116).
    Sex stereotypes means stereotypical notions of masculinity or 
femininity, including expectations of how individuals represent or 
communicate their gender to others, such as behavior, clothing, 
hairstyles, activities, voice, mannerisms, or body characteristics. 
These stereotypes can include the expectation that individuals will 
consistently identify with only one gender and that they will act in 
conformity with the gender-related expressions stereotypically 
associated with that gender. Sex stereotypes also include gendered 
expectations related to the appropriate roles of a certain sex.
    State-based Marketplace \SM\ means a Health Insurance Marketplace 
\SM\ established by a State pursuant to 45 CFR 155.100 and approved by 
the Department pursuant to 45 CFR 155.105.
    Taglines mean short statements written in non-English languages 
that indicate the availability of language assistance services free of 
charge.
    Title I entity means any entity established under Title I of the 
ACA, including State-based Marketplaces and Federally-facilitated 
Marketplaces.
    Title VI means Title VI of the Civil Rights Act of 1964 (Pub. L. 
88-352; 42 U.S.C. 2000d et seq.), as amended.
    Title IX means Title IX of the Education Amendments of 1972 (Pub. 
L. 92-318; 20 U.S.C. 1681 et seq.), as amended.


Sec.  92.5  Assurances required.

    (a) Assurances. An entity applying for Federal financial assistance 
to which this part applies shall, as a condition of any application for 
Federal financial assistance, submit an assurance, on a form specified 
by the Director, that the entity's health programs and activities will 
be operated in compliance with Section 1557 and this part. A health 
insurance issuer seeking certification to participate in a Health 
Insurance Marketplace \SM\ or a State seeking approval to operate a 
State-based Marketplace \SM\ to which Section 1557 or this part applies 
shall, as a condition of certification or approval, submit an 
assurance, on a form specified by the Director, that the health program 
or activity will be operated in compliance with Section 1557 and this 
part. An applicant or entity may incorporate this assurance by 
reference in subsequent applications to the Department for Federal 
financial assistance or requests for certification to participate in a 
Health Insurance Marketplace \SM\ or approval to operate a State-based 
Marketplace \SM\.
    (b) Duration of obligation. The duration of the assurances required 
by this subpart is the same as the duration of the assurances required 
in the Department's regulations implementing Section 504, 45 CFR 
84.5(b).
    (c) Covenants. When Federal financial assistance is provided in the 
form of real property or interest, the same conditions apply as those 
contained in the Department's regulations implementing Section 504, at 
45 CFR 84.5(c), except that the nondiscrimination obligation applies to 
discrimination on all bases covered under Section 1557 and this part.


Sec.  92.6  Remedial action and voluntary action.

    (a) Remedial action. (1) If the Director finds that a recipient or 
State-based Marketplace \SM\ has discriminated against an individual on 
the basis of race, color, national origin, sex, age, or disability, in 
violation of Section 1557 or this part, such recipient or State-based 
Marketplace \SM\ shall take such remedial action as the Director may 
require to overcome the effects of the discrimination.
    (2) Where a recipient is found to have discriminated against an 
individual on the basis of race, color, national origin, sex, age, or 
disability, in violation of Section 1557 or this part, and where 
another recipient exercises control over the recipient that has 
discriminated, the Director, where appropriate, may require either or 
both entities to take remedial action.
    (3) The Director may, where necessary to overcome the effects of 
discrimination in violation of Section 1557 or this part, require a 
recipient or State-based Marketplace \SM\ to take remedial action with 
respect to:
    (i) Individuals who are no longer participants in the recipient's 
or State-based Marketplace \SM\'s health program or activity but who 
were participants in the health program or activity when such 
discrimination occurred; or
    (ii) Individuals who would have been participants in the health 
program or

[[Page 31469]]

activity had the discrimination not occurred.
    (b) Voluntary action. A covered entity may take steps, in addition 
to any action that is required by Section 1557 or this part, to 
overcome the effects of conditions that result or resulted in limited 
participation in the covered entity's health programs or activities by 
individuals on the basis of race, color, national origin, sex, age, or 
disability.


Sec.  92.7  Designation of responsible employee and adoption of 
grievance procedures.

