[Federal Register Volume 84, Number 115 (Friday, June 14, 2019)]
[Proposed Rules]
[Pages 27846-27895]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-11512]



[[Page 27845]]

Vol. 84

Friday,

No. 115

June 14, 2019

Part II





 Department of Health and Human Services





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Centers for Medicare and Medicaid Services





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42 CFR Parts 438, 440 and 460

45 CFR Parts 86, 92, 147, et al.





Nondiscrimination in Health and Health Education Programs or 
Activities; Proposed Rule

  Federal Register / Vol. 84 , No. 115 / Friday, June 14, 2019 / 
Proposed Rules  

[[Page 27846]]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare and Medicaid Services

42 CFR Parts 438, 440, and 460

Office of the Secretary

45 CFR Parts 86, 92, 147, 155, and 156

[Docket No.: HHS-OCR-2019-0007]
RIN 0945-AA11


Nondiscrimination in Health and Health Education Programs or 
Activities

AGENCY: Centers for Medicare and Medicaid; Office for Civil Rights 
(OCR), Office of the Secretary, HHS.

ACTION: Proposed rule.

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SUMMARY: The Department of Health and Human Services (``the 
Department'') is committed to ensuring the civil rights of all 
individuals who access or seek to access health programs or activities 
of covered entities under Section 1557 of the Patient Protection and 
Affordable Care Act. The Department proposes to revise its Section 1557 
regulation in order to better comply with the mandates of Congress, 
address legal concerns, relieve billions of dollars in undue regulatory 
burdens, further substantive compliance, reduce confusion, and clarify 
the scope of Section 1557 in keeping with pre-existing civil rights 
statutes and regulations prohibiting discrimination on the basis of 
race, color, national origin, sex, age, and disability.

DATES: Submit comments on or before August 13, 2019.

ADDRESSES: You may submit comments to this proposed rule, identified by 
RIN 0945-AA11, by any of the following methods:
     Federal eRulemaking Portal: You may submit electronic 
comments at http://www.regulations.gov by searching for the Docket ID 
number HHS-OCR-2019-0007. Follow the instructions at http://www.regulations.gov online for submitting comments through this method.
     Regular, Express, or Overnight Mail: You may mail comments 
to U.S. Department of Health and Human Services, Office for Civil 
Rights, Attention: Section 1557 NPRM, RIN 0945-AA11, Hubert H. Humphrey 
Building, Room 509F, 200 Independence Avenue SW, Washington, DC 20201.
     Hand Delivery/Courier: You may hand deliver comments to 
the U.S. Department of Health and Human Services, Office for Civil 
Rights, Attention: Section 1557 NPRM, RIN 0945-AA11, Hubert H. Humphrey 
Building, Room 509F, 200 Independence Avenue SW, Washington, DC 20201.
    All comments received by the methods and due date specified above 
will be posted without change to http://www.regulations.gov, including 
any personal information provided, and such posting may occur before or 
after the closing of the comment period.
    We will consider all comments received by the date and time 
specified in the DATES section above, but, because of the large number 
of public comments we normally receive on Federal Register documents, 
we are not able to provide individual acknowledgements of receipt.
    Please allow sufficient time for mailed comments to be timely 
received in the event of delivery or security delays. Because access to 
the interior of the Hubert H. Humphrey Building is not readily 
available to persons without Federal government identification, 
commenters are encouraged to leave their comments in the mail drop 
slots located in the lobby of the building. Electronic comments with 
attachments should be in Microsoft Word or Excel; however, we prefer 
Microsoft Word.
    Please note that comments submitted by fax or email and those 
submitted after the comment period will not be accepted.
    Docket: For complete access to background documents or posted 
comments, go to http://www.regulations.gov and search for Docket ID 
number HHS-OCR-2019-0007.

FOR FURTHER INFORMATION CONTACT: Luben Montoya, Supervisory Civil 
Rights Analyst, HHS Office for Civil Rights at (800) 368-1019 or (800) 
537-7697 (TDD).

SUPPLEMENTARY INFORMATION: 

Table of Contents

I. Executive Summary
    A. Background on Section 1557 and Its Rulemaking
    B. Litigation Challenging the Section 1557 Regulation
    C. Summary of the Proposed Rule
    D. Cost-Effective Design of the Proposed Rule
II. Reasons for the Proposed Rulemaking
    A. Section 1557 of the PPACA Does Not Prevent or Limit 
Reconsideration of the Current Rule
    B. The Final Rule Adopted Novel and Inconsistent Legal 
Interpretations of Long-Standing Civil Rights Law
    1. The Final Rule Interpreted the Scope of Section 1557 Too 
Broadly
    2. The Final Rule Improperly Blended Substantive Requirements 
and Enforcement Mechanisms of the Underlying Statutes
    3. The Final Rule Inconsistently Applied Federal 
Nondiscrimination Law
    4. The Final Rule Created New Provisions Concerning Language 
Access Requirements Not Adequately Justified by Law or Policy
    5. The Final Rule's Definition of Discrimination ``On the Basis 
of Sex'' Has Been Enjoined by Federal Courts
    a. Background on Title IX of the Education Amendments
    b. HHS's Title IX Regulations
    c. Need for Consistency Among Components of HHS
    d. Pending Federal Litigation Over Section 1557 Regulation, 
Title IX, and Title VII
    e. HHS's Inconsistency With Other Federal Departments
    f. Need for Consistency With the Department of Justice on 
Implementation and Enforcement of Nondiscrimination Laws
    g. Clarity and Sensitive Balancing of Competing Interests at the 
Local Level
    C. The Costs of the Final Rule Were Unnecessary and Unjustified
    1. The Section 1557 Regulation Imposed Substantially Higher 
Regulatory Costs Than Predicted
    2. The Section 1557 Regulation's Burdens Are Not Justified by 
Need
III. Nondiscrimination in Health Programs and Activities
    Provisions of the Proposed Section 1557 Rule at 45 CFR part 92
    Proposed ``Subpart A--General Provisions''
    Proposed ``45 CFR 92.1 Purpose.''
    Proposed ``45 CFR 92.2 Nondiscrimination requirements.''
    Proposed ``45 CFR 92.3 Scope of application.''
    Proposed ``45 CFR 92.4 Assurances.''
    Proposed ``45 CFR 92.5 Enforcement mechanisms.''
    Proposed ``45 CFR 92.6 Relationship to other laws.''
    Proposed ``Subpart B--Specific Application to Health Programs or 
Activities''
    Proposed ``45 CFR 92.101 Meaningful access for individuals with 
limited English proficiency.''
    Proposed ``45 CFR 92.102 Effective communication for individuals 
with disabilities.''
    Proposed ``45 CFR 92.103 Accessibility standards for buildings 
and facilities.''
    Proposed ``45 CFR 92.104 Accessibility of information and 
communication technology.''
    Proposed ``45 CFR 92.105 Requirement to make reasonable 
modifications.''
    Request for Comments on Proposed 45 CFR 92.102 Through 92.105
    B. Current Section 1557 Regulation Provisions Proposed for 
Repeal or Reconsideration
    1. Taglines, Notices, Language Access Plans, and Video 
Interpretation Standards
    2. Redundant Provisions Duplicative of Pre-Existing Regulations

[[Page 27847]]

IV. Need for Conforming Amendments
    A. Nondiscrimination in Education Programs or Activities
    Proposed ``45 CFR 86.18 Amendments to conform to statutory 
exemptions.''
    B. Proposed Conforming Amendments
    C. Technical Amendments
V. Interim Treatment of Subregulatory Guidance
VI. Regulatory Impact Analysis
    A. Executive Orders 12866 and Related Executive Orders on 
Regulatory Review
    1. Summary of the Proposed Rule
    2. Need for the Proposed Rule
    3. Consideration of Regulatory Alternatives
    4. Considerations for Cost-Effective Design
    5. Methodology for Cost-Benefit Analysis
    6. Cost-Benefit Analysis
    a. Overview
    b. Generally Applicable Tangible and Intangible Benefits and 
Burdens
    c. Baseline Assumptions
    d. Covered Entities
    (1) Entities Covered by Section 1557
    (a) Entities With a Health Program or Activity, Any Part of 
Which Receives Federal Financial Assistance From the Department
    (b) Programs or Activities Administered by the Department Under 
Title I of the PPACA
    (c) Entities Established Under Title I of PPACA
    (2) Entities Covered by Title IX
    e. Cost Savings From Eliminating Notice and Taglines Requirement
    f. Cost Arising From Removal of Notice and Taglines Requirement
    g. Cost Savings From Changes to Language Access Plan Provisions
    h. Cost Savings Attributed to Covered Entities' Handling of 
Certain Grievances
    i. Additional Costs for Training and Familiarization Under the 
Proposed Rule
    (1) Number of Covered Entities That May Train Workers
    (2) Number of Individuals Who Will Receive Training
    (3) Total Cost of Training
    j. Additional Costs for Revising Policies and Procedures
    k. Other Costs Due to Reversion to Previous Practices
    l. Other Benefits or Costs
    7. Impact on State, Local, and Tribal Entities Under Executive 
Orders 12866, 13132, and 13175
    a. State and Local Governments
    b. Tribal Governments
    8. Avoidance of Inconsistent, Incompatible, or Duplicative 
Regulations
    B. Executive Order 13771 on Reducing and Controlling Regulatory 
Costs
    C. Congressional Review Act
    D. Unfunded Mandates Reform Act
    E. Regulatory Flexibility Act and Executive Order 13272 on 
Proper Consideration of Small Entities in Agency Rulemaking
    F. Executive Order 12250 on Leadership and Coordination of 
Nondiscrimination Laws
    G. Paperwork Reduction Act
VII. Effective Date
VIII. Delegation of Authority
IX. Request for Comment

I. Executive Summary

A. Background on Section 1557 and Its Rulemaking

    Section 1557 of the Patient Protection and Affordable Care Act 
(``PPACA'') \1\ prohibits discrimination on the basis of race, color, 
national origin, sex, age, or disability under any health program or 
activity that receives Federal financial assistance, or under any 
program or activity that is administered by an executive agency under 
Title I of the PPACA or by an entity established under such Title. 
Section 1557 cites Title VI of the Civil Rights Act of 1964 (42 U.S.C. 
2000d et seq.) (``Title VI''), Title IX of the Education Amendments of 
1972 (20 U.S.C. 1681 et seq.) (``Title IX''), the Age Discrimination 
Act of 1975 (42 U.S.C. 6101 et seq.) (``Age Act''), and Section 504 of 
the Rehabilitation Act of 1973 (29 U.S.C. 794) (``Section 504'').\2\ It 
further states that ``[t]he enforcement mechanisms provided for and 
available'' under those laws ``shall apply for purposes of violations'' 
of Section 1557.\3\
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    \1\ Patient Protection and Affordable Care Act, Public Law 111-
148, sec. 1557, 124 Stat. 119, 260 (Mar. 23, 2010) (codified at 42 
U.S.C. 18116). In this Notice of Proposed Rulemaking, we refer 
interchangeably to Section 1557 and 42 U.S.C. 18116.
    \2\ While Section 1557 does not incorporate nondiscrimination 
provisions by reference to Title VII, it provides that nothing in 
Title I of the PPACA is to be construed as invalidating or limiting 
the rights, remedies, procedures, or legal standards available under 
certain civil rights laws, and mentions Title VII specifically. 42 
U.S.C. 18116(b).
    \3\ 42 U.S.C. 18116(a).
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    Section 1557 authorizes, but does not require, the Secretary of 
Health and Human Services (``Secretary'') to promulgate regulations 
implementing Section 1557's nondiscrimination requirements.\4\
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    \4\ 42 U.S.C. 18116(c).
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    On August 1, 2013, the Department issued a Request for Information 
(RFI) soliciting input on regulations under Section 1557. 78 FR 46558. 
Thereafter, on September 8, 2015, the Department issued a Notice of 
Proposed Rulemaking (NPRM) to add a new part 92 to Title 45 of the Code 
of Federal Regulations and thereby impose numerous new requirements on 
covered entities.\5\ 80 FR 54172.
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    \5\ See 45 CFR 92.4 (``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 PPACA that administers a health program or activity; and 
(3) The Department.'').
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    On May 18, 2016, the Department finalized its proposed regulations 
for Section 1557 in 45 CFR part 92 (the ``Final Rule,'' ``current 
rule,'' or the ``Section 1557 Regulation''). 81 FR 31376.\6\ As noted 
above, Section 1557 bars discrimination on grounds prohibited under 
several civil rights statutes, including on the ground of sex under 
Title IX of the Education Amendments of 1972. In its Section 1557 
Regulation, the Department defined discrimination ``on the basis of 
sex'' to cover, among other things, discrimination on the basis of sex 
stereotyping, gender identity, and termination of pregnancy, but 
explicitly declined to include discrimination on the basis of sexual 
orientation. 81 FR 31390 (``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.''). As 
explained more fully below, the Final Rule, among other things, imposed 
specific requirements regarding language assistance services, multi-
language ``taglines,'' and nondiscrimination notices.
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    \6\ The Final Rule was later revised on July 18, 2016, when the 
Department issued a technical correction deleting an incorrect toll-
free telephone number to call the Department to file a civil rights 
complaint. 81 FR 46613 (July 18, 2016).
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    The Department estimated that, collectively, the Final Rule's new 
requirements, backed by the threat of enforcement action, would cost 
health care providers and other covered entities over $942.5 million in 
the first five years of implementation. 81 FR 31459.
    The Final Rule became effective on July 18, 2016, except to the 
extent that the Rule required changes to health insurance or group 
health plan benefits or benefit design, in which case the Final Rule 
applied on the first day of the first plan year that began on or after 
January 1, 2017. 45 CFR 92.1.
    On January 20, 2017, the President issued E.O. 13765 ``Minimizing 
the Economic Burden of the Patient Protection and Affordable Care Act 
Pending Repeal,'' that requires, among other things, ``[t]o the maximum 
extent permitted by law, the Secretary of Health and Human Services . . 
. shall exercise all authority and discretion available to [ ] waive, 
defer, grant exemptions from, or delay the implementation of any 
provision or requirement of the [PPACA] that would impose a fiscal 
burden on any State or a cost, fee, tax, penalty, or regulatory burden 
on individuals, families, healthcare providers, health insurers, 
patients, recipients of healthcare services, purchasers of health 
insurance, or makers of medical devices, products, or medications.'' 82 
FR 8351 (Jan. 24, 2017).

[[Page 27848]]

B. Litigation Challenging the Section 1557 Regulation

    Lawsuits challenging the regulations followed promulgation of the 
Final Rule. On August 23, 2016, the States of Texas, Wisconsin, 
Nebraska, Kentucky, and Kansas, along with three private health care 
providers, filed a complaint in the U.S. District Court for the 
Northern District of Texas challenging the Section 1557 Regulation. See 
Franciscan Alliance, Inc., et al. v. Burwell, et al., 227 F. Supp. 3d 
660 (N.D. Tex. 2016). The complaint stated that, ``by redefining a 
single word used in the Affordable Care Act . . . HHS has created a 
massive new liability for thousands of healthcare professionals unless 
they cast aside their medical judgment and perform controversial and 
even harmful medical transition procedures.'' Complaint, Franciscan 
Alliance, Inc., et al. v. Burwell, et al., No. 7:16-cv-00108-O (N.D. 
Tex. Aug. 23, 2016). Two other cases with similar objections were filed 
in the U.S. District Court for the District of North Dakota. Religious 
Sisters of Mercy, et al. v. Burwell, et al., No. 3:16-cv-386 (D.N.D. 
filed Nov. 7, 2016); Catholic Benefits Association, et al. v. Burwell, 
et al., No. 3:16-cv-432 (D.N.D. filed Dec. 28, 2016).\7\
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    \7\ Religious Sisters of Mercy, et al. v. Burwell, et al., No. 
3:16-cv-386; Catholic Benefits Association et al., v. Burwell, et 
al., No. 3:16-cv-432 (D.N.D. order of Jan. 23, 2017, consolidating 
North Dakota cases).
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    On December 31, 2016, the U.S. District Court in Franciscan 
Alliance issued a nationwide preliminary injunction against the 
Department, barring it from enforcing the Section 1557 Regulation's 
prohibition against discrimination on the basis of ``gender identity'' 
and ``termination of pregnancy.'' 227 F. Supp. 3d at 696. The district 
court held that the Department had adopted an erroneous interpretation 
of ``sex'' under Title IX, and that the regulation was also arbitrary 
and capricious for failing to incorporate Title IX's religious and 
abortion exemptions. Id. The district court concluded that the 
Department's interpretation was not entitled to deference under Chevron 
U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 
(1984), because ``the meaning of sex in Title IX unambiguously refers 
to the biological and anatomical differences between male and female 
students as determined at their birth.'' 227 F. Supp. 3d at 687 
(citations omitted).
    The Franciscan Alliance district court also held that plaintiffs 
had established a likelihood of success on the merits of their claims 
that the Department had violated the Administrative Procedure Act (APA) 
and the Religious Freedom Restoration Act (RFRA). Id. at 693. Regarding 
the RFRA claim, the district court found that HHS had not demonstrated 
a compelling interest in enforcing the regulation against the 
plaintiffs. Id. at 696. And even if the Department had demonstrated 
that compelling interest, the court held that the Department failed to 
show that its interest could not be pursued through less restrictive 
means for providing access to, and coverage for, services related to 
gender dysphoria. Id. at 693. The U.S. District Court for the District 
of North Dakota found the Franciscan Alliance order to be ``thorough 
and well-reasoned,'' and on that basis temporarily stayed enforcement 
of Section 1557's prohibitions against discrimination on the bases of 
gender identity and termination of pregnancy against the named 
plaintiffs in that court's two consolidated cases.\8\
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    \8\ Religious Sisters of Mercy, et al. v. Burwell, et al., Nos. 
3:16-cv-386 & 3:16-cv-432 (D.N.D. Order of January 23, 2017).
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    On July 10, 2017, the Franciscan Alliance court stayed proceedings 
to allow time for agency reconsideration, finding that the preliminary 
injunction order ``provides sufficient guidance for HHS's review of the 
Rule.'' \9\ The U.S. District Court for the District of North Dakota 
also further stayed the proceedings in its two cases on July 10, 2017 
and on August 24, 2017.\10\ Neither the previous Administration nor the 
current one appealed the nationwide preliminary injunction, or the 
orders in Franciscan Alliance, Religious Sisters of Mercy, or Catholic 
Benefits Association, staying proceedings. On May 2, 2017, the 
Department of Justice (DOJ) moved the Northern District of Texas for a 
voluntary remand and stay to allow HHS to ``reassess the 
reasonableness, necessity, and efficacy of the two aspects of the 
[Section 1557] regulation that are challenged'' in litigation.\11\ DOJ 
filed a similar motion with the District of North Dakota later that 
month.\12\
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    \9\ Franciscan Alliance, No. 7:16-cv-00108-O (filed July 10, 
2017).
    \10\ Religious Sisters of Mercy, et al. v. North Dakota v. 
Burwell, et al., No. 3:16-cv-386 (D.N.D. Order filed on July 10, 
2017; Catholic Benefits Association v. Burwell, No. 3:16-cv-432 
(D.N.D. Order filed Aug. 24, 2017).
    \11\ See Defendant's Motion, Franciscan Alliance, No. 7:16-cv-
00108-O (filed May 2, 2017).
    \12\ Defendant's Motion, Religious Sisters of Mercy, No. 3:16-
cv-386 (filed May 26, 2017).
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    On July 10, 2017, the Franciscan Alliance court stayed proceedings 
to allow time for agency reconsideration, finding that the court's 
preliminary injunction order ``provides sufficient guidance for HHS's 
review of the Rule.'' \13\ The district court in North Dakota similarly 
stayed proceedings on August 24, 2017, in order to allow HHS ``to 
reconsider the controversial rules and regulations at issue.'' \14\
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    \13\ Franciscan Alliance, No. 7:16-cv-00108-O (filed July 10, 
2017).
    \14\ Religious Sisters of Mercy, No. 3:16-cv-432 (order of Aug. 
24, 2017).
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    On February 4, 2019, the plaintiffs in the Franciscan Alliance case 
filed briefs in support of their renewed motions for summary judgment. 
On April 5, 2019, DOJ filed a brief in response to plaintiffs' motion 
summary judgment on behalf of HHS,\15\ stating that ``the relevant 
provisions of Title IX and Section 1557 unambiguously exclude gender-
identity discrimination.'' Id. at 14. In this brief, DOJ stated the 
position of the U.S. Government on the meaning of ``sex'' under Title 
VII of the Civil Rights Act, Title IX of the Education Amendments of 
1972, and Section 1557 of PPACA. DOJ stated, ``Since the [Section 1557 
Final] Rule was issued, the United States has returned to its 
longstanding position that the term `sex' in Title VII does not refer 
to gender identity, and there is no reason why Section 1557, which 
incorporates Title IX's analogous prohibition on `sex' discrimination, 
should be treated differently.'' Id. at 6. Therefore, DOJ concluded, 
``the [Final] Rule's prohibitions on discrimination on the basis of 
gender identity and termination of pregnancy conflict with Section 1557 
and thus are substantively unlawful under the APA.'' Id. DOJ continued, 
``[t]he [Final] Rule also fails to incorporate Title IX's exemptions 
despite Section 1557's directive to the contrary, thereby prohibiting 
conduct the statute permits.'' Id.
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    \15\ See Defendant's Memorandum in Response to Plaintiffs' 
Motions for Summary Judgment, Franciscan Alliance, No. 7:16-cv-
00108-O (filed April 5, 2019).
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    While it reconsiders its Section 1557 Regulation through the 
rulemaking process, the Department continues to abide by the 
preliminary injunction, which remains in place.

C. Summary of the Proposed Rule

    In order to better comply with the mandates of Congress, address 
legal concerns, relieve billions of dollars in undue regulatory 
burdens, further substantive compliance, reduce confusion, and clarify 
the scope of Section 1557, the Department proposes to make substantial 
revisions to the Section 1557 Regulation and to eliminate provisions 
that are inconsistent or redundant with pre-existing civil rights 
statutes and

[[Page 27849]]

regulations prohibiting discrimination on the basis of race, color, 
national origin, sex, age, and disability. In addition, to resolve 
confusion raised by the Section 1557 Regulation's reliance on an 
outdated version of the Department's Title IX regulation, the 
Department proposes to amend its Title IX regulation to implement 
statutory amendments made by Congress to Title IX in 1988.\16\
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    \16\ See Civil Rights Restoration Act of 1987, Public Law 100-
259, 102 Stat. 28 (Mar. 22, 1988) (amending Title IX). These 
proposed changes would better align HHS's regulations to the Title 
IX regulations adopted by other agencies and the position of the 
Department of Justice, the Federal civil rights coordinating 
authority under Executive Order 12250. See Executive Order 12250 on 
Leadership and Coordination of Nondiscrimination Laws, 45 FR 72995 
(Nov. 2, 1980).
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    The proposed rule would retain the obligation imposed on covered 
entities to submit assurances of compliance, certain provisions 
concerning language access for individuals with limited English 
proficiency (LEP), and certain provisions ensuring access for 
individuals with disabilities. The proposed rule would empower the 
Department to continue its robust enforcement of civil rights laws 
prohibiting discrimination on the basis of race, color, national 
origin, sex, age, or disability in Department-funded health programs or 
activities, and would make it clear that such civil rights laws remain 
in full force and effect.
    The Department further proposes to make limited conforming 
amendments to ten provisions in relevant Department regulations.

D. Cost-Effective Design of the Proposed Rule

    The proposed rule would be an economically significant deregulatory 
action. The Department projects that the proposed rule would result in 
approximately $3.6 billion in cost savings (undiscounted) over the 
first five years after finalization. The Department anticipates that 
the largest proportion of these estimated savings would result from 
repealing the Section 1557 Regulation's provisions related to mandatory 
notices. Specifically, the proposed rule would repeal requirements on 
covered entities to mail beneficiaries, enrollees, and others, notices 
concerning non-discrimination and the availability of language 
assistance services (in 15 languages) with every ``significant'' 
publication and communication larger than a postcard or brochure. The 
Department projects additional savings from eliminating the requirement 
for OCR to weigh the presence or absence of language access plans, and 
from repealing provisions that duplicate disability and sex 
discrimination regulatory requirements concerning covered entities 
establishing grievance procedures. The Department estimates that there 
will be some additional costs to covered entities regarding training 
and revision of policies and procedures if the proposed regulation is 
finalized.
    The Department believes that the anticipated benefits--which 
include compliance with Federal law, appropriate respect for the roles 
of Federal courts and Congress, and reduction or elimination of 
ineffective, unnecessary, or confusing provisions--far outweigh any 
costs or burdens that may arise from the proposed changes.

II. Reasons for the Proposed Rulemaking

    Section 1557 does not require any implementing regulations, but 
incorporates and builds on the existing civil rights framework of Title 
VI, Title IX, Age Act, and Section 504 by making the nondiscrimination 
requirements of such laws applicable to certain health programs or 
activities and related entities to the extent they do not already apply 
to such programs or activities. With this background in mind, the 
Department has decided to substantially revise the Section 1557 
Regulation for several reasons.
    The Department believes that the Final Rule exceeded its authority 
under Section 1557, adopted erroneous and inconsistent interpretations 
of civil rights law, caused confusion, and imposed unjustified and 
unnecessary costs. As stated in the Franciscan Alliance litigation, 
``the Rule's prohibitions of discrimination on the basis of gender 
identity and, without the accompanying statutory protections, 
termination of pregnancy are substantively unlawful under the APA.'' 
\17\ The existence of lawsuits and court orders blocking enforcement of 
significant parts of the Final Rule for over two years indicates that 
changes in the proposed rule may minimize litigation risk.
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    \17\ See Defendant's Memorandum in Response to Plaintiffs' 
Motions for Summary Judgment, Franciscan Alliance, No. 7:16-cv-
00108-O at *5 (filed April 5, 2019).
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    For all these reasons, the Department proposes to exercise its 
discretionary regulatory authority to revise the Section 1557 
Regulation to implement Federal civil rights law consistent with the 
applicable statutes as passed by Congress. The Department believes 
these amendments would reduce the significant confusion and unjustified 
burdens caused by the Final Rule.
    First, the Final Rule created inconsistencies with, and 
unnecessarily duplicated, the Department's long-standing existing civil 
rights regulations. See 45 CFR parts 80 and 81 (Title VI), 84 and 85 
(Section 504), 86 (Title IX), 90 and 91 (Age Act). Therefore, the 
Department proposes to repeal the provisions of the Final Rule that are 
confusing and redundant.
    Second, the U.S. District Court for the Northern District of Texas 
preliminarily enjoined enforcement of parts of the Section 1557 
Regulation because it found that the Department had exceeded its 
statutory authority.\18\ The Department proposes this rule to address 
the overbroad interpretations, adopted in the current rule, of Section 
1557 that were identified by the court and other Federal precedents. 
The Department also proposes to address the court's findings by 
incorporating, into the Department's implementing regulations, certain 
amendments to the statutes expressly identified by Congress in Section 
1557.
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    \18\ See Franciscan Alliance, 227 F. Supp. 3d at 696.
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    Third, the Department estimates that the prior rulemaking did not 
anticipate or account for an annual burden of approximately $147 
million (low-end) to $1.34 billion dollars (high-end), as further 
described in the Regulatory Impact Analysis of this proposed rule. The 
Department does not believe those burdens are justified by need, or by 
the benefits obtained by the rulemaking. In total, the proposed rule 
would relieve the American people of approximately $3.6 billion in 
unjustified costs over five years, while continuing to provide for 
vigorous enforcement of civil rights protections in health care. See 
Executive Order 13765, 82 FR 8351 (Jan. 20, 2017) (``Minimizing the 
Economic Burden of the Patient Protection and Affordable Care Act 
Pending Repeal'').
    As discussed below, the Department believes the repeal and 
replacement of significant portions of the Section 1557 Regulation 
would provide much needed finality, predictability, administrability, 
consistency, relief of burdens, and clarity, all of which would benefit 
covered entities, beneficiaries of Exchanges, and Department-funded or 
administered health programs or activities, the courts, and the general 
public.
    In light of these determinations, through this proposed rule, the 
Department proposes to codify the longstanding application of the civil 
rights laws cited in Section 1557 to health programs or activities 
receiving Federal financial assistance or programs

[[Page 27850]]

or activities administered by the Department under Title I of the PPACA 
or by entities established under such Title, both in terms of the 
protections those civil rights laws provide and the enforcement 
mechanisms they entail. This approach faithfully implements the 
Congressional mandate and seeks to avoid further litigation and 
uncertainty regarding the implementing regulations. The Department 
seeks comment on all of the provisions that are retained under this 
proposed rule, or that this rule proposes to repeal, amend, or add, 
including comment on whether provisions of the current Section 1557 
Regulation that the Department does not propose to retain in this 
proposed rule, if any, are in keeping with Congress's mandate such that 
the Department should consider retaining them--and whether any of such 
provisions should be incorporated into the Department's regulations 
implementing the underlying civil rights laws.

A. Section 1557 of the PPACA Does Not Prevent or Limit Reconsideration 
of the Current Rule

    Section 1557(c) states that the Secretary ``may'' promulgate 
implementing regulations. This language contrasts with the multiple 
other areas of Title I of the PPACA where Congress directed that the 
Secretary (or Secretaries) ``shall'' issue regulations. 42 U.S.C. 
18116(c). Section 1557 accordingly authorizes, but does not require, 
the Secretary to implement the statute through regulation. That 
approach makes sense because ``Section 1557 builds on a landscape of 
existing civil rights laws.'' 78 FR 46559 (RFI) (Aug. 1, 2013). Section 
1557 vests the Department with discretion to determine whether and to 
what degree implementing regulations are needed, and to revisit that 
determination, as appropriate, at a later date. Encino Motorcars v. 
Navarro, 146 S.Ct. 2117, 2125 (2016) (``Agencies are free to change 
their existing policies as long as they provide a reasoned explanation 
for the change''). (ConocoPhillips Co. v. U.S. E.P.A., 612 F.3d 822, 
832 (5th Cir. 2010) (``[e]mbedded in an agency's power to make a 
decision is its power to reconsider that decision.''); New England 
Power Generators Assn. v. FERC, 879 F.3d 1192 (D.C. Cir. 2018) (``So 
long as any change is reasonably explained, it is not arbitrary and 
capricious for an agency to change its mind in light of experience, or 
in the face of new or additional evidence, or further analysis or other 
factors indicating that the agency's earlier decision should be altered 
or abandoned.''). Thus, an agency action to substantially repeal a 
prior rule, or parts thereof, is not necessarily subject to a higher 
standard of justification in the exercise of such discretion compared 
to the level of justification required under the prior rulemaking on a 
blank slate. See FCC v. Fox Television Stations, Inc., 556 U.S. 502, 
515 (2009) (``When an agency changes its existing position, it need not 
always provide a more detailed justification than what would suffice 
for a new policy created on a blank slate. But the agency must at least 
display awareness that it is changing position and show that there are 
good reasons for the new policy.''). The agency's use of its rulemaking 
discretion in revisiting its original position is not, therefore, 
subject to a higher standard under the APA (5 U.S.C. 706); otherwise, 
agencies would be limited in their ability to revisit past regulations 
to cure defects or provide clarifications.

B. The Final Rule Adopted Novel and Inconsistent Legal Interpretations 
of Long-Standing Civil Rights Law

1. The Final Rule Interpreted the Scope of Section 1557 Too Broadly
    The Department has now concluded that its existing Section 1557 
Regulation impermissibly extends to programs and entities not covered 
by the text of the statute. With respect to the receipt of Federal 
financial assistance, the current rule defines ``health program or 
activity'' to cover ``all [ ] operations'' of entities principally 
engaged in providing or administering ``health services or health 
insurance coverage or other health coverage.'' 45 CFR 92.4. The scope 
of the regulation then includes all the operations of entities that 
provide ``health insurance coverage or other health coverage,'' whether 
or not they provide any health care.
    The Civil Rights Restoration Act of 1987 (CRRA), however, defined 
``program or activity'' for purposes of Title VI, Section 504 of the 
Rehabilitation Act, the Age Act, and Title IX to cover all operations 
of regulated entities only when they are ``principally engaged in the 
business of providing education, health care, housing, social services, 
or parks and recreation.'' Public Law 100-259, 102 Stat. 28 (Mar. 22, 
1988) (emphasis added). The ``business of providing . . . health care'' 
differs substantially from the business of providing health insurance 
coverage (or other health coverage) for such health care. Thus, the 
Final Rule goes beyond the CRRA by covering all the operations of 
entities that provide ``health insurance coverage or other health 
coverage'' and extends to those that are not principally engaged in the 
business of providing health care, and to those who provide no health 
care at all.\19\ Moreover, the Department had not previously 
interpreted the CRRA to cover all the operations of health insurance 
providers under any of the antidiscrimination laws covered by the CRRA 
(Title VI, Title IX, the Age Act, and Section 504) until it promulgated 
the Section 1557 regulation--over a quarter century after the CRRA was 
passed--despite there being nothing in Section 1557 indicating any 
abrogation--or expansion--of the CRRA. Therefore, the Department is now 
proposing to clarify that health insurance programs administered by 
entities not principally engaged in providing health care will only be 
covered by the Rule to the extent those programs (as opposed those 
entities) receive Federal financial assistance from the Department.
---------------------------------------------------------------------------

    \19\ The preamble to the Final Rule acknowledges the relevance 
of the CRRA, 81 FR at 31386, but does not explain how the provision 
of ``health care'' covers the provision of ``health insurance, even 
if only part of the health program or activity receives such 
assistance.''
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2. The Final Rule Improperly Blended Substantive Requirements and 
Enforcement Mechanisms of the Underlying Statutes
    The PPACA states that the ``enforcement mechanisms for and 
available under [ ] title VI, title IX, section 504, or such Age 
Discrimination Act shall apply,'' for purposes of enforcing Section 
1557. 42 U.S.C. 18116(a). Interpreting this provision in 2015, a 
Federal court held ``Congress's express incorporation of the 
enforcement mechanisms from those four Federal civil rights statutes, 
as well as its decision to define the protected classes by reference 
thereto, manifests an intent to import the various different standards 
and burdens of proof into a Section 1557 claim, depending upon the 
protected class at issue.'' Southeastern Pennsylvania v. Gilead, 102 F. 
Supp. 3d 688, 698-99 (E.D. Pa. 2015) (emphasis added). See also Briscoe 
v. Health Care Serv. Corp., 281 F. Supp. 3d 725, 738 (N.D. Ill. 2017) 
(``If Congress intended for a single standard to apply to all Sec.  
1557 discrimination claims, repeating the references to the civil-
rights statutes and expressly incorporating their distinct enforcement 
mechanisms would have been a pointless (and confusing) exercise.'').
    In interpreting and enforcing Section 1557 prior to the 
promulgation of the Final Rule--i.e., from 2010 to 2016--the Department 
applied Title VI, Title IX, Section 504, and the Age Act regulations as 
independent authorities.

