Court Blocks Enforcement of Certain ACA Section 1557 and Title VII Non-Discrimination Rules Against Christian Employer Group

Christian Employers Alliance v. EEOC, No. 1:21-cv-195 (DND, May 16, 2022)

A federal court has prevented HHS and the EEOC from enforcing certain interpretations by agencies of Section 1557 of the Affordable Care Act (ACA) and Title VII of the Civil Rights Act against a Christian employer group. The group assists member employers in providing health or other employment benefits to their employees, consistent with the employers’ Christian values. Among other non-discrimination provisions, Title VII prohibits employers with 15 or more employees from engaging in gender discrimination, and Section 1557 prohibits gender discrimination in “any health program or activity.” The EEOC has interpreted Title VII as protecting against gender discrimination (see, for example, our Checkpoint article), a position reinforced by the Bostock decision of the US Supreme Court (see our Checkpoint article). The HHS regulation issued in 2016 interpreted Section 1557 as prohibiting discrimination based on gender identity and termination of pregnancy (see our Checkpoint article). Legal action followed, culminating in a thoroughly revised Section 1557 regulation in 2020. Among other things, the 2020 regulations have repealed important parts of the 2016 regulations, including protections based on gender identity and termination of pregnancy (see our Checkpoint article). However, courts have since blocked enforcement of the 2020 rules that remove gender identity and termination of pregnancy from non-discrimination protections (see our Checkpoint article), and HHS has announced it will interpret Section 1557 as applicable to sexual discrimination. orientation and gender identity (see our Checkpoint article).

In its lawsuit against HHS and EEOC, the Christian Employers’ Group argued that the agencies’ interpretation and implementation of Section 1557 and Title VII restrict the free exercise of religion and expression of their members under the United States Constitution and religious rights under the Religious Freedom Restoration violate. act. The court concluded that the group is likely to suffer irreparable harm as a result of its compliance and that a probability of success on the ground has been demonstrated, and issued a preliminary injunction prohibiting HHS from opposing Section 1557 and its regulations. interpret or coerce current or prospective members of the group in a manner that would (1) require them to provide, offer, perform, facilitate, or refer gender transition services, or (2) prevent, restrict, or enforce group members’ views on gender identity issues. In addition, the EEOC is ordered to interpret or enforce Title VII against the group, its insurers or third-party administrators (TPAs) in a manner that would require current or prospective members of the group to provide insurance coverage for gender transition services.

Comment from EBIA: This preliminary injunction appears to apply only to the group involved in the lawsuits, and the application of Section 1557 and Title VII to employer-sponsored health plans remains in flux, now more than ever. While we await advice from the agencies, plan sponsors, insurers and TPAs ​​should monitor developments (new proposed regulations under Section 1557 are expected in Spring 2022) and consider plan provisions that could present costly legal challenges. For more information, see EBIA’s Health Care Reform manual in Section XXXIV.A (“Section 1557 Non-Discrimination: Grounds Prohibited Under Federal Laws”) and EBIA’s Group Health Plan Mandates manual in Sections XXI.C (“EEOC’s Position on Title VII and Health Coverage”) and XXI.M.1 (“Interaction of Title VII and Section 1557”). See also EBIA’s Self-Insured Health Plans manual in Section XIII.D.5 (“Section 1557 Non-Discrimination: Non-Discrimination in Health Programs and Activities”).

Contributing Editors: EBIA Staff.

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