    (a) Designation of responsible employee. Each covered entity that 
employs 15 or more persons shall designate at least one employee to 
coordinate its efforts to comply with and carry out its 
responsibilities under Section 1557 and this part, including the 
investigation of any grievance communicated to it alleging 
noncompliance with Section 1557 or this part or alleging any action 
that would be prohibited by Section 1557 or this part. For the 
Department, including the Federally-facilitated Marketplaces, the 
Director will be deemed the responsible employee under this section.
    (b) Adoption of grievance procedures. Each covered entity that 
employs 15 or more persons shall adopt grievance procedures that 
incorporate appropriate due process standards and that provide for the 
prompt and equitable resolution of grievances alleging any action that 
would be prohibited by Section 1557 or this part. For the Department, 
including the Federally-facilitated Marketplaces, the procedures for 
addressing complaints of discrimination on the grounds covered under 
Section 1557 or this part will be deemed grievance procedures under 
this section.


Sec.  92.8  Notice requirement.

    (a) Each covered entity shall take appropriate initial and 
continuing steps to notify beneficiaries, enrollees, applicants, and 
members of the public of the following:
    (1) The covered entity does not discriminate on the basis of race, 
color, national origin, sex, age, or disability in its health programs 
and activities;
    (2) The covered entity provides appropriate auxiliary aids and 
services, including qualified interpreters for individuals with 
disabilities and information in alternate formats, free of charge and 
in a timely manner, when such aids and services are necessary to ensure 
an equal opportunity to participate to individuals with disabilities;
    (3) The covered entity provides language assistance services, 
including translated documents and oral interpretation, free of charge 
and in a timely manner, when such services are necessary to provide 
meaningful access to individuals with limited English proficiency;
    (4) How to obtain the aids and services in paragraphs (a)(2) and 
(3) of this section;
    (5) An identification of, and contact information for, the 
responsible employee designated pursuant to Sec.  92.7(a), if 
applicable;
    (6) The availability of the grievance procedure and how to file a 
grievance, pursuant to Sec.  92.7(b), if applicable; and
    (7) How to file a discrimination complaint with OCR in the 
Department.
    (b) Within 90 days of the effective date of this part, each covered 
entity shall:
    (1) As described in paragraph (f)(1) of this section, post a notice 
that conveys the information in paragraphs (a)(1) through (7) of this 
section; and
    (2) As described in paragraph (g)(1) of this section, if 
applicable, post a nondiscrimination statement that conveys the 
information in paragraph (a)(1) of this section.
    (c) For use by covered entities, the Director shall make available, 
electronically and in any other manner that the Director determines 
appropriate, the content of a sample notice that conveys the 
information in paragraphs (a)(1) through (7) of this section, and the 
content of a sample nondiscrimination statement that conveys the 
information in paragraph (a)(1) of this section, in English and in the 
languages triggered by the obligation in paragraph (d)(1) of this 
section.
    (d) Within 90 days of the effective date of this part, each covered 
entity shall:
    (1) As described in paragraph (f)(1) of this section, post taglines 
in at least the top 15 languages spoken by individuals with limited 
English proficiency of the relevant State or States; and
    (2) As described in paragraph (g)(2) of this section, if 
applicable, post taglines in at least the top two languages spoken by 
individuals with limited English proficiency of the relevant State or 
States.
    (e) For use by covered entities, the Director shall make available, 
electronically and in any other manner that the Director determines 
appropriate, taglines in the languages triggered by the obligation in 
paragraph (d)(1) of this section.
    (f)(1) Each covered entity shall post the notice required by 
paragraph (a) of this section and the taglines required by paragraph 
(d)(1) of this section in a conspicuously-visible font size:
    (i) In significant publications and significant communications 
targeted to beneficiaries, enrollees, applicants, and members of the 
public, except for significant publications and significant 
communications that are small-sized, such as postcards and tri-fold 
brochures;
    (ii) In conspicuous physical locations where the entity interacts 
with the public; and
    (iii) In a conspicuous location on the covered entity's Web site 
accessible from the home page of the covered entity's Web site.
    (2) A covered entity may also post the notice and taglines in 
additional publications and communications.
    (g) Each covered entity shall post, in a conspicuously-visible font 
size, in significant publications and significant communications that 
are small-sized, such as postcards and tri-fold brochures:
    (1) The nondiscrimination statement required by paragraph (b)(2) of 
this section; and
    (2) The taglines required by paragraph (d)(2) of this section.
    (h) A covered entity may combine the content of the notice required 
in paragraph (a) of this section with the content of other notices if 
the combined notice clearly informs individuals of their civil rights 
under Section 1557 and this part.