[[Page 27851]]

However, contrary to the text of Section 1557, the Final Rule did not 
merely take existing protected classes and enforcement mechanism and 
apply them to health care programs or activities. Rather, it made 
certain individualized requirements, prohibitions, or enforcement 
mechanisms apply across all protected classes without sufficient 
statutory or regulatory support. This hodgepodge approach at times 
resulted in conflicts with precedents of the U.S. Supreme Court and 
lower Federal courts. See 81 FR 31387 (stating in the preamble of the 
Final Rule that there is ``a cognizable national origin discrimination 
claim under Title VI, 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''); see 
also 81 FR at 31440 (``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''); 
81 FR 31405 (``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''). But see 
Alexander v. Sandoval, 532 U.S. 275, 282 (2001) (denying private rights 
of action for disparate impact theories under Title VI).
    The Final Rule stated that an individual or entity may bring a 
civil action to challenge a violation of Section 1557 or of the 
regulation in Federal court. 45 CFR 92.302(d). The Department explained 
in the preamble to the Final Rule that private rights of action were 
available for Section 1557 claims against recipients of Federal 
financial assistance or State Exchanges for racial, national origin, 
sex, age, or disability discrimination. See 81 FR at 31440 (stating 
that ``both the proposed and the final rule specify that a private 
right of action is available under Section 1557'' and such actions are 
available ``on the basis of any of the criteria enumerated in the 
legislation''). Multiple Federal courts have held that Section 1557, or 
the statutes underlying it, do not permit private rights of action for 
disparate impact claims of discrimination on the basis of race \20\ or 
sex,\21\ and there is a split on the question with respect to 
disability, with one Federal appellate court holding that such private 
rights of action are not available and other Federal appellate courts 
holding that such private rights of action are available for claims of 
discrimination on the basis of disability.\22\
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    \20\ See Southeastern Pennsylvania Transp. Authority v. Gilead, 
102 F. Supp. 3d 688, 698-701 (E.D. Pa. 2015) (holding that Section 
1557, incorporating Title VI, does not permit a private right of 
action for a disparate impact claim on the basis of race); see also 
Alexander v. Sandoval, 532 U.S. 275, 282-83 (2001).
    \21\ See Condry v. UnitedHealth Group, No. 17-cf-00183-VC (N.D. 
Calif. 2018) (``disparate impact claims on the basis of sex are not 
cognizable under section 1557''); Weinreb v. Xerox Business 
Services, 323 F. Supp. 3d 501, 521 (S.D.N.Y. 2018); Briscoe v. 
Health Care Serv. Corp., 281 F. Supp. 3d 725, 738 (N.D. Ill. 2017); 
York v. Wellmark, Inc., No. 4:16-cv-00627-RGE-CFB, at *15-16 (S.D. 
Iowa Sep. 6, 2017); Southeastern Pennsylvania v. Gilead, 102 F. 
Supp. 3d 688 (E.D. Pa. 2015).
    \22\ Compare Crocker v. Runyon, 207 F.3d 314, 321 (6th Cir. 
2000); Doe v. Bluecross Blueshield, No. 2:17-cv-02793-TLP-cgc, 2018 
WL 3625012 (W.D. Tenn. 2018); and Briscoe v. Health Care Serv. 
Corp., 281 F. Supp. 3d 725, 738 (N.D. Ill. 2017), with Valencia v. 
City of Springfield, Ill., 883 F.3d 959, 967 (7th Cir. 2018); and 
Hollenbeck v. U.S. Olympic Comm. 513 F.3d 1191, 1197 (10th Cir. 
2008). To the Department's knowledge, no disparate impact claims on 
the basis of age have been filed under Section 1557 in a Federal 
court.
---------------------------------------------------------------------------

    These judicial interpretations of Section 1557 relied on Congress's 
decision to include a rule of construction in Title IX stating that it 
does not require educational institutions to use preferential treatment 
based on a disparate impact basis,\23\ and the U.S. Supreme Court's 
decisions precluding a right of action for disparate impact claims 
under Title VI.\24\
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    \23\ 20 U.S.C. 1681(b) (Title IX ``[s]hall not [be] construe[d] 
to require an educational institution to grant preferential or 
disparate treatment to the members of one sex on account of an 
imbalance which may exist with respect to the total number or 
percentage of persons of that sex participating in or receiving the 
benefits of any Federally supported program or activity, in 
comparison with the total number or percentage of persons of that 
sex in any community, State, section, or other area.'').
    \24\ Alexander v. Sandoval, 532 U.S. 275, 282 (2001) (holding 
that private rights of action for disparate impact are not 
authorized by Title VI).
---------------------------------------------------------------------------

    The Final Rule also stated that compensatory damages are available 
in appropriate administrative and judicial actions under the Section 
1557 Regulation, 45 CFR 92.301(b), and the Department stated in its 
preamble that this was added ``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,'' 81 FR at 
31440. However, the Department of Justice's Title VI Manual states 
that, under applicable Federal case law, compensatory damages are 
generally unavailable for claims based solely on an agency's disparate 
impact regulations.\25\
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    \25\ DOJ Title VI manual, https://www.justice.gov/crt/fcs/T6Manual9 (citing Alexander v. Sandoval, 532 U.S. 275, 282-83 
(2001), Barnes v. Gorman, 536 U.S. 181, 187 (2002), and Gebser v. 
Lago Vista Indep. Sch., 524 U.S. 274, 87 (1998)).
---------------------------------------------------------------------------

    The Final Rule also newly extended provisions applicable only to 
some of the underlying civil rights laws to apply to all of the 
prohibited bases of discrimination under Section 1557. For example, 
although only the Section 504 (disability) and Title IX (sex) 
regulations prohibit recipients from perpetuating discrimination by 
providing significant assistance to any agency, organization, or person 
that discriminates, the Final Rule extended this prohibition to Title 
VI and Age Act claims under Section 1557.\26\ The Section 1557 
Regulation similarly extended the prohibition, in the Title VI, Section 
504, and Age Discrimination Act regulations, on the utilization of 
criteria or methods of administration that have the effect of 
subjecting individuals to discrimination, to claims of discrimination 
on the basis of sex under Section 1557, although that prohibition is 
not included in the Title IX regulations.\27\
---------------------------------------------------------------------------

    \26\ See 45 CFR 84.4(b)(1)(v) (Section 504), 86.23(b)(7) (Title 
IX). But see 45 CFR 92.101(a)(4)(ii) (extended to age under Section 
1557 Regulation), Sec.  92.101(b)(1)(ii) (extended to race, color or 
national origin under Section 1557 Regulation).
    \27\ See 45 CFR 80.3(b)(2) (Title VI), 84.4(b)(4) (Section 504), 
91.11(b) (Age Act). But see 45 CFR 92.101(b)(3)(ii) (extended to sex 
under Section 1557 Regulation).
---------------------------------------------------------------------------

3. HHS Interpreted Federal Nondiscrimination Law Differently From Other 
Federal Agencies
    Because Section 1557, Title VI, Title IX, Section 504, and the Age 
Act are cross-cutting civil rights laws enforced by multiple Federal 
agencies the Department's interpretation of these laws should be 
consistent with other interpretations within the Executive Branch.\28\ 
By applying different

[[Page 27852]]

substantive requirements and enforcement mechanisms, as discussed 
above, HHS's Final Rule differed from other agencies' regulations on 
Title VI, Title IX, Section 504, and the Age Act. HHS's Section 1557 
Regulation is limited in scope to HHS-funded or HHS-administered health 
programs, activities, and PPACA Title I entities, but Section 1557 of 
the PPACA applies to health programs or activities which receive 
Federal financial assistance from any Executive agency.\29\ Although 
the then-OCR Director encouraged other agencies to adopt the standards 
in the Final Rule in 2016,\30\ each agency has its own enforcement 
responsibility for the programs they fund that fall within Section 1557 
jurisdiction. One agency's implementation and enforcement of a civil 
rights law that is inconsistent with other agencies would result in 
confusion for entities regulated by more than one agency and for the 
public as a whole, which is particularly imprudent given that Federal 
courts have implied the availability of monetary damages in private 
rights of action under the underlying civil rights statutes.\31\
---------------------------------------------------------------------------

    \28\ Pursuant to Executive Order 12250, the Attorney General has 
the responsibility to ``coordinate the implementation and 
enforcement by Executive agencies of (a) Title VI of the Civil 
Rights Act of 1964 (42 U.S.C. 2000d et seq.). (b) Title IX of the 
Education Amendments of 1972 (20 U.S.C. 1681 et seq.). (c) Section 
504 of the Rehabilitation Act of 1973, as amended (29 U.S.C. 794), 
(d) Any other provision of Federal statutory law which provides, in 
whole or in part, that no person in the United States shall, on the 
ground of race, color, national origin, handicap, religion, or sex, 
be excluded from participation in, be denied the benefits of, or be 
subject to discrimination under any program or activity receiving 
Federal financial assistance.'' Executive Order 12250 at sec. 1-
2(b), 45 FR 72995 (Nov. 2, 1980). See also 42 U.S.C. 6103 (requiring 
each Federal department or agency to submit Age Act enforcement 
reports to and obtain approval of their Age Act regulations by HHS).
    \29\ Compare 42 U.S.C. 18116(a) (stating that Section 1557 
applies to ``any health program or activity, any part of which is 
receiving Federal financial assistance, including credits, 
subsidies, or contracts of insurance, or under any program or 
activity that is administered by an Executive Agency or any entity 
established under this title (or amendments)'') (emphasis added) 
with 45 CFR 92.1 (stating that Part 92 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) (emphasis added).
    \30\ Memorandum from OCR Director to Civil Rights Heads of 
Federal Agencies, Enforcement Responsibilities under Section 1557 of 
the Affordable Care Act (July 12, 2016), https://www.hhs.gov/sites/default/files/directors-memo-july2016.pdf.
    \31\ Blunt v. Lower Merion Sch. Dist., 767 F.3d 247, 272 (3d 
Cir. 2014) (Title VI); Franklin v. Gwinnett Cty. Pub. Sch., 503 U.S. 
60 (1992) (Title IX).
---------------------------------------------------------------------------

4. The Final Rule Created New Provisions Concerning Language Access Not 
Adequately Justified by Law or Policy
    Title VI prohibits discrimination against persons on the basis of 
national origin under any program or activity receiving Federal 
financial assistance. Under governing U.S. Supreme Court case law, 
Title VI obligates recipients of Federal financial assistance to 
provide individuals with limited English proficiency (LEP) meaningful 
access to Federally funded programs or activities.\32\ In 2016, the 
Section 1557 Final Rule added certain language access provisions that 
were not required by Title VI case law or the underlying Title VI 
regulation.\33\
---------------------------------------------------------------------------

    \32\ Lau v. Nichols, 414 U.S. 563 (1974) (interpreting Title VI 
in the Department of Health Education and Welfare's Title VI 
regulation). The Title VI statute does not expressly mention 
``limited English proficiency.'' 42 U.S.C. 2000d et seq. Lau and its 
progeny relied on the word ``national origin'' in Title VI to 
encompass limited English proficiency (LEP).
    \33\ See 45 CFR parts 80 and 81 (the Department's Title VI 
regulations do not expressly reference LEP). Lau and subsequent case 
law interpreted the Title VI regulations' prohibition on recipients 
of Federal financial assistance ``utiliz[ing] criteria or methods of 
administration which have the effect of subjecting individuals to 
discrimination'' on the basis of national origin to require 
recipients to take reasonable steps to provide persons with limited 
English proficiency (LEP) meaningful access to Federally funded 
programs or activities. The Supreme Court has not specified what 
particular linguistic requirements may constitute ``meaningful 
access'' outside of the education context.
---------------------------------------------------------------------------

    Additionally, the Final Rule introduced confusing and costly notice 
and tagline requirements that were not required by law, were 
inconsistent with tagline requirements required by other components of 
the Department and, as discussed further below, provided relatively 
minimal benefit to LEP individuals. Complicating matters further, 
because the Section 1557 Regulation applies only to health care 
programs or activities, a recipient of Federal financial assistance 
from the Department for health care services is subject to different 
notice and tagline requirements than a recipient receiving Federal 
financial assistance from the Department for human services alone, such 
as a child welfare agency.
    Furthermore, the Final Rule newly required the OCR Director, in 
evaluating compliance, to take into account whether a recipient of 
Federal financial assistance has ``developed and implemented an 
effective written language access plan that is appropriate to its 
particular circumstances, to be prepared to meet its obligations'' 
under Section 1557. 45 CFR 92.201(b)(2). Before the promulgation of the 
Final Rule, an Executive Order directed Executive agencies to prepare 
language access plans applicable to their Federally conducted programs 
and activities (for example, the Veterans Administration's hospitals), 
but the Section 1557 provision applied to recipients of Federal 
financial assistance (for example, private hospitals accepting 
Medicaid). E.O. 13166, sec. 2, 65 FR 50121, 50121 (Aug. 16, 2000). The 
last section of the Executive Order also stated that it ``does not 
create any right or benefit, substantive or procedural, enforceable at 
law.'' 65 FR 50122.
5. The Final Rule's Definition of Discrimination ``On the Basis of 
Sex'' Has Been Enjoined by Federal Courts
    In its Section 1557 Regulation, the Department interpreted the 
``sex'' discrimination prohibited by Section 1557 to include 
discrimination on the basis of ``gender identity.'' 81 FR 31376, 31467 
(definition of ``on the basis of sex,'' codified at 45 CFR 92.4). In 
particular, the Department took the view that one can identify as 
``male, female, neither, or a combination of male and female'' and that 
this identification may differ from one's ``sex assigned at birth'' 
because, according to the regulation, gender identity ultimately relies 
on a subjective ``internal sense.'' 81 FR at 31467; 45 CFR 92.4 
(definition of ``gender identity''). It then reasoned that Title IX's 
prohibition of discrimination on the basis of sex (as incorporated by 
Section 1557) includes discrimination on the basis of pregnancy 
termination,\34\ sex stereotyping,\35\ and gender identity.\36\
---------------------------------------------------------------------------

    \34\ The preamble to the Final Rule cites the Department's Title 
IX regulation, which contains provisions on termination of 
pregnancy, but does not analyze this regulatory language in light of 
Title IX's statutory provisions about abortion. See 81 FR at 31387 
(citing 45 CFR 86.40(b)); but see 20 U.S.C. 1688 (``Nothing in this 
title shall be construed to require or prohibit any person, or 
public or private entity, to provide or pay for any benefit or 
service, including the use of facilities related to an abortion . . 
.'').
    \35\ The Final Rule defines ``sex stereotypes'' as 
``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 gender 
expectations related to the appropriate roles of a certain sex.'' 81 
FR at 31468 (codified at 45 CFR 92.4).
    \36\ The Final Rule defines ``gender identity'' as ``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.'' 81 FR at 
31467 (codified at 45 CFR 92.4). The Final Rule notes, in the 
definition, that ``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.'' Id. The 
definition also notes that ``[a] transgender individual is an 
individual whose gender identity is different from the sex assigned 
to that person at birth.'' Id. The regulation requires covered 
entities to treat individuals ``consistent with their gender 
identity'' except that covered entities ``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.'' 45 CFR 
92.206 and 92.207(b)(3).
---------------------------------------------------------------------------

    Interpreting Section 1557, through Title IX, to prohibit gender 
identity

[[Page 27853]]

discrimination was a relatively novel legal theory when the Department 
adopted the Final Rule. The theory, was not, and has not been, endorsed 
by the Supreme Court. See, e.g., Baker v. Aetna, 228 F. Supp. 3d 764, 
768-69 (N.D. Texas 2017) (noting no controlling U.S. Supreme Court 
legal precedent recognizing gender identity as prohibited 
discrimination under Section 1557).
a. Background on Title IX of the Education Amendments
    Title IX prohibits discrimination on the basis of sex in 
educational programs or activities that receive Federal financial 
assistance. Specifically, the statute states that ``[n]o person in the 
United States shall, on the basis of sex, be excluded from 
participation in, be denied the benefits of, or be subjected to 
discrimination under any education program or activity receiving 
Federal financial assistance. . . .'' 20 U.S.C. 1681. The statute uses 
the word ``sex'' but not ``sexual orientation'' or ``gender identity.'' 
Although it does not contain an express definition of the term ``sex,'' 
additional provisions in Title IX use explicitly binary terms such as 
``men'' and ``women,'' ``father-son,'' ``mother-daughter,'' ``boys'' 
and ``girls,'' ``both sexes,'' and ``one sex'' and ``the other sex.'' 
\37\
---------------------------------------------------------------------------

    \37\ Although Congress did not include a definition of the term 
``sex'', provisions in Title IX refer to ``men'' and ``women,'' 
``father-son,'' ``mother-daughter,'' ``boys'' and ``girls,'' ``both 
sexes,'' and ``one sex'' and ``the other sex 42 U.S.C. 1681(a)(2) 
(``both sexes''), (a)(2) (``one sex'' and ``other sex''), (a)(6)(B) 
(``Men's'' and ``Women's''), (a)(6)(B) (``Boy'' and ``Girl''); 
(a)(7)(A) (``Boys'' and ``Girls''), (a)(7)(B)(i) (``Boys'' and 
``Girls''), (a)(8) (``father-son'', ``mother-daughter''), and (a)(8) 
(``one sex'' and ``other sex''). See also 42 U.S.C. 1681(a)(2)(6) 
(``fraternity'' and ``sorority'').
---------------------------------------------------------------------------

    Congressional activity in this area suggests that ``sex'' under 
Title IX does not include sexual orientation or gender identity. See 
Food & Drug Admin. v. Brown & Williamson Tobacco Corp., 529 U.S. 120, 
122 (2000) (when ``Congress several times considered and rejected 
bills'' that would have granted the agency authority, Congress 
``evidenced a clear intent to preclude a meaningful policymaking role 
for any administrative agency''). For example, in 2016, Senator Mazie 
Hirono introduced the Patsy T. Mink Gender Equity in Education Act, S. 
3147 (114th Cong. 2016), to ``support educational entities so that such 
entities have the support to fully implement [T]itle IX'' and to define 
``sex discrimination'' to include ``[a]ctual or perceived sex, sexual 
orientation, gender, or gender identity.'' See also H.R. 5682 (114th 
Cong. 2016) (companion measure introduced in the House of 
Representatives). However, there was no action on the Senate bill after 
it was referred to the Senate Committee on Health, Education, Labor and 
Pensions. Congress has repeatedly considered bills that would add the 
bases of sexual orientation or gender identity to other statutes that 
already prohibited discrimination on the basis of sex, but has done so 
in only limited instances.\38\
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    \38\ 18 U.S.C. 249(c)(4) (the Matthew Shepard and James Byrd, 
Jr. Hate Crimes Prevention Act prohibits hate crimes which are based 
on ``actual or perceived religion, national origin, gender, sexual 
orientation, gender identity, or disability''); 34 U.S.C. 
12291(b)(13)(A) (the Violence Against Women Reauthorization Act 
(VAWA) prohibits discrimination on the basis of ``actual or 
perceived . . . sex, gender identity . . . [or] sexual 
orientation'').
---------------------------------------------------------------------------

    Over the past three decades, Members of Congress have repeatedly 
proposed to amend the Civil Rights Act to add the words ``sexual 
orientation'' and ``gender identity'' as prohibited bases of 
discrimination, but as of the date of publication of this proposed 
rule, such measures have never become Federal law.\39\
---------------------------------------------------------------------------

    \39\ Over the past three decades, the Employment Non-
Discrimination Act (ENDA) has been introduced ten times in the U.S. 
House of Representatives, but ENDA, which would prohibit employment 
discrimination on the basis of sexual orientation and gender 
identity, has never proceeded out of committee in the House. See 
H.R. 4636 (103rd Cong. 1994); H.R. 1863 (104th Cong. 1995); H.R. 
1858 (105th Cong. 1997); H.R. 2355 (106th Cong. 1999); H.R. 2692 
(107th Cong. 2001); H.R. 3285 (108th Cong. 2003); H.R. 2015 (110th 
Cong. 2007); H.R. 2981 (111th Cong. 2009); H.R. 1397 (112th Cong. 
2011); H.R. 1755 (113th Cong. 2013). The Equality Act has similarly 
been introduced in three successive sessions of Congress. See H.R. 
3185 (114th Cong. 2015); S. 1828 (114th Cong. 2015); H.R. 2282 
(115th Cong. 2017); S. 1006 (115th Cong. 2017); H.R. 5 (116th Cong.) 
(introduced Mar. 3, 2019). It did not proceed out of committee in 
the 114th and 115th Congresses, and it passed the House of 
Representatives on May 17, 2019. The Equality Act would amend the 
Civil Rights Act to include ``gender identity'' and ``sexual 
orientation'' in addition to ``sex'' as prohibited grounds of 
discrimination, and would also include a definition of the terms 
``sex'' and ``gender identity.''
---------------------------------------------------------------------------

b. HHS's Title IX Regulations
    In 1975, the predecessor to HHS (the Department of Health, 
Education, and Welfare (HEW)) became the first agency to adopt Title IX 
implementing regulations. 40 FR 24128 (June 4, 1975). The agency 
received and considered more than 9,700 comments before issuing its 
final regulations, and Congress held six days of hearings to determine 
whether the regulations were consistent with the statute.\40\ The 
regulations,\41\ like Title IX itself, included no explicit definition 
of ``sex.'' \42\ Like Title IX, however, the Title IX regulations do 
use explicitly binary terms such as ``male and female'' (Sec.  
86.41(c)) and ``one sex . . . [and] the other sex'' (passim).
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    \40\ Subcommittee on Postsecondary Education of the House 
Committee on Education and Labor, Review of Regulations to Implement 
Title IX of Public Law 92-318 Conducted Pursuant to Sec. 431 of the 
General Education Provisions Act (94th Cong. June 17, 20, 23, 24, 
25, 26, 1975); see also Title IX Common Rule, 65 FR 52857 (Sept. 29, 
2000) (the HEW regulations were ``the result of an extensive public 
comment process and congressional review'').
    \41\ See 45 CFR part 86.
    \42\ Consistent with the statutory language, the Title IX 
regulations used the same binary and biological language about sexes 
as found in Title IX, including ``both sexes,'' ``the other sex,'' 
and ``boys'' and ``girls.'' See 45 CFR 86.2(s), 86.7, 86.17(b)(2), 
86.21(c)(4), 86.31(c), 86.32(b)(2) and (c)(2), 86.33, 86.37(a)(3), 
86.41(b) and (c), 86.55(a), 86.58(a) and (b), 86.60(b), and 86.61.
---------------------------------------------------------------------------

    When HHS interpreted ``on the basis of sex'' under Title IX through 
its Section 1557 regulation, HHS did not add the definition to its 
Title IX regulation. Neither did HHS amend its Title IX Regulation to 
adjust the references to ``male and female'' or ``one sex . . . [and] 
the other sex'' to conform to the novel definition in the Section 1557 
regulation. Compare 81 FR 31467 (May 18, 2016) (Section 1557 
Regulation) with 70 FR 24320 (May 9, 2005) (the last time HHS's Title 
IX regulations were amended).
c. Need for Consistency Among Components of HHS
    Since 2012, other components of the Department adopted an 
interpretation of sex different from the definition OCR adopted in the 
Section 1557 Regulation. The Department's failure to address these 
other definitions in the Final Rule has resulted in substantial 
confusion and inconsistency.
    In 2014, the National Institutes of Health (NIH) announced its 
policy that researchers seeking NIH grant funds should explain how 
differences between males and females on the basis of biology are 
factored into research designs, analyses, and reporting in clinical 
research as a biological variable.\43\ This approach, according to NIH, 
acknowledged that research about male and female differences may be 
critical to the interpretation, validation, and generalizability of 
research findings and may inform clinical interventions. In 2017, NIH 
issued guidance to grant

[[Page 27854]]

recipients about this policy \44\ and continues to fund research that 
uses ``sex'' as a biological variable.\45\ Using sex as a biological 
variable addresses binary male/female differences found to impact the 
practice of medicine by influencing proper diagnosis, prognosis, and 
treatment of patients.\46\ Medical research prior to and subsequent to 
the Section 1557 Regulation have addressed differences between males 
and females as binary and biological.\47\
---------------------------------------------------------------------------

    \43\ Janine A. Clayton and Francis S. Collins, Policy: NIH to 
balance sex in cell and animal studies, Nature (May 14, 2014) 
(discussing disease-causing effects of Y-chromosome genes as 
different from X-chromosome genes, and intrinsic sex differences of 
female and male cells in vitro), https://www.nature.com/news/policy-nih-to-balance-sex-in-cell-and-animal-studies-1.15195; NIH, 
Consideration of Sex as a Biological Variable in NIH-Funded 
Research, NOT-OD-15-102 (June 9, 2015), https://grants.nih.gov/grants/guide/notice-files/not-od-15-102.html.
    \44\ NIH Guidance, Consideration of Sex as a Biological Variable 
in NIH-funded Research (2017), https://orwh.od.nih.gov/sites/orwh/files/docs/NOT-OD-15-102_Guidance.pdf.
    \45\ Suk Kyeong Lee, Sex as an important biological variable in 
biomedical research, BMB Rep. 167 (Apr. 2018), https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5933211; Terry Lynn Cornelison, 
Considering Sex as a Biomedical Variable in Biomedical Research, 
Gender and the Genome (June 1, 2017), https://journals.sagepub.com/doi/pdf/10.1089/gg.2017.0006; Inna Belfer, J. White, et al., 
Considering sex as a biological variable (SABV) in research: a 
primer for pain investigators, The Journal of Pain (Mar. 2018), 
https://www.jpain.org/article/S1526-5900(17)31024-6/pdf.
    \46\ Janine A. Clayton, Applying the new SABV (sex as a 
biological variable) policy to research and clinical care, 
Physiology and Behavior (Aug 17, 2017), https://doi.org/10.1016/j.physbeh.2017.08.012; see also Leah R. Miller, Cheryl Marks, et 
al., Considering sex as a biological variable in preclinical 
research, 31 Federation of American Societies for Experimental 
Biology Journal 29-34 (Sept. 2017) (defining ``Sex'' as ``being XY 
or XX''), https://www.ncbi.nlm.nih.gov/pmc/articles/PMC6191005.
    \47\ See. e.g., Douglas C. Dean III, E.M. Planalp, et al., 
Investigation of brain structure in the 1-month infant, Brain 
Structure and Function 1-18 (Jan. 5, 2018), https://www.ncbi.nlm.nih.gov/pubmed/29305647 (finding differences between 
male and female infants at the age of 1 month, ``[c]onsistent with 
findings from studies of later childhood and adolescence, 
subcortical regions appear more rightward asymmetric''); Wei Yang, 
Nicole M. Warrington, et al., Clinically Important Sex differences 
in GBM biology revealed by analysis of male and female imaging, 
transcriptome and survival data, Science Translational Medicine 
(Jan. 21, 2019), https://www.ncbi.nlm.nih.gov/pubmed/30602536S 
(identifying sex-specific molecular subtypes of glioblastoma); 
Stefan Ballestri, Fabio Nascimbeni, et al., NAFLD as a Sexual 
Dimorphic Disease: Role of Gender and Reproductive Status in the 
Development and Progression of Nonalcoholic Fatty Liver Disease and 
Inherent Cardiovascular Risk, Advances in Therapy (May 19, 2017), 
https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5487879; Ester Serrano-
Saiz, Meital Oren-Suissa, et al., Sexually Dimorphic Differentiation 
of a C. elegans Hub Neuron Is Cell Autonomously Controlled by a 
Conserved Transcription Factor, 27 Current Biology 199 (Jan. 5, 
2017), https://www.ncbi.nlm.nih.gov/pubmed/28065609; Anke 
Samulowitz, Ida Gremyr, et al., ``Brave Men'' and ``Emotional 
Women'': A Theory-Guided Literature Review on Gender Bias in Health 
Care and Gendered Norms towards Patients with Chronic Pain, Pain 
Research and Management (Feb. 25, 2018), https://www.ncbi.nlm.nih.gov/pubmed/29682130 (stating that ``the response to 
opioid receptor antagonists may generate a difference between men's 
and women's experiences of pain''); Susan Sullivan, Anna Campbell, 
et al., What's good for the goose is not good for the gander: Age 
and gender differences in scanning emotion faces, 72:3 Journals of 
Gerontology 441 (May 1, 2017), https://www.ncbi.nlm.nih.gov/pubmed/25969472; Ramona Stone and W. Brent Webber, Male-Female Differences 
in the Prevalence of Non-Hodgkin Lymphoma, 81 Journal of 
Environmental Health 16 (Oct. 2018).
---------------------------------------------------------------------------

    NIH also funded conferences of mental health professionals who 
developed the latest clinical manual on the diagnosis of ``gender 
dysphoria'' that defines ``sex'' (as distinct from ``gender identity'') 
in biological terms.\48\ Specifically, the Diagnostic and Statistical 
Manual of Mental Disorders (DSM-5) provides, ``[t]his chapter employs 
constructs and terms as they are widely used by clinicians from various 
disciplines with specialization in this area. In this chapter, sex and 
sexual refer to the biological indicators of male and female 
(understood in the context of reproductive capacity), such as in sex 
chromosomes, gonads, sex hormones, and nonambiguous internal and 
external genitalia.'' \49\
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    \48\ NIH sponsored thirteen scientific conferences that assisted 
in research evaluation by hundreds of mental health specialists for 
the American Psychiatric Association to produce the standard 
classifications of mental disorders of the Diagnostic and 
Statistical Manual of Mental Disorders Handbook of Differential 
Diagnosis (DSM-5).
    \49\ Although the Section 1557 Final Rule proposed to address 
insurance coverage for care related to gender dysphoria on the basis 
of a sex discrimination theory, neither the Notice of Proposed 
Rulemaking in 2015 nor the Final Rule in 2016 referenced the DSM-5's 
definition of the term ``sex.'' 81 FR 31429.
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    Additionally, NIH requires research grant applicants to consider 
sex as a biological variable ``defined by characteristics encoded in 
DNA, such as reproductive organs and other physiological and functional 
characteristics.'' \50\ According to an NIH article, ``[s]ex as a 
biological variable (SABV) is a key part of the new National Institutes 
of Health (NIH) initiative to enhance reproducibility through rigor and 
transparency. The SABV policy requires researchers to factor sex into 
the design, analysis, and reporting of vertebrate animal and human 
studies. The policy was implemented as it has become increasingly clear 
that male/female differences extend well beyond reproductive and 
hormonal issues. Implementation of the policy is also meant to address 
inattention to sex influences in biomedical research. Sex affects: Cell 
physiology, metabolism, and many other biological functions; symptoms 
and manifestations of disease; and responses to treatment. For example, 
sex has profound influences in neuroscience, from circuitry to 
physiology to pain perception. Extending beyond the robust efforts of 
NIH to ensure that women are included in clinical trials, the SABV 
policy also includes rigorous preclinical experimental designs that 
inform clinical research.''
---------------------------------------------------------------------------

    \50\ NIH Guidance, Consideration of Sex as a Biological Variable 
in NIH-funded Research at 1 (2017), https://orwh.od.nih.gov/sites/orwh/files/docs/NOT-OD-15-102_Guidance.pdf.
---------------------------------------------------------------------------

    In 2014, the Department's Office of Refugee Resettlement (ORR) 
published an Interim Final Rule \51\ which adopted a biologically based 
definition of ``sex'' that was distinct from gender identity, to 
implement section 1101(c) of the Violence Against Women Reauthorization 
Act of 2013.\52\ In setting forth standards and procedures to prevent, 
detect, and respond to sexual abuse and sexual harassment involving 
unaccompanied alien children in ORR's care provider facilities, the 
rule defines ``sex'' as ``a person's biological status and is typically 
categorized as male, female, or intersex.'' 45 CFR 411.5. The 
definition notes that ``[t]here are a number of indicators of 
biological sex, including sex chromosomes, gonads, internal 
reproductive organs, and external genitalia.'' Id. The regulation gives 
a separate definition for ``gender identity'' as ``one's sense of 
oneself as a male, female, or transgender.'' Id. The rule then uses 
these terms differently, setting forth protections and policies 
concerning ``sex,'' distinct from those protections and policies 
concerning ``gender'' or ``gender identity.'' \53\ The definitions 
section of the ORR regulation states ``'Gender' refers to the 
attitudes, feelings, and behaviors that a given culture associates with 
a person's biological sex.'' 45 CFR 411.5 In the preamble to the rule, 
ORR added, ``This term ['gender'] is not to be confused with `sex,' as 
defined [elsewhere in the rule].'' 79 FR at 77771.
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    \51\ ORR Final Rule, Standards to Prevent, Detect, and Respond 
to Sexual Abuse and Sexual Harassment Involving Unaccompanied 
Children, 79 FR 77767 (Dec. 24, 2014).
    \52\ See 127 Stat. 61 (Violence Against Women's Act 
reauthorization).
    \53\ Compare, e.g., 45 CFR 411.14 (``Care provider facilities 
must not search or physically examine a UC for the sole purpose of 
determining the UC's sex. If the UC's sex is unknown, it may be 
determined during conversations with the UC, by reviewing medical 
records, or, if necessary, learning that information as part of a 
broader medical examination conducted in private by a medical 
practitioner.'') with Sec.  411.41(c) (``Only trained staff are 
permitted to talk with UCs to gather information about their sexual 
orientation or gender identity, prior sexual victimization, history 
of engaging in sexual abuse, mental health status, and mental 
disabilities for the purposes of the assessment required under 
paragraph (a) of this section.'').
---------------------------------------------------------------------------

    In 2015, the Office of the National Coordinator for Health 
Information Technology (ONC) promulgated regulations \54\ that included 
standards

[[Page 27855]]

and requirements for coding certain health data. The regulations 
contained data sets for ``sex,'' separate from those for ``gender 
identity'' and ``sexual orientation.'' See 45 CFR 170.207(n) (``sex''); 
170.207(o) (``sexual orientation and gender identity''). In its 
preamble, ONC explained that it did not adopt a separate category for 
``assigned birth sex'' because ``we already require the capturing of 
birth sex as described under the ``sex'' section above.'' \55\ 
Furthermore, ONC stated that questions about patients' gender identity 
and sexual orientation ``have not yet been scientifically validated for 
use in health care settings'' and, thus, it did not adopt them.\56\ 
However, ONC added that, although not required, providers can 
separately code ``gender identity'' \57\ and ``sexual orientation'' 
\58\ if they opt to include such questions.\59\
---------------------------------------------------------------------------

    \54\ ONC Final Rule, 2015 Edition Health Information Technology 
(Health IT) Certification Criteria, 2015 Edition Base Electronic 
Health Record (EHR) Definition, and ONC Health IT Certification 
Program Modifications, 80 FR 62601 (Oct. 16, 2015); see also 80 FR 
76868 (Dec. 11, 2015) (making technical corrections and 
clarifications).
    \55\ 80 FR 62619. Requiring health care entities to code as male 
all persons who self-identify as male, regardless of biology, may 
lead to adverse health consequences. See, e.g., Daphne Stroumsa, 
Elizabeth F.S. Roberts, et al., ``The Power and Limits of 
Classification--A 32 Year Old Man with Abdominal Pain,'' New England 
Journal of Medicine (May 16, 2019), https://www.ncbi.nlm.nih.gov/pubmed/31091369; Marilynn Marchione, ``Blurred Lines,'' Associated 
Press (May 15, 2019), https://apnews.com/b5e7bb73c6134d58a0df9e1cee2fb8ad (identification of pregnant 
transgender person as male in medical records contributed to 
stillbirth of child).
    \56\ 80 FR at 62620.
    \57\ Options under the category ``gender identity'' were 
``Male'', ``Female, transgender male/Trans man/Female-to-male,'' 
``Transgender female/Trans woman/Male-to-female,'' ``Genderqueer, 
Neither exclusively male nor female,'' ``Additional gender category/
(or other), please specify,'' or ``Decline to answer.''
    \58\ Options under the category ``sexual orientation'' were 
``Straight or heterosexual,'' ``Lesbian, gay, or homosexual,'' 
``Bisexual,'' ``Something else, please describe,'' or ``Don't 
know.''
    \59\ 80 FR 62620.
---------------------------------------------------------------------------

    OCR itself has adopted different interpretations of ``on the basis 
of sex'' under Section 1557. In 2012, the then-OCR Director announced 
in a letter \60\ that OCR was accepting and investigating complaints of 
discrimination on the basis of ``actual or perceived sexual orientation 
or gender identity'' under Section 1557. Three years later, OCR changed 
its position and declined to include sexual orientation (unlike gender 
identity) as a per se protected class throughout the Section 1557 
rulemaking process. See Proposed Rule, 81 FR 54176 (Aug. 15, 2015) 
(``Current law is mixed on whether existing Federal nondiscrimination 
laws prohibit discrimination on the basis of sexual orientation as a 
part of their prohibitions of sex discrimination''); Final Rule, 81 FR 
31390 (May 18, 2016) (``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.''). It 
appears that OCR's letter in 2012 was the first time any HHS component 
departed from a binary and biological understanding of sex for purposes 
of sex discrimination and adopted a definition that included gender 
identity or sexual orientation.
---------------------------------------------------------------------------

    \60\ See 81 FR 31387, n.57.
---------------------------------------------------------------------------

d. Pending Federal Litigation Over Section 1557 Regulation, Title IX, 
and Title VII
    In addition to Franciscan Alliance in the U.S. District Court for 
the Northern District of Texas and Sisters of Mercy in the U.S. 
District Court for the District of North Dakota, other Federal courts 
have gender identity discrimination cases, filed under Section 1557, 
pending on their dockets. See Tovar v. Essentia Health, 342 F. Supp. 3d 
947 (D. Minn. Sept. 20, 2018) (on remand from 8th Cir.); Boyden v. 
Conlin, 341 F. Supp.3d 979 (W.D. Wis. 2018) (appealed to 7th Cir., No. 
3:18-3408 and No. 18-3485, on Nov. 9, 2018); Flack v. Wisconsin 
Department of Health Services, 328 F. Supp.3d 931 (W.D. Wis. 2018) 
(pending motion for class certification); Smith v. Highland Hospital of 
Rochester, No. 17-CV-6781-CJS (W.D.N.Y. filed Oct 2, 2018) (appealed to 
2d Circuit on Nov. 6, 2018); Prescott v. Rady Children's Hospital-San 
Diego, 265 F.Supp.3d 1090 (S.D. Cal. Sept. 27, 2017) (protective order 
granted on Nov. 6, 2018); Edmo v. Idaho Dept. of Correction, No. 1:17-
cv-00151, 2018 WL 2745898 (D. Id. filed Oct. 9, 2018) (motion to stay 
pending February 13, 2019); Enstad v. Peacehealth, No. 2:17-cv-01496-
RSM (W.D. Wash. filed Oct. 5, 2017) (granted stay of litigation on 
Sept. 24, 2018); Robinson v. Dignity Health, No. 16-CV-3035 YGR, 2016 
WL 7102832 (N.D. Cal. filed Dec. 6, 2016) (on remand from U.S. Supreme 
Court).
    Some Federal courts have declined to recognize gender identity 
discrimination claims under Title IX, and instead deferred to U.S. 
Supreme Court to settle the legal question. See, e.g., Evancho v. Pine-
Richland School District, 237 F. Supp.3d 267, 299 (W.D. Pa. February 
27, 2017) (``what makes the current legal landscape even more unsettled 
is that the Supreme Court is currently poised to grapple with these 
very issues''). While four appellate courts have addressed the 
issue,\61\ a large volume of district court opinions have been 
inconsistent on the issue. See Texas v. United States, 201 F. Supp. 3d 
810 (N.D. Tex. 2016) (holding that Title IX does not prohibit 
discrimination based on gender identity or transgender status); 
Johnston v. Univ. of Pittsburgh, 97 F. Supp. 3d 657 (W.D. Pa. 2015); 
but see Adams v. School Board of St. Johns County, 318 F. Supp. 3d 1293 
(M.D. Fla. 2018) (recognizing gender identity discrimination claim 
under Title IX); A.H. v. Minersville Area School District, 290 F. Supp. 
3d 321 (M.D. Pa. 2017). Appellate courts have also been split over the 
legal question whether discrimination on the basis of gender identity 
is prohibited by Title VII. Compare Etsitty v. Utah Transit Auth., 502 
F.3d 1215, 1220-1221 (10th Cir. 2007) with Mitchell v. Kallas, No. 15-
cv-108 (7th Cir. 2018). On April 22, 2019, the U.S. Supreme Court 
granted three petitions for writs of certiorari, raising the question 
whether Title VII's prohibition on discrimination on the basis of sex 
also bars discrimination on the basis of gender identity or sexual 
orientation.\62\ Because Title IX adopts the substantive and legal 
standards of Title VII,\63\ a holding by the U.S. Supreme Court on the 
definition of ``sex'' under Title VII will likely have ramifications 
for the definition of ``sex'' under Title IX, and for the cases raising 
sexual orientation or gender identity claims under Section 1557 and 
Title IX which are still pending in district courts.\64\
---------------------------------------------------------------------------

    \61\ See, e.g., Doe ex rel. Doe v. Boyertown Area Sch. Dist., 
893 F.3d 179 (3d Cir.), slip op. 23-31, vacated on reh'g, 897 F.3d 
515 (3d Cir.), and superseded by 897 F.3d 518 (3d Cir. 2018); 
Whitaker ex rel. Whitaker v. Kenosha Unified Sch. Dist. No. 1 Bd. of 
Educ., 858 F.3d 1034, 1046-54 (7th Cir. 2017), cert. dismissed, 138 
S. Ct. 1260 (2018); G.G. ex rel. Grimm v. Gloucester Cnty. Sch. Bd., 
822 F.3d 709, 720-723 (4th Cir. 2016), vacated and remanded, 137 S. 
Ct. 1239 (2017); Dodds v. U.S. Dept. of Education, 845 F.3d 217 (6th 
Cir. 2016). Portions of two of these opinions have been vacated. See 
Gloucester Cnty. Sch. Bd. v. G.G. ex rel. Grimm, 137 S. Ct. 1239 
(2017) (vacating court of appeals' decision in light of agency 
guidance); Doe ex rel. Doe v. Boyertown Area Sch. Dist., 897 F.3d 
518, 533-36 (3d Cir. 2018) (superseding opinion omitting portion of 
original opinion discussed in the petition, which was vacated on 
rehearing); cf. Doe, 893 F.3d 179, slip op. 23-31 (vacated opinion).
    \62\ Bostock v. Clayton County, 723 Fed. Appx. 964 (11th Cir. 
2018), cert granted, No. 17-1618 (U.S. Apr. 22, 2019); Altitude 
Express, Inc. v. Zarda, 883 F.3d 100 (2d Cir. 2018), cert granted, 
No. 17-1623 (U.S. Apr. 22, 2019); Equal Employment Opportunity 
Commission v. R.G. & G.R. Harris Funeral Homes, Inc., 884 F.3d 560 
(6th Cir. 2018), cert granted, No. 18-107 (U.S. Apr. 22, 2019), 
https://www.supremecourt.gov/orders/courtorders/042219zor_9olb.pdf.
    \63\ See DOJ, Title IX Legal Manual (August 6, 2015), https://www.justice.gov/crt/title-ix.
    \64\ Compare Etsitty v. Utah Transit Auth., 502 F.3d 1215 (10th 
Cir. Sept. 20, 2007) (Title IX does not prohibit gender identity 
discrimination); and Texas v. United States, 201 F. Supp. 3d 810 
(N.D. Tex. Aug. 21, 2016) with Doe ex rel. Doe v. Boyertown Area 
Sch. Dist., 893 F.3d 179 (3d Cir.), slip op. 23-31, vacated on 
reh'g, 897 F.3d 515 (3d Cir.), and superseded by 897 F.3d 518 (3d 
Cir. 2018); Whitaker ex rel. Whitaker v. Kenosha Unified Sch. Dist. 
No. 1 Bd. of Educ., 858 F.3d 1034, 1046-1054 (7th Cir. 2017) 
(interpreting Title IX and Equal Protection Clause), cert. 
dismissed, 138 S. Ct. 1260 (2018); and G.G. ex rel. Grimm v. 
Gloucester Cnty. Sch. Bd., 822 F.3d 709, 720-723 (4th Cir. 2016), 
vacated and remanded, 137 S. Ct. 1239 (2017).

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[[Page 27856]]

e. HHS's Inconsistency With Other Federal Agencies
    From 1972 to the present, no Title IX regulation from any agency 
explicitly defined ``sex'' to include ``gender identity.'' All of the 
Title IX regulations of all agencies which adopted such regulations--
including, as noted above, HHS's Title IX regulations--use the term in 
a binary and biological sense, and include phrases such as ``male and 
female,'' and ``one sex'' and ``the other sex.'' \65\ Currently, HHS is 
the only Federal agency with a regulation defining ``sex'' under Title 
IX (in its Section 1447 Regulation) as inclusive of gender identity. 
However, starting in 2012, two other agencies--the Department of 
Justice (DOJ), and the Department Education (ED)--took enforcement 
actions, issued guidance, or took litigating positions that 
discrimination on the basis of sex under certain anti-discrimination 
statutes included ``gender identity.'' See ED, Office for Civil Rights, 
Questions and Answers in Title IX and Single Sex Elementary and 
Secondary Classes and Extracurricular Activities (2014); \66\ ED and 
DOJ joint Dear Colleague Letter on Transgender Students (May 13, 2016) 
(Title IX guidance); Complaint, United States v. McCrory, No. 5:16-cv-
238-BO (M.D.N.C. filed May 9, 2016) (DOJ Title IX lawsuit challenging a 
North Carolina law concerning transgender access to intimate facilities 
at State university). The Department proposed (and then finalized) its 
definition to be consistent with the policy positions, sub-regulatory 
guidance, and enforcement actions of ED and DOJ.\67\
---------------------------------------------------------------------------

    \65\ See, e.g., Department of Education Title IX regulation at 
34 CFR 106.2(s), 106.7, 106.17(b)(2), 106.21(c)(4), 106.31(c), 
106.32(b)(2) and (c)(2), 106.33, 106.37(a)(3), 106.41(b) and (c), 
106.55(a), 106.58(a) and (b), 106.60(b), and 106.61; Department of 
Justice Title IX regulation at 28 CFR 54.105, 54.130, 54.230(b)(2), 
54.235(b)(3), 54.300(c)(4), 54.400(c), 54.405(b)(2) and (c)(2), 
54.410, 54.430(a)(3), 54.450(b) and (c)(2), 54.520(a), 54.535(a) and 
(b), 54.545(b), and 54.550. See also DOJ Coordination and Compliance 
Division, Title IX Regulations by Agency, https://www.justice.gov/crt/fcs/Agency_Regulations#2.
    \66\ http://www2.ed.gov/about/offices/list/ocr/docs/faqs-title-ix-single-ex201412.pdf.
    \67\ See 81 FR at 31388-31389.
---------------------------------------------------------------------------

    The earlier interpretations have now been taken under review, 
dismissed, preliminarily enjoined, or revoked outright. See Franciscan 
Alliance, Inc., et al. v. Burwell, et al., 227 F. Supp. 3d 660, 696 
(N.D. Tex. 2016) (nationwide preliminary injunction against the Section 
1557 regulation); Texas, et al. v. United States, et al., 201 F. Supp. 
3d 810, 836 (N.D. Tex. 2016) (preliminarily enjoining ED's Title IX 
interpretation); Dear Colleague Letter (Feb. 22, 2017) (ED and DOJ's 
withdrawal of the May 13, 2016 Dear Colleague Letter); Stipulated Joint 
Notice of Dismissal, United States v. State of North Carolina, No. 
1:16-cv-425 (M.D.N.C. May 4, 2017) (dismissing, with prejudice, the DOJ 
lawsuit challenging the North Carolina law).
    As noted above, in Franciscan Alliance, DOJ submitted a brief on 
behalf of HHS, in response to plaintiffs' motions for summary judgment, 
on April 5, 2019. The brief stated that Section 1557's prohibition on 
sex discrimination ``unambiguously excludes discrimination on the basis 
of gender identity.'' \68\
---------------------------------------------------------------------------

    \68\ See Defendant's Memorandum in Response to Plaintiffs' 
Motions for Summary Judgment, Franciscan Alliance, No. 7:16-cv-
00108-O, p. 11 (N.D. Tex, filed April 5, 2019).
---------------------------------------------------------------------------

    The Department proposes to repeal the novel definition of ``sex'' 
in the Section 1557 regulation in order to make the Department's 
regulations implementing Title IX through the Section 1557 Regulation 
more consistent with the Title IX regulations of other Federal 
agencies. The Department further believes this proposed rule avoids 
different interpretations of the same statute by multiple agencies, and 
promotes consistent expectations and enforcement.
f. Need for Consistency With the Department of Justice on 
Implementation and Enforcement of Nondiscrimination Laws
    In 1980, the President delegated to the Attorney General the 
responsibility to lead the coordination of consistent and effective 
implementation of cross-cutting nondiscrimination laws, including Title 
VI, Title IX, and Section 504.\69\ The Department, along with each 
other Executive Agency, is required to cooperate with DOJ and issue its 
implementing regulations consistent with the requirements prescribed by 
the Attorney General, unless prohibited by law.\70\
---------------------------------------------------------------------------

    \69\ Executive Order 12250, Leadership and Coordination of 
Nondiscrimination Laws, Secs. 1-201(a) through (c), 45 FR 72995 
(Nov. 2, 1980).
    \70\ Executive Order 12250 at Secs. 1-401 through 1-402.
---------------------------------------------------------------------------

    In court briefs and otherwise on behalf of the United States, DOJ 
has stated that the ordinary meaning of the word ``sex'' for purposes 
of Federal nondiscrimination laws does not encompass sexual orientation 
or gender identity. On April 5, 2019, DOJ filed a brief on behalf of 
HHS in the Franciscan Alliance case stating that ``the relevant 
provisions of Title IX and Section 1557 unambiguously exclude gender-
identity discrimination.'' \71\ Similarly, in a July 26, 2017 amicus 
curiae brief in a Second Circuit case regarding the prohibition of sex 
discrimination in employment under Title VII of the Civil Rights Act of 
1964, DOJ stated, `` `[i]n common, ordinary usage in 1964--and now, for 
that matter--the word `sex' means biologically male or female.' '' \72\
---------------------------------------------------------------------------

    \71\ See Defendant's Memorandum in Response to Plaintiffs' 
Motions for Summary Judgment, Franciscan Alliance, No. 7:16-cv-
00108-O, p. 14 (N.D. Tex, filed April 5, 2019).
    \72\ See also DOJ Brief for the United States as Amicus Curiae, 
p. 4, in Zarda v. Altitude Express, Inc., 883 F.3d 100 (2d Cir. July 
26, 2017) (quoting dissent in Hively v. Ivy Tech Community College, 
853 F.3d 339, 362 (7th Cir. 2017)); DOJ Brief in Support of 
Defendants' Motion to Dismiss at 2-6, U.S. Pastor Council v. EEOC, 
No. 4:18-cv-00824-O (N.D. Tex. Dec. 17, 2018).
---------------------------------------------------------------------------

    Consistent with this position, a few months later, the Attorney 
General issued a memorandum stating that `` `sex' is ordinarily defined 
to mean biologically male or female'' and that ``Congress has confirmed 
this ordinary meaning by expressly prohibiting, in several other 
statutes, `gender identity' discrimination, which Congress lists in 
addition to, rather than within, prohibitions on discrimination on the 
basis of `sex' or `gender.' '' \73\ The memorandum concluded, ``Title 
VII's prohibition on sex discrimination encompasses discrimination 
between men and women but does not encompass discrimination based on 
gender identity per se, including transgender status. Therefore, as of 
the date of this memorandum . . . the Department of Justice will take 
that position in all pending and future matters . . . .''
---------------------------------------------------------------------------

    \73\ Memorandum of the Attorney General (Oct. 4, 2017), https://www.justice.gov/ag/page/file/1006981/download.
---------------------------------------------------------------------------

    DOJ also took that position on October 24, 2018, when it submitted 
a brief to the U.S. Supreme Court in another Title VII case in which a 
petition for a writ of certiorari was filed. DOJ argued that ``Title 
VII does not define the term `sex,' so the term should `be interpreted 
as taking [its] ordinary, contemporary, common meaning.' When Title VII 
was enacted in 1964, `sex' meant biological sex; it `refer[red] to 
[the] physiological distinction[ ]' between `male and female.' Title 
VII thus does not apply to discrimination against an individual

[[Page 27857]]

based on his or her gender identity. Notably, Congress has specifically 
prohibited discrimination based on `gender identity' in other statutes, 
as a separate protected category in addition to `sex' or `gender.' It 
has not included similar language in Title VII as originally enacted in 
1964 or in any amendment in the 54 years since.'' \74\
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    \74\ DOJ, Brief for the Federal Respondent in Opposition to 
Petition for Writ of Certiorari in R.G. & G.R. Harris Funeral Homes, 
Inc. v. Equal Employment Opportunity Commission, et al., No. 18-107, 
16-18 (Oct. 2018) (citations omitted).
---------------------------------------------------------------------------

    Nevertheless, because the Section 1557 Regulation's gender identity 
provisions remain, public confusion persists. To ensure that its civil 
rights regulations are consistent with the views of the Department of 
Justice, other Federal agencies, and internally, the Department 
proposes to repeal the definition of ``on the basis of sex'' that had 
been adopted in its Section 1557 Final Rule. Because of the likelihood 
that the Supreme Court will be addressing the issue in the near 
future,\75\ the Department declines, at this time, to propose its own, 
definition of ``sex'' for purposes of discrimination on the basis of 
sex in the regulation.
---------------------------------------------------------------------------

    \75\ See Bostock v. Clayton County, 723 Fed. Appx. 964 (11th 
Cir. 2018), cert granted, No. 17-1618 (U.S. Apr. 22, 2019); Altitude 
Express, Inc. v. Zarda, 883 F.3d 100 (2d Cir. 2018), cert granted, 
No. 17-1623 (U.S. Apr. 22, 2019); Equal Employment Opportunity 
Commission v. R.G. & G.R. Harris Funeral Homes, Inc., 884 F.3d 560 
(6th Cir. 2018), cert granted, No. 18-107 (U.S. Apr. 22, 2019), 
https://www.supremecourt.gov/orders/courtorders/042219zor_9olb.pdf.
---------------------------------------------------------------------------

g. Sensitive Balancing of Competing Interests at the Local Level
    The adoption of a definition of ``sex'' in the Section 1557 
Regulation may stifle the ability of States, local governments, and 
covered entities to set their own policies and balance multiple 
competing interests on questions related to gender dysphoria. Because 
Title IX and Section 1557 get their constitutional authority from the 
Spending Clause, according to the Supreme Court, it is appropriate that 
it be exercised with respect for State sovereignty:

[L]egislation enacted pursuant to the spending power is much in the 
nature of a contract: In return for federal funds, the States agree 
to comply with federally imposed conditions. The legitimacy of 
Congress' power to legislate under the spending power thus rests on 
whether the State voluntarily and knowingly accepts the terms of the 
``contract.'' See Steward Machine Co. v. Davis, 301 U. S. 548, 585-
598 (1937); Harris v. McRae, 448 U. S. 297 (1980). There can, of 
course, be no knowing acceptance if a State is unaware of the 
conditions or is unable to ascertain what is expected of it. 
Accordingly, if Congress intends to impose a condition on the grant 
of federal moneys, it must do so unambiguously. Cf. Employees v. 
Department of Public Health and Welfare, 411 U. S. 279, 285 (1973); 
Edelman v. Jordan, 415 U. S. 651 (1974). By insisting that Congress 
speak with a clear voice, we enable the States to exercise their 
choice knowingly, cognizant of the consequences of their 
participation.

Pennhurst State School and Hospital v. Halderman, 451 U.S. 1, 17 
(1981); see also National Federation of Independent Business v. 
Sebelius, 567 U.S. 519, 588 (2012) (``Congress has no authority to 
order the States to regulate according to its instructions. Congress 
may offer the States grants and require the States to comply with 
accompanying conditions, but the States must have a genuine choice 
whether to accept the offer'') (opinion of Roberts, C.J., joined by 
Breyer and Kagan, JJ.). The Department's broad reinterpretation of 
``sex'' under Title IX affected States' ability to accept these 
restrictions knowingly as they came long after states became heavily 
reliant on the continued receipt of Federal funds subject to Title IX 
requirements.
    This proposed rule would significantly restore the ability of 
States to establish policies in this area, based on their weighing the 
competing interests at stake. This proposed rule is not intended to 
remove any protection that Congress has provided by statute, including 
Title IX, or to deny States the ability to provide protections that 
exceed those required by Title IX. Rather, the proposed rule would 
ensure that the Department's Title IX and corresponding Section 1557 
regulations follow the will of Congress with respect to the States by 
not expanding Title IX's definition of ``sex'' beyond the statutory 
bounds.

C. The Costs of the Final Rule Were Unnecessary and Unjustified

    The Department has determined that the Section 1557 Regulation 
imposed substantially larger regulatory burdens than predicted, a 
result inconsistent with the policies of this Administration. In his 
first day in office, President Donald Trump issued Executive Order 
13765, identifying it as Administration policy to ``minimize the 
unwarranted economic and regulatory burdens of the [Patient Protection 
and Affordable Care] Act, and prepare to afford the States more 
flexibility and control to create a more free and open healthcare 
market.'' This Executive Order states that ``the Secretary of Health 
and Human Services (Secretary) and the heads of all other executive 
departments and agencies (agencies) with authorities and 
responsibilities under the [PPACA] shall exercise all authority and 
discretion available to them to waive, defer, grant exemptions from, or 
delay the implementation of any provision or requirement of the [PPACA] 
that would impose a fiscal burden on any State or a cost, fee, tax, 
penalty, or regulatory burden on individuals, families, healthcare 
providers, health insurers, patients, recipients of healthcare 
services, [or] purchasers of health insurance.'' President Trump has 
also issued two further Executive Orders directing executive agencies 
to relieve the regulatory burden and reduce regulatory costs across the 
Federal government.\76\
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    \76\ Executive Order 13771 on Reducing Regulation and 
Controlling Costs (Jan. 30, 2017); Executive Order 13777 on 
Enforcing the Regulatory Reform Agenda (Feb. 24, 2017); see also 
Executive Order 13563 on Improving Regulation and Regulatory Review, 
76 FR 3821 (Jan. 21, 2011).
---------------------------------------------------------------------------

1. The Section 1557 Regulation Imposed Substantially Higher Regulatory 
Costs Than Predicted
    The Department has concluded, based on its independent assessment 
of the evidence, that the costs and burdens imposed by the Section 1557 
Regulation are substantially larger than originally anticipated. The 
Final Rule requires covered entities to post and disseminate to 
beneficiaries, enrollees, and the public, detailed notices of 
nondiscrimination that include information on how individuals with 
disabilities may receive auxiliary aids and services and how LEP 
individuals may receive translated documents or oral interpretation. 45 
CFR 92.7. The Department estimated that this notice requirement would 
impose approximately $3.6 million of costs in the first year of 
compliance and zero for the following four years. In calculating this 
cost, the Department counted the employee time required to initially 
download, print, and post notices in public areas, but did not count 
the recurring costs of paper, ink/toner, and additional postage for the 
required initial or subsequent mailings of these notices. 81 FR 31453, 
31458.
    The Final Rule additionally requires covered entities to provide to 
beneficiaries, enrollees, and others, ``taglines'' describing the 
availability of free language assistance services. The Final Rule 
requires these taglines be written in ``at least the top 15 languages'' 
spoken by LEP individuals in the relevant State or States. 45 CFR 
92.8(d)(1). The Department estimated that the taglines requirement 
would cost the same as the notice of nondiscrimination requirement, 
namely, $3.6 million in the first year and zero over the following four 
years. 81 FR

[[Page 27858]]

31453, 31458. Again, as with notices, the Department counted the 
employee time required to initially download, print, and post taglines, 
but did not count the recurring costs of paper, ink/toner, and 
additional postage for the required initial or subsequent mailings of 
taglines. 81 FR 31453.
    The Department did not fully appreciate the volume of mail inserts 
the combined notice and tagline provisions would require. The Final 
Rule requires notices of nondiscrimination and taglines be appended to 
all ``significant'' publications and communications (bigger than a 
postcard or brochure) sent by covered entities to beneficiaries, 
enrollees, applicants, or members of the public. 45 CFR 92.8(f)(1). The 
Final Rule's preamble explained that ``significant communications'' 
include ``not only documents intended for the public . . . but also 
written notices to an individual, such as those pertaining to rights or 
benefits.'' 81 FR 31402. Many health insurance issuers reasonably 
interpreted the Section 1557 Regulation as requiring that they provide 
the notice and taglines to their subscribers in nearly every written 
communication, including every time the issuer processes a claim and, 
as a consequence, issues a beneficiary an Explanation of Benefits.
    Many of these matters were discussed in DOJ's 2002 and HHS's 2003 
LEP guidance documents. The LEP guidance documents flagged concerns 
about ``unrealistic'' interpretations of translating written materials 
into languages when recipients serve communities in large cities or 
across the country and serve LEP persons who speak dozens and sometimes 
over 100 different languages. 67 FR 41455, 41463 (June 18, 2002) (DOJ 
guidance); 68 FR 47311, 47319 (Aug. 8, 2003) (HHS guidance). 
Furthermore, with the recognition that there could be large numbers of 
documents in need of translation into dozens of languages, the LEP 
guidance documents advised that recipients could start with several of 
the more frequently encountered languages and set benchmarks for 
continued translations into the remaining languages over time. 67 at 
41463 (DOJ); 68 FR at 47319 (HHS). By contrast, the Section 1557 
Regulation set an effective date of July 18, 2016--only 60 days after 
promulgation of the final rule. The Section 1557 Regulation used the 
vague term ``significant'' to identify documents to which providers 
must append translated tagline notices. See 45 CFR 92.8(g). However, 
the Department's long-standing LEP guidance discussed translation of 
``vital'' documents, with the acknowledgement that ``[c]lassifying a 
document as vital or non-vital is sometimes difficult'' because the 
health care context is so fact-specific, depending on ``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.'' 68 FR at 47318 (HHS 
guidance).
    In practice, the notices and taglines requirement results in the 
inclusion of one to two sheets of paper (which may be double-sided) per 
each significant communication mailed by a covered entity.
    Data collected from covered entities, and the Department's 
independent analysis, illustrate the financial impact of the notice and 
tagline requirements. One covered health insurance issuer, which sends 
over 42 million Explanations of Benefits for one of its health plans to 
enrollees each year, states that it was required to add 2-5 pages of 
disclosure content to each letter or document, and estimates the 
incremental cost of printing, paper, and postage alone to be 
approximately $8 million per year.\77\ That covered health insurance 
issuer also reported that another of its health plans, which 
communicates with enrollees 50 to 90 times per year, estimated that it 
is spending approximately $14 million annually on printing and postage 
for notice and tagline requirements.\78\ A third plan reported that its 
costs for taglines were $802,000 for the last quarter of 2016 and were 
projected to be $2.4 million in 2017.\79\ Another large plan estimates 
it will spend $4-5 million per year to comply with these 
requirements.\80\
---------------------------------------------------------------------------

    \77\ Source: Aetna health plan representatives (April 13, 2017).
    \78\ Source: Aetna health plan representatives (May 1, 2017).
    \79\ Source: Aetna (April 10, 2017).
    \80\ Source: UnitedHealth Group (April 10, 2017).
---------------------------------------------------------------------------

    A pharmacy benefit managers (PBM) trade association has reported 
similar effects of the Section 1557 Regulation. It estimates that PBMs 
process over three billion prescriptions per year, with each 
prescription requiring multiple ``significant'' communications be sent 
to beneficiaries (such as explanations of benefits, refill reminders, 
drug safety information, and other notices), many of which are sent by 
mail. The trade association estimates that this amounts to between 1 
and 4.8 billion notices and taglines mailed per year at approximately 
$0.50 to $1 in additional printing and postage costs per communication. 
Thus, according to the trade association, these requirements have cost 
PBMs from $500 million to nearly $5 billion per year.\81\ The high 
costs that health insurance issuers, health plans, and the members of a 
PBM trade association have reported about the costs resulting from the 
notice and tagline provisions of the Final Rule prompted the Department 
to reevaluate the requirement and its associated benefits and burdens.
---------------------------------------------------------------------------

    \81\ Source: Pharmaceutical Care Management Association (May 2, 
2017).
---------------------------------------------------------------------------

    As discussed further in the Regulatory Impact Analysis of this 
proposed rule, and based on the Department's independent analysis, the 
Department concludes that its original assessment of $7.2 million in 
one-time notice and tagline-related costs underestimated the actual 
costs associated with including nondiscrimination notices and taglines 
in significant communications and publications.
    The Department now estimates that the burden from the notice and 
taglines requirement ranges from $147 million (low-end) to $1.34 
billion dollars (high-end) in annual costs before accounting for 
electronic delivery, as described below. These estimates are a function 
of multiplying the low and high per-unit cost of including a 
nondiscrimination notice and tagline insert ($0.035/per unit to $0.32/
per unit) by the volume of significant communications and publications 
to which covered entities are required to attach the notice and 
taglines. The Regulatory Impact Analysis explains the calculations 
underlying these estimates in detail. The Department uses an average of 
the low- and high-end estimates, and adjusts for electronic delivery, 
to arrive at an average savings of $0.632 billion per year which totals 
approximately $3.16 billion over five years. The Regulatory Impact 
Analysis explains the assumptions, rationale, and calculations for this 
weighted average.
2. The Section 1557 Regulation's Burdens Are Not Justified by Need
    The Department does not believe that the regulatory burdens of the 
Section 1557 Regulation, either as originally anticipated or as now 
more correctly estimated, are justified. The Department stated in the 
Final Rule that, apart from burdens related to the Final Rule's 
definition of discrimination ``on the basis of sex'' and provisions 
concerning language access plans,\82\ ``we do not

[[Page 27859]]

anticipate that covered entities will undertake new actions or bear any 
additional costs in response to the issuance of the regulation'' 
because the Final Rule applies ``pre-existing requirements'' that have 
applied to regulated entities ``for years.'' 81 FR 31446. Indeed, the 
Department noted in the preamble to the Final Rule that, following the 
passage of Section 1557 in 2010, the Department's Office for Civil 
Rights (OCR) complaint workload had increased only ``slightly.'' 81 FR 
31458.
---------------------------------------------------------------------------

    \82\ Language access plans are meant to assist covered entities 
in fulfilling their obligations to provide LEP individuals 
meaningful access to services provided by the covered entity. 
Although the Final Rule did not require covered entities to develop 
a language access plan, the Rule stated that the development and 
implementation of a language access plan is a factor the Director 
``shall'' take into account when evaluating whether an entity is in 
compliance with Section 1557. 45 CFR 92.201(b)(2). The Department 
anticipated that 50% of covered entities would develop and implement 
a language access plan following issuance of the Final Rule. 81 FR 
31454.
---------------------------------------------------------------------------

    These facts call into question the need for both the $942 million 
in costs to the public over five years that the Department originally 
anticipated, 81 FR 31459, and the additional approximately $3.2 billion 
in notice and tagline compliance costs of which the Department is now 
aware.
    Several factors suggest that the extraordinary burdens imposed by 
the notice and tagline requirements in particular are not justified by 
need. First, those requirements are difficult for covered entities to 
implement because of other differing and overlapping requirements 
already imposed by the Federal government (with respect to Federal 
health care programs such as Medicare), and by many States (with 
respect to State-regulated health insurance), concerning language 
access.\83\
---------------------------------------------------------------------------

    \83\ E.g., 42 U.S.C. 300gg-15(b)(2) and 300gg-19(a)(1)(B) 
(requiring standards for ensuring that the Summaries of Benefits and 
Coverage and certain notices are provided in a culturally and 
linguistically appropriate manner); 42 U.S.C. 1396d(p)(5)(A) 
(requiring HHS to distribute to States an application form for 
Medicare cost-sharing in English and 10 non-English languages); 26 
CFR 1.501(r)-4(a)(1), (b)(5)(ii) (requiring a hospital organization 
to translate certain documents, among other requirements, to qualify 
for a tax-exempt status with respect to a hospital facility); 42 CFR 
422.2262(a)(1)-(2) and 422.2264(e) (setting forth Medicare Advantage 
marketing requirements, which include requiring Medicare Advantage 
organizations to translate marketing materials into non-English 
languages spoken by 5% or more of individuals in a plan service 
area), Sec.  423.2262(a)(1)-(2) and Sec.  423.2264(e) (setting forth 
Medicare Part D marketing requirements, which include requiring Part 
D plan sponsors to translate marketing materials into non-English 
languages spoken by 5% or more of individuals in a plan service 
area); 45 CFR 155.205(c)(2)(iii)(A) (Marketplaces must post taglines 
on their websites and include taglines in documents ``critical for 
obtaining health insurance coverage or access to health care 
services through a QHP''); 45 CFR 147.136(e)(2)(iii) and (e)(3), and 
147.200(a)(5) (requiring taglines in languages in which 10% of 
individuals with limited English proficiency (LEP) county-wide are 
exclusively literate on internal claims and appeals notices and on 
an issuer's Summary of Benefits and Coverage); 42 CFR 435.905(b)(3) 
(requiring individuals to be ``informed of the availability of 
language services . . . and how to access . . . [them] through 
providing taglines in non-English languages indicating the 
availability of language services''); 42 CFR 457.340(a) (applying 
certain Medicaid requirements, including Sec.  435.905(b)(3), which 
requires individuals to be ``informed of the availability of 
language services . . . and how to access . . . [them] through 
providing taglines in non-English languages indicating the 
availability of language services''); 210 Illinois Cons. Stat. 87/1 
(Illinois Language Assistance Act).
---------------------------------------------------------------------------

    Second, the Department has heard from multiple stakeholders that 
the repetitive nature of the notices and taglines in communications and 
publications dilutes the message contained in significant 
communications to the point that some recipients may be disregarding 
the information entirely.\84\
---------------------------------------------------------------------------

    \84\ Sources: Aetna, ``Member Reactions to 1557 Taglines'' (Apr. 
2017); American Health Insurance Plans and Blue Cross Blue Shield 
Association (May 5, 2017); Pharmaceutical Care Management 
Association (May 2, 2017).
---------------------------------------------------------------------------

    Third, the Department has learned that many beneficiaries of 
Federal and other health programs do not want to receive extra pages of 
information they have seen many times before out of environmental 
concerns or annoyance.\85\ Aetna, one of the largest health insurance 
issuers in the United States, surveyed 322 enrollees by showing them a 
sample document with 4 pages of taglines; 75% of the enrollees reacted 
negatively (referring to the taglines as ``wasteful,'' ``confusing,'' 
``unintelligible,'' ``incomprehensible,'' ``inefficient,'' among 
others), 50% said they would be less likely to carefully read documents 
from their insurer if they had taglines, and about one third said they 
would be less likely to open mail from an insurer if taglines were 
included in each document.\86\
---------------------------------------------------------------------------

    \85\ Sources: Aetna (May 1, 2017); Pharmaceutical Care 
Management Association (Mar. 27, 2017); American Health Insurance 
Plans and Blue Cross Blue Shield Association (May 5, 2017).
    \86\ Source: Aetna, ``Member Reactions to 1557 Taglines'' (Apr. 
2017).
---------------------------------------------------------------------------

    Fourth, the Department has received little evidence of more 
beneficiaries seeking language assistance as a result of the 
requirements that caused these increased burdens. Health plans report, 
anecdotally, that there has been no increase in the number of calls to 
their language lines requesting oral interpretation or written 
translation services since the notice and tagline requirements became 
effective in October 2016.\87\ One plan reported lower numbers after 
the tagline requirement--it received 98,800 calls during the period 
between January and March 2016, but only 91,800 during the same time 
period in 2017.\88\ Since the Final Rule, some pharmacy benefit 
managers report having received a handful of calls to their anti-
discrimination grievance line, some have noticed an increase in their 
translation line call volume, some have noticed no change in call 
volume, and others have seen a decrease, but they report that, as a 
group, they have received significantly more complaints about providing 
too many notices, as compared to requests for translation 
assistance.\89\
---------------------------------------------------------------------------

    \87\ Sources: Pharmaceutical Care Management Association (Mar. 
27, 2017); American Health Insurance Plans and Blue Cross Blue 
Shield Association (May 5, 2017).
    \88\ Source: Aetna (May 1, 2017).
    \89\ Source: Pharmaceutical Care Management Association (Mar. 
27, 2017).
---------------------------------------------------------------------------

    Fifth, the Department has found little evidence showing that 
repeatedly mailing all beneficiaries taglines with 15 or more languages 
is an efficient use of covered entities' resources when the 
overwhelming majority of beneficiaries speak English (with Spanish 
being a distant second). According to Census statistics, as of 2015, 
over three-quarters (79%) of the U.S. population over age 18 speaks 
only English at home, followed by Spanish (12.5%).\90\ Additionally, of 
persons selecting a language preference when registering for coverage 
on the HealthCare.gov platform for 2017, 89.93% selected English, 
followed by 8.36% who selected Spanish.\91\ This data suggests that, 
for the large majority of people who receive them, the required 
language tagline mailings provide little to no benefit (and potentially 
impose burdens) because they are already proficient English speakers 
with little need for, and no entitlement under the law to, translation 
services.
---------------------------------------------------------------------------

    \90\ U.S. Census Bureau, American FactFinder, ``B16007: Age by 
Language Spoken at Home for the Population 5 Years and Over,'' 2011-
2015 American Community Survey (2017), https://factfinder.census.gov/bkmk/table/1.0/en/ACS/16_5YR/S1601/0100000US.
    \91\ CMS, ``Race, Ethnicity, and Language Preference in the 
Health Insurance Marketplaces 2017 Open Enrollment Period,'' (April 
2017), https://www.cms.gov/About-CMS/Agency-Information/OMH/Downloads/Data-Highlight-Race-Ethnicity-and-Language-Preference-Marketplace.pdf. California and New York were not included in the 
analysis as they do not use the HealthCare.gov platform.
---------------------------------------------------------------------------

    Sixth, confusion over the notices has resulted in an increased 
volume of mistaken inquiries on the Department's public phone line.\92\ 
OCR's toll-free

[[Page 27860]]

phone number, available to file civil rights complaints, is listed at 
the bottom of the Notice of Nondiscrimination. See Appendix A to Part 
92 (Sample Notice Informing Individuals About Nondiscrimination and 
Accessibility Requirements and Sample Nondiscrimination Statement: 
Discrimination Is Against the Law). However, recipients of the notices 
often misunderstand it to be the phone number to call when they have 
questions to ask their health insurance issuer or health care provider. 
The majority of phone calls to the OCR complaint line do not concern 
civil rights matters at all. This experience indicates that many 
members of the public do not fully read the non-discrimination notice 
or are confused because it is attached to other information sent to 
them by their providers or issuers. The result has been a significant 
waste of OCR resources with respect to its complaint line and a 
commensurate waste of time for callers.
---------------------------------------------------------------------------

    \92\ Between November 26, 2018 and April 2, 2019, OCR's Call 
Center received 983 calls on the complaint line from individuals who 
actually wanted to speak to their insurance company, not OCR, in 
order to raise billing questions, report a change of address, 
request a replacement insurance card, seek a reimbursement check, or 
make a payment.
---------------------------------------------------------------------------

    The Department's proposal to substantially replace the Section 1557 
Regulation with the existing framework for protection of civil rights 
laws, while expressly addressing language access issues in this 
proposed rule, will better strike the balance between the government's 
interest in ensuring meaningful access to covered healthcare programs 
for LEP individuals and the burdens imposed on regulated entities in 
support of that interest.

III. Nondiscrimination in Health Programs or Activities

    This proposed rule would substantially replace the Section 1557 
Regulation. The provisions proposed for retention, revision, and repeal 
are as follows:

A. Provisions of the Proposed Section 1557 Rule at 45 CFR Part 92

    The proposed rule would more faithfully fulfill the Department's 
congressional mandate. In Section 1557 of the PPACA, Congress applied 
long-standing nondiscrimination requirements to any health programs or 
activities that receive Federal financial assistance, or programs or 
activities administered by an Executive agency under Title I of the 
PPACA or any entity established under such Title I. It did so by cross-
referencing the categories of protected classifications listed in those 
longstanding civil rights laws, namely, discrimination on the basis of 
race, color, national origin, sex, age, or disability. To ensure 
compliance, Congress dictated that ``[t]he enforcement mechanisms 
provided for and available under'' such laws ``shall apply for purposes 
of violations of'' Section 1557. The Department now proposes to fulfill 
this Congressional mandate by applying the enforcement mechanisms 
already provided for, and available under, existing statutes and their 
implementing regulations, including the rights and remedies under such 
laws.
    Based on its review, and the preliminary injunction issued by the 
court in Franciscan Alliance that held parts of the Final Rule exceeded 
the Department's authority under the PPACA, the Department has 
determined that (in addition to exceeding its statutory authority) 
parts of the regulation are duplicative, unduly burdensome, and 
confusing to the regulated community. This proposed rule, accordingly, 
would substantially replace 45 CFR part 92 with provisions in keeping 
with the plain language of Section 1557, while continuing to codify 
certain provisions regarding covered entities' obligations with respect 
to language and disability access. This will ensure better compliance 
with the mandates of Congress, avoid further litigation, relieve 
regulatory burdens, reduce confusion, reduce uncertainty about the 
scope of Section 1557, promote substantive compliance, and improve the 
consistency of regulatory requirements between entities required to 
comply with the civil rights laws as a result of Section 1557 and those 
directly subject to only to the underlying civil rights laws.
    The proposed rule would be divided into two subparts: Subpart A on 
General Provisions (consistent with the current regulation), and 
Subpart B on Specific Applications to Health Programs or Activities. 
The Department proposes to replace Sec. Sec.  92.1 through 92.3, 92.5, 
92.6, and 92.101 of the current rule with provisions addressing Section 
1557's purpose, nondiscrimination requirements, scope of application, 
enforcement mechanisms, relationship to other laws, and meaningful 
access for LEP individuals.
    The Department's proposal does not change the provision to submit 
assurances of compliance with Section 1557 at Sec.  92.5, designated as 
Sec.  92.4. In addition, the Department would retain, but redesignate 
(to adjust to the proposed restructuring in the rule) the provisions on 
voluntary acceptance of language assistance services (Sec.  92.201(g)), 
effective communication for individuals with disabilities (Sec.  
92.202), accessibility of buildings and facilities (Sec.  92.203), 
accessibility of information and communication technology (Sec.  
92.204), and the requirement to make reasonable modifications (Sec.  
92.205).
    Although the proposed rule would eliminate the definitions section 
in the Section 1557 Regulation, the Department proposes to retain many 
key definitions explicitly in other sections or through incorporation 
by reference to relevant statutes or regulations. For example, as 
discussed below, proposed Sec.  92.3 (Scope of application) will define 
the scope of ``health program or activity.'' Proposed Sec.  92.3 also 
effectively defines ``covered entities'' similar to the Final Rule by 
clarifying that the rule applies to: (1) Every health program or 
activity, any part of which is receiving Federal financial assistance 
(including credits, subsidies, or contracts of insurance) provided or 
made available by the Department; (2) any program or activity 
administered by the Department under Title I of the PPACA; or (3) any 
program or activity administered by any entity established under such 
Title. Furthermore, consistent with the text of Section 1557, proposed 
Sec. Sec.  92.2 and 92.3 provide that ``Federal financial assistance'' 
includes credits, subsidies, or contracts of insurance.
    The proposed rule uses the same characteristics as are included in 
the definitions of ``qualified interpreter'' for an LEP individual and 
of ``qualified translator'' in describing the requirements that an 
interpreter and translator, respectively, should meet (but omits the 
word ``qualified'' which is implied by the context). See proposed Sec.  
92.101(b)(3)(i) and (ii). The proposed rule also retains nearly 
verbatim, as requirements with respect to the provision of language 
access services, the characteristics used to define ``language 
assistance services.'' See proposed Sec.  92.101(b)(2).
    Additionally, the proposed rule retains most of the disability-
rights related definitions from the current rule either explicitly, 
such as the definitions of ``disability'' and ``information and 
communication technology;'' by using the definition to describing the 
requirements or characteristics of the entity, such as when describing 
a ``qualified interpreter'' for an individual with a disability; or by 
referencing underlying regulations or statutes, such as for technical 
accessibility standards and definitions.
    In other cases, some terms are clear enough to obviate the need for 
further definition given the context of the proposed rule including 
terms such as ``age,'' ``individual with limited English

[[Page 27861]]

proficiency,'' ``qualified bilingual/multilingual staff,'' or 
``individual with a disability.'' In these examples, OCR will continue 
to interpret the phrases naturally and consistent with the Final Rule.
    The Department will also continue to abide by terms defined in the 
definitions sections of the implementing regulations for the underlying 
statutes. In fact, the Department believes it is generally more 
appropriate to rely on individual definitions applicable to individual 
statutes incorporated into Section 1557 as opposed to picking one 
standard (or creating a new one) and making it applicable in all cases, 
as under the Final Rule.
    The Department asks for comment on whether other definitions should 
be included in the regulatory text.

                           Redesignation Table
------------------------------------------------------------------------
                Old section                          New section
------------------------------------------------------------------------
92.201(g).................................  92.101(c)
92.202....................................  92.102
92.203....................................  92.103
92.204....................................  92.104
92.205....................................  92.105
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    The remaining provisions of Section 1557 would be repealed. A 
description of each proposed provision of the Section 1557 Regulation 
follows:
Proposed ``Subpart A--General Provisions''
Proposed ``45 CFR 92.1 Purpose.''
    This proposed section describes the purpose of the proposed 
regulation as providing for the enforcement of Section 1557, which 
prohibits discrimination under any health program or activity receiving 
Federal financial assistance, or under any program or activity 
administered by an Executive agency under Title I of the PPACA or by 
any entity established under such Title, on the grounds of race, color, 
national origin, sex, age, or disability. The proposed section would 
provide that the Department's Office for Civil Rights (OCR) enforces 
these prohibitions using the mechanisms set forth in the Department's 
Title VI, Title IX, Age Act, and Section 504 regulations. The proposed 
section would replace the current Sec.  92.1 in its entirety.
Proposed ``45 CFR 92.2 Nondiscrimination requirements.''
    This proposed section describes the core substantive requirements 
of compliance with Section 1557 under the proposed regulation. Namely, 
the Department proposes to provide that, except as otherwise provided 
by Title I of the PPACA, an individual shall not be excluded from 
participation in, be denied the benefits of, or be subjected to 
discrimination under, any health program or activity, any part of which 
is receiving Federal financial assistance (including credits, 
subsidies, or contracts of insurance) provided by the Department, or 
under any program or activity administered by the Department under such 
Title, or under any program or activity administered by any entity 
established under such Title, on any grounds prohibited under the 
following statutes:
    (1) Title VI of the Civil Rights Act of 1964 (42 U.S.C. 2000d et 
seq.) (race, color, national origin);
    (2) Title IX of the Education Amendments of 1972 (20 U.S.C. 1681 et 
seq.) (sex);
    (3) The Age Discrimination Act of 1975 (42 U.S.C. 6101 et seq.) 
(age); or
    (4) Section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794) 
(disability).
    The cross-reference to existing civil rights statutes does not 
change the prohibited grounds of discrimination, but applies them, to 
the extent they did not already apply, to the health care context. 
Thus, for example, the cross-referencing of Title IX (which prohibits 
sex discrimination in education programs or activities) in Section 1557 
and in the proposed regulation means that sex discrimination, as 
defined by Title IX, is prohibited in health programs or activities to 
which this proposed part applies, not merely health programs or 
activities related to education. This proposed section would replace 
current Sec.  92.2 in its entirety.
    In keeping with the text of Section 1557, proposed Sec.  92.2 would 
apply to health programs or activities receiving Federal financial 
assistance, ``including credits, subsidies, or contracts of 
insurance.''
    Although Section 1557 prohibits discrimination by any program 
``administered by an Executive Agency,'' the Final Rule itself 
acknowledged the difficulty of the Department enforcing the rule with 
respect to programs administered by other agencies.\93\ Many other 
agencies have their own rules implementing the underlying statutes 
incorporated in section 1557. See, e.g., 65 FR 52857 (Title IX common 
rule for 21 Federal agencies). HHS, therefore, proposes to continue the 
general limitation on the rule's scope found in the Final Rule, 
specifically, that the proposed rule not assert or encompass 
enforcement jurisdiction over entities receiving Federal financial 
assistance administered by another agency under Section 1557.
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    \93\ In the preamble to the Final Rule, the Department 
acknowledged its limited ability to regulate programs covered by 
other agencies. 81 FR 31379 (``Drafting a rule applicable to health 
programs and activities assisted by other Departments would pose 
numerous challenges'').
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    The current regulation, however, departed from this general 
principle by defining Federal financial assistance to include 
assistance that HHS ``does not have primary responsibility for 
administering,'' but merely ``plays a role'' in providing or 
administering. 81 FR 31384; 45 CFR 92.4. This gloss goes beyond the 
text of Section 1557, which, in relevant part, only covers certain 
programs or activities ``administered'' by the Department, not any 
program in which the Department ``plays a role in administering.'' In 
keeping with the text of Section 1557, the proposed regulation would 
not retain the ``plays a role'' language. As a result, the proposed 
rule would no longer cover issuers of Exchange plans solely on the 
basis that HHS plays a role in administering tax credits, also 
administered by the Internal Revenue Service.\94\ Exchange plans, 
however, may still be subject to antidiscrimination enforcement by the 
Department under Section 1557 on other grounds, or under other 
antidiscrimination authorities. For example, qualified health plans 
(QHPs) sold on the Exchanges established under Title I of the PPACA are 
subject to Section 1557, and the issuers of QHPs are subject to 
regulation by the Department's Center for Consumer Information and 
Insurance Oversight, of the Centers for Medicare & Medicaid Services.
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    \94\ In the preamble to the Final Rule, the Department 
acknowledged its limited ability to regulate programs covered by 
other agencies. 81 FR 31379 (``Drafting a rule applicable to health 
programs and activities assisted by other Departments would pose 
numerous challenges''). Additionally, the Department has not applied 
the Final Rule to the risk adjustments program (Section 1343 of the 
PPACA), and does not propose to do so in this proposed rule. See 
also 45 CFR 153.310 (risk adjustment administration).
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    The Department seeks specific comment on the proposed elimination 
of the ``plays a role'' language.
    The Final Rule applies to ``every health program or activity 
administered by the Department; and every health program or activity 
administered by a Title I entity.'' 45 CFR 92.2. But Section 1557, with 
respect to the administration of programs by the Department and PPACA's 
Title I entities, does not include the term ``health.'' Rather Section 
1557 applies to ``any program or activity'' administered by the 
Department or any entity established under Title I of the PPACA.