Subpart B--Nondiscrimination Provisions


Sec.  92.101  Discrimination prohibited.

    (a) General. (1) Except as provided in Title I of the ACA, an 
individual shall not, on the basis of race, color, national origin, 
sex, age, or disability, be excluded from participation in, be denied 
the benefits of, or otherwise be subjected to discrimination under any 
health program or activity to which this part applies.
    (2) This part does not apply to employment, except as provided in 
Sec.  92.208.
    (b) Specific discriminatory actions prohibited. Under any health 
program or activity to which this part applies:
    (1)(i) Each covered entity must comply with the regulation 
implementing Title VI, at Sec.  80.3(b)(1) through (6) of this 
subchapter.
    (ii) No covered entity shall, on the basis of race, color, or 
national origin, aid or perpetuate discrimination against any person by 
providing significant assistance to any entity or person that 
discriminates on the basis of race, color, or national origin in 
providing any aid, benefit, or service to beneficiaries of the covered 
entity's health program or activity.

[[Page 31470]]

    (2)(i) Each recipient and State-based Marketplace\SM\ must comply 
with the regulation implementing Section 504, at Sec. Sec.  84.4(b), 
84.21 through 84.23(b), 84.31, 84.34, 84.37, 84.38, and 84.41 through 
84.52(c) and 84.53 through 84.55 of this subchapter. Where this 
paragraph cross-references regulatory provisions that use the term 
``recipient,'' the term ``recipient or State-based Marketplace\SM\'' 
shall apply in its place.
    (ii) The Department, including the Federally-facilitated 
Marketplaces, must comply with the regulation implementing Section 504, 
at Sec. Sec.  85.21(b), 85.41 through 85.42, and 85.44 through 85.51 of 
this subchapter.
    (3)(i) Each covered entity must comply with the regulation 
implementing Title IX, at Sec.  86.31(b)(1) through (8) of this 
subchapter. Where this paragraph cross-references regulatory provisions 
that use the term ``student,'' ``employee,'' or ``applicant,'' these 
terms shall be replaced with ``individual.''
    (ii) A covered entity may not, directly or through contractual or 
other arrangements, utilize criteria or methods of administration that 
have the effect of subjecting individuals to discrimination on the 
basis of sex, or have the effect of defeating or substantially 
impairing accomplishment of the objectives of the program with respect 
to individuals on the basis of sex.
    (iii) In determining the site or location of a facility, a covered 
entity may not make selections that have the effect of excluding 
individuals from, denying them the benefits of, or subjecting them to 
discrimination under any programs to which this regulation applies, on 
the basis of sex; or with the purpose or effect of defeating or 
substantially impairing the accomplishment of the objectives of the 
program or activity on the basis of sex.
    (iv) A covered entity may operate a sex-specific health program or 
activity (a health program or activity that is restricted to members of 
one sex) only if the covered entity can demonstrate an exceedingly 
persuasive justification, that is, that the sex-specific health program 
or activity is substantially related to the achievement of an important 
health-related or scientific objective.
    (4)(i) Each covered entity must comply with the regulation 
implementing the Age Act, at Sec.  91.11(b) of this subchapter.
    (ii) No covered entity shall, on the basis of age, aid or 
perpetuate discrimination against any person by providing significant 
assistance to any agency, organization, or person that discriminates on 
the basis of age in providing any aid, benefit, or service to 
beneficiaries of the covered entity's health program or activity.
    (5) The enumeration of specific forms of discrimination in this 
paragraph does not limit the generality of the prohibition in paragraph 
(a) of this section.
    (c) The exceptions applicable to Title VI apply to discrimination 
on the basis of race, color, or national origin under this part. The 
exceptions applicable to Section 504 apply to discrimination on the 
basis of disability under this part. The exceptions applicable to the 
Age Act apply to discrimination on the basis of age under this part. 
These provisions are found at Sec. Sec.  80.3(d), 84.4(c), 85.21(c), 
91.12, 91.15, and 91.17-.18 of this subchapter.
    (d) Where the regulatory provisions referenced in paragraphs 
(b)(1), (b)(3), and (b)(4), and paragraph (c) of this section use the 
term ``recipient,'' the term ``covered entity'' shall apply in its 
place. Where the regulatory provisions referenced in paragraphs (b)(1), 
(b)(3), and (b)(4) and paragraph (c) of this section use the terms 
``program or activity'' or ``program'' or ``education program,'' the 
term ``health program or activity'' shall apply in their place.

Subpart C--Specific Applications to Health Programs and Activities


Sec.  92.201  Meaningful access for individuals with limited English 
proficiency.

    (a) General requirement. A covered entity shall take reasonable 
steps to provide meaningful access to each individual with limited 
English proficiency eligible to be served or likely to be encountered 
in its health programs and activities.
    (b) Evaluation of compliance. In evaluating whether a covered 
entity has met its obligation under paragraph (a) of this section, the 
Director shall:
    (1) Evaluate, and give substantial weight to, the nature and 
importance of the health program or activity and the particular 
communication at issue, to the individual with limited English 
proficiency; and
    (2) Take into account other relevant factors, including whether a 
covered entity has developed and implemented an effective written 
language access plan, that is appropriate to its particular 
circumstances, to be prepared to meet its obligations in Sec.  
92.201(a).
    (c) Language assistance services requirements. Language assistance 
services required under paragraph (a) of this section must be provided 
free of charge, be accurate and timely, and protect the privacy and 
independence of the individual with limited English proficiency.
    (d) Specific requirements for interpreter and translation services. 
Subject to paragraph (a) of this section:
    (1) A covered entity shall offer a qualified interpreter to an 
individual with limited English proficiency when oral interpretation is 
a reasonable step to provide meaningful access for that individual with 
limited English proficiency; and
    (2) A covered entity shall use a qualified translator when 
translating written content in paper or electronic form.
    (e) Restricted use of certain persons to interpret or facilitate 
communication. A covered entity shall not:
    (1) Require an individual with limited English proficiency to 
provide his or her own interpreter;
    (2) Rely on an adult accompanying an individual with limited 
English proficiency to interpret or facilitate communication, except:
    (i) In an emergency involving an imminent threat to the safety or 
welfare of an individual or the public where there is no qualified 
interpreter for the individual with limited English proficiency 
immediately available; or
    (ii) Where the individual with limited English proficiency 
specifically requests that the accompanying adult interpret or 
facilitate communication, the accompanying adult agrees to provide such 
assistance, and reliance on that adult for such assistance is 
appropriate under the circumstances;
    (3) Rely on a minor child to interpret or facilitate communication, 
except in an emergency involving an imminent threat to the safety or 
welfare of an individual or the public where there is no qualified 
interpreter for the individual with limited English proficiency 
immediately available; or
    (4) Rely on staff other than qualified bilingual/multilingual staff 
to communicate directly with individuals with limited English 
proficiency.
    (f) Video remote interpreting services. A covered entity that 
provides a qualified interpreter for an individual with limited English 
proficiency through video remote interpreting services in the covered 
entity's health programs and activities shall provide:
    (1) Real-time, full-motion video and audio over a dedicated high-
speed, wide-bandwidth video connection or wireless connection that 
delivers high-quality video images that do not produce lags, choppy, 
blurry, or grainy images, or irregular pauses in communication;
    (2) A sharply delineated image that is large enough to display the 
interpreter's

[[Page 31471]]

face and the participating individual's face regardless of the 
individual's body position;
    (3) A clear, audible transmission of voices; and
    (4) Adequate training to users of the technology and other involved 
individuals so that they may quickly and efficiently set up and operate 
the video remote interpreting.
    (g) Acceptance of language assistance services is not required. 
Nothing in this section shall be construed to require an individual 
with limited English proficiency to accept language assistance 
services.


Sec.  92.202  Effective communication for individuals with 
disabilities.

    (a) A covered entity shall take appropriate steps to ensure that 
communications with individuals with disabilities are as effective as 
communications with others in health programs and activities, in 
accordance with the standards found at 28 CFR 35.160 through 35.164. 
Where the regulatory provisions referenced in this section use the term 
``public entity,'' the term ``covered entity'' shall apply in its 
place.
    (b) A recipient or State-based Marketplace\SM\ shall provide 
appropriate auxiliary aids and services to persons with impaired 
sensory, manual, or speaking skills, where necessary to afford such 
persons an equal opportunity to benefit from the service in question.