[[Page 27862]]

    The Department added the health limitation to the current rule 
because it did not believe Section 1557 was intended to apply to every 
program or activity administered by every Executive agency whether or 
not it had any relation to health. Accordingly, the preamble to the 
Final Rule stated it covered health programs administered by CMS, HRSA, 
CDC, Indian Health Service (IHS), and SAMHSA (for example, IHS tribal 
hospitals and clinics operated by the Department and the National 
Health Service Corps) but not any human services programs administered 
by the Department. 81 FR 31446. The Department continues to believe 
that Congress did not provide such expansive coverage, but believes 
that Section 1557 itself already provides a meaningful limitation 
without resort to inserting the word ``health'' when Congress did not 
do so, Section 1557 specifies that it applies to any program or 
activity administered by the Department (or other Executive Agency) 
``under this title,'' meaning Title I of the PPACA. To be consistent 
with the text as passed by Congress, the proposed Sec.  92.2 would 
apply to any program or activity administered by the Department under 
Title I of the PPACA and any program or activity administered by any 
entity established under such Title. Entities established under Title I 
of the PPACA include the health insurance exchanges established 
pursuant to the PPACA. Such exchanges currently include the 12 State 
Exchanges, 5 State Exchanges on the Federal platform, and 34 Federally-
facilitated Exchanges. Title I additionally establishes, among other 
things, State advisory councils concerning community health insurance 
(section 1323).
    The Department seeks public comment on the impact of this language, 
including on mechanisms for identifying affordable health insurance 
coverage options (Sec. 1103), the wellness program demonstration 
project (Sec. 1201, adding Public Health Service (PHS) Act Section 
2705(l)), and the provision of community health insurance options (Sec. 
1323).
Proposed ``45 CFR 92.3 Scope of application.''
    This proposed section would clarify that the scope of application 
of the proposed rule would be consistent with the Civil Rights 
Restoration Act (CRRA), which defined the scope of the underlying civil 
rights laws based on whether or not an entity receiving Federal 
financial assistance is or is not principally engaged in the business 
of providing health care.
    Proposed Sec.  92.3 clarifies the scope of entities covered by the 
rule by specifying that the rule applies to: (1) Any health program or 
activity, any part of which is receiving Federal financial assistance 
(including credits, subsidies, or contracts of insurance) provided by 
the Department; (2) any program or activity administered by the 
Department under Title I of the PPACA; or (3) any program or activity 
administered by any entity established under such Title. Furthermore, 
as provided in Section 1557 of the PPACA \95\ and in proposed Sec.  
92.2, the Department interprets ``Federal financial assistance'' in the 
proposed rule to apply to credits, subsidies, or contracts of 
insurance.
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    \95\ 42 U.S.C. 18116(a) (Section 1557 applies to recipients of 
Federal financial assistance for contracts of insurance).
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    With respect to entities receiving Federal financial assistance, 
the current regulation defines the operation of a ``health program or 
activity'' to cover ``all [ ] operations'' of such entities when they 
are principally engaged in providing or administering ``health services 
or health insurance coverage or other health coverage.'' 45 CFR 92.4. 
The CRRA, however, defined ``program or activity'' under Title VI, the 
Rehabilitation Act, the Age Act, and Title IX to cover all the 
operations of entities only when they are ``principally engaged in the 
business of providing education, health care, housing, social services, 
or parks and recreation.'' Public Law 100-259, 102 Stat. 28 (Mar. 22, 
1988) (emphasis added).
    ``Health insurance'' is distinct from ``health care.'' Compare 5 
U.S.C. 5371 (```health care''' means direct patient-care services or 
services incident to direct patient-care services'') with 42 U.S.C. 
300gg-91 (``The term `health insurance coverage' means benefits 
consisting of medical care (provided directly, through insurance or 
reimbursement, or otherwise and including items and services paid for 
as medical care) under any hospital or medical service policy or 
certificate, hospital or medical service plan contract, or health 
maintenance organization contract offered by a health insurance 
issuer.'').\96\ The Final Rule, however, went beyond the CRRA by 
covering all the operations of entities that are principally engaged in 
providing ``health insurance coverage or other health coverage,'' even 
if they are not principally engaged in the business of providing 
``health care,'' despite there being nothing in Section 1557 indicating 
any abrogation--or extension--of the CRRA.\97\
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    \96\ See also 45 CFR 160.103 (HIPAA administrative 
simplification) (``Health care means care, services, or supplies 
related to the health of an individual. Health care includes, but is 
not limited to, the following: (1) Preventive, diagnostic, 
therapeutic, rehabilitative, maintenance, or palliative care, and 
counseling, service, assessment, or procedure with respect to the 
physical or mental condition, or functional status, of an individual 
or that affects the structure or function of the body; and (2) Sale 
or dispensing of a drug, device, equipment, or other item in 
accordance with a prescription.'').
    \97\ The preamble to the Final Rule acknowledges the relevance 
of the CRRA, 81 FR at 31386, but does not explain how the provision 
of ``health care'' covers the provision of ``health insurance, even 
if only part of the health program or activity receives such 
assistance.''
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    Therefore, to provide further clarity on these issues and return to 
the CRRA's statutory text, proposed Sec.  92.3 would explicitly 
incorporate the CRRA standard. The Department also believes this 
approach is an appropriate interpretation of the phrase ``health 
program or activity.'' If an entity is principally engaged in the 
business of health care, the Department proposes to interpret Section 
1557 so that all operations of that entity would be deemed part of any 
``program or activity'' it engages in, any part of which receives 
Federal financial assistance. If, on the other hand, an entity is not 
principally engaged in the business of health care, the Department 
proposes to interpret Section 1557 so that only the operation for which 
it receives Federal financial assistance is part of the ``program or 
activity.''
    Specifically, the proposed section would set forth the general 
applicability standard from Section 1557: That it applies to any health 
program or activity, any part of which is receiving Federal financial 
assistance administered by the Department, including credits, 
subsidies, or contracts of insurance, or under any program or activity 
that is administered by the Department or any entity established under 
Title I of the PPACA.
    Further, the Department proposes that Sec.  92.3 provide that the 
regulation would cover all of the operations of any entity that 
receives Federal financial assistance from the Department and that is 
principally engaged in the business of providing health care, as part 
of a ``health program or activity.'' For any entity not principally 
engaged in the business of providing health care, ``health program or 
activity'' under the proposed regulation would apply to such entity's 
operations only to the extent any such operations receive Federal 
financial assistance.
    Finally, the proposed section would clarify that, for purposes of 
the rule, an entity principally or otherwise engaged in the business of 
providing health insurance shall not, by virtue of such

[[Page 27863]]

provision, be considered to be principally engaged in the business of 
providing health care.
    The proposed regulation would not apply to entities that do not 
receive Federal financial assistance from the Department. Likewise, as 
discussed above concerning the CRRA, the Department proposes that where 
entities receive Federal financial assistance but are not principally 
engaged in the business of providing health care, the regulation would 
not apply to the components or activities of those entities that do not 
receive Federal financial assistance. If an entity, such as a health 
insurance issuer, receives Federal financial assistance from the 
Department to further a health program or activity but is not 
principally engaged in the business of providing health care, the 
proposed regulation would apply to the entity's specific operations 
which receive Federal financial assistance from the Department, but it 
would not apply to the entity's entire operations.\98\ Thus, for 
example, the proposed rule would generally not apply to short term 
limited duration insurance (STLDI) because, as the Department 
understands it, providers of STLDI are either (1) not principally 
engaged in the business of health care, or (2) not receiving Federal 
financial assistance with respect to STLDI plans specifically.\99\
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    \98\ Compare with Grove City College v. Bell, 465 U.S. 555 
(1984) (holding that receipt of Federal financial aid does not 
automatically trigger institution-wide coverage under Title IX) 
abrogated in part by the CRRA.
    \99\ The Public Health Service Act expressly excludes STLDI from 
its definition of ``individual health coverage,'' and the PPACA does 
not deem short term limited duration insurance to be qualifying 
coverage under the PPACA's minimum essential coverage requirements. 
42 U.S.C. 300gg-91(b)(5); 26 U.S.C. 5000A; see also 83 FR 38212 
(Aug. 3, 2018) (rule clarifying definition of short-term, limited-
duration insurance to Departments of Treasury, Labor, and Health and 
Human Services regulations at 26 CFR 54.9801-2, 29 CFR 2590.701-2, 
and 45 CFR 144.103).
---------------------------------------------------------------------------

    Under the proposed section, examples of entities principally 
engaged in the business of providing health care would include 
hospitals, nursing facilities, hospices, community health centers, and 
physical therapists. Examples of recipients of Federal financial 
assistance from the Department for health programs or activities would 
include laboratories, medical schools, and nursing schools. Examples of 
recipients of Department assistance for contracts of insurance would 
include Medicare Part C (Medicare Advantage).
    The proposed rule would not apply to Medicare Part B (except to the 
extent participation in a health care program is required for engaging 
in other operations),\100\ or self-funded group health plans under the 
Employee Retirement Income Security Act of 1974 (ERISA), Federal 
Employees Health Benefits (FEHB) Program, or STLDI plans because (or to 
the extent) such programs do not receive Federal financial assistance 
from HHS and/or the entities operating them are not principally engaged 
in the business of providing health care as discussed above.
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    \100\ The Department believes that the Federal financial 
assistance does not include Medicare Part B under the Social 
Security Act. See 2 CFR 200.40(c) (Uniform Administrative 
Requirement, Cost Principles, and Audit Requirements for Federal 
Awards); 45 CFR 75.502(h) (Uniform Administrative Requirement, Cost 
Principles, and Audit Requirements for HHS Awards).
---------------------------------------------------------------------------

    The Department seeks public comment on issues related to the scope 
of coverage under the proposed rule, including whether it should define 
``health care'' in the rule according to the statutes cited above 
defining the term, whether it should define ``recipient'' according to 
the current rule or by incorporation by reference to definitions in the 
underlying statutes, and whether such a definition of recipient should 
include subrecipients.
Proposed ``45 CFR 92.4 Assurances.''
    The Department contemplates retaining current Sec.  92.5, requiring 
covered entities to submit an assurance of compliance with Section 1557 
to the Department without change, but proposes to redesignate it as 
Sec.  92.4. Paragraph (a) requires applicants for the Department's 
Federal financial assistance for health programs or activities, health 
insurance issuers seeking certification to participate in an Exchange, 
and States seeking approval to operate State Exchanges to submit 
assurances that the health program or activity will comply with Section 
1557 and its regulation. Paragraph (b) clarifies that assurances of 
compliance with Section 1557 apply to the period during which Federal 
financial assistance is extended, or the applicable property is used, 
owned or possessed. Paragraph (c) requires that assurances with Section 
1557 must be contained in covenants running with applicable property, 
interest, and land transfers from the Department. The source of these 
provisions is the Department's Section 504 regulations, and while 
Section 504 regulations have more detail, they do not have major 
substantive requirements that differ from their Title IX, Title VI, or 
Age Act regulations.\101\
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    \101\ Compare 45 CFR 84.5 (Section 504) with 45 CFR 86.4 (Title 
IX), 80.4(a) (Title VI), 91.33 (Age Act).
---------------------------------------------------------------------------

    The Department proposes to retain the assurance provisions and 
identify ``Section 1557'' on a consolidated assurance form with Title 
VI, Title IX, Section 504, and the Age Act to include major applicable 
civil rights laws and require all applicable covered entities to submit 
the assurance. The Department believes keeping Section 1557 on a 
consolidated form ensures that the insurance industry and States are 
aware that these Federal civil rights laws currently apply to them.
    The Department seeks comment on whether it is appropriate to retain 
the requirement to submit an assurance of compliance with Section 1557 
to the Department, or whether it unnecessarily duplicates requirements 
in the underlying regulations to provide such assurances of compliance 
to the Department.
Proposed ``45 CFR 92.5 Enforcement mechanisms.''
    This proposed section would ensure that even under the proposed 
rule's repeal of certain provisions of the Section 1557 Regulation, the 
enforcement mechanisms provided for, and available 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, and the Department's implementing 
regulations, shall apply for purposes of enforcement of Section 1557. 
Other than as proposed in the conforming amendments discussed in Part 
IV, the proposed rule would not repeal or otherwise amend the 
regulations implementing and enforcing Title VI at 45 CFR parts 80 and 
81, Title IX at 45 CFR part 86, Section 504 at 45 CFR parts 84 and 85, 
and the Age Act at 45 CFR parts 90 and 91.
    The proposed Sec.  92.5 also designates the Director of the 
Department's Office for Civil Rights to receive complaints, conduct 
compliance reviews, and otherwise investigate and take enforcement 
actions with respect to allegations of discrimination in violation of 
Section 1557 under this part.\102\
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    \102\ The Office of Personnel Management (OPM) handles of claims 
alleging discrimination in the Federal Employees Health Benefits 
(FEHB) Program. OPM is charged by Federal statute 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.

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[[Page 27864]]

Proposed ``45 CFR 92.6 Relationship to other laws.''
    The Department proposes Sec.  92.6, to define the relationship of 
the regulation to other laws with more specificity than the current 
sections titled ``Application'' (Sec.  92.2) and ``Relationship to 
other laws'' (Sec.  92.3). The Department proposes to combine the 
substance of these two sections into a new Sec.  92.6. It would set 
forth the text of Section 1557(b) nearly verbatim, and state that 
nothing in the proposed regulation shall be construed to invalidate or 
limit the rights, remedies, procedures, or legal standards available to 
individuals aggrieved under Title VI of the Civil Rights Act of 1964, 
Title VII 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, or to displace additional 
protections under State antidiscrimination laws.
    The proposed section would also specify that the proposed 
regulation not be applied in a manner that conflicts with or supersedes 
exemptions, rights, or protections contained in several civil rights 
statutes, including those just mentioned, the Architectural Barriers 
Act of 1968,\103\ the Americans with Disabilities Act of 1990 (as 
amended by the Americans with Disabilities Act Amendments Act of 
2008),\104\ Section 508 of the Rehabilitation Act of 1973,\105\ and 
statutes protecting conscience and religious freedom.
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    \103\ 42 U.S.C. 4151 et seq.
    \104\ 42 U.S.C. 12181 et seq.
    \105\ 29 U.S.C. 794d.
---------------------------------------------------------------------------

    Although the Section 1557 Regulation incorporated exemptions to 
Title VI, Section 504, and the Age Act,\106\ it did not incorporate 
abortion,\107\ religious,\108\ and other \109\ exemptions contained in 
Title IX. The Final Rule considered the question of explicitly 
incorporating the Title IX religious exemption in the Section 1557 
Regulation, but declined, instead providing that, ``[i]nsofar 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.''
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    \106\ See 45 CFR 92.101(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.'')
    \107\ ``Nothing in this title shall be construed to require or 
prohibit any person, or public or private entity, to provide or pay 
for any benefit or service, including the use of facilities related 
to an abortion . . . .'' Public Law 100-259, 102 Stat. 28 (Mar. 22, 
1988) (codified at 20 U.S.C. 1688).
    \108\ 20 U.S.C. 1681(a)(3) (providing that the prohibition of 
discrimination on the basis of sex ``shall not apply to an 
educational institution which is controlled by a religious 
organization if the application of this subsection would not be 
consistent with the religious tenets of such organization''); see 
also 45 CFR 86.12 (Title IX exemption for educational organizations 
controlled by religious organizations).
    81 FR 31435 (HHS declines to include a religious exemption in 
Section 1557).
    \109\ 20 U.S.C. 1681(a)(6)(B) (Title IX exemption for voluntary 
youth service organizations); 1686 (separate living facilities); 45 
CFR 86.33 (exemption for separate toilet, locker room, and shower 
facilities).
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    The Franciscan Alliance court stated that the Department's failure 
to incorporate statutory exemptions ``nullifies Congress's specific 
direction to prohibit only the ground proscribed by Title IX.'' 
Franciscan Alliance, 227 F. Supp. 3d at 690-691 (citations omitted). 
The Franciscan Alliance court held that there was a likelihood that 
plaintiffs would prevail on the claim that ``[t]he Rule's failure to 
include Title IX's religious exemptions renders the Rule contrary to 
law.'' \110\
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    \110\ 227 F. Supp. 3d at 690-91.
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    In its April 5, 2019, brief in Franciscan Alliance, DOJ, on behalf 
of HHS, stated that the prohibition on sex discrimination under Section 
1557 ``unambiguously includes Title IX's exemptions, including those 
addressing religion and abortion.'' \111\ This statement represents the 
Department's own further consideration of this issue, guided by DOJ's 
pronouncements on Title VII and Title IX. The Department believes that 
its enforcement of Title IX, and its enforcement of Section 1557 (to 
the extent it incorporates Title IX), must be constrained by the 
statutory contours of Title IX, which include explicit abortion and 
religious exemptions and which should be set forth more clearly than in 
the Final Rule.\112\
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    \111\ See Defendant's Memorandum in Response to Plaintiffs' 
Motions for Summary Judgment, Franciscan Alliance, No. 7:16-cv-
00108-O, p. 11 (N.D. Tex, filed April 5, 2019).
    \112\ As discussed further below, HHS also proposes to amend its 
underlying Title IX regulation to include the statutory abortion and 
religious exemptions explicitly.
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    In the Department's view, Section 1557 did not override any 
statutes protecting conscience or civil rights, and the exemptions 
thereto, and it is appropriate to specify that the Section 1557 
Regulation will not be implemented in violation of those laws. Indeed, 
Section 1303 of the PPACA states that nothing in the PPACA shall be 
construed to require qualified health plans to cover abortions as an 
essential health benefit (42 U.S.C. 18023(b)(1)(A)(i)) and ``[n]othing 
in this Act shall be construed to have any effect on Federal laws 
regarding--(i) conscience protection; (ii) willingness or refusal to 
provide abortion; and (iii) discrimination on the basis of the 
willingness or refusal to provide, pay for, cover, or refer for 
abortion or provide or participate in training to provide abortion'' 
(42 U.S.C. 18023(c)(2)(A)). With respect to Section 1303 of the PPACA, 
this language is contained in a provision labeled ``NO EFFECT ON 
FEDERAL LAWS REGARDING ABORTION'' and is in a section that dealing with 
``special rules'' about abortion. However, the language (``conscience 
protections'') is not limited to abortion.
    In light of the PPACA's text and structure and the experience of 
the Franciscan Alliance litigation, the proposed section would 
incorporate by reference statutory exemptions and protections 
concerning religious and abortion exemptions with greater clarity than 
the Final Rule's Sec.  92.2(b)(2) which currently states that, 
``[i]nsofar 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.''
    This current provision would be amended and replaced by the 
proposed Sec.  92.6 which provides that, ``[i]nsofar as the application 
of any requirement under this part would violate, depart from, or 
contradict definitions, exemptions, affirmative rights, or protections 
provided by any of the[se] statutes [ ] . . . or any related, 
successor, or similar Federal laws or regulations, such application 
shall not be imposed or required.''
    Additionally proposed Sec.  92.6 would explicitly identify and 
incorporate protections from specific religious freedom, conscience, 
and nondiscrimination statutes--42 U.S.C. 18113 (Section 1553 of the 
Patient Protection and Affordable Care Act); 42 U.S.C. 2000bb et seq. 
(the Religious Freedom Restoration Act, which applies to ``all Federal 
law . . . unless such law explicitly excludes such application''); 42 
U.S.C. 238n (the Coats-Snowe Amendment); 42 U.S.C. 300a-7 (the Church 
Amendments); the Weldon Amendment (e.g., Consolidated Appropriations 
Act of 2019, Pub. L. 115-245, Div. B, sec. 506(d) (Sept. 28, 2018)); 
and related conscience provisions in appropriations law (e.g., 
Consolidated Appropriations Act of 2019, Pub. L. 115-245, Div. B. sec. 
506) (Sept. 28, 2018)).

[[Page 27865]]

Proposed ``Subpart B--Specific Applications''
Proposed ``45 CFR 92.101 Meaningful access for individuals with limited 
English proficiency''
    The Department proposes to redesignate Sec.  92.201, on providing 
meaningful access for individuals with limited English proficiency 
(LEP), as Sec.  92.101 and, as so redesignated, to amend the provision 
to more closely align with the Department's 2003 LEP guidance.
    In proposed paragraph (a), the Department sets forth the governing 
standard for the provision of meaningful access to programs and 
activities receiving Federal financial assistance based on the U.S. 
Supreme Court decision of Lau v. Nichols, 414 U.S. 563 (1974), which 
interprets Title VI's prohibition of discrimination on the basis of 
``national origin'' in the context of LEP individuals. Subsection (a) 
also incorporates language from the Department of Justice's and HHS's 
LEP guidance documents. See 67 FR 41455 (June 18, 2002) (DOJ Guidance 
to Federal Financial Assistance Recipients Regarding Title VI 
Prohibition Against National Origin Discrimination Affecting Limited 
English Proficient Persons); 68 FR 47311 (Aug. 8, 2003) (HHS Guidance 
to Federal Financial Assistance Recipients Regarding Title VI 
Prohibition Against National Origin Discrimination Affecting Limited 
English Proficient Persons).
    Proposed paragraph (a) would adopt the standard from DOJ's and 
HHS's LEP guidance by specifying that any entity operating or 
administering a health program or activity subject to this rule shall 
take reasonable steps to ensure meaningful access to such programs or 
activities by limited English proficient individuals. Because Section 
1557 applies to a broader scope of entities than only recipients of 
federal financial assistance, the Department proposes to use ``entity'' 
rather than ``recipient'' which retains the nomenclature used in the 
current rule with respect to LEP access.
    Adopting this language would apply the same standard to both health 
and human services within the Department, and conform to the other 
Federal agencies who follow DOJ's LEP guidance, consistent with its 
civil rights coordinating authority. This standard is also consistent 
with Department's LEP guidance.\113\ This provision is proposed to 
replace the current rule's provision which requires that reasonable 
steps to provide meaningful access be provided to each LEP individual 
eligible to be served or likely to be encountered.\114\
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    \113\ 68 FR 47312 (Aug. 8, 2003) (HHS LEP guidance) (stating 
that ``Title VI and its implementing regulations require that 
recipients take reasonable steps to ensure meaningful access by LEP 
persons.'' See also 67 FR 41455 (June 18, 2002) (DOJ LEP Guidance); 
Executive Order 13166 on Improving Access to Services for Persons 
with Limited English Proficiency, 65 FR 50121 (Aug. 16, 2000) 
(directing all Federal agencies to develop LEP guidance consistent 
with DOJ's LEP guidance).
    \114\ 45 CFR 92.201(a). But see 68 FR 47312, 47314 (Aug. 8, 
2003) (HHS LEP guidance) (stating that recipients may conclude that 
``in certain circumstances'' recipient-provided language services 
are not necessary).
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    Proposed paragraph (b) would likewise adopt the four factors from 
the Department's existing LEP guidance to assist entities in 
determining the extent of a covered entity's obligation to provide 
language assistance services. The Department proposes to clarify that 
the starting point for OCR's exercise of its enforcement discretion 
would be an individualized case-by-case assessment that balances the 
following four factors: (1) The number or proportion of LEP individuals 
eligible to be served or likely to be encountered in the eligible 
service population; (2) the frequency with which LEP individuals come 
in contact with the entity's health program, activity, or service; (3) 
the nature and importance of the entity's health program, activity, or 
service; and (4) the resources available to the entity and costs. 68 FR 
at 47314-15 (HHS guidance); accord 67 FR at 41459-60 (factors from 
DOJ's 2002 LEP guidance).\115\ By using the factors as written in the 
Department's LEP Guidance, the proposed rule would use the same factors 
in health care that already apply to all of the Department's programs, 
including human services.
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    \115\ The Department notes that, in both its LEP guidance and in 
the Department of Justice's LEP guidance, language in factor (1) 
also refers to LEP persons rather than individuals, refers to the 
number of those persons served or encountered rather than those 
eligible to be served or likely to be encountered, and refers to 
those served or encountered by the program or grantee rather than in 
the eligible service population. . Likewise, language in factor (3) 
refers to the nature and importance of the program, activity, or 
service provided by the program to people's lives. The Department 
believes that these variations in descriptions of the factors have 
the same meaning, but asks for comment on which formulation of these 
factors it should use for purposes of this rulemaking.
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    Although the current Section 1557 Regulation states that it applies 
to individuals ``eligible to be served or likely to be encountered,'' 
\116\ it did not explicitly address factors such as the number or 
proportion of LEP individuals, the frequency of contact, the resources 
available, or the costs identified in the Department's LEP 
guidance.\117\ Additionally the Final Rule newly required the OCR 
Director to take into account whether a covered entity had developed 
and implemented an effective written language access plan in evaluating 
compliance.\118\ By contrast, the HHS LEP Guidance had stated that 
``[r]ecipients with very few LEP persons and recipients with very 
limited resources, may choose not to develop a written LEP plan.'' 68 
FR 47320. The Department also stated in its guidance that recipients 
have ``alternative and reasonable ways to articulate'' how they are 
providing meaningful access to LEP individuals besides through written 
language access plans. Id.
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    \116\ 45 CFR 92.201(a).
    \117\ But see 45 CFR 92.201(b) (including a catchall allowing 
the Director to ``take into account other relevant factors'').
    \118\ See 45 CFR 92.201(a).
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    Because of these departures from the Department's LEP guidance, the 
Department anticipated that 50% of covered entities would develop 
language access plans subsequent to the finalization of the Section 
1557 Regulation, amounting to a total annualized cost of $84.1 million 
over five years (undiscounted). 81 FR 31459.
    The Department seeks comment on this proposed provision with 
respect to how health care providers would articulate their 
responsibilities under the proposed rule and comment on any related 
costs or cost savings.
    Next, the Department retains Sec.  92.201(c) through (e) and (g) 
from the current rule, but proposes to redesignate these provisions as 
Sec.  92.101(b)(2) through (4) and (c), with the proposed clarifying 
revision that these obligations, which are applicable to specific 
language services, would apply only to the extent necessary to comply 
with the standard articulated in (a) (which is consistent with the HHS 
LEP guidance), as informed by the entity's individualized assessment of 
the four factors. In general, language assistance services, if required 
to be offered by an entity, must be no-cost, timely, and accurate. If 
the standard requires an entity to offer translators or interpreters, 
they must also meet specific minimum qualifications, including ethical 
principles, confidentiality, proficiency, effective interpretation, and 
ability to use specialized terminology as necessary in the health care 
setting. The proposed paragraph also provides a list of other types of 
``language assistance services'' to mirror the definition of the phrase 
under the current rule, with the exception of taglines, which the 
Department no longer believes constitute the actual provision of a

[[Page 27866]]

service, as opposed to the notification of the availability of 
services.
    Like the current rule, when interpretation services are required by 
the rule, the proposed rule would prohibit an entity from requiring a 
LEP individual to bring his or her own interpreter or rely on a minor 
child or accompanying adult to facilitate communication, except under 
limited exceptions.
    Finally, the Department proposes to redesignate Sec.  92.201(f), 
which identified specific technical and training requirements for use 
of video remote interpreting services for LEP individuals, as Sec.  
92.101(b)(3)(iii), and, as so designated, to revise the provision. In 
Sec.  92.201(f), the Department extended the application of the 
Americans with Disabilities Act regulatory definition of ``video remote 
interpreting services'' which requires video that is high quality, 
real-time, full-motion large, sharply delineated, and that does not 
transmit blurry or grainy images. See 45 CFR 35.160. Although 
individuals with hearing impairments rely on accurately seeing sign 
language interpreters (and the proposed rule retains these access 
standards for persons who are deaf or hard of hearing), foreign 
language speakers can, in many circumstances, rely solely on a clear 
audio transmission for effective communication. Given that equipment 
and training costs for more sophisticated video remote interpreting 
technology can be more expensive than audio,\119\ the Department 
believes that additional video standards may not justify the costs, 
particularly with respect to small providers.\120\
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    \119\ See Barb Jacobs, Anne M. Ryan, et al., Medical 
Interpreters in Outpatient Practice, 16:1 Annals of Family Medicine 
70-76 (Jan. 2018), https://doi.org/10.1370/afm.2154 (stating that 
costs can be ``considerable,'' ranging from $1.25 to $3.00 per 
minute for audio interpreters, and $1.95 to 3.49 per minute for 
video interpreters, sometimes with minimum number of minutes 
required per session. Setup costs for video remote interpreting 
equipment vary, depending on whether a laptop, desktop, or cameras, 
speakers and microphones are used'').
    \120\ Christopher M. Burkle, Kathleen A. Anderson, et al., 
Assessment of the efficiency of language interpreter services in a 
busy surgical and procedural practice, BMC Health Services Research 
17:456 (2017), https://doi.10.1186/s12913-017-2425-7 (``With 
increasing numbers of LEP patients over time along with any new 
mandates for providing language assistance, the financial 
implications for many health care facilities will likely continue to 
be a challenge'').
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    The Department seeks comment on the extent to which covered 
entities rely on video remote interpreting for LEP individuals, 
circumstances where a clear video signal (as opposed to audio) would be 
necessary for effective communication, the applicable costs of this 
service, and whether such standards improve the effectiveness of 
communication. Consequently the Department proposes to repeal certain 
provisions on video standards for remote language interpretation 
services, but retain the audio standards which require clear, audible 
transmission of voices, use of quality video connection without lagging 
or irregular pauses in transmission, and applicable training of staff 
to use the remote interpreting technology.
    Finally, paragraph (c), by retaining the provision currently found 
at Sec.  42.201(g), would clarify that Section 1557 does not require 
patients to accept the language access services offered by a provider.
    In its proposed revisions to its meaningful access requirements, 
the Department attempts, in accordance with Supreme Court guidance, to 
strike an appropriate balance with respect to the Title VI rights of 
LEP individuals and the burdens imposed on the regulated community. The 
Department believes that its proposal--in what it proposes to retain, 
and in what it proposes to revise--strikes the right balance and 
provides benefits greater than the burdens imposed. The Department 
nevertheless seeks comment on whether it has struck that proper balance 
with respect to benefits and burdens.
    The Department seeks comment particularly in light of the proposed 
retention of some provisions that impose requirements on covered 
entities under the Section 1557 Regulation (which govern health 
programs or activities) but not on entities who only receive HHS 
funding for human services. Specifically, on whether there is or will 
continue to be problems, confusion or further complexity in 
implementing the regulations arising from differing standards, and if 
so, what could or should be done to address such problems/issues, 
including the possibility of amending the Department's Title VI 
regulation.
    The Department retains several key definitions with respect to LEP 
services. The proposed rule incorporates, as requirements with respect 
to interpreters and translators, the elements of the definitions of 
``qualified interpreter'' for an individual with LEP and of ``qualified 
translator'' in the text of the rule. See proposed Sec.  92.101(b)(3). 
In other cases, some terms are clear enough so as to not require a 
definition, such as ``individual with limited English proficiency.'' In 
this example, OCR will continue to interpret the phrase as under the 
Final Rule to mean ``an individual whose primary language for 
communication is not English and who has a limited ability to read, 
write, speak, or understand English.'' Similarly, OCR will continue to 
interpret the phrase ``qualified bilingual/multilingual staff'' to mean 
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 at least spoken English and the spoken 
language in need of interpretation, including any necessary specialized 
vocabulary, terminology and phraseology, and (2) is able to 
effectively, accurately, and impartially communicate directly with LEP 
individuals in their primary languages.
    The Department contemplates also continuing to abide by terms 
defined in the definition section of the Title VI regulation where 
relevant to LEP issues.
Proposed ``45 CFR 92.102 Effective communication for individuals with 
disabilities.''
    The Department retains Sec.  92.202 of the current rule, but 
proposes to redesignate it as Sec.  92.102. Paragraph (a) requires that 
communications with individuals with disabilities must include 
provision of appropriate auxiliary aids and services, bars requiring 
that individuals with disabilities bring their own interpreters, sets 
minimum standards for video remote interpreting and telephone relay 
services, exempts covered entities from actions that result in a 
fundamental alteration in the nature of a service, program, or activity 
or in undue financial and administrative burdens, and requires 
appropriate timeliness, respect for privacy concerns, and independence 
of the individual with a disability. Paragraph (b) requires recipients 
of Federal financial assistance and State Exchanges subject to part 92 
to provide appropriate auxiliary aids. These provisions are drawn from 
regulations implementing Title II of the Americans with Disabilities 
Act, which applies to any public entity,\121\ and which were 
promulgated by the Department of Justice. See 28 CFR 35.160 through 
35.164.
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    \121\ ``Public entity'' includes State or local government; any 
department, agency, special purpose district, or other 
instrumentality of a State or States or local government. 42 U.S.C. 
12311; see also 28 CFR 35.104(3). The proposed rule instead uses 
``entity'' with respect to provisions concerning disability rights, 
as it does with other provisions concerning who or what is covered 
by the proposed rule.
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    As stated earlier, although the Department proposes to repeal the 
definitions section, it would still apply

[[Page 27867]]

many of the definitions that the Section 1557 Regulation incorporated 
from the Americans with Disabilities Act (``ADA'') (42 U.S.C. 12101 et 
seq.) or its regulations. The definitions incorporated from the ADA are 
the following: disability,\122\ auxiliary aids and services,\123\ 
qualified interpreter,\124\ video remote interpreting,\125\ information 
and communications technology,\126\ technical definitions and standards 
under the ADA,\127\ and Uniform Federal Accessibility Standards as 
promulgated.\128\ The Department also proposes to retain the Current 
Rule's definitions of ``oral transliterators'' \129\ and ``cued 
language transliterators.'' \130\
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    \122\ 42 U.S.C. 12102 (The term ``disability'' means with 
respect to an individual--(A) a physical or mental impairment that 
substantially limits one or more major life activities of such 
individual; (B) a record of such an impairment; or (C) being 
regarded as having such an impairment.'' 42 U.S.C. 12102(1)).
    \123\ The list of auxiliary aids and services from 28 CFR 35.104 
is incorporated into the proposed rule at Sec.  92.102(b)(1).
    \124\ The description of a qualified interpreter from 28 CFR 
35.104 informs the description in the proposed rule at Sec.  
92.101(b)(3).
    \125\ The description of video remote interpreting at 28 CFR 
36.303(f) is incorporated by reference in the proposed rule at Sec.  
92.102(b)(1)(i).
    \126\ 36 CFR part 1194, appendix D, D1194.4.
    \127\ Appendix D to 28 CFR part 36 and 28 CFR 35.104.
    \128\ 49 FR 31528 (Aug. 7, 1984), https://www.access-board.gov/guidelines-and-standards/buildings-and-sites/about-the-aba-standards/ufas.
    \129\ The Section 1557 Rule defined ``oral transliterators'' as 
``individuals who represent or spell in the characters of another 
alphabet''). 45 CFR 92.4.
    \130\ ``Cued language interpreters'' are defined as 
``individuals who represent or spell by using a small number of 
handshapes''). 45 CFR 92.4.
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    The Department seeks comment on whether to propose an exemption 
from the auxiliary aids and services requirement for covered entities 
with fewer than 15 employees. The Department's current Section 504 
regulations permit the exemption, but allow the OCR Director discretion 
to impose a requirement on recipients with fewer than 15 employees if 
provision of auxiliary aids and services would not significantly impair 
the ability of the recipient to provide the benefits or services. See 
45 CFR 84.52(d). The OCR Director announced such a requirement in 2000. 
See 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). The Final Rule did not include the exemption because the 
Department believed that imposing the requirement on all entities would 
promote ``uniformity and consistent administration of law.'' 81 FR 
31407.
Proposed ``45 CFR 92.103 Accessibility standards for buildings and 
facilities.''
    The Department proposes to retain Sec.  92.203 of the current rule, 
but to redesignate it as Sec.  92.103. Subsection (a) requires that new 
construction or alteration of buildings or facilities subject to 
Section 1557 must comply with the 2010 ADA Standards for Accessible 
Design by January 18, 2018. However, this paragraph allows departures 
from the 2010 ADA standards where other methods are permitted that 
provide substantially equivalent or greater access to and usability of 
the building. Subsection (b) contains a safe harbor for new 
construction or alteration of buildings or facilities subject to 
Section 1557, allowing existing facilities which were only required to 
be compliant with the UFAS standards, 1991 ADA Standards, or the 2010 
ADA Standards as of July 18, 2016, to be deemed compliant, unless there 
is new construction or alteration after January 18, 2018. The source of 
these provisions, Title III of the Americans with Disabilities Act, 
applies to any public or private owner, lessor, or operator of a place 
of public accommodation,\131\ any public or private owner, lessor, or 
operator of commercial facilities,\132\ or private entities that offer 
examinations or courses related to applications, licensing, 
certification, or credentialing for secondary or postsecondary 
education, professional, or trade purposes.\133\
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    \131\ 42 U.S.C. 12812(a). See also 28 CFR 35.102 (DOJ 
regulations apply to ``all services, programs, and activities 
provided or made available by public entities'').
    \132\ 42 U.S.C. 12183.
    \133\ 28 CFR 36.102(a)(3).
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    The Department seeks comment on the appropriateness of applying the 
2010 ADA Standards' definition of ``public building or facility'' to 
all entities covered under Section 1557, specifically with respect to 
benefits to individuals and disabilities or burdens on private entities 
related to multistory building elevator \134\ and TTY \135\ 
requirements.
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    \134\ Exception 1 of section 206.2.3 of the 2010 Standards 
exempts multistory buildings besides the professional office of a 
health care provider owned by private entities from the requirement 
to provide an elevator to facilitate an accessible route throughout 
the building. This exemption does not apply to public entities.
    \135\ The 2010 ADA Standards also specifies TTY requirements for 
public buildings different from private buildings. Compare ADA 2010 
Standard 217.4.3.1 (public buildings) with ADA 2010 Standard 
217.4.3.2 (private buildings).
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Proposed ``45 CFR 92.104 Accessibility of information and communication 
technology for individuals with disabilities.''
    The Department retains Sec.  92.204 of the current rule, but 
proposes to redesignate it as Sec.  92.104. Paragraph (a) requires 
covered entities to ensure that their health programs or activities 
provided through information and communication technology are 
accessible to individuals with disabilities, except when resulting in 
an undue financial or administrative burden or fundamental alteration 
in the nature of an entity's health program or activity. Paragraph (b) 
requires effective communication over Federally-facilitated Exchange 
websites and Department administered health programs or activities it 
administers.
    The Department proposes to use the term ``information and 
communication technology'' as defined in the Architectural and 
Transportation Barriers Compliance Board (``U.S. Access Board'') 
regulations implementing Section 508 of the Rehabilitation Act (36 CFR 
part 1194, appendix A, E103.4). In the Final Rule, HHS stated that it 
would use the terminology and its definition from the U.S. Access Board 
regulations. 81 FR 31382. At the time of the Final Rule's promulgation, 
the Architectural and Transportation Barriers Compliance Board 
regulations had been proposed but the rulemaking process had not 
concluded. The proposed Section 1557 rule includes the updated citation 
and nomenclature change from the now finalized U.S. Access Board 
regulation. 82 FR 5790 (Jan. 18, 2017) (Final Rule); 83 FR 2912 (Jan. 
22, 2018) (technical edits).
    Paragraph (b) states the requirements of Section 504 as applied to 
the Department and Department-conducted or administered health programs 
or activities. See 29 U.S.C. 794 (Section 504); 45 CFR part 85 (Section 
504). However, in addition to Section 504, Section 508 of the 
Rehabilitation Act and its implementing regulations also apply to each 
Federal department or agency. See 29 U.S.C. 794d; see also 45 CFR part 
85 (Section 504), 36 CFR 1194.1 and Apps. A, C, and D.\136\ The

[[Page 27868]]

Department seeks comment as to whether the Department should cross-
reference Section 508 and its applicable implementing regulations in 
proposed Sec.  92.104.
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    \136\ When conformance to requirements in the Revised 508 
Standards would impose an undue burden or would result in a 
fundamental alteration in the nature of the ICT, conformance is 
required only to the extent that it does not impose an undue burden 
or result in a fundamental alteration in the nature of the ICT. The 
Section 1557 Regulation does not override the standards under 
Section 508 that concurrently apply to the Department and 
Department-conducted health programs or activities.
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Proposed ``45 CFR 92.105 Requirement to make reasonable 
modifications.''
    The Department retains Sec.  92.205 of the current rule, but 
proposes to redesignate it as Sec.  92.105. This section requires 
covered entities to make reasonable modifications to policies, 
practices, or procedures when necessary, to avoid discrimination on the 
basis of disability, except if the modification would fundamentally 
alter the nature of the health program or activity. This provision is 
derived from regulations implementing Title II of the Americans with 
Disabilities Act promulgated by the Department of Justice and imposed 
on all public entities. See 28 CFR 35.104.
    The Department seeks comment whether this provision should be 
retained or substituted with language conforming to the Department of 
Justice's Section 504 coordinating regulations which state that covered 
entities ``shall make reasonable accommodation to the known physical or 
mental limitations of an otherwise qualified'' individual with a 
disability. See 28 CFR 92.205. The Department also seeks comment 
whether to include an exemption for ``undue hardship.'' See 45 CFR 
84.12 (HHS Section 504 regulation); 28 CFR 92.205 (DOJ Section 504 
coordinating regulation).
Request for Comments on Proposed 45 CFR 92.102 Through 92.105
    In retaining the requirements imposed in the Section 1557 
Regulation through Section 504 with respect to disability, the 
Department seeks to strike an appropriate balance with respect to the 
Section 504 rights of individuals with disabilities and the obligations 
imposed on the regulated community. With respect to the requirement for 
regulated entities to provide assurances, the Department also seeks to 
strike an appropriate balance. The Department believes that, in 
retaining all of these requirements, it has struck that balance and 
provides benefits greater than the burdens it imposes. Even so, the 
Department seeks comment on whether it has struck that proper balance 
by retaining the provisions, and whether the benefits of these 
provisions exceed the burdens imposed by them. The Department also 
seeks comment on whether, in light of the proposed retention of such 
provisions, the requirements imposed on covered entities under the 1557 
regulations differ from those entities who are only subject to the 
underlying civil rights laws and regulations (e.g., the Department's 
human services grantees), and whether there is or will continue to be 
problems, confusion or further complexity in implementing the 
regulations arising from any lack of consistency of the requirements 
imposed under the regulations and, if so, what could or should be done 
to address such problems or issues.
    The Department seeks comment on whether revisions should be made to 
these provisions and whether they are adequately addressed in the 
underlying regulations (or should be) or if additional cross references 
should be made.