Sec.  92.203  Accessibility standards for buildings and facilities.

    (a) Each facility or part of a facility in which health programs or 
activities are conducted that is constructed or altered by or on behalf 
of, or for the use of, a recipient or State-based Marketplace\SM\ shall 
comply with the 2010 Standards as defined in Sec.  92.4, if the 
construction or alteration was commenced on or after July 18, 2016, 
except that if a facility or part of a facility in which health 
programs or activities are conducted that is constructed or altered by 
or on behalf of, or for the use of, a recipient or State-based 
Marketplace\SM\, was not covered by the 2010 Standards prior to July 
18, 2016, such facility or part of a facility shall comply with the 
2010 Standards, as defined in Sec.  92.4, if the construction was 
commenced after January 18, 2018. Departures from particular technical 
and scoping requirements by the use of other methods are permitted 
where substantially equivalent or greater access to and usability of 
the facility is provided. All newly constructed or altered buildings or 
facilities subject to this section shall comply with the requirements 
for a ``public building or facility'' as defined in Section 106.5 of 
the 2010 Standards.
    (b) Each facility or part of a facility in which health programs or 
activities are conducted that is constructed or altered by or on behalf 
of, or for the use of, a recipient or State-based Marketplace\SM\ in 
conformance with the 1991 Standards or the 2010 Standards as defined in 
Sec.  92.4 shall be deemed to comply with the requirements of this 
section and with 45 CFR 84.23(a) and (b), cross-referenced in Sec.  
92.101(b)(2)(i) with respect to those facilities, if the construction 
or alteration was commenced on or before July 18, 2016. Each facility 
or part of a facility in which health programs or activities are 
conducted that is constructed or altered by or on behalf of, or for the 
use of, a recipient or State-based Marketplace\SM\ in conformance with 
the Uniform Federal Accessibility Standards as defined in Sec.  92.4, 
shall be deemed to comply with the requirements of this section and 
with 45 CFR 84.23(a) and (b), cross-referenced in Sec.  92.101(b)(2)(i) 
with respect to those facilities, if the construction was commenced 
before July 18, 2016 and such facility was not covered by the 1991 
Standards or 2010 Standards.


Sec.  92.204  Accessibility of electronic and information technology.

    (a) Covered entities shall ensure that their health programs or 
activities provided through electronic and information technology are 
accessible to individuals with disabilities, unless doing so would 
result in undue financial and administrative burdens or a fundamental 
alteration in the nature of the health programs or activities. When 
undue financial and administrative burdens or a fundamental alteration 
exist, the covered entity shall provide information in a format other 
than an electronic format that would not result in such undue financial 
and administrative burdens or a fundamental alteration but would 
ensure, to the maximum extent possible, that individuals with 
disabilities receive the benefits or services of the health program or 
activity that are provided through electronic and information 
technology.
    (b) Recipients and State-based Marketplaces shall ensure that their 
health programs and activities provided through Web sites comply with 
the requirements of Title II of the ADA.


Sec.  92.205  Requirement to make reasonable modifications.

    A covered entity shall make reasonable modifications to policies, 
practices, or procedures when such modifications are necessary to avoid 
discrimination on the basis of disability, unless the covered entity 
can demonstrate that making the modifications would fundamentally alter 
the nature of the health program or activity. For the purposes of this 
section, the term ``reasonable modifications'' shall be interpreted in 
a manner consistent with the term as set forth in the ADA Title II 
regulation at 28 CFR 35.130(b)(7).


Sec.  92.206  Equal program access on the basis of sex.

    A covered entity shall provide individuals equal access to its 
health programs or activities without discrimination on the basis of 
sex; and a covered entity shall treat individuals consistent with their 
gender identity, except that a covered entity may not deny or limit 
health services that are ordinarily or exclusively available to 
individuals of one sex, to a transgender individual based on the fact 
that the individual's sex assigned at birth, gender identity, or gender 
otherwise recorded is different from the one to which such health 
services are ordinarily or exclusively available.


Sec.  92.207  Nondiscrimination in health-related insurance and other 
health-related coverage.

    (a) General. A covered entity shall not, in providing or 
administering health-related insurance or other health-related 
coverage, discriminate on the basis of race, color, national origin, 
sex, age, or disability.
    (b) Discriminatory actions prohibited. A covered entity shall not, 
in providing or administering health-related insurance or other health-
related coverage:
    (1) Deny, cancel, limit, or refuse to issue or renew a health-
related insurance plan or policy or other health-related coverage, or 
deny or limit coverage of a claim, or impose additional cost sharing or 
other limitations or restrictions on coverage, on the basis of race, 
color, national origin, sex, age, or disability;
    (2) Have or implement marketing practices or benefit designs that 
discriminate on the basis of race, color, national origin, sex, age, or 
disability in a health-related insurance plan or policy, or other 
health-related coverage;
    (3) Deny or limit coverage, deny or limit coverage of a claim, or 
impose additional cost sharing or other

[[Page 31472]]

limitations or restrictions on coverage, for any health services that 
are ordinarily or exclusively available to individuals of one sex, to a 
transgender individual based on the fact that an individual's sex 
assigned at birth, gender identity, or gender otherwise recorded is 
different from the one to which such health services are ordinarily or 
exclusively available;
    (4) Have or implement a categorical coverage exclusion or 
limitation for all health services related to gender transition; or
    (5) Otherwise deny or limit coverage, deny or limit coverage of a 
claim, or impose additional cost sharing or other limitations or 
restrictions on coverage, for specific health services related to 
gender transition if such denial, limitation, or restriction results in 
discrimination against a transgender individual.
    (c) The enumeration of specific forms of discrimination in 
paragraph (b) does not limit the general applicability of the 
prohibition in paragraph (a) of this section.
    (d) Nothing in this section is intended to determine, or restrict a 
covered entity from determining, whether a particular health service is 
medically necessary or otherwise meets applicable coverage requirements 
in any individual case.


Sec.  92.208  Employer liability for discrimination in employee health 
benefit programs.

    A covered entity that provides an employee health benefit program 
to its employees and/or their dependents shall be liable for violations 
of this part in that employee health benefit program only when:
    (a) The entity is principally engaged in providing or administering 
health services, health insurance coverage, or other health coverage;
    (b) The entity receives Federal financial assistance a primary 
objective of which is to fund the entity's employee health benefit 
program; or
    (c) The entity is not principally engaged in providing or 
administering health services, health insurance coverage, or other 
health coverage, but operates a health program or activity, which is 
not an employee health benefit program, that receives Federal financial 
assistance; except that the entity is liable under this part with 
regard to the provision or administration of employee health benefits 
only with respect to the employees in that health program or activity.


Sec.  92.209  Nondiscrimination on the basis of association.

    A covered entity shall not exclude from participation in, deny the 
benefits of, or otherwise discriminate against an individual or entity 
in its health programs or activities on the basis of the race, color, 
national origin, sex, age, or disability of an individual with whom the 
individual or entity is known or believed to have a relationship or 
association.

Subpart D--Procedures


Sec.  92.301  Enforcement mechanisms.

    (a) The enforcement mechanisms available for and provided under 
Title VI of the Civil Rights Act of 1964, Title IX of the Education 
Amendments of 1972, Section 504 of the Rehabilitation Act of 1973, or 
the Age Discrimination Act of 1975 shall apply for purposes of Section 
1557 as implemented by this part.
    (b) Compensatory damages for violations of Section 1557 are 
available in appropriate administrative and judicial actions brought 
under this rule.


Sec.  92.302  Procedures for health programs and activities conducted 
by recipients and State-based Marketplaces.

    (a) The procedural provisions applicable to Title VI apply with 
respect to administrative enforcement actions concerning discrimination 
on the basis of race, color, national, origin, sex, and disability 
discrimination under Section 1557 or this part. These procedures are 
found at Sec. Sec.  80.6 through 80.11 of this subchapter and part 81 
of this subchapter.
    (b) The procedural provisions applicable to the Age Act apply with 
respect to enforcement actions concerning age discrimination under 
Section 1557 or this part. These procedures are found at Sec. Sec.  
91.41 through 91.50 of this subchapter.
    (c) When a recipient fails to provide OCR with requested 
information in a timely, complete, and accurate manner, OCR may find 
noncompliance with Section 1557 and initiate appropriate enforcement 
procedures, including beginning the process for fund suspension or 
termination and taking other action authorized by law.
    (d) An individual or entity may bring a civil action to challenge a 
violation of Section 1557 or this part in a United States District 
Court in which the recipient or State-based Marketplace \SM\ is found 
or transacts business.