B. Current Section 1557 Regulation Provisions Proposed for Repeal or 
Reconsideration

    The proposed rule would repeal certain provisions of the Section 
1557 Regulation that conflict with, or unnecessarily duplicate, the 
statutory text of Section 1557, Federal case law, the four statutes 
incorporated by Section 1557 (Title VI of the Civil Rights Act of 1964, 
Title IX of the Education Amendments of 1972, the Age Discrimination 
Act of 1975, and Section 504 of the Rehabilitation Act of 1973), or 
their implementing regulations. The proposal to repeal such provisions 
from the Section 1557 Regulation would leave in place all of the 
substantive protections of Title VI of the Civil Rights Act of 1964, 
Title IX of the Education Amendments of 1972, the Age Discrimination 
Act of 1975, and Section 504 of the Rehabilitation Act of 1973 and the 
enforcement mechanisms of those statutes referenced at proposed Sec.  
92.2. As discussed above, the Department does not propose to remove 
several provisions prohibiting discrimination against individuals with 
disabilities: With respect to effective communication, accessibility of 
buildings and facilities, accessibility of information and 
communication technology, and the requirement to make reasonable 
modifications. The Department also does not propose to repeal the 
provision on assurances of compliance with Section 1557. A provision on 
language access services for LEP individuals is retained (with proposed 
revisions), with the exception of the provisions on taglines, notices 
of nondiscrimination, the use of language access plans, and video 
standards, as described in the following section, as well as many 
duplicative provisions.
1. Taglines, Notices, Language Access Plans, and Video Interpretation 
Standards
    The Department proposes to repeal in toto the Section 1557 
provisions on taglines,\137\ the use of language access plans,\138\ and 
notices of non-discrimination.\139\ The Department also proposes to 
replace the requirements for remote English-language video interpreting 
services with comparably effective requirements with respect to audio-
based services.\140\ The current rule's provisions were not justified 
by need, were overly burdensome compared to the benefit provided, and 
created inconsistent requirements for HHS funded health programs or 
activities as compared to HHS funded human services programs or 
activities. The Department proposes to return to the language access 
standard previously in place under the existing Title VI regulation as 
interpreted by the U.S. Supreme Court and HHS and the Department of 
Justice in their LEP guidance documents. Other Department regulations 
that require the provision of taglines in certain healthcare contexts 
\141\ and do not otherwise track,

[[Page 27869]]

reference, or rely on Section 1557 or its regulations would not be 
impacted by the proposed repeal of the taglines provisions.\142\
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    \137\ See 45 CFR 92.4 (definition of taglines), 92.8(d) (posting 
of taglines), 92.8(e) (languages of taglines), 92.8(f) (tagline 
notices). 92.8(g) (taglines in significant publications and 
communications); Appendix B to 45 CFR part 92 (sample tagline).
    \138\ 45 CFR 92.201(b)(2) (requiring the OCR Director to ``take 
into account . . . whether a covered entity has developed and 
implemented an effective written language access plan, that is 
appropriate to its particular circumstances'' in evaluation of 
compliance). 45 CFR 92.201(b)(2).
    \139\ 45 CFR 92.8; Appendix B to 45 CFR part 92 (sample notice).
    \140\ 45 CFR 92.201(f).
    \141\ E.g., 42 U.S.C. 300gg-15(b)(2) and 300gg-19(a)(1)(B) 
(requiring standards for ensuring that the Summaries of Benefits and 
Coverage and certain notices are provided in a culturally and 
linguistically appropriate manner); 42 U.S.C. 1396d(p)(5)(A) 
(requiring HHS to distribute to States an application form for 
Medicare cost-sharing in English and 10 non-English languages); 26 
CFR 1.501(r)-4(a)(1), (b)(5)(ii) (requiring a hospital organization 
to translate certain documents, among other requirements, to qualify 
for a tax-exempt status with respect to a hospital facility); 42 CFR 
422.2262(a)(1)-(2) and 422.2264(e) (setting forth Medicare Advantage 
marketing requirements, which include requiring Medicare Advantage 
organizations to translate marketing materials into non-English 
languages spoken by 5% or more of individuals in a plan service 
area), 423.2262(a)(1)-(2) and 423.2264(e) (setting forth Medicare 
Part D marketing requirements, which include requiring Part D plan 
sponsors to translate marketing materials into non-English languages 
spoken by 5% or more of individuals in a plan service area); 45 CFR 
155.205(c)(2)(iii)(A) (Marketplaces must post taglines on their 
websites and include taglines in documents ``critical for obtaining 
health insurance coverage or access to health care services through 
a QHP''); 45 CFR 147.136(e)(2)(iii) and (e)(3), and 147.200(a)(5) 
(requiring taglines in languages in which 10% of individuals with 
limited English proficiency (LEP) county-wide are exclusively 
literate on internal claims and appeals notices and on an issuer's 
Summary of Benefits and Coverage); 42 CFR 435.905(b)(3) (requiring 
individuals to be ``informed of the availability of language 
services . . . and how to access . . . [them] through providing 
taglines in non-English languages indicating the availability of 
language services''); 42 CFR 457.340(a) (applying certain Medicaid 
requirements, including 435.905(b)(3), which requires individuals to 
be ``informed of the availability of language services . . . and how 
to access . . . [them] through providing taglines in non-English 
languages indicating the availability of language services''); 210 
Illinois Cons. Stat. 87/1 (Illinois Language Assistance Act).
    \142\ See, e.g., 45 CFR 155.205(c)(2)(iii)(A) (deeming 
compliance with the LEP provisions of the Section 1557 regulation to 
constitute compliance with CMS's LEP requirements).
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    When it promulgated the Section 1557 Regulation, the Department did 
not discuss all available Department data on the extent of voluntary 
compliance with HHS's LEP 2003 guidance. In 2010, the Department's 
Office of the Inspector General (OIG) published two reports,\143\ which 
found that the vast majority of Medicare providers and plans in 
counties with high proportions of LEP persons surveyed in 2009 
conducted the assessment recommended in HHS's guidance.\144\ 
Additionally, in that 2010 report, 27% of providers cited the cost of 
offering language services as an obstacle.\145\ The generally high rate 
of voluntary action is one reason that the Department proposes to 
repeal some of the Final Rule's LEP mandates and replace them with the 
principles and factors of HHS's LEP guidance. The Department requests 
comment on these OIG reports, and requests other surveys or reports, if 
available, with more current or comprehensive data, to evaluate the 
level of voluntary compliance with the best practices identified in the 
Department's LEP guidance.
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    \143\ HHS OIG, Guidance and Standards on Language Access 
Services: Medicare Providers (July 2010) (OIG Providers Report), 
https://oig.hhs.gov/oei/reports/oei-05-10-00051.pdf (surveying 140 
randomly selected Medicare providers, such as hospitals and nursing 
homes, that directly supply health care services to beneficiaries); 
HHS OIG, Guidance and Standards on Language Access Services: 
Medicare Plans (July 2010) (OIG Plans Report), https://oig.hhs.gov/oei/reports/oei-05-10-00050.pdf (surveying 139 randomly selected 
private companies that contract with CMS to provide health insurance 
under Medicare Advantage or prescription drug coverage under 
Medicare Part D).
    \144\ OIG Providers Report at 34; OIG Plans Report at 29.
    \145\ OIG Providers Report at 23.
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2. Redundant Provisions Duplicative of Pre-Existing Regulations
    The Section 1557 Regulation contains provisions that are 
duplicative of, inconsistent with, or may be confusing in relation to 
the Department's pre-existing Title VI, Section 504, Title IX, and the 
Age Act regulations. In some cases, they may also be duplicative of, 
inconsistent with, or confusing in relation to coordinating regulations 
published by DOJ for Title VI and Section 504, applicable to recipients 
of Federal financial assistance. See 28 CFR parts 41 (Section 504) and 
42 (Title VI).
    These Section 1557 provisions relate to definitions; \146\ health 
insurance coverage; \147\ certain employee health benefits programs; 
\148\ notification of rights of beneficiaries under civil rights laws; 
\149\ designation of responsible employees and adoption of grievance 
procedures; \150\ access granted to OCR for review of covered entities' 
records of compliance; \151\ prohibitions on intimidation and 
retaliation; \152\ and remedial action and voluntary action.\153\
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    \146\ Compare 45 CFR 92.4 (Section 1557) with 45 CFR 80.13 
(Title VI), 85.3 (Section 504), 86.2 (Title IX) and 91.12 (Age Act).
    \147\ Compare 45 CFR 92.207 (non-discrimination in health-
related insurance and other health-related coverage under Section 
1557) with 45 CFR 80.5 (health benefits under Title VI), 84.43 
(health insurance under Section 504), 84.52 (health benefits under 
Section 504), 84.33 (rule of construction of Section 504 vis-
[agrave]-vis validly obligated payments from health insurer); 86.39 
(health insurance benefits and services under Title IX).
    \148\ Compare 45 CFR 92.208 (employer liability for 
discrimination in employee health benefit programs in Section 1557) 
with 45 CFR 86.56 (discrimination on the basis of sex in fringe 
benefits under Title IX). In view of the current 1557 rulemaking, 
the enforcement Memorandum of Understanding (MOU) between OPM and 
the Department, available at https://www.hhs.gov/sites/default/files/opm.pdf, would be moot if this proposed rule were to become 
final. Moreover, because the MOU is akin to subregulatory guidance, 
it is suspended during this rulemaking, consistent with Section V 
below.
    \149\ Compare 45 CFR 92.8 and Appendix A to 45 CFR part 92 
(Section 1557) with 45 CFR 80.6 and Appendix to Part 80 (Title VI), 
84.8 (Section 504), 86.9 (Title IX) and 91.32 (Age Act).
    \150\ Compare 45 CFR 92.7 and Appendix C to 45 CFR part 92 
(Section 1557) with 45 CFR 84.7 (Section 504), and 86.8 (Title IX).
    \151\ Compare 45 CFR 92.303(c) (Section 1557) with 45 CFR 91.31 
(Age Act) and 80.6(c) (Title VI).
    \152\ Compare 45 CFR 92.303(d) (Section 1557) with 45 CFR 
80.7(e) (Title VI) and 91.45 (Age Act).
    \153\ Compare 45 CFR 92.6 (Section 1557) with 45 CFR 84.6 
(Section 504), 86.3 (Title IX), and 91.48 (Age Act).
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    The Department seeks comment on the provisions proposed for repeal, 
and which of these, if any, should be preserved, in whole or part, in 
the rule, whether they are already addressed in the underlying 
regulations (or should be), and with particular comments requested 
about the following subjects:
     Coverage of certain employee health benefit programs.
     Designation of responsible employees and adoption of 
grievance procedures.
     Notification of beneficiaries, enrollees, applicants, 
patients, and/or members of the public of rights and responsibilities 
under civil rights laws.

IV. Need for Conforming Amendments

    In conjunction with the proposed new provisions for the Section 
1557 regulation, the Department proposes to add provisions containing 
Title IX's exemptions to its Title IX Regulation in order to conform it 
to the statute, be consistent with the Section 1557 regulation, and 
reflect current law. This proposed rule would also amend regulations 
governing certain HHS-funded or HHS-administered health programs 
covered by Section 1557 or Title IX in order to conform them to the 
scope of the changes defined by this proposed rule.

A. Nondiscrimination in Education Programs or Activities

    In conjunction with the proposed Section 1557 Regulation, the 
Department proposes to conform the Title IX regulation to statutory 
exemptions consistent with the Section 1557 regulation and current law. 
Although the Section 1557 Regulation incorporated exemptions of Title 
VI, Section 504, and the Age Act,\154\ it did not incorporate the 
abortion and religious exemptions contained in Title IX. The Franciscan 
Alliance court stated that the Department's failure to incorporate 
statutory exemptions ``nullifies Congress's specific direction to 
prohibit only the ground proscribed by Title IX.'' Franciscan Alliance, 
227 F. Supp. 3d at 690-691 (citations omitted).
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    \154\ See 45 CFR 92.101(a)(6) (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.'')
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    In its April 5, 2019 brief in Franciscan Alliance, DOJ, on behalf 
of HHS, stated that the prohibition on sex discrimination under Section 
1557 ``unambiguously includes Title IX's exemptions, including those 
addressing religion and abortion.'' \155\ To address the Franciscan 
Alliance court's holding and ensure a consistent and equitable 
enforcement approach, HHS proposes to amend its Title IX regulation to 
include

[[Page 27870]]

the statutory abortion \156\ and religious \157\ exemptions.
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    \155\ See Defendant's Memorandum in Response to Plaintiffs' 
Motions for Summary Judgment, Franciscan Alliance, No. 7:16-cv-
00108-O, p. 11 (N.D. Tex, filed April 5, 2019).
    \156\ ``Nothing in this title shall be construed to require or 
prohibit any person, or public or private entity, to provide or pay 
for any benefit or service, including the use of facilities related 
to an abortion . . . .'' Public Law 100-259, 102 Stat. 28 (Mar. 22, 
1988) (codified at 20 U.S.C. 1688).
    \157\ 20 U.S.C. 1681(a)(3) (providing that the prohibition of 
discrimination on the basis of sex ``shall not apply to an 
educational institution which is controlled by a religious 
organization if the application of this subsection would not be 
consistent with the religious tenets of such organization''); 81 FR 
31435 (HHS declines to include a religious exemption in Section 
1557).
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    The Final Rule did not include an affirmative religious exemption 
in the Section 1557 Regulation, but stated that ``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.'' The Franciscan Alliance court 
held that there was a likelihood that plaintiffs would prevail on the 
claim that ``[t]he Rule's failure to include Title IX's religious 
exemptions renders the Rule contrary to law.'' \158\ After further 
consideration of this issue, the Department concludes that any 
enforcement of Title IX by the Department, and, therefore, any 
enforcement of Section 1557 to the extent it incorporates Title IX, 
must be constrained by the statutory contours of Title IX, which 
include its abortion and religious exemptions, and must be set forth 
more clearly than occurred in the Final Rule. Therefore, to comply with 
the Franciscan Alliance court's decision and Congress's directives in 
Title IX and Section 1557, and to properly give effect to religious 
liberty and conscience protections related to the provision of abortion 
services provided explicitly under Title IX, the Department proposes to 
amend its Title IX regulation to conform to the statute.
---------------------------------------------------------------------------

    \158\ 227 F. Supp. 3d at 690-671.
---------------------------------------------------------------------------

    In the Final Rule, the Department stated that termination of 
pregnancy \159\ was included as a prohibited basis of discrimination on 
the basis of sex under the Section 1557 Regulation in order to 
``mirror'' the text of the Department's Title IX regulation. 81 FR at 
31387 (May 19, 2016) (Section 1557 Final Rule); see also 80 FR at 54176 
(Sept. 8, 2015) (Section 1557 Proposed Rule). However, the Department 
did not incorporate relevant abortion exemption language from the text 
of Title IX itself. 20 U.S.C. 1688.\160\ As the Franciscan Alliance 
court noted:
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    \159\ Although this proposed rule does not adopt a position on 
whether discrimination on the basis of termination of pregnancy can 
constitute discrimination on the basis of sex, it does not mean that 
OCR could not consider such claims of discrimination, such as 
discrimination on the basis of miscarriage or discrimination on the 
basis of medical complications resulting from a termination of 
pregnancy.
    \160\ The Civil Rights Restoration Act (CRRA) added the 
following language to Title IX, ``Nothing in this chapter shall be 
construed to require or prohibit any person, or public or private 
entity, to provide or pay for any benefit or service, including the 
use of facilities, related to an abortion. Nothing in this section 
shall be construed to permit a penalty to be imposed on any person 
or individual because such person or individual is seeking or has 
received any benefit or service related to a legal abortion.'' 
Public Law 100-259, 102 Stat. 28 (Mar. 22, 1988) (codified at 20 
U.S.C. 1688). The CRRA also included a rule of construction stating 
that ``No provision of this Act or any amendment made by this Act 
shall be construed to force or require any individual or hospital or 
any other institution, program, or activity receiving Federal funds 
to perform or pay for an abortion.'' Id. at Sec. 8.

    Title IX prohibits discrimination on the basis of sex, but . . . 
. categorically exempts any application that would require a covered 
entity to provide abortion or abortion-related services. 20 U.S.C. 
1688. . . . Failure to incorporate Title IX's religious and abortion 
exemptions nullifies Congress's specific direction to prohibit only 
---------------------------------------------------------------------------
the ground proscribed by Title IX. That is not permitted.

Franciscan Alliance, 227 F. Supp. 3d at 690-91.
Proposed ``45 CFR 86.18 Amendments to conform to statutory 
exemptions.''
    To resolve the current litigation, avoid future litigation over the 
Department's Title IX and Section 1557 regulations, and give effect to 
the statutory abortion exemption provisions adopted by Congress and 
relevant rules of construction adopted by Congress, the Department 
proposes to amend its Title IX regulations at 45 CFR part 86 to add a 
new Section 86.18.
    In proposed Sec.  86.18(a), the Department seeks to codify the 
abortion exemption to Title IX. The Department proposes to use the text 
Congress added to Title IX by means of the CRRA--which states that 
``Nothing in this chapter shall be construed to require or prohibit any 
person, or public or private entity, to provide or pay for any benefit 
or service, including the use of facilities, related to an abortion,'' 
Public Law 100-259, 102 Stat. 28 (Mar. 22, 1988) (codified at 20 U.S.C. 
1688)--as the basis of the regulatory text, making the appropriate 
changes to reflect the difference between the statute and the 
implementing regulations.
    Proposed Sec.  86.18(b) would set forth the rule of construction in 
Title IX, as added by the CRRA. The Department again proposes to base 
the regulatory text on the language of the rule of construction adopted 
by Congress: ``No provision of this Act or any amendment made by this 
Act shall be construed to force or require any individual or hospital 
or any other institution, program, or activity receiving Federal funds 
to perform or pay for an abortion.'' Id. at Sec. 8.
    In proposed Sec.  86.18(c), the Department proposes to incorporate 
other relevant laws that may impact the application of the Title IX 
abortion exemption. This paragraph would incorporate the laws cited by 
the Franciscan Alliance court: the Religious Freedom Restoration 
Act,\161\ the Weldon Amendment,\162\ the Coats-Snowe Amendment,\163\ 
and the Church Amendments.\164\ See 227 F. Supp. 3d at 690-91. The 
Department also proposes to reference the First Amendment to the U.S. 
Constitution, the Hyde Amendment,\165\ the Helms Amendment,\166\ and 
Section 1303 of the Patient Protection and Affordable Care Act.\167\ 
The Department concludes that all of these statutes establish 
Congressionally required parameters that may apply to the Department's 
interpretation, implementation, and enforcement of Title IX.\168\
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    \161\ 42 U.S.C. 2000bb-1.
    \162\ E.g., Public Law 114-113, Div. H, sec. 507(d), 129 Stat. 
2242, 2649 (2015).
    \163\ 42 U.S.C. 238n.
    \164\ 42 U.S.C. 300a-7.
    \165\ E.g., Consolidated Appropriations Act, 2019, Public Law 
115-245, Div. B, sec. 506(a).
    \166\ E.g., Continuing Appropriations Act, 2019, Public Law 115-
245, Div. C, sec. 7018.
    \167\ 42 U.S.C. 18023.
    \168\ To the extent the law is found in an appropriations rider, 
it applies to the Department's interpretation, implementation, and 
enforcement of Title IX every year that it is enacted.
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    The Department requests comment on proposed Sec.  86.18.

B. Proposed Conforming Amendments

    The Department proposes to amend certain regulations that identify 
``sexual orientation'' or ``gender identity'' as prohibited bases of 
discrimination for certain Department health programs or activities, to 
the extent that the regulations are not based on independent statutory 
authority which expressly provides such prohibition. As stated above, 
Congress through Section 1557 adopted certain nondiscrimination 
requirements for health programs or activities, any part of which 
receive Federal financial assistance or programs or activities 
administered by an Executive agency under Title I of the PPACA or by an 
entity established under such Title by cross-referencing the grounds 
for discrimination prohibited by longstanding civil rights laws--
namely, race, color, national origin, sex, age, or disability. Neither 
Section 1557 nor any of those longstanding civil rights laws reference 
sexual orientation or gender identity.

[[Page 27871]]

    Moreover, as noted in the preamble to the Final Rule, the current 
regulation does not treat ``an individual's sexual orientation status 
alone [a]s a form of sex discrimination under Section 1557,'' 81 FR 
31390. It is the position of the United States government that Title 
VII, which is read consistent with or carries over to Title IX when 
determining the scope of discrimination on the basis of ``sex,'' ``does 
not reach discrimination based on sexual orientation.'' DOJ Brief for 
the United States as Amicus Curiae, Zarda v. Altitude Express, Inc., 
No. 15-3775 (2d Cir. July 26, 2017). It is also the position of the 
United States government that ``Title VII's prohibition on sex 
discrimination . . . does not encompass discrimination based on gender 
identity per se, including transgender status.'' Memorandum of the 
Attorney General (Oct. 4, 2017).\169\ As discussed above, on April 5, 
2019, DOJ filed a brief in Franciscan Alliance v. Azar on behalf of 
HHS, reiterating the U.S. Government's position about Title VII, and 
stating that ``the [Section 1557] Rule's prohibitions of discrimination 
on the basis of gender identity and, without the accompanying statutory 
protections, termination of pregnancy are substantively unlawful under 
the APA.'' \170\
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    \169\ Memorandum of the Attorney General, (Oct. 4, 2017), 
https://www.justice.gov/ag/page/file/1006981/download.
    \170\ See Defendant's Memorandum in Response to Plaintiffs' 
Motions for Summary Judgment, Franciscan Alliance, No. 7:16-cv-
00108-O, at 5 (filed April 5, 2019).
---------------------------------------------------------------------------

    This proposed rule, thus, seeks to amend regulations that identify 
sexual orientation or gender identity as prohibited bases for 
discrimination for certain Department funded or administered programs 
covered by Section 1557 in order to conform them more closely to the 
prohibited bases for discrimination authorized by Section 1557, and 
encompassed in the proposed Sec.  92.2, and to conform them with 
government policy. The provisions proposed to be conformed are:
     45 CFR 155.120(c)(1)(ii) and 155.220(j)(2), 
nondiscrimination provisions concerning how States and Exchanges carry 
out PPACA requirements and how agents or brokers market to individuals 
they assist with Exchange enrollment or related applications.
     45 CFR 147.104(e), nondiscrimination provision concerning 
marketing or benefit design practices of health insurance issuers under 
the PPACA.
     45 CFR 156.200(e) and 156.1230(b)(3), nondiscrimination 
provision concerning the administration of qualified health plans (QHP) 
by issuers and concerning marketing and other conduct by QHP issuers 
engaged in direct enrollment of applicants under the PPACA.
     42 CFR 460.98(b)(3) and 460.112(a), nondiscrimination 
provisions concerning organizations operating Programs for All-
inclusive Care of the Elderly (PACE) programs and participants 
receiving PACE services under Medicare.
     42 CFR 438.3(d)(4), 438.206(c)(2), and 440.262, 
nondiscrimination provisions concerning Medicaid beneficiary 
enrollment, and promotion and delivery of access and services.
    Additionally, the Department proposes to amend its Title IX 
regulation at 45 CFR 86.31 to remove any potential ambiguity or 
conflict concerning the current regulation's prohibition of 
discrimination ``in the application of any rules of appearance.'' 
Currently, the Department is the only Federal agency with Title IX 
regulatory language prohibiting discrimination ``against any person in 
the application of any rules of appearance.'' \171\ 45 CFR 86.31(b)(5) 
(retained from the predecessor 1975 HEW regulation). While ``rules of 
appearance'' does not appear in Title IX and was never defined in any 
agency's Title IX regulations, the phrase may cause confusion in the 
public about Title IX's coverage and compliance responsibilities and 
has already led to at least one lawsuit.\172\ Because this language is 
not in current regulations of any other agencies, the proposed edit 
would eliminate the potential for conflicting and inequitable Federal 
agency enforcement of Title IX. See Jespersen v. Harrah's Operating 
Co., No. 03-15045 (9th Cir. Apr. 14, 2006) (en banc) (finding sex-
specific uniform, appearance and grooming standards did not violate 
Title VII's prohibition on sex discrimination).
---------------------------------------------------------------------------

    \171\ See, e.g., 47 FR 32527 (July 28, 1982) (Department of 
Education Title IX regulation); 65 FR 52858 (Aug. 30, 2000) (common 
rule adopted by twenty agencies), 66 FR 4627 (Feb. 20, 2001) (common 
rule adopted by Department of Energy); 82 FR 46656 (Oct. 6, 2017) 
(U.S. Department of Agriculture adopting common rule). None of these 
agency Title IX rules contain any language concerning ``rules of 
appearance.''
    \172\ See Complaint, Peltier et al. v. Charter Day School, No. 
7:16-CV-30-H, No. 160 (E.D.N.C. Mar. 30, 2017) (citing ``rules of 
appearance'' in Department of Agriculture's Title IX regulation to 
challenge a school's girls' dress code for ``subject[ing] them to 
archaic sex stereotypes about what constitutes appropriate behavior 
and conduct''); but see 82 FR 46655 (Oct. 6, 2017) (by adopting the 
Title IX common rule, the Department of Agriculture no longer 
contains language about ``rules of appearance'').
---------------------------------------------------------------------------

C. Technical Amendments

    Several technical amendments are proposed to the Department's 
Section 1557 and Title IX regulations. The Department makes a 
nomenclature change to replace ``State-based Marketplace \SM\'' with 
``State Exchange'' to conform the proposed rule to CMS regulations. See 
45 CFR 155.20. The Department also makes a nomenclature change from 
``electronic and information technology'' to ``information and 
communication technology'' \173\ and updates the regulatory cross-
reference in this definition from the Access Board's former 508 
Standards (36 CFR 1194.4) to its revised 508 Standards (36 CFR part 
1194, appendix A, E103.4). The Department also inserts cross-references 
to ADA 2010 Standards, 1991 Standards, and UFAS in the regulatory text 
concerning accessibility for individuals with disabilities.
---------------------------------------------------------------------------

    \173\ Although the Section 1557 Regulation uses the term 
``electronic and information technology'' (EIT) in Sec.  92.204, the 
Department stated that it would update its nomenclature to the U.S. 
Access Board's then-proposed new term ``information and 
communication technology'' (ICT) upon finalization of the U.S. 
Access Board regulation. 81 FR 31382 (Section 1557 Final Rule). See 
also 82 FR 5790 (Jan. 18, 2017) (Access Board ICT Final Rule).
---------------------------------------------------------------------------

    The Department proposes to make a conforming amendment to Sec.  
86.2, which defines Title IX for purposes of the regulation as certain 
enumerated provisions in the U.S. Code. When the Department updated its 
Title IX regulation in 2005 in order to conform to the 1987 CRRA, the 
Department failed to add all relevant statutory citations, including 20 
U.S.C. 1688, which requires neutrality with respect to abortion. 
Compare 70 FR 24314 (May 9, 2005) with Public Law 100-259, 102 Stat. 28 
(Mar. 22, 1988) (CRRA). The Department's Title IX regulation should 
encompass all relevant provisions of the statute it is regulating and, 
accordingly, the Department proposes to edit Sec.  86.2 include 
references to 20 U.S.C. 1687 and 1688 to correct the omission.
    The enforcement section in the Department's Title IX regulation 
currently only addresses applicable procedures for the interim period 
between Title IX's ``effective date and the final issuance of a 
consolidated procedural regulation applicable to Title IX and other 
civil rights authorities.'' 45 CFR 86.71. The proposed rule would 
address current enforcement procedures by adopting the same language 
from the Title IX common rule, which incorporates Title VI procedures.
    The proposed rule would also make nomenclature change to the Title 
IX regulation by replacing ``United States

[[Page 27872]]

Commissioner of Education'' with the official's current title, 
``Secretary of Education.'' See 45 CFR 86.2(n).

V. Interim Treatment of Subregulatory Guidance

    Because the enforcement mechanisms of the underlying four civil 
rights statutes in Section 1557 are already enshrined in the 
Department's free standing regulations, and implemented and enforced by 
the Department's Office for Civil Rights, existing sub-regulatory 
guidance not inconsistent with this rulemaking would not be impacted by 
this rulemaking. Other subregulatory guidance may, however, be 
inconsistent with the Department's interpretation of Section 1557 and 
Title IX, and its requirement to comply with court orders.
    Upon publication of this notice of proposed rulemaking, the 
Department will, as a matter of enforcement discretion, suspend all 
subregulatory guidance issued before this proposed rule that interprets 
or implements Section 1557 (including FAQs,\174\ letters,\175\ and the 
preamble to the current Section 1557 Regulation) that is inconsistent 
with any provision in this proposed rule (including the preamble) or 
with the requirements of the underlying civil rights statutes cross-
referenced by Section 1557 or their implementing regulations. This 
suspension may be revoked wholly or partially at any time before 
finalization of this proposed rule and will be lifted automatically if 
this proposed rule is withdrawn. This suspension is consistent with the 
Attorney General's memorandum of November 16, 2017, stating that, for 
the Department of Justice, ``guidance may not be used as a substitute 
for rulemaking and may not be used to impose new requirements on 
entities outside the Executive Branch. Nor should guidance create 
binding standards by which the Department will determine compliance 
with existing regulatory or statutory requirements.'' \176\ It is also 
consistent with the Associate Attorney General's memorandum of Jan. 25, 
2018, indicating that Department of Justice litigators cannot use 
noncompliance with guidance documents as the basis for proving 
violations of law in affirmative civil enforcement cases and may not 
use its enforcement authority to convert agency guidance documents into 
binding rules.\177\
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    \174\ After publishing the Final Rule, OCR issued guidance 
explaining that anything printed on an 8.5'' x 11'' sheet of paper 
is considered ``significant,'' and, thus, must include the tagline 
notice. See OCR, Question 23, General Questions about Section 1557 
(May 18, 2017), https://www.hhs.gov/civil-rights/for-individuals/section-1557/1557faqs/index.html; see also OCR, Sample Covered 
Entity Tagline Informing Individual with Limited English Proficiency 
of Language Assistance, https://cms-drupal-hhs-prod.cloud.hhs.gov/sites/default/files/sample-ce-tagline-english.pdf. This documents 
are examples of sub-regulatory guidance that must be suspended under 
this proposed rule. See also OCR, Sample Notice Informing 
Individuals About Nondiscrimination and Accessibility Requirements 
and Sample Nondiscrimination Statement, https://cms-drupal-hhs-prod.cloud.hhs.gov/sites/default/files/sample-ce-notice-english.pdf; 
OCR, Frequently Asked Questions to Accompany the Estimates of at 
Least the Top 15 Languages Spoken by Individuals with Limited 
English Proficiency under Section 1557 of the Affordable Care Act, 
(Sept. 1, 2016), https://www.hhs.gov/civil-rights/for-individuals/section-1557/1557faqs/top15-languages/index.html.
    \175\ On July 12, 2012, the OCR Director first announced in a 
correspondence addressed to a single member of the public that OCR 
was accepting and investigating complaints of discrimination on the 
basis of ``actual or perceived sexual orientation or gender 
identity'' under Section 1557 of the PPACA. OCR Transaction Number 
12-00800 (July 12, 2012).
    \176\ Memorandum of the Attorney General, ``Prohibition on 
Improper Guidance Documents.'' https://www.justice.gov/opa/press-release/file/1012271/download.
    \177\ Memorandum of the Associate Attorney General, ``Limiting 
Use of Agency Guidance Documents In Affirmative Civil Enforcement 
Cases.'' https://www.justice.gov/file/1028756/download.
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VI. Regulatory Impact Analysis

    The Department has examined the impacts of the proposed rule as 
required by Executive Order 12866 on Regulatory Planning and Review, 58 
FR 51735 (Oct. 4, 1993); Executive Order 13563 on Improving Regulation 
and Regulatory Review, 76 FR 3821 (Jan. 21, 2011); Executive Order 
13132 on Federalism, 64 FR 43255 (Aug. 4, 1999); Executive Order 13175 
on Tribal Consultation, 65 FR 67249 (Nov. 6, 2000); Executive Order 
13771 on Reducing Regulation and Controlling Costs, 82 FR 9339 (Jan. 
30, 2017); the Congressional Review Act (Pub. L. 104-121, sec. 251, 110 
Stat. 847 (Mar. 29, 1996)); the Unfunded Mandates Reform Act of 1995, 
Public Law 104-4, 109 Stat. 48 (Mar. 22, 1995); the Regulatory 
Flexibility Act (Pub. L. 96-354, 94 Stat. 1164 (Sept. 19, 1980); 
Executive Order 13272 on Proper Consideration of Small Entities in 
Agency Rulemaking, 67 FR 53461 (Aug. 16, 2002); Executive Order 12250, 
Leadership and Coordination of Nondiscrimination Laws, 45 FR 72995 
(Nov. 2, 1980), and the Paperwork Reduction Act of 1995, 44 U.S.C. 
3501, et seq.

A. Executive Orders 12866 and Related Executive Orders on Regulatory 
Review

    Executive Order 12866 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 is 
supplemental to, and reaffirms the principles, structures, and 
definitions governing regulatory review as established in, Executive 
Order 12866.
    As discussed below, the Department has estimated that the proposed 
rule will have an effect on the economy greater than $100 million in at 
least one year in fact it will result in greater than $100 million in 
savings. Thus, it has been concluded that this proposed rule is 
economically significant. It has therefore been determined that this 
proposed rule is a ``significant regulatory action'' (albeit of a 
deregulatory nature) under Executive Order 12866. Accordingly, the 
Office of Management and Budget (OMB) has reviewed this proposed rule.
1. Summary of the Proposed Rule
    Through Section 1557 of the PPACA, Congress applied certain long-
standing civil rights nondiscrimination requirements to any health 
programs or activities that receive Federal financial assistance, and 
any programs or activities administered by an Executive agency under 
Title I of the PPACA or by an entity established under such Title. It 
did so by cross-referencing the discriminatory grounds prohibited by 
those longstanding civil rights laws, namely, discrimination on the 
basis of race, color, national origin, sex, age, or disability, in an 
array of Federally funded and administered programs or activities. To 
ensure compliance, Congress dictated that ``[t]he enforcement 
mechanisms provided for and available under'' such laws ``shall apply 
for purposes of violations of'' Section 1557. The proposed rule would, 
thus, eliminate most of the provisions in the current Section 1557 
Regulation and return to the enforcement mechanisms provided for, and 
available under, those existing statutes and the Department's 
implementing regulations. Specifically, the Department proposes to 
repeal the provisions which interpret Federal law inconsistently with 
Federal court opinions or impose burdens that unjustifiably exceed 
anticipated benefits. These include: The Section 1557 Regulation's 
inclusion of novel definitions; language access plan provisions; 
provisions that set forth new requirements for tagline notices, notices 
of nondiscrimination, and grievance procedures; application of theories 
and remedies available under a subset of civil rights laws to all of 
them, without

[[Page 27873]]

analysis of whether such theories and remedies were available under all 
such civil rights laws; and, provisions based on legal theories that 
were inconsistent with (or, at a minimum, unnecessarily duplicated) 
provisions of long-standing regulations of the underlying civil rights 
laws cited in Section 1557. Consistent with this approach to the 
Section 1557 Regulation, the Department proposes to retain certain 
language and disability access provisions, as well as the assurance of 
compliance requirements. The proposed rule empowers the Department to 
continue its robust enforcement of civil rights laws by additionally 
making it clear that the substantive protections of Title VI of the 
Civil Rights Act of 1964, Title IX of the Education Amendments of 1972, 
the Age Discrimination Act of 1975, and Section 504 of the 
Rehabilitation Act of 1973, remain in full force and effect.\178\ The 
Department also proposes to make certain conforming changes to 
regulations across the Department, and to update its underlying Title 
IX regulation to adopt statutory amendments, in light of the failures 
noted by the district court in Franciscan Alliance.
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    \178\ While Section 1557 does not incorporate nondiscrimination 
provisions by reference to Title VII, it provides that nothing in 
Title I of the PPACA is to be construed as invalidating or limiting 
the rights, remedies, procedures, or legal standards available under 
certain civil rights laws, including Title VII. 42 U.S.C. 18116(b).
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2. Need for the Proposed Rule
    The Department proposes to substantially replace the Section 1557 
Regulation, while retaining certain LEP, disability, and assurances of 
compliance provisions, in order to better comply with the mandates of 
Congress, relieve approximately $3.6 billion in undue regulatory 
burdens, further substantive compliance, reduce confusion, and clarify 
the scope of Section 1557.
    As stated above, the proposed rule is needed in part because two 
Federal district courts have determined that the Department exceeded 
its authority in promulgating parts of the regulation and have enjoined 
or stayed it from applying those parts. By substantially repealing most 
of the Section 1557 Regulation, the Department would revert to 
statutory interpretations more consistent with the law and with the 
United States Government's official position on certain of the 
underlying civil rights statutes, and ultimately allow the Federal 
courts, in particular, the U.S. Supreme Court, to resolve any dispute 
about the proper legal interpretation of such statute and, thus, on 
Section 1557 of the Affordable Care Act.
    Additionally, the Department has determined that the Final Rule is 
duplicative and confusing, has imposed substantial unanticipated 
burdens, and that its anticipated and unanticipated burdens are not 
justified.
    The Department initially estimated the costs from the Section 1557 
Regulation at over $942 million across the first five years. 81 FR 
31458-31459. This figure, however, underestimated actual five year 
costs by at least $2.6 billion, according to the Department's current 
estimates. Most of this expense is derived from the taglines 
requirement, which amounts to an annual burden of approximately $147 
million (low-end) to $1.34 billion dollars (high-end), before 
accounting for electronic delivery, for an average annual burden of 
$0.632 billion per year, and an average five year burden of $3.16 
billion after accounting for electronic delivery, as further described 
in this Regulatory Impact Analysis. Based on the Department's re-
examination of the burden on regulated entities, the Department has 
preliminarily determined that the potential public benefits of imposing 
such requirements are outweighed by the large costs those requirements 
impose on regulated entities and other parties.
3. Consideration of Regulatory Alternatives
    The Department carefully considered several alternatives, including 
the option of not pursuing any regulatory changes, but rejected that 
approach for several reasons.
    First, not pursuing any regulatory changes would be inconsistent 
with the Administration's policies to appropriately reduce regulatory 
burden, in general, with respect to individuals, businesses and others, 
and resulting from PPACA specifically. Not pursuing any regulatory 
change would also be inconsistent with a nationwide preliminary 
injunction in place against the Department with respect to the 
inclusion, in the Section 1557 Regulation, of gender identity and 
termination of pregnancy in the definition of discrimination on the 
basis of sex.
    Second, Federal courts have reached varying conclusions concerning 
a number of legal positions taken by the Department in the Section 1557 
Regulation. The Northern District of Illinois dismissed a plaintiff's 
claim that the Department created a new enforcement legal standard, 
because the ``plain and unambiguous'' statutory text of Section 1557 
expressly incorporated four distinct enforcement mechanisms. Briscoe v. 
Health Care Serv. Corp., 281 F. Supp. 3d 725, 738 (N.D. Ill. 2017) 
(dismissing a Section 1557 claim for sex discrimination using a 
disparate impact standard); but see Rumble v. Fairview Health Servs., 
No. 14-cv-2037 (SRN/FLN) (D.Minn. Mar. 16, 2017) (declining to 
determine the specific standard on motion to dismiss, rejecting 
implication Congress meant to create a ``new anti-discrimination 
framework completely `unbound by the jurisdiction of the four 
referenced statutes,' '' but concluding Congress ``likely'' intended a 
single standard to avoid ``patently absurd consequences''). In 
addition, Federal courts in California, New York, and Iowa did not 
recognize disparate impact claims for sex discrimination under Section 
1557, because such claims are not cognizable under Title IX. See Condry 
v. UnitedHealth Group, No. 3:17-cf-00183-VC (N.D. Calif. June 27, 2018) 
(Slip. Op. at 7); Weinreb v. Xerox Business Services, 323 F. Supp. 3d 
501, 521 (S.D.N.Y. 2018); York v. Wellmark, Inc., No. 4:16-cv-00627-
RGE-CFB, Slip. Op. at *30 (S.D. Iowa Sep. 6, 2017). Another court in 
Pennsylvania indicated that there is no disparate impact claim for 
discrimination on the basis of race under Section 1557 because such 
claims are unavailable under Title VI. See Southeastern Pennsylvania v. 
Gilead, 102 F. Supp. 3d 688 (E.D. Pa. 2015); but see Callum v. CVS 
Corp., 137 F. Supp. 3d 817 (D.S.C. 2015).
    Third, the Department believes that the status quo would not 
address, much less remedy, public confusion regarding complainants' 
rights, and covered entities' legal obligations. The Department 
believes that revisiting the rule will address inconsistences between 
the Department's underlying regulations and with the regulations and 
actions taken by other components of the Department. As applied to sex 
discrimination claims, the Department currently employs a definition of 
discrimination on the basis of sex under Section 1557 and, thus, under 
Title IX that varies from the practice of other Departments. Moreover, 
revising the Section 1557 Regulation will allow the Department to 
resolve current and future complaints of sexual orientation and gender 
identity discrimination in a manner consistent with other agencies' 
enforcement efforts under Title IX. If the Department uses 
interpretations of Title IX that differ from other Departments, and 
that diverges from the legal interpretation of the U.S. Government, as 
set forth by DOJ, it would lead to inconsistent outcomes across 
complainants and covered entities, with

[[Page 27874]]

the problem being especially acute in cases involving a single covered 
entity being investigated with respect to the same allegations by 
multiple Departments that come to different conclusions on effectively 
the same question.
    The Department also considered adding ``gender identity'' and 
``sexual orientation'' to a definition of ``sex'' or ``on the basis of 
sex'' under Title IX. The Department concluded it is inappropriate to 
do so at this time, in light of the government position on the meaning 
of discrimination on the basis of sex under Title VII and cases on 
which the U.S. Supreme Court has granted petitions for writs of 
certiorari to resolve similar questions in the context of Title VII. As 
a policy matter, the Department believes State and local entities are 
better equipped to address issues of gender dysphoria or sexual 
orientation and the sometimes competing privacy interests with 
sensitivity, especially when young children or intimate settings are 
involved. The Department's position will not bar covered entities from 
choosing to grant protections for sexual orientation and gender 
identity that are not required by, but do not conflict with, any other 
Federal law.\179\ The Department has also determined that more complex 
forms of regulation, such as economic incentives or performance 
objectives, are neither appropriate nor feasible solutions to the 
problem to be solved.
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    \179\ Policies of covered entities that result in unwelcome 
exposure to, or by, persons of the opposite biological sex where 
either party may be in a state of undress--such as in changing 
rooms, shared living quarters, showers, or other shared intimate 
facilities--may trigger hostile environment concerns under Title IX. 
United States v. Virginia, 518 U.S. 515, 550 n.19 (1996) 
(``Admitting women to [an all-male school] would undoubtedly require 
alterations necessary to afford members of each sex privacy from the 
other sex in living arrangements''); Fortner v. Thomas, 983 F.22d 
1024, 1030 (11th Cir. 1993) (``[M]ost people have a special sense of 
privacy in their genitals, and involuntary exposure of them in the 
presence of people of the other sex may be especially demeaning or 
humiliating.'').
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    The Department also considered simply repealing the Section 1557 
Regulation in toto and not issuing a replacement regulation. Such an 
approach would be consistent with the Administration's goals of 
reducing the regulatory burden on covered entities and is allowed under 
Section 1557, since that provision does not require the Department to 
issue implementing regulations. However, the Department is committed to 
vigorous enforcement of civil rights and nondiscrimination laws as 
directed by Congress. Additionally, it believes that certain 
provisions--such as those addressing the assurance of compliance with 
Section 1557, effective communication and accessibility for individuals 
with disabilities, and certain language access services--address 
applications of civil rights laws without the statutory or legal 
conflicts or excessive regulatory burdens entailed by other provisions 
of the current Rule.
    The Department considered retaining the provision on visual 
standards for video remote interpreting services for LEP individuals. 
However, the burden of requiring covered entities to provide video 
technology training and utilize expensive software does not appear to 
be justified based on minimal benefit to language speakers who can 
effectively communicate when there is clear audio transmission through 
the remote interpreting service.
    Accordingly, the Department believes it is appropriate to clarify 
how the Office for Civil Rights would enforce the PPACA's 
nondiscrimination protections by replacing the Section 1557 Regulation 
with regulatory provisions (1) explicitly applying the enforcement 
mechanisms provided under the civil rights statutes and related 
implementing regulations cited by Section 1557 to the health contexts 
identified in Section 1557, (2) vesting enforcement authority under 
Section 1557 with the Director of the Office for Civil Rights, and (3) 
specifying how Section 1557 enforcement shall interact with existing 
laws--while retaining certain language and disability access provisions 
and the assurances provision.
    With respect to the requirement that covered entities provide 
nondiscrimination notices and taglines, the Department considered 
keeping the requirement but limiting the frequency of required mailings 
to one per year to each person served by the covered entity. To 
estimate the cost of this option, the Department adopted the base 
assumptions described in this Regulatory Impact Analysis regarding the 
number of covered entities and the average unit cost associated with 
the low-end and high-end costs of a notice and tagline mailing 
(materials, postage, and labor).\180\ The Department adjusted the 
volume of mailings based on the average number of individuals served by 
each covered entity.\181\ The Department assumed the same covered 
entity compliance rate for the insurance industry as under this 
Regulatory Impact Analysis but assumed an increased compliance rate for 
non-insurers (assuming 30% instead of 10%) to reflect that more 
entities would likely comply with the requirements if the burden were 
to be significantly reduced to one mailing per customer/patient per 
year. Based on this method, the estimated total cost of this 
alternative is approximately $63 million per year. Although this option 
poses a significantly reduced burden, the Department believes the costs 
under this alternative still outweigh the benefits because such mass 
multi-language taglines mailings would still be received overwhelmingly 
by English speakers and because the requirement to issue non-
discrimination notices would be largely duplicative of non-
discrimination notice requirements that already exist under Section 
1557's underlying civil rights regulations.\182\
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    \180\ The average of the low ($0.035) and high ($0.32) unit 
costs is $0.18 per notice and tagline mailing.
    \181\ The estimated volume is expected to vary based on covered 
entity type. For instance, each of the 180 health insurance issuers 
serve 685,138 individuals on average, based on the number of insured 
individuals (123 million), which equates to 685,138 mailings per 
issuer. Each of the 185,649 physicians' offices serve 1,703 
individuals, based on the average number of individuals (316 
million) associated with 990 million physicians visits. On average, 
each covered entity serves about 3,000 persons per entity, which 
equates to 3,000 mailings per entity, based on 820 million persons 
served by 275,002 covered entities.
    \182\ See 45 CFR 80.6(d) (Title VI), 84.8 (Section 504), 86.9 
(Title IX), 91.32 (Age Act).
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    The Department invites comment on its proposed approach, as well as 
the other approaches considered by the Department.
4. Considerations for Cost-Effective Design
    In this proposed rule, the Department proposes to substantially 
replace most of the Section 1557 Regulation, so as to significantly 
reduce the regulatory burden of compliance and to return to the pre-
existing understanding of the underlying nondiscrimination obligations 
imposed by the civil rights laws referenced by Section 1557.
    In the preamble to the Final Rule, the Department observed there 
were pre-existing requirements under Federal civil rights laws that, 
``except in the area of sex discrimination,'' applied to a large 
percentage of entities covered by the Final Rule. 81 FR at 31446. Thus, 
in the Final Rule the Department concluded it did not expect covered 
entities to undertake additional costs with respect to the prohibitions 
on discrimination on the basis of race, color, national origin, age, or 
disability discrimination, ``except with respect to the voluntary 
development of a language access plan.'' Id.
    By proposing to repeal the Section 1557 Regulation's novel 
definition of sex discrimination and to eliminate the notices, 
taglines, visual standards in video remote interpreting services for

[[Page 27875]]

LEP individuals, language access plans, and duplicative grievance 
procedures requirements, the proposed rule would also allow covered 
entities the freedom to order their operations efficiently, flexibly, 
and in a cost-effective manner.
    Accordingly, returning to the familiar pre-existing requirements 
and eliminating novel requirements not contemplated nor allowed by 
Section 1557 is a cost-effective way of (1) removing the unjustified 
burdens imposed by the Section 1557 Regulation; (2) reducing confusion 
among the public and covered entities; (3) promoting consistent, 
predictable, and cost-effective enforcement; and (4) creating space for 
innovation in the provision of compliant services by covered entities 
(including flexible and innovative language access practices and 
technology), while faithfully and vigorously enforcing Section 1557's 
civil rights protections.
5. Methodology for Cost-Benefit Analysis
    For purposes of this Regulatory Impact Analysis (RIA), the proposed 
rule adopts the list of covered entities and other costs assumptions 
identified in the 2016 RIA for the Final Rule. The use of assumptions 
from the 2016 rulemaking in the present RIA, however, does not mean 
that the Department adopts those assumptions in any respect beyond the 
purpose of estimating (1) the number of covered entities that would be 
relieved of burden, and (2) cost relief. For example, the 2016 
rulemaking based several cost estimates on an expansive definition of 
Federal financial assistance, which significantly impacted the number 
of covered entities currently burdened by the Final Rule; thus, it is 
appropriate to use that definition for estimating cost relief.\183\ 
Such use, however, should not be interpreted as an endorsement or 
acceptance of the definitions for any other purpose. Moreover, the 
existing definition of Federal financial assistance under the Section 
1557 Regulation is proposed to be repealed in this NPRM.
---------------------------------------------------------------------------

    \183\ The Department seeks public comment in particular on one 
aspect of the Final Rule where there was no estimate of the number 
of impacted entities: The number of religious organizations that 
provide health services and receive Federal financial assistance 
from the Department. The Department seeks public comment to better 
estimate the impact of the proposed rule on such religious entities, 
and the impact of any applicable religious exemptions that might 
change the effect of the proposed rule on those entities.
---------------------------------------------------------------------------

    The Department also does not ``carry over'' every assumption from 
the 2016 Section 1557 Regulation for this NPRM's RIA calculation 
purposes. Most notably, the Department no longer considers its prior 
estimates of costs imposed due to the current Section 1557 Regulation's 
taglines requirement accurate or valid, and provides a more thorough 
and accurate estimate for purposes of this NPRM.
    Cost savings result from the repeal of (1) the provision on the 
incentive for covered entities to develop language access plans and (2) 
the provisions on notice and taglines. In addition, the Department 
quantitatively analyzes and monetizes the impact that this proposed 
rule may have on covered entities' voluntary actions to re-train their 
employees on, and adopt policies and procedures to implement, the legal 
requirements of this proposed rule. The Department analyzes the 
remaining benefits and burdens qualitatively because of the uncertainty 
inherent in predicting other concrete actions that such a diverse scope 
of covered entities might take in response to this proposed rule. The 
Department requests all relevant information or data that would inform 
a quantitative analysis of proposed reforms that the Department 
qualitatively addresses in this RIA.
6. Cost-Benefit Analysis
a. Overview
    In 2016, the Department estimated $942 million \184\ in costs (over 
five years) for the Section 1557 Regulation due to impacts on personnel 
training and familiarization, enforcement, posting of nondiscrimination 
notices and taglines, and revisions in covered entity policies and 
procedures. 81 FR 31446, and 31458-31459 (at Table 5). As stated 
earlier, the Department estimated in its 2016 rulemaking that these 
costs would arise primarily from requirements imposed by the Section 
1557 Regulation with which covered entities were not already 
complying.\185\ The Department specifically identified the Final Rule's 
interpretation of sex discrimination to cover gender identity and sex 
stereotyping,\186\ and the Final Rule's consideration of language 
access plans for compliance purposes, as provisions triggering the 
imposition of new costs.\187\ See 81 FR 31459--Table 5.
---------------------------------------------------------------------------

    \184\ Throughout the regulatory impact analysis in the Section 
1557 Regulation, the 2016 estimates used 2014 dollars unless 
otherwise noted.
    \185\ 81 FR 31446 (``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'').
    \186\ 81 FR 31455 (``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.'').
    \187\ Although the Final Rule did not require covered entities 
to develop a language access plan, the Rule stated that the 
development and implementation of a language access plan is a factor 
the Director ``shall'' take into account when evaluating whether an 
entity is in compliance with Section 1557. 45 CFR 92.201(b)(2). 
Therefore, the Department anticipated that 50% of covered entities 
would be induced to develop and implement a language access plan 
following issuance of the Final Rule. 81 FR 31454.
---------------------------------------------------------------------------

    In 2016, the Department estimated that the Final Rule's 
nondiscrimination notice requirement would impose approximately $3.6 
million in one-time additional costs on covered entities. 81 FR at 
31469. Regarding these requirements, the Department stated: ``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.'' 81 FR at 31469. Thus, the total notice and tagline cost 
was estimated at $7.2 million in the first year and was predicted to go 
down to zero after year one despite the regulatory requirement for 
covered entities to provide notices and taglines to beneficiaries, 
enrollees, and applicants by appending notices and taglines to all 
``significant publications and significant communications'' larger than 
postcards or small brochures. Compare 81 FR 31458 (Table 5), with 45 
CFR 92.8.
    For reasons explained more fully below, the 2016 estimate of $7.2 
million in one-time costs stemming from the notice and taglines 
requirement was a gross underestimation, and thus this proposed rule's 
elimination of those requirements would generate a large economic 
savings of approximately $3.6 billion over five years based on the 
proposed repeal of the notice and taglines provision.

[[Page 27876]]



                     Table 1--Accounting Table of Benefits and Costs of All Proposed Changes
                                                  [In millions]
----------------------------------------------------------------------------------------------------------------
                                       Year 1       Year 2       Year 3       Year 4       Year 5       Total
----------------------------------------------------------------------------------------------------------------
Savings:
    Total (undiscounted)..........         $807         $789         $770         $751         $733       $3,850
    Total (3%)....................          696          660          626          593          562        3,137
    Total (7%)....................          575          525          479          437          399        2,416
Costs--Quantified Costs:
    Total (undiscounted)..........          276            0            0            0            0          276
    Total (3%)....................          238            0            0            0            0          238
    Total (7%)....................          197            0            0            0            0          197
                                   -----------------------------------------------------------------------------
        Net Total (undiscounted)..  ...........  ...........  ...........  ...........  ...........        3,574
----------------------------------------------------------------------------------------------------------------
Non quantified benefits and costs are described below.

b. Generally Applicable Tangible and Intangible Benefits and Burdens
    The proposed rule would result in other tangible benefits for 
covered entities. First, because the proposed rule is simple and easily 
administrable, it would be less likely that covered entities would need 
to pay for legal advice or otherwise expend organizational resources to 
understand their obligations under Section 1557, either in general or 
with respect to any particular situation that arises. Second, the 
proposed rule would eliminate the need for covered entities to expend 
labor and money on an ongoing basis to maintain internal procedures for 
mitigating the legal risk that persists due to unresolved controversy 
over the meaning of Section 1557. The Department solicits comment 
regarding the nature and magnitude of such ongoing costs incurred by 
covered entities.
    The proposed rule would also carry intangible benefits, most 
important of which is that covered entities would enjoy increased 
freedom to adapt their Section 1557 compliance programs to most 
efficiently address their particular needs, benefiting both covered 
entities and individuals. The value of knowledge of civil rights is 
difficult to quantify. Covered entities would be free under the 
proposed rule to implement policies and procedures that comply with 
Federal civil rights laws in creative, effective, and efficient ways 
that are tailored to the covered entities and the communities that they 
serve.
    The Section 1557 Regulation likely induced many covered entities to 
conform their policies and operations to reflect gender identity as 
protected classes under Title IX. The Department anticipates that, as a 
result of the proposed rule, some--but not all--covered entities may 
revert to the policies and practices they had in place before the 
agency actions that created confusion regarding Title IX's definition 
of discrimination on the basis of sex.\188\ Such a reversion may 
naturally entail amending organizational nondiscrimination policies and 
training materials, and communicating those changes to employees. The 
process of voluntarily reverting to previous practices would cost 
covered entities some time and money. In addition, the Department 
believes that, under the proposed rule, some covered entities would no 
longer incur labor costs pursuant to the Section 1557 Regulation 
associated with processing grievances related to sex discrimination 
complaints as they relate to gender identity under Title IX because 
such claims would not be cognizable under the proposed rule.
---------------------------------------------------------------------------

    \188\ Covered entities located in jurisdictions that prohibit 
sexual orientation and gender identity discrimination under State or 
local laws likely already have policies, training, or grievance 
procedures concerning sexual orientation and gender identity and 
likely would not change their policies under the proposed rule.
---------------------------------------------------------------------------

    The Department, however, is uncertain as to the total number of 
covered entities that would change their policies and grievance 
processes to reflect the understanding of sex discrimination set forth 
in this proposed rule. It anticipates that such changes would be 
influenced by a number of factors, including applicable State and local 
laws, along with the covered entities' experiences in implementing the 
previous definition. Accordingly, the Department, at this time, cannot 
estimate the number of covered entities that would revert to the 
previous interpretation of ``sex'' under their internal policies and 
operations and the related cost and benefits from such change in 
behavior. The Department solicits public comments and data on this 
question.
    Consequently, the Department also lacks the data necessary to 
estimate the number of individuals who currently benefit from covered 
entities' policies governing discrimination on the basis of gender 
identity who would no longer receive those benefits as a consequence of 
the rule--notwithstanding that nothing in the rule precludes covered 
entities from continuing such policies voluntarily. The Department 
seeks comments on this question.
    The Department also solicits comments regarding this and other 
intangible benefits that would be conferred by this proposal.
c. Baseline Assumptions
    The following discussion identifies the economic baseline from 
which the Department measures the expected costs and benefits of the 
proposed rule. Its baseline includes the cost estimates in the Final 
Rule, in addition to data it has gathered since the Final Rule was 
implemented, as described in more detail below.
    Key assumptions include the following: (1) The Final Rule triggered 
significant voluntary activity on the part of covered entities, 
generating both costs and benefits; (2) covered entities were already 
complying with civil rights laws and related regulations that were in 
effect before the Final Rule and, thus, the proposed rule does not 
impose any new burden by reaffirming the requirements of those laws; 
(3) the projected costs from the Final Rule for years 1 and 2 have been 
incurred, and the projected costs from years 3, 4, and 5 have not been 
incurred; (4) repeal of the Final Rule's notice and taglines 
requirements would not affect notice or tagline requirements required 
by Centers for Medicare & Medicaid Services guidance or regulations 
that do not reference, rely on, or depend upon the taglines 
requirements of the Final Rule; (5) a relatively small percentage of 
physicians and hospitals currently append notices and taglines to 
billing statements sent to patients, while all insurance companies 
append notices and taglines to their explanations of benefits 
statements; and (6) covered employers are more likely to train

[[Page 27877]]

employees who interact with the public than those who do not.
d. Covered Entities
(1) Entities Covered by Section 1557
    The Final Rule and the proposed rule replacing Section 1557 apply 
to any entity that has a health program or activity, any part of which 
receives Federal financial assistance from the Department, any program 
or activity administered by the Department under Title I of the PPACA, 
or any program or activity administered by an entity established under 
such Title. Covered entities under the current rule's definition \189\ 
include:
---------------------------------------------------------------------------

    \189\ As noted above, we use the list and number of covered 
entities and other figures from the 2016 Final Rule's RIA in this 
RIA for the sake of consistency and convenience, but such use does 
not mean that we adopt or accept any of the underlying analysis, 
definitions, or assumptions from the Final Rule's RIA for any other 
purpose related to this proposed rule.
---------------------------------------------------------------------------

(a) Entities With a Health Program or Activity, Any Part of Which 
Receives Federal Financial Assistance From the Department
    The RIA for the Final Rule stated that the 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 & Medicaid Services (CMS), provides Federal 
financial assistance through various mechanisms to health programs or 
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 Medicaid programs and may 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 capture entities that 
receive Federal financial assistance from only one component of the 
Department. Under the Final Rule, the covered entities consisted of the 
following:
    (i) Entities receiving Federal financial assistance through their 
participation in Medicare (excluding Medicare Part B) or Medicaid 
(about 133,343 facilities).\190\ Examples of these entities cited in 
the 2016 RIA include:
---------------------------------------------------------------------------

    \190\ CMS, Provider of Service file (June 2014), https://www.cms.gov/Research-Statistics-Data-and-Systems/Downloadable-Public-Use-Files/Provider-of-Services/POS2014.html.

 Hospitals (includes short-term, rehabilitation, psychiatric, 
and long-term)
 Skilled nursing facilities/nursing facilities (facility-based 
and 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

    (ii) 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).
    (iii) Community health centers receiving Federal financial 
assistance through grant awards from HRSA (1,300 community health 
centers).\191\
---------------------------------------------------------------------------

    \191\ HRSA, Justification of Estimates for Appropriation 
Committee For Fiscal Year 2016, 53, http://www.hrsa.gov/about/budget/budgetjustification2016.pdf.
---------------------------------------------------------------------------

    (iv) 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.\192\
---------------------------------------------------------------------------

    \192\ HRSA, Justification of Estimates for Appropriation 
Committee For Fiscal Year 2016, 53, http://www.hrsa.gov/about/budget/budgetjustification2016.pdf.
---------------------------------------------------------------------------

    (v) 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).
    (vi) 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).
    (vii) 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 Exchanges receiving Federal 
financial assistance through advance payments of premium tax credits 
and cost sharing reductions and at least 11 health insurance issuers 
operating in the State Exchanges).\193\
---------------------------------------------------------------------------

    \193\ Qualified Health Plans Landscape Individual Market Medical 
(2015), https://data.healthcare.gov/dataset/2015-QHP-Landscape-Individual-Market-Medical/mp8z-jtg7.
---------------------------------------------------------------------------

    (viii) Physicians receiving Federal financial assistance through 
Medicaid payments, ``meaningful use'' payments, and other sources, but 
not Medicare Part B payments; Medicare Part B payments to physicians 
are not 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 2016 rulemaking, the Department estimated that the Final 
Rule likely covers almost all licensed physicians because they accept 
Federal financial assistance from sources other than Medicare Part B. 
Many physicians participate in more than one Federal, State, and local 
health program that receives Federal financial assistance, and many 
practice in several different settings which increases the possibility 
that they may receive payments constituting Federal financial 
assistance.
    For the sake of consistency and convenience, the Department uses 
the 2016 RIA estimate of the number of physicians receiving Federal 
financial assistance. As the 2016 RIA noted, based on 2010 Medicaid 
Statistical Information System data (the latest available), about 
614,000 physicians accept Medicaid payments and are covered under 
Section 1557 as a result.\194\ This figure represents about 69% of 
licensed physicians in the United States when compared to the 890,000 
licensed physicians reported in the Area Health Resource File.\195\ In 
addition, physicians receiving Federal payments from non-Part B 
Medicare sources will also come under Section 1557. The 2016 RIA noted 
that, as of

[[Page 27878]]

January 2014, 296,500 Medicare-eligible professionals had applied for 
funds to support their ``meaningful use'' technology efforts.\196\ 
Adding the approximately 614,000 physicians who receive Medicaid 
payments to the 296,500 physicians who receive meaningful use payments 
yields over 900,000 physicians potentially reached by Section 1557 
because they participate in Federal programs other than Part B of 
Medicare. Because physicians can receive both Medicaid and meaningful 
use payments, and these figures are not adjusted for duplication, the 
900,000 result is best interpreted as an upper bound.
---------------------------------------------------------------------------

    \194\ 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://kaiserfamilyfoundation.files.wordpress.com/2013/01/medicaid-coverage-and-spending-in-health-reform-national-and-state-by-state-results-for-adults-at-or-below-133-fpl.pdf. 
Estimates are based on data from FY 2010 MSIS.
    \195\ HRSA, Area Health Resource Files (2015), http://ahrf.hrsa.gov.
    \196\ Mynti Hossain and Marsha Gold, Mathematical Policy 
Research Inc.: Prepared for The Office of the National Coordinator 
for Health Information Technology, HHS, Monitoring National 
Implementation of HITECH: Status and Key Activity Quarterly Summary 
(Jan. to Mar. 2014), http://www.healthit.gov/sites/default/files/globalevaluationquarterlyreport_januarymarch2014.pdf.
---------------------------------------------------------------------------

    When the Department 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), and allowing for 
duplication in both the Medicare/Medicaid and HRSA numbers,\197\ the 
Department concluded in the 2016 RIA 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.
---------------------------------------------------------------------------

    \197\ The Area Health Resource File itself double counts 
physicians who are licensed in more than one State.
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    The Department invites the public to submit information regarding 
physician participation in health programs or activities that receive 
Federal financial assistance.
(b) Programs or Activities Administered by the Department Under Title I 
of the PPACA
    This proposed rule applies to programs or activities administered 
by the Department under Title I of the PPACA. Such programs or 
activities include temporary high risk pools (section 1101), temporary 
reinsurance for early retirees (section 1102), Department mechanisms 
for identifying affordable health insurance coverage options (section 
1103), the wellness program demonstration project (section 1201, adding 
Public Health Service (PHS) Act 2705(l)), the provision of community 
health insurance options (section 1323), and the establishment of risk 
corridors for certain plans (section 1342).
(c) Entities Established Under Title I of PPACA
    This proposed rule applies to the health insurance exchanges 
established under Title I of PPACA. Such exchanges currently include 
the 12 State Exchanges, 5 State Exchanges on the Federal platform and 
34 Federally-facilitated Exchanges.\198\ Title I additionally 
establishes State advisory councils concerning community health 
insurance (section 1323) and certain reinsurance entities under the 
transitional reinsurance program (section 1341).
---------------------------------------------------------------------------

    \198\ CMS, State-Based Exchanges for Plan Year 2018 (Nov. 13, 
2018), https://www.cms.gov/CCIIO/Resources/Fact-Sheets-and-FAQs/state-marketplaces.html.
---------------------------------------------------------------------------

(2) Entities Covered by Title IX
    Title IX applies to recipients of Federal financial assistance for 
education programs or activities. 20 U.S.C. 1681. The population of 
applicable covered entities is defined by the term ``recipient'' in the 
Department's Title IX regulations. The population includes any State or 
political subdivision thereof, or any instrumentality of a State or 
political subdivision thereof, any public or private agency, 
institution, or organization, or other entity, or any person, to whom 
Federal financial assistance is extended directly or through another 
recipient and that operates an education program or activity that 
receives such assistance, including any subunit, successor, assignee, 
or transferee thereof. See, e.g., 45 CFR 86.2. Under the definition of 
program or activity, recipients of Federal financial assistance within 
the scope of Title IX may include colleges, universities, local 
educational agencies, vocational education systems, or other entities 
or organizations principally engaged in the business of providing 
education. See, e.g., 45 CFR part 86, appendix A (cross-referencing 
appendix B to 45 CFR part 80).
e. Cost Savings From Eliminating Notice and Taglines Requirement
    The Department's baseline for calculating the savings from 
repealing the notice and taglines requirement includes approximately 
$0.632 billion in additional average annual costs from the requirement 
that were not considered in the 2016 rulemaking. It is important to 
note that, while industry estimates prompted the Department to reassess 
the burdens imposed by the Final Rule, the Department conducted and 
relied upon its own cost analysis in developing the RIA for this 
proposed rule.
    The Final Rule assessed $7.1 million for covered entities and 
$70,400 for the Federal government in combined annual costs for 
printing and distributing nondiscrimination notices and taglines, with 
the costs being apportioned roughly equally between notices and 
taglines. 81 FR 31453. As explained in detail below, the Department 
estimates the combined notice and taglines requirement actually costs 
covered entities hundreds of millions of dollars per year, as explained 
in this analysis.
    The Final Rule requires covered entities to include a notice and 
taglines for any ``significant'' document or publication, but did not 
define the term ``significant.'' 45 CFR 92.8(f)(1)(i).\199\ Thus, 
covered entities have reasonably interpreted this provision to require 
a notice and taglines to accompany many communications from covered 
entities, including annual benefits notices, medical bills from 
hospitals and doctors, explanations of benefits from health insurance 
companies or health plans, and communications from pharmacy benefit 
managers.
---------------------------------------------------------------------------

    \199\ After publishing the Final Rule, OCR issued guidance 
explaining that any significant publication printed on an 8.5 x 11 
sheet of paper is not considered small sized and, thus, must include 
a minimum of 15 taglines. See OCR, Question 23, General Questions 
about Section 1557 (May 18, 2017), https://www.hhs.gov/civil-rights/for-individuals/section-1557/1557faqs/index.html.
---------------------------------------------------------------------------

    Covered entities such as plan administrators and pharmacy benefit 
managers have reasonably interpreted this guidance to require a notice 
and taglines for an extraordinary amount of mailed communications, 
including every auto-ship refill reminder, formulary notice, and 
specialty benefit letter. Further, some other entities that operate in 
multiple States have interpreted the Final Rule as requiring them to 
include taglines for as many as 60 languages, or to include that many 
taglines in mailed communications due to the cost or technical barriers 
to customizing mailing inserts on a State-by-State basis and, thus, 
have incurred costs to send up to an additional two double-sided pages 
of notices with each communication.\200\
---------------------------------------------------------------------------

    \200\ Although OCR has issued guidance stating that a covered 
entity may identify the top 15 languages spoken across all the 
States that the entity serves, see https://www.hhs.gov/civil-rights/for-individuals/section-1557/1557faqs/aggregation_tagline/index.html, evidence of notices that some covered entities shared 
with OCR suggests covered entities with beneficiaries in multiple 
States may issue more comprehensive tagline notices exceeding 15 
languages, likely because of reasonable interpretations of the 
relevant provisions of the Final Rule.
---------------------------------------------------------------------------

    To estimate the volume of notices and taglines that accompany an 
annual

[[Page 27879]]

benefits notice, we began with the approximately 300 million persons in 
the United States who have health insurance,\201\ or approximately 91% 
of the U.S. population. The Department then assumed that the annual 
notice of benefits (that includes a notice and taglines) is sent to 
each policyholder, not to each individual member of a covered 
household, such as covered children. Of the total U.S. population, 306 
million individuals belong to 117.7 million households. For the data 
set relied on, a ``household'' includes ``all the people who occupy a 
housing unit. . . . The occupants may be a single family, one person 
living alone, two or more families living together, or any other group 
of related or unrelated people \202\ who share living 
arrangements.''\203\ By implication, 17.3 million individuals do not 
belong to a household,\204\ and live in group quarters.\205\ The 
Department assumed that the percentage of the U.S. population that is 
uninsured, 9%, is the same percentage of U.S. individuals belonging to 
U.S. households that are uninsured. To calculate the number of annual 
benefits notices, the Department added the total number of individuals 
that do not belong to a household (17.3 million) to the total number of 
households (117.7 million), and discounted the sum (135 million) by 9% 
to exclude those individuals who are not insured. The total number of 
annual notices of benefits that include a nondiscrimination notice and 
taglines is therefore approximately 123 million (approximately 91% of 
135 million).
---------------------------------------------------------------------------

    \201\ Calculated by subtracting total uninsured population (28.1 
million as of 2016), see https://www.census.gov/library/publications/2017/demo/p60-260.html, from the total U.S. Population 
(327,350,075 as of March 14, 2018), see https://www.census.gov/popclock.
    \202\ The calculations do not take into account households where 
two or more unrelated persons have individual coverage, and thus 
receive separate annual notices at the same household. The 
Department believes, however, that this exclusion has only a minor 
impact on the overall figures but welcome comments on whether they 
should be included.
    \203\ U.S. Census Bureau, American Community Survey and Puerto 
Rico Community Survey 2016 Subject Definitions 76, https://www2.census.gov/programs-surveys/acs/tech_docs/subject_definitions/2016_ACSSubjectDefinitions.pdf (defining ``household'' under 
``Household Type and Relationship'').
    \204\ The Department subtracted 306 million individuals 
belonging to a household from the total US population in of 323.4 
million individuals. See U.S. Census Bureau, https://factfinder.census.gov/faces/tableservices/jsf/pages/productview.xhtml?src=bkmk (relied on 2016 population nationally).
    \205\ U.S. Census Bureau, American Community Survey and Puerto 
Rico Community Survey 2016 Subject Definitions 76, https://www2.census.gov/programs-surveys/acs/tech_docs/subject_definitions/2016_ACSSubjectDefinitions.pdf (``People not living in households 
are classified as living in group quarters.''). ``Group quarters 
include . . . college residence halls, . . . skilled nursing 
facilities, . . . correctional facilities, and workers' 
dormitories.'' U.S. Census Bureau, 2016 American Community Survey/
Puerto Rico Community Survey Group Quarters Definitions, 1 https://www2.census.gov/programs-surveys/acs/tech_docs/group_definitions/2016GQ_Definitions.pdf.
---------------------------------------------------------------------------

    To estimate the volume of notices and taglines that accompany auto-
reenrollment communications from the health insurance Exchanges, the 
Department assumes the Exchanges send these communications to the 11.8 
million individuals enrolled in the individual market.\206\ It assumes 
that the Exchanges send out approximately 1.5 notices per person per 
year. This accounts for the annual re-enrollment communication plus 
additional communications Exchanges will send for special enrollment 
periods. Thus, the total estimated volume of notices and taglines 
attributable to the Exchanges is 17.7 million.
---------------------------------------------------------------------------

    \206\ See CMS, Health Insurance Exchanges 2018 Open Enrollment 
Period Final Report (Apr. 3, 2018), https://www.cms.gov/Newsroom/MediaReleaseDatabase/Fact-sheets/2018-Fact-sheets-items/2018-04-03.html.
---------------------------------------------------------------------------

    To estimate the volume of notices and taglines that accompany 
hospital bills and explanations of benefits sent by insurance companies 
(or health plans) for hospital admissions, the Department first 
estimated the total number of hospital bills and explanation of 
benefits that would be sent to patients annually. There are 35,158,934 
million hospital admissions per year.\207\ For the purpose of this 
estimate, the Department assumes that each admission generates three 
bills from one hospital visit--each of which would include a notice and 
tagline document, for a total of 105,476,802 bills (35,158,934 
admissions times three bills per admission).\208\ The Department 
assumes that 10% of the 105,476,802 bills will have a notice and 
tagline document attached, for a total of 10,547,680 notice and tagline 
documents.
---------------------------------------------------------------------------

    \207\ CDC, Chartbook on Long-Term Trends in Health (2016), 
http://www.cdc.gov/nchs/data/hus/hus16.pdf#317.
    \208\ The Department presumes one hospital visit likely will 
generate a bill from the physician and two bills from any 
combination of services, such as anesthesia, ambulance service, 
imaging/radiology, or laboratory or blood work.
---------------------------------------------------------------------------

    For patients who were insured upon admission to the hospital, in 
addition to the three hospital bills they would receive (on average), 
they would receive three associated explanations of benefits from their 
insurer or health plan, each of which would also include notice and 
tagline documents. If more than three service providers bill a patient 
for a hospital visit, then the savings associated with this patient 
encounter would be greater than estimated due to the additional notice 
and tagline documents that the insurer would send with each additional 
explanation of benefits beyond the initial three assumed. If less than 
three service providers bill for a hospital visit, then the savings 
would be less due to the decreased volume of notice and tagline 
documents that the insurer would send given that the insurer would send 
fewer than three explanation of benefits. Given that approximately 91% 
of the U.S. population is insured, the Department estimates that 
approximately 32,104,054 admissions of the 35,158,934 million hospital 
admissions are associated with insured patients (91% of 35,158,934 
million hospital admissions).\209\ This assumption does not account for 
variation in health care consumption between the insured and uninsured 
populations. It is possible that more hospital admissions are 
attributable to the uninsured than the insured population. If such is 
the case, the Department's estimate for the number of notices and 
taglines attributable to explanations of benefits would be lower. 
Further, this estimate does not account for outpatient hospital visits, 
which would increase the volume of notices and taglines.
---------------------------------------------------------------------------

    \209\ Calculated by subtracting total uninsured population (28.1 
million as of 2016), see https://www.census.gov/library/publications/2017/demo/p60-260.html, from the total U.S. Population 
in 2016 (323,405,935), see https://www.census.gov/popclock. The 
Department also notes that Gallup recently conducted a study that 
shows that 12.2% of the U.S. Population is uninsured. See Zac Auter, 
U.S. Uninsured Rate Steady at 12.2% in Fourth Quarter of 2017 (Jan. 
16, 2016), http://news.gallup.com/poll/225383/uninsured-rate-steady-fourth-quarter-2017.aspx?g_source=Well-Being&g_medium=newsfeed&g_campaign=tiles.
---------------------------------------------------------------------------

    As discussed further below, the Department assumes 100% of 
insurance companies are compliant with the notice and taglines 
requirement. Thus, approximately 96 million notice and tagline 
documents are attributable to the explanations of benefits sent by 
insurers (32,104,054 admissions times three explanation of benefits). 
Using rounded values, approximately 107 million additional notices and 
taglines (96 million plus 11 million) are related to hospital 
admissions.
    To estimate the volume of notices and taglines that accompany 
doctor's bills and explanations of benefits from a physician's visit, 
the Department relied on data showing that individuals visit a doctor 
approximately 990 million times each year.\210\ Given that 
approximately

[[Page 27880]]

9% \211\ of Americans are uninsured, the Department assumes (and 
subtracting an estimated 5% for uninsured patients who do not visit the 
doctor, except in an emergency), 95% of individuals who see doctors 
every year are insured in some form. The Department assumes that each 
visit to a compliant doctor's office will generate at least one bill 
from the doctor and at least one explanation of benefits from the 
health insurance company. As explained below, it also assumes that 10% 
of doctors and 100% of insurance companies comply with the notice and 
taglines requirement. Thus, approximately 99 million notices and 
taglines are attributable to doctors billing the patients directly and 
approximately 941 million are attributable to explanations of benefits 
sent by insurers which results in a total of 1.04 billion additional 
notices and taglines related to physician visits. The Department seeks 
comment on these cost estimates, the frequency of communications to 
which taglines and notices are sent, and how often insurers mail (other 
otherwise, provide copies in person or via electronic delivery) 
documents to the ensured.
---------------------------------------------------------------------------

    \210\ CDC, Ambulatory Care Use and Physician Office Visits 
(2016), https://www.cdc.gov/nchs/fastats/physician-visits.htm. As 
noted above, the Department relies on the 2016 RIA assumption that 
virtually all doctors receive Federal financial assistance and, 
thus, are subject to the 2016 Final Rule.
    \211\ Calculated by subtracting total uninsured population (28.1 
million as of 2016), see https://www.census.gov/library/publications/2017/demo/p60-260.html, from the total U.S. Population 
in 2016 (323,405,935), see https://www.census.gov/popclock.
---------------------------------------------------------------------------

    Because experience and substantial feedback from health care 
insurers suggests a very high degree of compliance with the notice and 
taglines requirements concerning documents such as explanations of 
benefits, the Department has presumed 100% compliance for purposes of 
this RIA. Anecdotal evidence, however, suggests that hospital and 
physician compliance with the notice and tagline requirements in the 
documents discussed above is not standard industry practice. The 
Department estimates that, at most, 10% of such covered entities 
include notices and taglines in their significant mailed communications 
with patients. While, according to the 2016 RIA, most hospitals and 
physicians are covered entities under Section 1557, the Department 
believes their failure to adopt notices and taglines as a standard 
billing and communication practice may be due to the fact the notice 
and taglines requirement in the Final Rule mentions a duty to notify 
``beneficiaries, enrollees, applicants, and members of the public'' and 
does not explicitly mention ``patients.'' 45 CFR 92.8(a). Additionally, 
the preamble to the Final Rule explained that the notice and taglines 
requirement covered communications ``pertaining to rights or benefits'' 
which insurance companies have universally interpreted as applying to 
significant numbers of communications they send to beneficiaries. 81 FR 
31402. For these reasons, the Department's calculations presume a 10% 
compliance rate for hospitals and physicians and a 100% compliance rate 
by health insurance companies concerning the notice and taglines 
requirement as it relates to bills and explanations of benefits, 
respectively.
    To estimate the volume of notices and taglines that accompany 
pharmacy-related communications, the Department relied on estimates 
from the Pharmaceutical Care Management Association, which, due to the 
nature of its organization, obtained an estimated number of impacted 
beneficiaries from its member organizations. Approximately 173 million 
beneficiaries are being impacted annually by the notice and taglines 
requirement, and these beneficiaries receive between 6 and 28 
communications per year with an accompanying notice and taglines. The 
Department relied the average of this estimate (17 communications per 
year per beneficiary) to determine that 2.9 billion prescription-
related communications (e.g., communications from pharmacy benefit 
managers) are sent each year.\212\
---------------------------------------------------------------------------

    \212\ Source: Pharmaceutical Care Management Association (May 2, 
2017).
---------------------------------------------------------------------------