Sec.  92.303  Procedures for health programs and activities 
administered by the Department.

    (a) This section applies to discrimination on the basis of race, 
color, national origin, sex, age, or disability in health programs or 
activities administered by the Department, including the Federally-
facilitated Marketplaces.
    (b) The procedural provisions applicable to Section 504 at 
Sec. Sec.  85.61 through 85.62 of this subchapter shall apply with 
respect to enforcement actions against the Department concerning 
discrimination on the basis of race, color, national origin, sex, age, 
or disability under Section 1557 or this part. Where this section 
cross-references regulatory provisions that use the term ``handicap,'' 
the term ``race, color, national origin, sex, age, or disability'' 
shall apply in its place.
    (c) The Department shall permit access by OCR to its books, 
records, accounts, other sources of information, and facilities as may 
be pertinent to ascertain compliance with Section 1557 or this part. 
Where any information required of the Department is in the exclusive 
possession of any other agency, institution or individual, and the 
other agency, institution or individual shall fail or refuse to furnish 
this information, the Department shall so certify and shall set forth 
what efforts it has made to obtain the information. Asserted 
considerations of privacy or confidentiality may not operate to bar OCR 
from evaluating or seeking to enforce compliance with Section 1557 or 
this part. Information of a confidential nature obtained in connection 
with compliance evaluation or enforcement shall not be disclosed except 
where necessary under the law.
    (d) The Department shall not intimidate, threaten, coerce, or 
discriminate against any individual for the purpose of interfering with 
any right or privilege secured by Section 1557 or this part, or because 
such individual has made a complaint, testified, assisted, or 
participated in any manner in an investigation, proceeding or hearing 
under Section 1557 or this part. The identity of complainants shall be 
kept confidential by OCR, except to the extent necessary to carry out 
the purposes of Section 1557 or this part.

Appendix A to Part 92--Sample Notice Informing Individuals About 
Nondiscrimination and Accessibility Requirements and Sample 
Nondiscrimination Statement: Discrimination is Against the Law

    [Name of covered entity] complies with applicable Federal civil 
rights laws and does not discriminate on the basis of race, color, 
national origin, age, disability, or sex. [Name of covered entity] 
does not exclude people or treat them differently because of race, 
color, national origin, age, disability, or sex.
    [Name of covered entity]:
     Provides free aids and services to people with 
disabilities to communicate effectively with us, such as:

[[Page 31473]]

    [cir] Qualified sign language interpreters
    [cir] Written information in other formats (large print, audio, 
accessible electronic formats, other formats)
     Provides free language services to people whose primary 
language is not English, such as:
    [cir] Qualified interpreters
    [cir] Information written in other languages
    If you need these services, contact [Name of Civil Rights 
Coordinator]
    If you believe that [Name of covered entity] has failed to 
provide these services or discriminated in another way on the basis 
of race, color, national origin, age, disability, or sex, you can 
file a grievance with: [Name and Title of Civil Rights Coordinator], 
[Mailing Address], [Telephone number ], [TTY number--if covered 
entity has one], [Fax], [Email]. You can file a grievance in person 
or by mail, fax, or email. If you need help filing a grievance, 
[Name and Title of Civil Rights Coordinator] is available to help 
you. You can also file a civil rights complaint with the U.S. 
Department of Health and Human Services, Office for Civil Rights 
electronically through the Office for Civil Rights Complaint Portal, 
available at https://ocrportal.hhs.gov/ocr/portal/lobby.jsf, or by 
mail or phone at: U.S. Department of Health and Human Services, 200 
Independence Avenue SW., Room 509F, HHH Building, Washington, DC 
20201, 1-800-868-1019, 800-537-7697 (TDD).
    Complaint forms are available at https://www.hhs.gov/ocr/office/file/.
    Nondiscrimination statement for significant publications and 
signification communications that are small-size:
    [Name of covered entity] complies with applicable Federal civil 
rights laws and does not discriminate on the basis of race, color, 
national origin, age, disability, or sex.

Appendix B to Part 92--Sample Tagline Informing Individuals With 
Limited English Proficiency of Language Assistance Services

    ATTENTION: If you speak [insert language], language assistance 
services, free of charge, are available to you. Call 1-xxx-xxx-xxxx 
(TTY: 1-xxx-xxx-xxxx).