    The Department seeks comment on these calculations. In particular, 
it requests that commenters identify significant communications sent by 
covered entities that include a notice and taglines that have not been 
considered by this analysis, as well as the estimated annual volume for 
such communications. The Department also seeks comment on whether the 
estimates in this RIA for covered communications (communications 
subject to the notice and taglines requirement) by health insurance 
companies or pharmacy benefit managers are reasonable. The Department 
also seeks comment on the cost burden of, how many entities utilize, 
how many beneficiaries opt for receipt of, and the expected 
effectiveness to LEP individuals of, providing non-paper notices or 
taglines relevant communications related to prescriptions or 
explanations of benefits. The Department also seeks comment from small, 
community, and independent providers and pharmacy benefit managers 
about notices of availability of language assistance services for LEP 
individuals.
    To calculate the costs of the notice and taglines requirement, the 
Department assumes that the underlying communication to which a 
nondiscrimination notice and taglines document is attached is a 
communication that is on average three sheets of paper or less. 
Combined with the nondiscrimination notice and taglines (which 
constitute another 1-4 sides of a page, that is, 1 sheet single-sided 
\213\ to 2 sheets of paper double-sided), the total number of sheets of 
paper that would be transmitted is equivalent to 4-5 sheets of paper or 
less. The associated costs of the notice and taglines requirement are 
(1) materials, (2) postage, and (3) labor. Because of the uncertainty 
around some of the estimates, we report ranges for some values in this 
analysis.
---------------------------------------------------------------------------

    \213\ Although this cost-benefit analysis assumes a lower-bound 
estimate that a notice of nondiscrimination and 15 taglines may be 
printed on one side of one sheet of paper, HHS believes that a 
notice of that length is likely noncompliant with the current 
Section 1557 rule requirement to be posted ``in conspicuously-
visible font size.'' See also OCR, Sample Notice Informing 
Individuals About Nondiscrimination and Accessibility Requirements 
and Sample Nondiscrimination Statement: Discrimination is Against 
the Law (printed on two sides of one sheet of paper), https://www.hhs.gov/sites/default/files/sample-ce-notice-english.pdf.
---------------------------------------------------------------------------

    For materials, the Department assumes that materials (paper and 
ink) per notice and taglines mailing insert will cost between $0.025 
and $0.10. The Department assumes that low materials cost would be 
$0.025 to print a 1-page notice and taglines on a single sheet of paper 
single-sided, and the high materials cost of $0.10 to print a 4-page 
notice and taglines on 2 sheets of paper double sided. The Department 
seeks comment on its estimate of the length of the materials, including 
whether the required notice and taglines could have fit on one side of 
one page only, and how often entities did so in compliance with the 
requirement, as opposed to using 2-4 sides of a page.
    For postage, the Department estimates that the additional weight of 
the notice and tagline inserts result in a range of no incremental 
postage costs (low-end) to $0.21 per mailing (high-end). For instance, 
if an underlying communication is three sheets of paper or less, a 
covered entity's inclusion of one double-sided page (or shorter) of 
notice and taglines insert would likely weigh one ounce or less 
(approximately four letter-sized pages weigh one ounce).\214\ 
Consequently, in this

[[Page 27881]]

scenario, the notice and taglines insert would not increase the total 
weight of the mailing beyond the one ounce of postage that a covered 
entity would already expect to incur. If, however, a covered entity 
included 2 sheets of paper double-sided containing the 
nondiscrimination notice and taglines, added to a communication of 
three sheets of paper or more,, the total weight of the mailing would 
likely be at least five sheets of paper, and therefore over one ounce. 
The marginal cost of postage for each ounce is $0.21.\215\ The 
Department seeks comment on whether and how often the required notice 
and tagline inserts are inserted in larger mailings so as not to 
implicate the higher end of the estimated incremental postage costs.
---------------------------------------------------------------------------

    \214\ See ``How Many Sheets of Paper Fit in a 1 Ounce Envelope 
for Mailing Purposes,'' https://www.reference.com/business-finance/many-sheets-paper-fit-1-ounce-envelope-mailing-purposes-84ba93a60789c2e1.
    \215\ See U.S. Postal Service Postage Rates, https://www.stamps.com/usps/current-postage-rates/.
---------------------------------------------------------------------------

    For labor, the Department estimates the burden to download, print, 
and include these notices and taglines with all significant 
communications for an office clerk (Occupation Code No. 43-9061) with a 
mean hourly wage of $16.92/hour \216\ plus an additional $16.92/hour in 
fringe benefits, or $33.84/hour for labor costs.\217\ Based on 
experience, entities can manually fold and insert notices and taglines 
into envelopes at a rate of approximately 360 per hour. Entities that 
use commercial machines can fold and insert notices and taglines as 
fast as 5,400 envelopes per hour.\218\ The Department uses the median 
of 2,520 notices and taglines that can be folded and placed into an 
envelope in an hour. Under these assumptions, the unit labor cost per 
notice and taglines mailing is $0.01, or $56.2 million per year.
---------------------------------------------------------------------------

    \216\ BLS, Occupational Employment and Wages (May 2018), https://www.bls.gov/oes/2018/may/oes_nat.htm.
    \217\ CMS estimates that the labor costs would be a one-time 
cost of $16,244 for Medicaid managed care and a one-time cost of 
$9,669 for CHIP managed care. The Department assumes for its 
calculations that the labor costs for the notice and tagline 
provisions are not one-time but are ongoing costs associated with 
the value of office clerks' time printing and including the notices 
and taglines with significant publications and significant 
communications.
    \218\ See, e.g., Pitney Bowes, Relay Mid to High Volume Inserter 
Systems, https://www.pitneybowes.com/us/shipping-and-mailing/inserters-sorters-printers/relay-mid-high-volume-inserting-systems.html.
---------------------------------------------------------------------------

    Considering materials, postage and labor, the per-unit cost for the 
notice and taglines insert ranges from $0.035 at the low-end (for one 
single-sided sheet of paper of notice and taglines) and $0.32 at the 
high-end (for two double-sided sheets of paper of notice and taglines) 
if the Department assumes that the average underlying mailer is 3 
sheets of paper. In addition, the Department estimates that some of 
these costs would be mitigated absent regulatory action, due to 
transitions to electronic delivery for some communications affected by 
the rule. The Department estimates electronic delivery would reduce 
costs of affected communications by approximately 10-20% absent 
regulatory action, shifting linearly from 10% in the first year to 20% 
in the fifth year following implementation. Electronic delivery would 
eliminate postage costs, but may merely shift the costs of paper and 
printing from the entity providing the communication to the consumer/
beneficiary/patient, given that some consumer/beneficiary/patient 
recipients of electronic communications will print them out and incur 
costs for the paper and ink associated with doing so. The Department 
has not included such consumer/beneficiary/patient costs in its 
estimates, but requests comments on this issue, including on whether 
there is a higher likelihood of electronic use than assumed here.
    The Department averages the low and high-end estimates to determine 
a primary estimate of annual cost savings, which results in average 
savings of approximately $0.632 billion per year after adjusting for 
electronic delivery.
    These cost estimates are based on the Department's own research and 
extensive feedback from covered entities. It invites comment on these 
estimates, in particular the average numbers of pages sent by covered 
entities and the costs for publishing and distributing notices and 
taglines that may be borne by covered entities or types of transactions 
that it has not identified in this discussion.
    With repeal of the Final Rule requirements, the Department assumes 
that two other regulatory requirements for taglines would also be fully 
repealed because they depend on, or refer to, the Final Rule for 
authority for the tagline requirement. The first is the requirement 
placed on Health Insurance Exchanges (see 45 CFR 
155.205(c)(2)(iii)(A)), which the Department estimates issue 17.7 
million communications per year, primarily through eligibility and 
enrollment communications. The second is the requirement placed on 
Qualified Health Plan Issuers (see HHS Notice of Benefit and Payment 
Parameters for 2016; Final Rule, 80 FR 10750, 10788 (Feb. 27, 2015)), 
whose costs are incorporated into the volume calculations for annual 
notices of benefits, and explanations of benefits discussed in more 
detail above. The Department also assumes that health insurance 
entities would not voluntarily append notices and taglines to routine 
monthly premium statements absent the Final Rule, but are doing so 
because of it (or because of a requirement in another regulation which 
bases its requirement on the Section 1557 Regulation's requirement).

  Table 2--Annual Savings From Repeal of Requirement To Publish and Mailing Notices and Taglines, by Volume of
                    Transactions per Type per Year Before Accounting for Electronic Delivery
                                                  [In millions]
----------------------------------------------------------------------------------------------------------------
                                                                                   Estimated low  Estimated high
                                                                       Count          savings     savings ($0.32/
                                                                                   ($0.035/unit)       unit)
----------------------------------------------------------------------------------------------------------------
Exchange enrollment communications..............................            17.7           $0.62           $5.66
Annual notice of benefits.......................................             123            4.32           39.46
Explanations of Benefits--hospital admissions...................              96            3.37           30.82
Explanations of Benefits--physician's visits....................             941           32.93          301.05
Medical bills--hospital admissions..............................              11            0.37            3.38
Medical bills--physician visits.................................              99            3.47           31.69
Pharmacy-related notices........................................           2,900          101.50          928.00
                                                                 -----------------------------------------------
    Subtotal, not accounting for electronic communications......           4,188          146.57        1,340.06
----------------------------------------------------------------------------------------------------------------


[[Page 27882]]

    The average of the low and high end estimates yields a primary 
estimate of annual savings of approximately $0.632 billion after 
accounting for electronic delivery. The Department assumes that the 
nine other CMS regulations or guidelines requiring taglines will 
continue to be in effect, and the cost of complying with these CMS 
requirements would need to be subtracted from the total savings that 
the Section 1557 Regulation's rescission generates for the health care 
sector as set forth in Table 2. These requirements include (1) Group 
Health Plans and Health Insurance Issuers requirements; \219\ (2) 
Navigator requirements; \220\ (3) Non-Navigator Assistance Personnel 
requirements; \221\ Medicaid requirements; \222\ Medicaid Managed Care 
requirements \223\ CHIP requirements; \224\ CHIP Managed Care 
requirements; \225\ Hospitals Qualifying for Tax-Exempt Status 
requirements; \226\ and Medicare Advantage (Part C) and Prescription 
Drug Plans (Part D) requirements.\227\ Because the Department's 
previous rulemaking on these CMS tagline requirements did not attempt 
to estimate these costs, it invites comment on cost implications here.
---------------------------------------------------------------------------

    \219\ 45 CFR 147.136(e)(2)(iii) and (e)(3), and 147.200(a)(5).
    \220\ 45 CFR 155.215(c)(4).
    \221\ 45 CFR 155.215(c)(4).
    \222\ 42 CFR 435.905(b)(3).
    \223\ 42 CFR 438.10(d)(2) through (3), (d)(5)(i) and (iii), and 
(j).
    \224\ 42 CFR 457.340(a).
    \225\ 42 CFR 457.1207.
    \226\ 26 CFR 1.501(r)-4(b)(5)(ii).
    \227\ Medicare Marketing Guidelines Sec.  30.5.1, https://www.cms.gov/Medicare/Health-Plans/ManagedCareMarketing/FinalPartCMarketingGuidelines.html.
---------------------------------------------------------------------------

    Other burdens imposed by the Final Rule's notice and taglines 
requirements are real, but difficult to quantify.
    The vast majority of recipients of taglines do not require 
translation services. For example, according to Census statistics, as 
of 2015, over three-quarters (79%) of the U.S. population over age 18 
speak only English at home, followed by Spanish (12.5%).\228\ 
Additionally, of persons selecting a language preference when 
registering for coverage on the HealthCare.gov platform for 2017, 
89.93% selected English, followed by 8.36% who selected Spanish.\229\ 
These data points indicate that, for the large majority of people who 
receive them, the required language tagline mailings provide little to 
no benefit because they are already proficient English speakers with 
little need for, and no entitlement under the law to, translation 
services.
---------------------------------------------------------------------------

    \228\ U.S. Census Bureau, B16007: Age by Language Spoken at Home 
for the Population 5 Years and Over, 2011-2015 American Community 
Survey (American FactFinder) (2017), https://factfinder.census.gov/bkmk/table/1.0/en/ACS/16_5YR/S1601/0100000US. See also Kimberly 
Proctor, Shondelle M. Wilson-Frederick, et al., The Limited English 
Proficient Population: Describing Medicare, Medicaid, and Dual 
Beneficiaries, 2.1 Health Equity 87 (May 1, 2018), http://online.liebertpub.com/doi/10.1089/heq.2017.0036 (identifying Spanish 
as the language of the largest majority of limited English 
proficient speakers in Medicaid and Medicare, according to the 2014 
American Community Survey).
    \229\ CMS, Race, Ethnicity, and Language Preference in the 
Health Insurance Marketplaces 2017 Open Enrollment Period (April 
2017), https://www.cms.gov/About-CMS/Agency-Information/OMH/Downloads/Data-Highlight-Race-Ethnicity-and-Language-Preference-Marketplace.pdf. States that that do not use the HealthCare.gov 
platform, such as California and New York, were not included in this 
report.
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    The Department has received many communications from beneficiaries 
and advocacy groups complaining about the excessive amount of paperwork 
they receive. These individuals and groups have explained that few 
people read the notice and taglines and most ignore the last pages of 
lengthy health documents. These complaints make us concerned that the 
Section 1557 Regulation has resulted in ``cognitive overload,'' such 
that individuals experience a diminished ability to process information 
when inundated with duplicative information and paperwork.
    Additionally, documents that contain a significant number of pages 
that recipients do not value will induce annoyance or frustration due 
to perceived wasting of time, ignorance of the customers' actual needs 
or language abilities, waste of economic resources, or insensitivity to 
environmental concerns. These frustrations, though difficult to 
quantify are reasonable to expect, given the large volume of health 
care communications with notice and taglines that most Americans 
receive. It is also reasonable to expect that repeated mailings of 
taglines to people who do not want them may negatively impact their 
likelihood to read truly significant documents from their insurers or 
doctors, and may negatively impact health outcomes in some cases.
    The Department seeks comment on whether and how the Final Rule's 
notice and taglines requirements impose costs on covered entities and 
other downstream entities and individuals.
f. Costs Arising From Removal of Notice and Taglines Requirement
    Repealing the notice and taglines requirement may impose costs, 
such as decreasing access to, and utilization of, health care for non-
English speakers by reducing their awareness of available translation 
services. Even so, such an impact is expected to be negligible. Reports 
from covered entities suggest, anecdotally, that utilization of 
translation services did not appreciably rise after the Final Rule's 
imposition of notice and taglines requirements.\230\ Furthermore, the 
Section 1557 requirement added 47 languages to existing language access 
requirements, which only increased access to 0.4% of the entire U.S. 
population. This is after broadly defining ``limited English 
proficiency'' to include those who speak English ``well'' but not 
``very well.'' \231\ The Department's Office for Civil Rights also 
produced a list of the top 15 languages in each State; however 26 of 
the languages on OCR's list are not spoken by even 0.004 percent of the 
population. In some States, especially those with sparser populations, 
health insurance issuers must provide tagline services in languages 
spoken by very few people in the State. For instance, in Wyoming, 
issuers must provide translation notices in Gujarati and Navajo in 
every significant communication sent to beneficiaries to account for 
approximately 40 Gujarati speakers and 39 Navajo speakers; in Montana 
issuers must provide notices to account for approximately 80 speakers 
of Pennsylvania Dutch; and in Puerto Rico, issuers must provide 
taglines notices to account for approximately 22 Korean speakers and 22 
French Creole speakers.\232\ In addition, the Section 1557 Regulation 
omitted some languages, like Hungarian, spoken by significant numbers 
of people in more densely populated States.
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    \230\ Source: Aetna (May 1, 2017).
    \231\ See HHS OCR, Frequently Asked Questions to Accompany the 
Estimates of at Least the Top 15 Languages Spoken by Individuals 
with Limited English Proficiency under Section 1557 of the 
Affordable Care Act, Question 2 (Sept. 1, 2016), https://www.hhs.gov/civil-rights/for-individuals/section-1557/1557faqs/top15-languages/index.html (using 2013 year estimates). See U.S. 
Census Bureau, Language Spoken at Home by Ability to Speak English 
for the Population 5 Years and Over, https://factfinder.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=ACS_14_5YR_B16001&prodType=table (2016 year 
estimates).
    \232\ OCR, Resource for Entities Covered by Section 1557 of the 
Affordable Care Act, Estimates of at Least the Top 15 Languages 
Spoken by Individuals with Limited English Proficiency for the 50 
States, the District of Columbia, and the U.S. Territories (Aug. 
2016), https://www.hhs.gov/sites/default/files/resources-for-covered-entities-top-15-languages-list.pdf.
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    Regulations under Section 504 of the Rehabilitation Act require the 
provision of auxiliary aids and services in health programs or 
activities that receive Federal financial assistance. 45 CFR 84.52(d). 
Because the notice requirement under the Final Rule requires frequent 
mailed notification of the availability of auxiliary aids and

[[Page 27883]]

services, repealing the notice of nondiscrimination requirement may 
result in additional societal costs, such as decreased utilization of 
auxiliary aids and services by individuals with disabilities due to 
their reduced awareness of such services. This impact may be limited, 
however, because the Section 504 regulations already require recipients 
of Federal financial assistance employing fifteen or more persons 
provide notice to participants, beneficiaries, applications, employees, 
and other interested persons of the availability of such aids and 
services. 45 CFR 85.12 and 84.22(f).
    Additionally, an unknown number of persons are likely not aware of 
their right to file complaints with the Department's Office for Civil 
Rights and some unknown subset of this population may suffer remediable 
grievances, but will not complain to OCR absent notices informing them 
of the process.
g. Cost Savings From Changes to Language Access Plan Provisions
    Although the Final Rule did not require covered entities to develop 
a language access plan, the Rule stated that the development and 
implementation of a language access plan is a factor the Director 
``shall'' take into account when evaluating whether an entity is in 
compliance with Section 1557. 45 CFR 92.201(b)(2). Therefore, the 
Department anticipated that 50% of covered entities would develop and 
implement a language access plan following issuance of the Final Rule. 
81 FR 31454.
    OCR estimated 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 $109.36 based on Bureau of Labor Statistics (BLS) data 
for 2018.\233\ The Department estimated that approximately 269,141 
entities could potentially make changes and develop language access 
plans, as part of the requirement to take reasonable steps to provide 
meaningful communication with LEP individuals (calculated by reducing 
the total number of entities (275,002) by the number of hospitals and 
nursing care facilities that were already subject to language access 
plan requirements under Medicare Part A (5,861). The Department further 
assumed that only 50% of the identified entities would actually make 
changes to implement a language access plan. These assumptions imply 
that the total cost of developing language access plans will be 
approximately $44.1 million (269,141 entities multiplied by 50% of 
entities multiplied by 3 hours per entity multiplied by $109.36 per 
hour) in the first year and approximately $14.7 million (269,141 
entities multiplied by 50% of entities multiplied by 1 hour per entity 
multiplied by $109.36 per hour) per year in subsequent years. In making 
these calculations, the Department assumes sunk costs cannot be 
recovered by this rule, and therefore that initial language access plan 
development costs described above cannot be recovered.
---------------------------------------------------------------------------

    \233\ BLS, Occupational Employment and Wages (May 2018), https://www.bls.gov/oes/2018/may/oes_nat.htm.
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    By repealing the provision of the Final Rule regarding the Language 
Access Plans, the Department estimates an annual savings are $14.7 
million.
h. Cost Savings Attributed to Covered Entities' Handling of Certain 
Grievances
    The proposed rule proposes to repeal the requirement for each 
covered entity with 15 or more employees to have a compliance 
coordinator and a written grievance procedure to handle complaints 
alleging violations of Section 1557. The Department estimates that, 
under the proposed rule, covered entities would no longer have to incur 
certain labor costs associated with processing grievances related to 
sex discrimination complaints as they relate to gender identity and 
sex-stereotyping as defined under the Final Rule because such 
definitions would be repealed and no longer binding under the proposed 
rule. This proposed repeal would not, however, affect the independent 
obligations of Section 1557 covered entities to comply with Federal 
regulations under Section 504 and Title IX to have written processes in 
place to handle grievances alleging certain disability and sex 
discrimination claims, respectively.\234\
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    \234\ See, e.g., 45 CFR 84.7(a) (HHS regulations implementing 
Section 504) (requiring a written process in place for handling 
grievances alleging disability discrimination), 86.8(a) (HHS 
regulations implementing Title IX) (requiring a written process in 
place for handling grievances alleging sex discrimination).
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    For the sake of consistency and convenience, the Department uses 
the methodology from the 2016 Final Rule as a foundation for estimating 
the projected savings of this proposed rule provision.
    The 2016 Final Rule estimated that, in years three through five of 
the Final Rule's implementation, covered entities with 15 or more 
employees would incur $85.5 million in costs annually to handle Section 
1557 grievances. 81 FR 31458. This estimate assumed that covered 
entities would experience an average increase in grievances equal to 
OCR's projected long-term increase in caseload of about 1%. 81 FR 
31376. The 2016 Final Rule monetized this 1% increase in caseload as a 
labor cost equivalent to 1% of the annual median wage for a medical and 
health service manager (occupation code 11-9111). 81 FR 31376. The 
Department continues to assume that OCR's increase in caseload 
attributed to the 2016 Final Rule reasonably informs the increase in 
grievance processing that covered entities experience.
    Based on OCR's tracking of Section 1557 complaints received from 
promulgation of the Final Rule (May 18, 2016) until present, OCR 
predicts that its long-term caseload would have increased 5% rather 
than 1% as originally predicted. Further, OCR believes roughly 60% of 
this increase (which equals 3% of the overall increase) would have been 
attributable to discrimination claims based on the Final Rule's 
definition of sex discrimination with respect to gender identity and 
sex stereotyping. The Department uses the phrase ``would have'' with 
regard to OCR's caseload because, as described above, the Department 
has been enjoined by a Federal court from enforcing claims based on the 
Final Rule's novel definition of sex discrimination.
    The Final Rule asserted that private parties have the right to 
challenge a violation of Section 1557 or the Final Rule in Federal 
court, independent of OCR enforcement or involvement. 45 CFR 92.302(d). 
In the preamble to the Final Rule, the Department estimated that the 
ability for private parties to sue under the Final Rule would result in 
covered entities bearing increased compliance costs. 81 FR 31395 (``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.''). The injunction does not apply to suits filed by private 
parties.
    Although the Supreme Court has recognized a private right of action 
for some civil rights statutes enforced by the Department, with the 
proposed rule change, the Department would no longer assert that a 
private right of action exists for parties to sue covered entities for 
any and all alleged violations of the proposed rule. The Department 
would no longer take a

[[Page 27884]]

position on that issue in its regulations, leaving the matter as 
primarily one for the courts to decide. Additionally, by virtue of 
rescinding the definitions from the regulatory text, the proposed rule 
would remove the expansive inclusion of gender identity and sex 
stereotyping in the definition of sex discrimination as substantive 
grounds for a private right of action alleging such violations by 
covered entities. As a result, a certain number of covered entities 
that are currently incurring grievance-related costs related to these 
claims may no longer incur such costs under the proposed rule.
    For reasons set forth above, the Department estimates that covered 
entities have experienced a 3% increase in grievance claims over the 
long term concerning gender identity and sex stereotyping claims as set 
forth under the Final Rule and that, under the proposed rule, they 
would no longer have to process such claims under the grievance 
procedures required under the Final Rule. However, due to voluntary 
policies or more stringent State requirements, the Department expects 
that 50% of covered entities would likely continue to accept and handle 
grievances alleging discrimination based on gender identity and sex 
stereotyping as set forth under the Final Rule, notwithstanding that 
this proposed rule would eliminate those provisions. Consequently, the 
Department estimates that only approximately half of the 3% increase in 
caseload, or about 1.5%, will be realized as annual savings by covered 
entities. The annual savings in labor attributed to a 1.5% decrease in 
grievance caseload is $123.4 million. This value represents 1.5% of the 
annual median wage of a medical and health service manager ($199,472 
fully loaded) multiplied by the 41,250 covered entities with 15 or more 
employees.
i. Additional Costs for Training and Familiarization Under Proposed 
Rule
    To comply with the proposed rule, the Department anticipates that 
some covered entities may incur costs to re-train employees in order 
realize potential longer term costs savings from the deregulatory 
aspects of this proposed rule change, for example, provisions 
eliminating the need for certain grievance procedures described in the 
preceding section. The Department assumes 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, the Department 
assumes that 50% of the covered entity's staff will receive one-time 
training on the requirements of the regulation. It uses the 50% 
estimate as a proxy, given the lack of certain information as described 
below. For the purposes of the analysis, the Department does not 
distinguish between employees whom covered entities will train and 
those who obtain training independently of a covered entity.
(1) Number of Covered Entities That May Train Workers
    The Final Rule estimated that 275,002 covered entities would train 
their employees on the Rule's requirements in general (including 
training regarding language access provisions), and used that 275,002 
figure as the basis for calculating costs to covered entities arising 
specifically out of the Rule's prohibition on discrimination on the 
basis of sex. See 81 FR at 31450. HHS assumes, for purposes of this 
analysis, that the Final Rule's estimation was an accurate and 
reasonable basis for calculating costs arising out of the Final Rule's 
prohibition of sex discrimination. However, HHS seeks comment on the 
accuracy of these assumptions and calculations.

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

(2) Number of Individuals Who Will Receive Training
    The first category of health care staff that may receive training 
comprises 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 2018 reported 
count for this occupational group is approximately 5.4 million with 
average loaded wages of $98.04 per hour.
    The second category of health care staff that the Department 
assumes will receive training comprises degreed technical staff 
(Occupation code 29-2000) and accounts for 3.1 million workers with 
average loaded wages of $46.52 per hour. Technicians work in almost 
every area of health care: X-ray to physical, speech, psychiatric,

[[Page 27885]]

dietetic, laboratory, nursing, and records technicians, to name but a 
few areas.
    The third category of health care staff that the Department assumes 
will receive training comprises 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. The Department refers to this workforce as non-degreed 
compared to medical technicians who generally have degrees or 
certificates. There are approximately 4.1 million individuals employed 
in these occupations with average loaded wages of $31.14 per hour.
    The fourth category of health care staff that the Department 
assumes will receive training is health care managers (approximately 
0.4 million based on BLS data for occupation code 11-9111) with average 
loaded wages of $109.36 per hour. Because the Department assesses costs 
of familiarization with the regulation for one manager at each entity, 
it assumes 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 the Department assumes 
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 2.8 million individuals were 
employed in these occupations in health facilities in 2018 with average 
loaded wages of $36.50 per hour. The Department assumes that outreach 
workers are included in the five categories listed above, especially in 
the manager category.
(3) Total Cost of Training
    The Final Rule estimated that covered entities would incur $420.7 
million in undiscounted costs to train employees on the requirements of 
the Rule, distributed roughly evenly over the first two years after the 
Final Rule's effective date. 81 FR at 31458. This conclusion presumed 
covered entities were already periodically training employees on their 
obligations under Section 1557, but that the Final Rule's new sex 
discrimination requirements would induce covered entities to engage in 
additional ``comprehensive training.'' 81 FR 31447.
    For the purposes of this regulatory impact analysis, the Department 
assumes covered entities would face similar costs to retrain the 
workforce on the proposed rule's requirements.\235\ However, because 
some covered entities will avoid incurring training expenses when they 
are not required to (and they will not be under the proposed rule), and 
because several States with large populations already prohibit gender 
identity discrimination in health care, the Department further assumes 
that only 50% of covered entities would modify their policies and 
procedures to reflect the changes in the proposed rule. The Department 
further assumes that the same percentage, 50%, of covered entities, or 
137,501, would train their employees to reflect the changes in the 
proposed rule. As in the Final Rule, the Department assumes that 
approximately half of the employees at these covered entities will 
engage in an average of an additional hour of training, and that this 
will occur in the first year of implementing this rule. These 
assumptions imply total training costs of $235.9 million. The Final 
Rule's calculations of training costs did not anticipate any ongoing 
training costs after year one--either in the form of annual refresher 
training for returning employees or training for new employees. The 
Department now believes that covered entities likely incur such costs, 
but assumes that equal costs would also be incurred under the proposed 
rule. Therefore, HHS has excluded ongoing training costs from the 
calculation of the baseline and from the calculation of the projected 
costs of the proposed rule, because such training has a net zero effect 
on projected costs. HHS solicits comment on the foregoing assumptions 
and calculations of the costs of training under the Final Rule and the 
proposed rule.
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    \235\ Training costs in the Final Rule relied upon 2014 wages. 
See, e.g., 81 FR 31451 (estimating the median hourly wage for 
occupation code 29-1000 at $36.26, unloaded, at https://
fxsp0;www.bls.gov/oes/2014/may/oes_nat.htm#29-0000https://www.bls.gov/oes/tables.htm (OES Data: May 2014). https://www.bls.gov/oes/2014/may/oes_nat.htm#29-0000https://www.bls.gov/oes/2014/may/oes_nat.htm#29-0000).
---------------------------------------------------------------------------

j. Additional Costs for Revising Policies and Procedures
    As discussed above, the Department anticipates that 50% of covered 
entities, or approximately 137,501 entities, would choose to revise 
their policies or procedures to reflect this proposed rule's 
clarification of the application of Section 1557 (if finalized as 
proposed), while other covered entities may retain their policies to 
ensure compliance with State or local laws. The Department assumes that 
it would take, on average, three to five hours for a provider to modify 
policies and procedures concerning the Section 1557 proposed rule. The 
Department selects four hours, or the midpoint of this range, for the 
analysis. HHS further assumes that an average of three of the hours 
would be spent by a mid-level manager equivalent to a front-line 
supervisor (Occupation code 43-1011), at a cost of $57.06 per hour 
\236\ after adjusting for overhead and benefits, and an average of one 
hour would be spent by executive staff equivalent to a general and 
operations manager (Occupation code 11-1021), at a cost of $119.12 per 
hour \237\ after adjusting for overhead and benefits. HHS solicits 
comment on the accuracy of these assumptions. The total cost for the 
estimated 137,501 covered entities to make their policies and 
procedures consistent with the proposed rule's clarification of 
discrimination on the basis of sex is estimated to be approximately 
$39.9 million following implementation of this rule.
---------------------------------------------------------------------------

    \236\ BLS, Occupational Employment and Wages, May 2018, https://www.bls.gov/oes/2018/may/oes_nat.htm.
    \237\ Id.
---------------------------------------------------------------------------

    The above estimates of time and number of entities that would 
choose to revise their policies under the regulation are approximate 
estimates 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 choose to revise their 
policies under the regulation is difficult to calculate.
k. Other Costs Due to Reversion to Previous Practices
    The Final Rule may have prompted covered health care providers to 
institute operational changes beyond their nondiscrimination policies 
and procedures. HHS solicits comment on providers' experience with the 
efficiency or cost-effectiveness of any such operational changes made 
in response to the Final Rule. To the extent that such changes required 
more than a de minimis cost to implement, providers that choose to 
revert to previous practices may incur more than a de minimis cost in 
making that reversion. However, as such changes would likely be 
voluntary, HHS assumes that providers would make such changes because 
they determined them to be cost-effective. HHS solicits comment on the 
accuracy of this assumption.

[[Page 27886]]

l. Other Benefits or Costs
    The Final Rule's regulatory impact analysis did not include an 
economic cost-benefit analysis of the impact of the regulation on 
health insurance benefit design. The Department lacks sufficient data 
on how much burden the Final Rule has placed on the development and 
operation of insurance benefits policies, and, thus, is unable to fully 
assess the benefit of removing this requirement. The Final Rule was 
intended to impact benefit design by applying Section 1557's 
nondiscrimination requirements to denial, cancellation, limitation, 
refusal to issue, refusal to renew, or categorical exclusion of certain 
benefits related to gender identity. A Federal court, however, enjoined 
application of the Final Rule in this manner on a nationwide basis 
immediately before the start of the first plan year after the Final 
Rule came into effect, thus, OCR has not enforced the Final Rule's 
benefit design provisions as they relate to coverage of gender 
identity-related treatments.
    The Department does not know what effect the Final Rule, in 
conjunction with the court injunction, has had on benefit design with 
respect to coverage of gender identity-related treatments. It, 
therefore, does not have enough information to estimate effects from 
the proposal to repeal of the Final Rule's benefit design requirements. 
The Department believes, however, that because a Federal court enjoined 
enforcement of the Section 1557 Regulation before the start of the 
first plan year in which the current rule would have applied, that 
beneficiaries of the expanded gender identity provisions could not have 
developed a reliance interest on the enjoined parts of the rule. The 
Department seeks comments on the effective date of repeal of the gender 
identity benefit design provisions.
    Additionally, aside from benefit design questions, the Department 
seeks comment and documentation of cases where, despite the preliminary 
injunction barring OCR from enforcing the provisions, persons would not 
have received treatments or procedures related to gender identity or 
termination of pregnancy, but for the Final Regulation's gender 
identity and termination of pregnancy provisions.
    The Department does not estimate any cost savings related to 
decreased OCR enforcement of gender identity related claims under the 
proposed rule because the injunction has generally prevented OCR 
enforcement of such claims to date and the proposed rule would thus 
merely reflect the status quo and not result in additional cost savings 
related to OCR enforcement expenditures.
    Continued enforcement of Section 1557 includes vindication of legal 
rights, the benefits of which are difficult to quantify. The proposed 
rule would continue to prohibit covered entities from discriminating 
against patients and beneficiaries on the basis of their race, color, 
national origin, disability, age, or sex. OCR will continue to 
vigorously enforce civil rights in order to help guarantee more access 
to health care and concomitant improved health outcomes--but these 
benefits are difficult to estimate given that many of the prohibitions 
encompassed by the proposed rule, as with the Final Rule, have been in 
place at the Federal level for many years or have been otherwise 
required by State or local law. We welcome comments on these issues.
7. Impact on State, Local, and Tribal Entities Under Executive Orders 
12866, 13132, and 13175
a. State and Local Governments
    Executive Order 13132 establishes certain requirements that an 
agency must meet when it issues a proposed rule (and subsequent Final 
Rule) that imposes substantial direct requirement costs on State and 
local governments, preempts State law, or otherwise has federalism 
implications. Executive Order 13132, 64 FR 43255 (Aug. 4, 1999). The 
Department does not believe that this rulemaking would (1) impose 
substantial direct requirements costs on State or local governments; 
(2) preempt State law; or (3) otherwise have federalism implications. 
Section 1557 itself provides that it shall not be construed ``to 
supersede State laws that provide additional protections against 
discrimination on any basis described in subsection (a) [of Section 
1557].'' 42 U.S.C. 18116(b).
    The proposed rule maintains the full force of Federal civil rights 
laws' protections against discrimination, but does not attempt to 
impose a ceiling on how those protections may be observed by States. 
State and local jurisdictions would continue to have the flexibility to 
impose additional civil rights protections.
    The Department believes that there would be reduced costs to State 
and local entities, by repealing wasteful Federal mandates and giving 
States more flexibility to address the needs of LEP individuals or 
other regional-specific issues.
    The Department believes that the proposed change to its Title IX 
regulations would not have a substantial direct effect on the States, 
on the relationship between the national government and the States, on 
the distribution of power and responsibilities among the various levels 
of government, or on tribal self-government or sovereignty. The 
proposed rule would not subject Title IX funding recipients to new 
obligations, but rather would relieve potential burden on the States or 
tribes that could have resulted from the prior interpretation of Title 
IX by HHS. The proposed rule would allow States and tribes to adopt or 
continue to provide nondiscrimination protections on the basis of 
sexual orientation and gender identity in State, local, and tribal law. 
Therefore, the Department has determined that the proposed rule would 
not have sufficient federalism implications to warrant the preparation 
of a federalism summary impact statement under Executive Order 13132, 
and that the rule would not implicate the requirements of Executive 
Orders 12866 and 13175 with respect to tribes.
b. Tribal Governments
    Executive Order 12866 directs that significant regulatory actions 
avoid undue interference with State, local, or tribal governments, in 
the exercise of their governmental functions. Executive Order 12866 at 
section 6(a)(3)(B).\238\ Executive Order 13175 further directs that 
Agencies respect Indian tribal self-government and sovereignty, honor 
tribal treaty and other rights, and strive to meet the responsibilities 
that arise from the unique legal relationship between the Federal 
Government and Indian tribal governments. Executive Order 13175 at 
section 2(a). The Department does not believe that the proposed rule 
would implicate the requirements of Executive Orders 12866 and 13175 
with respect to tribal sovereignty, and solicits comments from tribal 
representatives and tribal members on this conclusion and all other 
provisions of this proposed rule as they relate to tribes.
---------------------------------------------------------------------------

    \238\ As stated in the preceding section, the proposed rule does 
not have federalism implications.
---------------------------------------------------------------------------

8. Avoidance of Inconsistent, Incompatible, or Duplicative Regulations
    Executive Order 12866 requires the Department to avoid issuing 
regulations that are inconsistent, incompatible, or duplicative with 
other regulations that it has issued or that have been issued by other 
Federal agencies. Executive Order 12866 at section 1(b)(10). Section 
1557 itself requires avoidance of duplication by providing that the 
enforcement

[[Page 27887]]

mechanism under specifically identified civil rights laws ``shall apply 
for purposes of violations'' of Section 1557. 42 U.S.C. 18116(a).\239\ 
The preamble to the Final Rule repeatedly stated that, with the 
exception of issues concerning notices, sex discrimination, and 
language access plans, it was merely applying civil rights protections 
that were already applicable and familiar to covered entities. See 81 
FR 31446. (``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.''); 81 FR 
31464 (``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.'').
---------------------------------------------------------------------------

    \239\ For the applicable enforcement mechanisms, see 45 CFR 
parts 80 and 81 (Title VI), 85 (Section 504), 86 (Title IX), 90 and 
91 (Age Act).
---------------------------------------------------------------------------

    With regard to the current Section 1557 Regulation's notice and 
taglines requirement, covered entities are already subject to dozens of 
regulations concerning multi-language taglines or notices concerning an 
individual's right to have documents translated. For example, CMS 
imposes tagline requirements on health insurance marketplaces, 
qualified health plan issuers, group health plans and health insurance 
issuers, navigators, non-navigator assistance personnel, Medicaid, 
Medicaid managed care, Children's Health Insurance Program, Medicare 
Advantage, and Medicare Part D.\240\ Furthermore, a Department of 
Treasury regulation imposed tagline requirements for hospital 
organizations to qualify for tax-exempt status.\241\ Additionally, in 
2003, the Department issued guidance under Title VI of the Civil Rights 
Act of 1964, setting forth a flexible four-factor framework to assess 
the necessity and reasonableness for providing written translation for 
LEP individuals.\242\ Finally, the PPACA itself provides that each 
summary of benefits and coverage provided by issuers--perhaps the 
single most important health insurance-related document a person 
receives--must be ``presented in a culturally and linguistically 
appropriate manner.'' 42 U.S.C. 300gg-15(b)(2).
---------------------------------------------------------------------------

    \240\ 45 CFR 147.136(e)(2)(iii) and (e)(3) and 147.200(a)(5) 
(requiring group health plans and QHP issuers to post taglines in 
languages in which 10% of individuals with LEP county-wide are 
exclusively literate on internal claims and appeals notices, and 
requiring QHP issuers to post on its Summary of Benefits and 
Coverage), 155.215(c)(4) (requiring Navigators and non-Navigator 
personnel in States with Marketplaces operated by HHS to ``[p]rovide 
oral and written notice to consumers with LEP, in their preferred 
language, informing them of their right to receive language 
assistance services and how to obtain them''); 42 CFR 435.905(b)(3) 
(Medicaid regulations requiring individuals to be ``informed of the 
availability of language services . . . and how to access . . . 
[them] through providing taglines in non-English languages 
indicating the availability of language services''); 438.10(c)(5)(i) 
through (ii) (Medicaid managed care regulations requiring taglines 
until July 1, 2017); 438.10(d)(2) through (3), (d)(5)(i), 
(d)(5)(iii) and (d)(5)(j) (Medicaid managed care regulations 
requiring taglines on ``all written materials for potential 
enrollees'' in the prevalent non-English languages in the State and 
requiring notification that ``oral interpretation is available for 
any language and written translation is available in prevalent 
languages'' during the rating period for contracts with managed care 
entities beginning on or after July 1, 2017), 457.340(a) (applying 
certain Medicaid requirements to the Children's Health Insurance 
Program, including Sec.  435.905(b)(3), which requires individuals 
to be ``informed of the availability of language services . . . and 
how to access . . . [them] through providing taglines in non-English 
languages indicating the availability of language services''), 
457.1207 (applying certain Medicaid managed care requirements to 
Children's Health Insurance Program managed care, including Sec.  
438.10(c)(5)(i)-(ii) until the State fiscal year beginning on or 
after July, 1, 2018), Sec.  438.10(d)(2)-(3), (d)(5)(i), (iii), (j) 
(applying certain Medicaid managed care requirements to Children's 
Health Insurance Program managed care, in the State fiscal year 
beginning on or after July, 1, 2018); CMS, 2017 Medicare Marketing 
Guidelines, Sec.  30.5.1, Sec.  100.2.2, Sec.  8, Sec.  80-8 (Jun. 
10, 2016), https://www.cms.gov/Medicare/Health-Plans/ManagedCareMarketing/Downloads/2017MedicareMarketingGuidelines2.pdf 
(providing a CMS Multi-Language Insert'' for certain Medicare 
Advantage Plan's and Medicare Part D Plan Sponsors' marketing 
materials meeting the percentage translation threshold in Sec. Sec.  
422.2264(e) and 423.2264(e) of Title 42 of the CFR). As discussed in 
the RIA section of this NPRM, we presume 45 CFR 
155.205(c)(2)(iii)(A) (requiring Marketplaces and QHP issuers to 
post taglines on their websites and documents ``critical for 
obtaining health insurance coverage or access to health care 
services through a QHP'') and other provisions that depend or refer 
to 45 CFR part 92 for their tagline requirements would no longer 
apply if this proposed rule is finalized.
    \241\ See 79 FR 78954 (Dec. 31, 2014) (finalizing rule requiring 
the plain language summary of the financial assistance policy for 
hospital organizations to qualify as tax exempt, to indicate, if 
applicable, whether the summary, the financial assistance policy, 
and the application for such assistance are available in other 
languages).
    \242\ Guidance to Federal Financial Assistance Recipients 
Regarding Title VI Prohibition Against National Origin 
Discrimination Affecting Limited English Proficient Persons, 68 FR 
47315 (Aug. 8, 2003) (HHS LEP Guidance).
---------------------------------------------------------------------------

    Substantially replacing many provisions of the Final Rule as 
proposed, including removing the notice and taglines requirements, 
would eliminate significant redundancies identified above, while 
maintaining vigorous enforcement of existing Federal civil rights 
statutes.

B. Executive Order 13771 on Reducing and Controlling Regulatory Costs

    This proposed rule is expected to be an E.O. 13771 deregulatory 
action. The Department estimates that this proposed rule would generate 
$532 million in net annualized savings at a 7% discount rate 
(discounted relative to year 2016, over a perpetual time horizon, in 
2016 dollars).
    Furthermore, Executive Order 13765 states that ``the Secretary of 
Health and Human Services (Secretary) and the heads of all other 
executive departments and agencies (agencies) with authorities and 
responsibilities under the [PPACA] shall exercise all authority and 
discretion available to waive, defer, grant exemptions from, or delay 
the implementation of any provision or requirement of the [PPACA] that 
would impose a fiscal burden on any State or a cost, fee, tax, penalty, 
or regulatory burden on individuals, families, healthcare providers, 
health insurers, patients, recipients of healthcare services, [or] 
purchasers of health insurance.'' Executive Order 13765, 82 FR 8351, 
8351 (Jan. 24, 2017). In implementing Section 1557 of the PPACA, the 
Section 1557 Regulation imposed significant regulatory burdens on 
covered entities, including States, healthcare providers, and health 
insurers, without corresponding benefits for patients or beneficiaries. 
By proposing to substantially replace the Final Rule with a regulation 
that requires compliance with pre-existing civil rights laws, the 
Department is acting in accordance with Executive Order 13765 in 
exercising its authority and discretion to address the fiscal burdens 
on States, and the regulatory burdens imposed on individuals, families, 
healthcare providers, health insurers, patients, and recipients of 
healthcare service. The proposed rule would particularly reduce the 
economic burden imposed on health care providers and insurers required 
to provide taglines under the Final Rule. Decreasing the burden on 
these providers and insurers will allow them to pass along some of the 
cost savings to individuals, families, patients, and beneficiaries of 
insurance to whom they provide services or coverage. Additionally, 
eliminating the taglines requirement will alleviate burdens on patients 
and insurance beneficiaries that neither need nor want to receive 
repeated tagline mailings.

C. Congressional Review Act

    The Congressional Review Act (CRA) defines a ``major rule'' as 
``any rule that the Administrator of the Office of Information and 
Regulatory Affairs (OIRA) of the Office of Management and Budget finds 
has resulted in or is likely to result in--(A) an annual effect on the 
economy of $100,000,000 or more; (B) a major increase in costs or 
prices for

[[Page 27888]]

consumers, individual industries, Federal, State, or local government 
agencies, or geographic regions; or (C) significant adverse effects on 
competition, employment, investment, productivity, innovation, or on 
the ability of United States-based enterprises to compete with foreign-
based enterprises in domestic and export markets.'' 5 U.S.C. 804(2). 
Based on the analysis of this proposed rule under Executive Order 
12866, this proposed rule, if finalized as proposed, is expected to be 
a major rule for purposes of the Congressional Review Act because it 
proposes cost savings of over $100 million. The Department will comply 
with the CRA's requirements to inform Congress if applicable.

D. Unfunded Mandates Reform Act

    The proposed rule is not subject to the Unfunded Mandates Reform 
Act because it falls under an exception for regulations that establish 
or enforce any statutory rights that prohibit discrimination on the 
basis of race, color, religion, sex, national origin, age, handicap, or 
disability. 2 U.S.C. 1503(2).

E. Regulatory Flexibility Act and Executive Order 13272 on Proper 
Consideration of Small Entities in Agency Rulemaking

    The Regulatory Flexibility Act (RFA) requires agencies to analyze 
regulatory options that would minimize any significant impact of a rule 
on small entities. Public Law 96-354, 94 Stat. 1164 (Sept. 19, 1980) 
(codified at 5 U.S.C. 601 through 612). The RFA requires an agency to 
describe the impact of a proposed rulemaking on small entities by 
providing an initial regulatory flexibility analysis, unless the agency 
expects that the proposed rule will not have a significant economic 
impact on a substantial number of small entities, provides a factual 
basis for this determination, and proposes to certify the statement. 5 
U.S.C. 603(a), 605(b). If an agency must provide an initial regulatory 
flexibility analysis, this analysis must address the consideration of 
regulatory options that would minimize the economic impact of the 
proposed rule on small entities. 5 U.S.C. 603(c).
    For purposes of the RFA, small entities include small businesses, 
nonprofit organizations, and small governmental jurisdictions. HHS 
considers a rule to have a significant impact on a substantial number 
of small entities if it has at least a three percent impact of revenue 
on at least five percent of small entities.
    Based on its examination, the Department has preliminarily 
concluded that this proposed rule does not have a significant economic 
impact on a substantial number of small entities. The preamble to the 
Final Rule discussed the character of small entities impacted by the 
Final Rule in detail. 81 FR 31463-31464. Although the proposed rule 
would affect numerous small entities, it does not create new or 
expanded requirements, and, for all the reasons stated in the RIA, it 
will be reducing economic burdens on such entities overall. The 
proposed changes to Title IX would not impose any new substantive 
obligations on Federal funding recipients and, in fact, would provide 
regulatory clarity and relief for any small entities previously subject 
to several of the policies and requirements imposed by the Department.
    To the extent the proposed rule imposes economic costs, it is 
limited to entities' voluntary choices to revise their policies and 
procedures and conduct training, and we believe these costs are well 
below those required to have a significant impact on a substantial 
number of small entities. In addition, the majority of the costs 
associated with this proposed rule are proportional to the size of 
entities, meaning that even the smallest of the affected entities are 
unlikely to face a substantial impact.
    For these reasons, the Secretary certifies that the proposed rule 
will not have a significant impact on a substantial number of small 
entities.
    Executive Order 13272 on Proper Consideration of Small Entities in 
Agency Rulemaking reinforces the requirements of the RFA and requires 
the Department to notify the Chief Counsel for Advocacy of the Small 
Business Administration if the proposed rule may have a significant 
economic impact on a substantial number of small entities under the 
RFA. Executive Order 13272, 67 FR 53461 (Aug. 16, 2002). Because the 
economic impact of the proposed rule is not significant under the RFA, 
the Department is not subject to Executive Order 13272's notification 
requirement.

F. Executive Order 12250 on Leadership and Coordination of 
Nondiscrimination Laws

    Pursuant to Executive Order 12250, the Attorney General has the 
responsibility to ``coordinate the implementation and enforcement by 
Executive agencies of . . . Title IX of the Education Amendments of 
1972 (20 U.S.C. 1681 et seq.)'' Executive Order 12250 at sec. 1-2(b), 
45 FR 72995 (Nov. 2, 1980). Furthermore, Executive Order 12250 requires 
the Attorney General to ``review . . . proposed rules . . . of the 
Executive agencies in order to identify those which are inadequate, 
unclear or unnecessarily inconsistent.'' Id. at sec. 1-202. The 
proposed rule has been reviewed and approved by the Attorney General 
pursuant to Executive Order 12250.

G. Paperwork Reduction Act

    The Department has determined that the proposed rule does not 
impose additional reporting or recordkeeping requirements under the 
Paperwork Reduction Act of 1995, 44 U.S.C. 3501 et seq. If the rule is 
finalized as proposed, OCR will update and revise its burden analysis 
by removing the burden associated with the posting of a 
nondiscrimination notice and taglines, development and implementation 
of a language access plan, and designation of a compliance coordinator 
and adoption of grievance procedures for covered entities with 15 or 
more employees. OCR is seeking Paperwork Reduction Act approval for 
this reporting requirement via an update to HHS Form 690 (Consolidated 
Civil Rights Assurance Form) \243\ separate from this rulemaking.
---------------------------------------------------------------------------

    \243\ See HHS OCR, Assurance of Compliance Portal, https://ocrportal.hhs.gov/ocr/aoc/instruction.jsf.
---------------------------------------------------------------------------

VII. Effective Date

    Because this proposed rule would relieve significant regulatory 
burdens, particularly the tagline requirements, the Department proposes 
that the effective date be 60 days after publication of the Final Rule.

VIII. Request for Comment

    The Department seeks comment on all issues raised by the proposed 
regulation. Specifically, in addition to issues on which it has already 
requested comments, above, the Department requests comment on:
     The financial impact of the proposed rule on the health 
care sector, with any detailed supporting information, facts, surveys, 
audits, or reports;
     Whether, and if so how, the proposed rule addresses 
clarity and confusion over compliance requirements and rights of 
protected classes;
     Whether the Final Rule's grievance procedures have 
achieved any significant mitigation of the costs of litigation over the 
new requirements created by the Final Rule;
     Whether, and if so, how new and developing technologies 
can assist covered entities with their compliance obligations and 
enhance access to quality health care;

[[Page 27889]]

     The costs incurred for design of health benefits, with any 
detailed information facts, surveys, audits, or reports;
     The costs to provide nondiscrimination notices and 
taglines, specifically including the marginal labor, material, postage, 
and depreciation costs for printing and mailing additional sides and 
sheets of paper (including extra postage), the volume of such notices 
or mailings, and the impact of such notices or mailings on the 
utilization of language access services with any detailed supporting 
information, facts, surveys, audits, or reports;
     The prevalence of health care entities that operate and 
beneficiaries that reside in more than one State, with any detailed 
supporting information, facts, surveys, audits, or reports;
     The amount of marketing, enrollment, and benefits 
communications delivered or mailed per year, with any detailed 
supporting information, facts, surveys, audits, or reports;
     Unaddressed discrimination on the basis of race, color, 
national, and origin, sex, disability, and age as applied to State and 
Federally-facilitated Exchanges, with any detailed supporting 
information, facts, surveys, audits, or reports;
     Whether covered entities seek guidance on best practices 
for compliance with Section 1557, such as for civil rights assurances 
signed by recipients of Federal financial assistance, and notices of 
civil rights posted in areas such as employee break rooms;
     The costs of coming into compliance or remaining in 
compliance with a Federal prohibition of discrimination on the basis of 
gender identity or sexual orientation under Title IX, and with any 
detailed supporting information, facts, surveys, audits, or reports;
     Whether the proposed LEP provisions are practical, 
effective, fiscally responsible, reasonable, responsive to the 
particular circumstances relevant to health care programs or 
activities, and capable of being readily implemented;
     Whether HHS's Title VI regulations at 45 CFR part 80 
should be amended to address the Lau v. Nichols precedent applicable to 
LEP individuals under any program or activity receiving Federal 
financial assistance from HHS;
     Whether HHS's Section 504 regulations at 45 CFR part 85 
should be amended to address effective communication, accessibility 
standards for buildings of facilities, accessibility of electronic 
information technology, and the requirement to make reasonable 
modifications for otherwise qualified individuals with disabilities 
under any program or activity receiving Federal financial assistance 
from HHS; and
     Whether the proposed provisions on language assistance 
services adequately balance an LEP individual's meaningful access to 
effectively participate in the covered health program or activity with 
the resources available and costs to the covered entity.

List of Subjects

42 CFR Part 438

    Civil rights, Discrimination, Grant programs--health, Individuals 
with disabilities, Medicaid, National origin, Nondiscrimination, 
Reporting and recordkeeping requirements, Sex discrimination.

42 CFR Part 440

    Civil rights, Discrimination, Grant programs--health, Individuals 
with disabilities, Medicaid, National origin, Nondiscrimination, Sex 
discrimination.

42 CFR Part 460

    Age discrimination, Aged, Civil rights, Discrimination, Health 
Incorporation by reference, Individuals with disabilities, Medicare, 
Medicaid, National origin, Nondiscrimination, Religious discrimination, 
Reporting and recordkeeping requirements, Sex discrimination.

45 CFR Part 86

    Civil rights, Colleges and universities, Employment, Administrative 
practice and procedure, Buildings and facilities, Education of 
individuals with disabilities, Education, Educational facilities, 
Educational research, Educational study programs, Equal educational 
opportunity, Equal employment opportunity, Graduate fellowship program, 
Grant programs--education, Individuals with disabilities, 
Investigations, Reporting and recordkeeping requirements, Sex 
discrimination, State agreement program, Student aid, Women.

45 CFR Part 92

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

45 CFR Part 147

    Age discrimination, Civil rights, Discrimination, Health care, 
Health insurance, Individuals with disabilities, National origin, 
Nondiscrimination, Reporting and recordkeeping requirements, Sex 
discrimination, State regulation of health insurance.

45 CFR Part 155

    Actuarial value, Administration and calculation of advance payments 
of the premium tax credit, Administrative practice and procedure, 
Advance payments of premium tax credit, Age discrimination, Civil 
rights, Cost-sharing reductions, Discrimination, Health care access, 
Health insurance, Individuals with disabilities, National origin, 
Nondiscrimination, Plan variations, Reporting and recordkeeping 
requirements, Sex discrimination, State and local governments.

45 CFR Part 156

    Administrative appeals, Administrative practice and procedure, 
Administration and calculation of advance payments of premium tax 
credit, Advertising, Advisory Committees, Age discrimination, Brokers, 
Civil rights, Conflict of interest, Consumer protection, Cost-sharing 
reductions, Discrimination, Grant programs-health, Grants 
administration, Health care, Health insurance, Health maintenance 
organization (HMO), Health records, Hospitals, American Indian/Alaska 
Natives, Individuals with disabilities, Loan programs-health, 
Organization and functions (Government agencies), Medicaid, National 
origin, Nondiscrimination, Payment and collections reports, Public 
assistance programs, Reporting and recordkeeping requirements, Sex 
discrimination, State and local governments, Sunshine Act, Technical 
assistance, Women, Youth.

    For the reasons set forth in the preamble, the Department of Health 
and Human Services proposes to amend 42 CFR parts 438, 440, and 460 and 
45 CFR parts 86, 92, 147, 155, and 156 as follows:

Title 42--Public Health

PART 438--MANAGED CARE

0
1. The authority citation for part 438 continues to read as follows:

    Authority:  42 U.S.C. 1302.

0
2. Amend Sec.  438.3 by revising paragraph (d)(4) to read as follows:


Sec.  438.3  Standard contract requirements.

* * * * *
    (d) * * *

[[Page 27890]]

    (4) The MCO, PIHP, PAHP, PCCM or PCCM entity will not discriminate 
against individuals eligible to enroll on the basis of race, color, 
national origin, sex, or disability and will not use any policy or 
practice that has the effect of discriminating on the basis of race, 
color, or national origin, sex, or disability.
* * * * *
0
3. Amend Sec.  438.206 by revising paragraph (c)(2) to read as follows:


Sec.  438.206  Availability of services.

* * * * *
    (c) * * *
    (2) Access and cultural considerations. Each MCO, PIHP, and PAHP 
participates in the State's efforts to promote the delivery of services 
in a culturally competent manner to all enrollees, including those with 
limited English proficiency and diverse cultural and ethnic 
backgrounds, disabilities, and regardless of sex.
* * * * *

PART 440--SERVICES: GENERAL PROVISIONS

0
4. The authority citation for part 440 continues to read as follows:

    Authority: 42 U.S.C. 1302.

0
5. Revise Sec.  440.262 to read as follows:


Sec.  440.262  Access and cultural conditions.

    The State must have methods to promote access and delivery of 
services in a culturally competent manner to all beneficiaries, 
including those with limited English proficiency, diverse cultural and 
ethnic backgrounds, disabilities, and regardless of sex.

PART 460--PROGRAMS OF ALL-INCLUSIVE CARE FOR THE ELDERLY (PACE)

0
6. The authority citation for part 460 continues to read as follows:

    Authority:  42 U.S.C. 1302, 1395l, 1395eee(f), and 1396u-4(f).

0
7. Amend Sec.  460.98 by revising paragraph (b)(3) to read as follows:


Sec.  460.98  Service delivery.

* * * * *
    (b) * * *
    (3) The PACE organization may not discriminate against any 
participant in the delivery of required PACE services based on race, 
ethnicity, national origin, religion, sex, age, mental or physical 
disability, or source of payment.
* * * * *
0
8. Amend Sec.  460.112 by revising paragraph (a) to read as follows:


Sec.  460.112  Specific rights to which a participant is entitled.

    (a) Respect and nondiscrimination. Each participant has the right 
to considerate, respectful care from all PACE employees and contractors 
at all times and under all circumstances. Each participant has the 
right not to be discriminated against in the delivery of required PACE 
services based on race, ethnicity, national origin, religion, sex, age, 
mental or physical disability, or source of payment.
* * * * *

Title 45--Public Welfare

PART 86--NONDISCRIMINATION ON THE BASIS OF SEX IN EDUCATION 
PROGRAMS OR ACTIVITIES RECEIVING FEDERAL FINANCIAL ASSISTANCE

0
9. The authority citation for part 86 is revised to read as follows:

    Authority:  20 U.S.C. 1681-1688; Pub. L. 100-259, 102 Stat. 28 
(Mar. 22, 1988).


Sec.  86.2  [Amended]

0
10. Amend Sec.  86.2:
0
a. In paragraph (a), by adding ``1687, 1688'' after ``1686''.
0
b. In paragraph (n), by removing the words ``United States Commissioner 
of Education'' and adding in their place the words ``Secretary of 
Education''.
0
11. Add Sec.  86.18 to read as follows:


Sec.  86.18  Amendments to conform to statutory exemptions.

    (a) Nothing in this part shall be construed to force or require any 
individual or hospital or any other institution, program, or activity 
receiving Federal Funds to perform or pay for an abortion.
    (b) Nothing in this part shall be construed to require or prohibit 
any person, or public or private entity, to provide or pay for any 
benefit or service, including the use of facilities, related to an 
abortion. Nothing in the preceding sentence shall be construed to 
permit a penalty to be imposed on any person or individual because such 
person or individual is seeking or has received any benefit or service 
related to a legal abortion.
    (c) This part shall be construed consistently with, as applicable, 
the First Amendment to the Constitution, Title IX's religious 
exemptions (20 U.S.C. 1681(a)(3) and 1687(4)), the Religious Freedom 
Restoration Act (42 U.S.C. 2000b et seq.), and provisions related to 
abortion in the Church Amendments (42 U.S.C. 300a-7), the Coats-Snowe 
Amendment (42 U.S.C. 238n), Section 1303 of the Patient Protection and 
Affordable Care Act (42 U.S.C. 18023), and appropriation rider 
provisions relating to abortion, to the extent they remain in effect or 
applicable, such as the Hyde Amendment (e.g., Consolidated 
Appropriations Act, 2019, Pub. L. 115-245, Div. B, sec. 506-507), the 
Helms Amendment (e.g., Continuing Appropriations Act, 2019, Pub. L. 
116-6, Div. F, Titl III), and the Weldon Amendment (e.g., Consolidated 
Appropriations Act, 2019, Pub. L. 115-245, Div. B, sec. 507(d)).
0
12. Amend Sec.  86.31 by revising paragraph (b) to read as follows:


Sec.  86.31  Education programs or activities.

* * * * *
    (b) Specific prohibitions. Except as provided in this subsection, 
in providing any aid, benefit, or service to a student, a recipient 
shall not, on the basis of sex:
    (1) Treat one person differently from another in determining 
whether such person satisfies any requirement or condition for the 
provision of such aid, benefit, or service;
    (2) Provide different aid, benefits, or services or provide aid, 
benefits, or services in a different manner;
    (3) Deny any person any such aid, benefit, or service;
    (4) Subject any person to separate or different rules of behavior, 
sanctions, or other treatment;
    (5) Apply any rule concerning the domicile or residence of a 
student or applicant, including eligibility for in-State fees and 
tuition;
    (6) Aid or perpetuate discrimination against any person by 
providing significant assistance to any agency, organization, or person 
which discriminates on the basis of sex in providing any aid, benefit 
or service to students or employees;
    (7) Otherwise limit any person in the enjoyment of any right, 
privilege, advantage, or opportunity.
* * * * *
0
13. Revise Sec.  86.71 to read as follows:


Sec.  86.71  Enforcement procedures.

    For the purposes of implementing this Part, the procedural 
provisions applicable to Title VI of the Civil Rights Act of 1964 (42 
U.S.C. 2000d) are hereby adopted and incorporated herein by reference. 
These procedures may be found at 45 CFR 80.6 through 80.11 and 45 CFR 
part 81.
0
14. Revise part 92 to read as follows:

[[Page 27891]]

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 PROGRAMS OR ACTIVITIES 
ADMINISTERED BY THE DEPARTMENT OF HEALTH AND HUMAN SERVICES UNDER 
TITLE I OF THE PATIENT PROTECTION AND AFFORDABLE CARE ACT OR BY 
ENTITIES ESTABLISHED UNDER SUCH TITLE

Subpart A--General Provisions
Sec.
92.1 Purpose.
92.2 Nondiscrimination requirements.
92.3 Scope of application.
92.4 Assurances.
92.5 Enforcement mechanisms.
92.6 Relationship to other laws.
Subpart B--Specific Applications to Health Programs or Activities
92.101 Meaningful access for individuals with limited English 
proficiency.
92.102 Effective communication for individuals with disabilities.
92.103 Accessibility standards for buildings and facilities.
92.104 Accessibility of information and communication technology.
92.105 Requirement to make reasonable modifications.

    Authority:  42 U.S.C. 18116; 5 U.S.C. 301, Pub. L. 100-259, 102 
Stat. 28 (Mar. 22 1988); 42 U.S.C. 2000d et seq. (Title VI of the 
Civil Rights Act of 1964, as amended); 29 U.S.C. 794 (Section 504 of 
the Rehabilitation Act of 1973, as amended); 20 U.S.C. 1681 et seq. 
(Title IX of the Education Amendments of 1972, as amended); 42 
U.S.C. 6101 et seq.; (Age Discrimination Act of 1975, as amended); 
Lau v. Nichols, 414 U.S. 563 (1974).

Subpart A--General Provisions


Sec.  92.1  Purpose.

    The purpose of this part is to provide for the enforcement of 
Section 1557 of the Patient Protection and Affordable Care Act, 42 
U.S.C. 18116, prohibiting discrimination under any health program or 
activity receiving Federal financial assistance, or under any program 
or activity administered by an Executive agency, or by any entity 
established, under Title I of such law, on the grounds of race, color, 
national origin, sex, age, or disability, except as provided in Title I 
of such law (or any amendment thereto). Section 1557 requires the 
application of the enforcement mechanisms under Title VI of the Civil 
Rights Act of 1964 (42 U.S.C. 2000d et seq.), Title IX of the Education 
Amendments of 1972 (20 U.S.C. 1681 et seq.), the Age Discrimination Act 
of 1975 (42 U.S.C. 6101 et seq.), and Section 504 of the Rehabilitation 
Act of 1973 (29 U.S.C. 794) for purposes of violations of Section 1557 
and this part.


Sec.  92.2  Nondiscrimination requirements.

    (a) Except as provided in Title I of the Patient Protection and 
Affordable Care Act (or any amendment thereto), an individual shall 
not, on any of the grounds set forth in paragraph (b) of this section, 
be excluded from participation in, be denied the benefits of, or be 
subjected to discrimination under any health program or activity, any 
part of which is receiving Federal financial assistance (including 
credits, subsidies, or contracts of insurance) provided by the U.S. 
Department of Health and Human Services; or under any program or 
activity administered by the Department under such Title; or under any 
program or activity administered by any entity established under such 
Title.
    (b) The grounds are the grounds prohibited under the following 
statutes:
    (1) Title VI of the Civil Rights Act of 1964 (42 U.S.C. 2000d et 
seq.) (race, color, national origin);
    (2) Title IX of the Education Amendments of 1972 (20 U.S.C. 1681 et 
seq.) (sex);
    (3) The Age Discrimination Act of 1975 (42 U.S.C. 6101 et seq.) 
(age); or
    (4) Section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794) 
(disability).


Sec.  92.3  Scope of application.

    (a) Except as otherwise provided in this part, this part applies to
    (1) Any health program or activity, any part of which is receiving 
Federal financial assistance (including credits, subsidies, or 
contracts of insurance) provided by the Department;
    (2) Any program or activity administered by the Department under 
Title I of the Patient Protection and Affordable Care Act; or
    (3) Any program or activity administered by any entity established 
under such Title.
    (b) As used in this part, ``health program or activity'' 
encompasses all of the operations of entities principally engaged in 
the business of providing health care that receive Federal financial 
assistance as described in paragraph (a)(1) of this section. For any 
entity not principally engaged in the business of providing health 
care, the requirements applicable to a ``health program or activity'' 
under this part shall apply to such entity's operations only to the 
extent any such operation receives Federal financial assistance as 
described in paragraph (a)(1) of this section.
    (c) For purposes of this part, an entity principally or otherwise 
engaged in the business of providing health insurance shall not, by 
virtue of such provision, be considered to be principally engaged in 
the business of providing health care.


Sec.  92.4  Assurances.

    (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 of the Department's Office for Civil Rights, that the 
entity's health programs or activities will be operated in compliance 
with Section 1557 and this part. A health insurance issuer seeking 
certification to participate in an Exchange or a State seeking approval 
to operate a State Exchange 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 of the Department's 
Office for Civil Rights, 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 an Exchange or approval to 
operate a State Exchange.
    (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 at 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.  92.5  Enforcement mechanisms.

    (a) The enforcement mechanisms provided for, and available under, 
Title VI of the Civil Rights Act of 1964 (42 U.S.C. 2000d et seq.), 
Title IX of the Education Amendments of 1972 (20 U.S.C. 1681 et seq.), 
the Age Discrimination Act of 1975 (42 U.S.C. 6101 et seq.), or Section 
504 of the Rehabilitation Act of 1973 (29 U.S.C. 794), including under 
the Department's regulations implementing those statutes, shall apply 
for purposes of violations of Sec.  92.2 of this part.
    (b) The Director of the Office for Civil Rights has been delegated 
the authority to enforce 42 U.S.C. 18116 and this part, which includes 
the authority to handle

[[Page 27892]]

complaints, initiate and conduct compliance reviews, conduct 
investigations, supervise and coordinate compliance within the 
Department, make enforcement referrals to the Department of Justice, in 
coordination with the Office of the General Counsel and the relevant 
component or components of the Department, and take other appropriate 
remedial action as the Director deems necessary, in coordination with 
the relevant component or components of the Department, and as allowed 
by law to overcome the effects of violations of 42 U.S.C. 18116 or of 
this part.


Sec.  92.6  Relationship to other laws.

    (a) Nothing in this part shall be construed to invalidate or limit 
the rights, remedies, procedures, or legal standards available to 
individuals aggrieved under Title VI of the Civil Rights Act of 1964 
(42 U.S.C. 2000d et seq.), Title VII of the Civil Rights Act of 1964 
(42 U.S.C. 2000e et seq.), Title IX of the Education Amendments of 1972 
(20 U.S.C. 1681 et seq.), the Age Discrimination Act of 1975 (42 U.S.C. 
6101 et seq.), or Section 504 of the Rehabilitation Act of 1973 (29 
U.S.C. 794), or to supersede State laws that provide additional 
protections against discrimination on any basis described in Sec.  92.2 
of this part.
    (b) Insofar as the application of any requirement under this part 
would violate, depart from, or contradict definitions, exemptions, 
affirmative rights, or protections provided by any of the statutes 
cited in paragraph (a) of this section or provided by the Architectural 
Barriers Act of 1968 (42 U.S.C. 4151 et seq.); the Americans with 
Disabilities Act of 1990, as amended by the Americans with Disabilities 
Act Amendments Act of 2008 (42 U.S.C. 12181 et seq.), Section 508 of 
the Rehabilitation Act of 1973, as amended (29 U.S.C. 794d), the Coats-
Snowe Amendment (42 U.S.C. 238n), the Church Amendments (42 U.S.C. 
300a-7), the Religious Freedom Restoration Act (42 U.S.C. 2000bb et 
seq.), Section 1553 of the Patient Protection and Affordable Care Act 
(42 U.S.C. 18113), Section 1303 of the Patient Protection and 
Affordable Care Act (42 U.S.C. 18023), the Weldon Amendment 
(Consolidated Appropriations Act, 2019, Pub. L. 115-245, Div. B sec. 
209 and sec. 506(d) (Sept. 28, 2018)), or any related, successor, or 
similar Federal laws or regulations, such application shall not be 
imposed or required.

Subpart B--Specific Applications to Health Programs or Activities


Sec.  92.101  Meaningful access for individuals with limited English 
proficiency.

    (a) Obligation. Any entity operating or administering a health 
program or activity subject to this part shall take reasonable steps to 
ensure meaningful access to such programs or activities by limited 
English proficient individuals.
    (b) Specific applications--(1) Enforcement discretion. In 
evaluating whether any entity to which paragraph (a) of this section 
applies has complied with paragraph (a) of this section, the Director 
of the Department's Office for Civil Rights may assess how such entity 
balances the following four factors:
    (i) The number or proportion of limited English proficient 
individuals eligible to be served or likely to be encountered in the 
eligible service population;
    (ii) The frequency with which LEP individuals come in contact with 
the entity's health program, activity, or service;
    (iii) The nature and importance of the entity's health program, 
activity, or service; and
    (iv) The resources available to the entity and costs.
    (2) Language assistance services requirements. Where paragraph (a) 
of this section, in light of the entity's individualized assessment of 
the four factors set forth in paragraph (b)(1) of this section, 
requires the provision of language assistance services, such services 
must be provided free of charge, be accurate and timely, and protect 
the privacy and independence of the individual with limited English 
proficiency. Language assistance services may include:
    (i) 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; and
    (ii) Written translation, performed by a qualified translator, of 
written content in paper or electronic form into languages other than 
English.
    (3) Specific requirements for interpreter and translation services. 
(i) Where paragraph (a) of this section, in light of the entity's 
individualized assessment of the four factors set forth in paragraph 
(b)(1) of this section, requires the provision of interpreter services, 
they must be provided by an interpreter who:
    (A) Adheres to generally accepted interpreter ethics principles, 
including client confidentiality;
    (B) Has demonstrated proficiency in speaking and understanding at 
least spoken English and the spoken language in need of interpretation; 
and
    (C) 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.
    (ii) Where paragraph (a) of this section, in light of the entity's 
individualized assessment of the four factors set forth in paragraph 
(b)(1) of this section, requires the provision of translation services 
for written content (in paper or electronic form), they must be 
provided by a translator who:
    (A) Adheres to generally accepted translator ethics principles, 
including client confidentiality;
    (B) Has demonstrated proficiency in writing and understanding at 
least written English and the written language in need of translation; 
and
    (C) Is able to translate effectively, accurately, and impartially 
to and from such language(s) and English, using any necessary 
specialized vocabulary, terminology and phraseology.
    (iii) If remote audio interpreting services are required to comply 
with paragraph (a) of this section, in light of the entity's 
individualized assessment of the four factors set forth in paragraph 
(b)(1) of this section, the entity to which Section 1557 applies (as 
defined in Sec.  92.3 of this part) shall provide:
    (A) Real-time, audio over a dedicated high-speed, wide-bandwidth 
video connection or wireless connection that delivers high-quality 
audio without lags or irregular pauses in communication;
    (B) A clear, audible transmission of voices; and
    (C) Adequate training to users of the technology and other involved 
individuals so that they may quickly and efficiently set up and operate 
the remote interpreting services.
    (4) Restricted use of certain persons to interpret or facilitate 
communication. If an entity is required by paragraph (a) of this 
section, in light of the entity's individualized assessment of the four 
factors set forth in paragraph (b)(1) of this section, to provide 
interpretation services, such entity shall not:
    (i) Require an individual with limited English proficiency to 
provide his or her own interpreter;
    (ii) Rely on an adult accompanying an individual with limited 
English proficiency to interpret or facilitate communication, except

[[Page 27893]]

    (A) 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;
    (B) 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;
    (iii) 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
    (iv) Rely on staff other than qualified bilingual/multilingual 
staff to communicate directly with individuals with limited English 
proficiency.
    (c) 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.  92.102  Effective communication for individuals with 
disabilities.

    (a) Any entity operating or administering a program or activity 
under this part shall take appropriate steps to ensure that 
communications with individuals with disabilities are as effective as 
communications with others in such programs or 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 ``entity'' shall apply in its place.
    (b) A recipient or State Exchange shall provide appropriate 
auxiliary aids and services, including interpreters and information in 
alternate formats, to individuals with impaired sensory, manual, or 
speaking skills, where necessary to afford such persons an equal 
opportunity to benefit from the service in question.
    (1) Auxiliary aids and services include:
    (i) Interpreters on-site or through video remote interpreting (VRI) 
services, as defined in 28 CFR 35.104 and 36.303(f); 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 information 
and communication technology; or other effective methods of making 
aurally delivered information available to individuals who are deaf or 
hard of hearing; and
    (ii) Readers; taped texts; audio recordings; Braille materials and 
displays; screen reader software; magnification software; optical 
readers; secondary auditory programs; large print materials; accessible 
information and communication technology; or other effective methods of 
making visually delivered materials available to individuals who are 
blind or have low vision.
    (2) When an entity is required to provide an interpreter under 
subsection (b), the interpreting service shall be provided to 
individuals free of charge and in a timely manner, via a remote 
interpreting service or an onsite appearance, by an interpreter who
    (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.
    (3) An interpreter for an individual with a disability for purposes 
of this section 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).
    (c) 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 Americans with Disabilities Act (ADA), 
as amended (42 U.S.C. 12102 et seq.). Where this part cross-references 
regulatory provisions that use the term ``handicap,'' ``handicap'' 
means ``disability'' as defined in this section.


Sec.  92.103  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 Exchange shall comply with 
the 2010 Standards, 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 Exchange, 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 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 under this part are conducted that is constructed or altered 
by or on behalf of, or for the use of, a recipient or State Exchange in 
conformance with the 1991 Standards at appendix D to 28 CFR part 36 or 
the 2010 Standards shall be deemed to comply with the requirements of 
this section and with 45 CFR 84.23(a) and (b) 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 
Exchange in conformance with UFAS shall be deemed to comply with the 
requirements of this section and with 45 CFR 84.23(a) and (b), if the 
construction was commenced before July 18, 2016 and such facility was 
not covered by the 1991 Standards or 2010 Standards.
    (c) For purposes of this part:
    (1) ``1991 Standards'' refers to the 1991 Americans with 
Disabilities Act Standards for Accessible Design at appendix D to 28 
CFR part 36.
    (2) ``2010 Standards'' refers to the 2010 ADA Standards for 
Accessible Design, as defined in 28 CFR 35.104.
    (3) ``UFAS'' refers to the Uniform Federal Accessibility Standards 
as promulgated in 49 FR 31528 (Aug. 7, 1984).

[[Page 27894]]

Sec.  92.104  Accessibility of information and communication 
technology.

    (a) Entities required to comply with Sec.  92.2, unless otherwise 
exempted by this part, shall ensure that their health programs or 
activities provided through information and communication 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 information and communication 
technology.
    (b) A recipient or State Exchange shall ensure that its health 
programs or activities provided through websites comply with the 
requirements of Title II of the Americans with Disabilities Act (42 
U.S.C. 12131 through 12165).
    (c) For purposes of this part, ``information and communication 
technology'' (ICT) means information technology and other equipment, 
systems, technologies, or processes, for which the principal function 
is the creation, manipulation, storage, display, receipt, or 
transmission of electronic data and information, as well as any 
associated content. Examples of ICT include computers and peripheral 
equipment; information kiosks and transaction machines; 
telecommunications equipment; customer premises equipment; 
multifunction office machines; software; applications; websites; 
videos; and, electronic documents.


Sec.  92.105  Requirement to make reasonable modifications.

    Any entity to which Section 1557 applies (as defined in Sec.  92.3 
of this part) shall make reasonable modifications to its 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 regulation 
promulgated under Title II of the Americans with Disabilities Act, at 
28 CFR 35.130(b)(7).

PART 147--HEALTH INSURANCE REFORM REQUIREMENTS FOR THE GROUP AND 
INDIVIDUAL HEALTH INSURANCE MARKETS

0
15. The authority citation for part 147 continues to read as follows:

    Authority:  42 U.S.C. 18021, 18031, 18041, 18044, 18054, 18061, 
18063, 18071, and 18082, 26 U.S.C. 36B, 31 U.S.C. 9701.

0
16. Amend Sec.  147.104 by revising paragraph (e) to read as follows:


Sec.  147.104  Guaranteed availability of coverage.

* * * * *
    (e) Marketing. A health insurance issuer and its officials, 
employees, agents and representatives must comply with any applicable 
State laws and regulations regarding marketing by health insurance 
issuers and cannot employ marketing practices or 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, expected length of life, degree of 
medical dependency, quality of life, or other health conditions.
* * * * *

PART 155--EXCHANGE ESTABLISHMENT STANDARDS AND OTHER RELATED 
STANDARDS UNDER THE AFFORDABLE CARE ACT

Subpart B--General Standards Related to the Establishment of an 
Exchange

0
17. The authority citation for Part 155 continues to read as follows:

    Authority: 42 U.S.C. 18021-18024, 18031-18033, 18041-18042, 
18051, 18054, 18071, and 18081-18083.

0
18. Amend Sec.  155.120 by revising paragraph (c)(1)(ii) to read as 
follows:


Sec.  155.120  Non-interference with Federal law and non-discrimination 
standards.

* * * * *
    (c) * * *
    (1) * * *
    (ii) Not discriminate based on race, color, national origin, 
disability, age, or sex.
* * * * *
0
19. Amend Sec.  155.220 by revising paragraph (j)(2)(i) to read as 
follows:


Sec.  155.220  Ability of States to permit agents and brokers to assist 
qualified individuals, qualified employers, or qualified employees 
enrolling in QHPs.

* * * * *
    (j) * * *
    (2) * * *
    (i) Provide consumers with correct information, without omission of 
material fact, regarding the Federally-facilitated Exchanges, QHPs 
offered through the Federally-facilitated Exchanges, and insurance 
affordability programs, and refrain from marketing or conduct that is 
misleading (including by having a direct enrollment website that HHS 
determines could mislead a consumer into believing they are visiting 
HealthCare.gov), coercive, or discriminates based on race, color, 
national origin, disability, age, or sex;
* * * * *

PART 156--HEALTH INSURANCE ISSUER STANDARDS UNDER THE AFFORDABLE 
CARE ACT, INCLUDING STANDARDS RELATED TO EXCHANGES

0
20. The authority citation for part 156 continues to read as follows:

    Authority: 5 U.S.C. 552; 42 U.S.C. 300jj-11 and 300jj-14.

0
21. Amend Sec.  156.200 by revising paragraph (e) to read as follows:


Sec.  156.200  QHP issuer participation standards.

* * * * *
    (e) Non-discrimination. A QHP issuer must not, with respect to its 
QHP, discriminate on the basis of race, color, national origin, 
disability, age, or sex.
* * * * *
0
22. Amend Sec.  156.1230 by revising paragraph (b)(3) to read as 
follows:


Sec.  156.1230  Direct enrollment with the QHP issuer in a manner 
considered to be through the Exchange.

* * * * *
    (b) * * *

[[Page 27895]]

    (3) The QHP issuer must provide consumers with correct information, 
without omission of material fact, regarding the Federally-facilitated 
Exchanges, QHPs offered through the Federally-facilitated Exchanges, 
and insurance affordability programs, and refrain from marketing or 
conduct that is misleading (including by having a direct enrollment 
website that HHS determines could mislead a consumer into believing 
they are visiting HealthCare.gov), coercive, or discriminates based on 
race, color, national origin, disability, age, or sex.
* * * * *

    Dated: May 23, 2019.
Alex M. Azar II,
Secretary, Department of Health and Human Services.
[FR Doc. 2019-11512 Filed 6-13-19; 8:45 am]
 BILLING CODE 4153-01-P