Appendix C to Part 92--Sample Section 1557 of the Affordable Care Act 
Grievance Procedure

    It is the policy of [Name of Covered Entity] not to discriminate 
on the basis of race, color, national origin, sex, age or 
disability. [Name of Covered Entity] has adopted an internal 
grievance procedure providing for prompt and equitable resolution of 
complaints alleging any action prohibited by Section 1557 of the 
Affordable Care Act (42 U.S.C. 18116) and its implementing 
regulations at 45 CFR part 92, issued by the U.S. Department of 
Health and Human Services. Section 1557 prohibits discrimination on 
the basis of race, color, national origin, sex, age or disability in 
certain health programs and activities. Section 1557 and its 
implementing regulations may be examined in the office of [Name and 
Title of Section 1557 Coordinator], [Mailing Address], [Telephone 
number], [TTY number--if covered entity has one], [Fax], [Email], 
who has been designated to coordinate the efforts of [Name of 
Covered Entity] to comply with Section 1557.
    Any person who believes someone has been subjected to 
discrimination on the basis of race, color, national origin, sex, 
age or disability may file a grievance under this procedure. It is 
against the law for [Name of Covered Entity] to retaliate against 
anyone who opposes discrimination, files a grievance, or 
participates in the investigation of a grievance.
    Procedure:
     Grievances must be submitted to the Section 1557 
Coordinator within (60 days) of the date the person filing the 
grievance becomes aware of the alleged discriminatory action.
     A complaint must be in writing, containing the name and 
address of the person filing it. The complaint must state the 
problem or action alleged to be discriminatory and the remedy or 
relief sought.
     The Section 1557 Coordinator (or her/his designee) 
shall conduct an investigation of the complaint. This investigation 
may be informal, but it will be thorough, affording all interested 
persons an opportunity to submit evidence relevant to the complaint. 
The Section 1557 Coordinator will maintain the files and records of 
[Name of Covered Entity] relating to such grievances. To the extent 
possible, and in accordance with applicable law, the Section 1557 
Coordinator will take appropriate steps to preserve the 
confidentiality of files and records relating to grievances and will 
share them only with those who have a need to know.
     The Section 1557 Coordinator will issue a written 
decision on the grievance, based on a preponderance of the evidence, 
no later than 30 days after its filing, including a notice to the 
complainant of their right to pursue further administrative or legal 
remedies.
     The person filing the grievance may appeal the decision 
of the Section 1557 Coordinator by writing to the (Administrator/
Chief Executive Officer/Board of Directors/etc.) within 15 days of 
receiving the Section 1557 Coordinator's decision. The 
(Administrator/Chief Executive Officer/Board of Directors/etc.) 
shall issue a written decision in response to the appeal no later 
than 30 days after its filing.
    The availability and use of this grievance procedure does not 
prevent a person from pursuing other legal or administrative 
remedies, including filing a complaint of discrimination on the 
basis of race, color, national origin, sex, age or disability in 
court or with the U.S. Department of Health and Human Services, 
Office for Civil Rights. A person can file a complaint of 
discrimination electronically through the Office for Civil Rights 
Complaint Portal, which is available at: https://ocrportal.hhs.gov/ocr/portal/lobby.jsf, or by mail or phone at: U.S. Department of 
Health and Human Services, 200 Independence Avenue SW., Room 509F, 
HHH Building, Washington, DC 20201.
    Complaint forms are available at: https://www.hhs.gov/ocr/office/file/. Such complaints must be filed within 180 days of 
the date of the alleged discrimination.
    [Name of covered entity] will make appropriate arrangements to 
ensure that individuals with disabilities and individuals with 
limited English proficiency are provided auxiliary aids and services 
or language assistance services, respectively, if needed to 
participate in this grievance process. Such arrangements may 
include, but are not limited to, providing qualified interpreters, 
providing taped cassettes of material for individuals with low 
vision, or assuring a barrier-free location for the proceedings. The 
Section 1557 Coordinator will be responsible for such arrangements.

    Dated: May 11, 2016.
Sylvia M. Burwell,
Secretary.
[FR Doc. 2016-11458 Filed 5-13-16; 11:15 am]
 BILLING CODE 4153-01-P