In litigation under Section 1557 of the Affordable Care Act (ACA), a California district court has concluded that a health plan participant plausibly alleged that the plan insurer's coverage standards for artificial insemination under the insurer's infertility policy were discriminatory (Berton v. Aetna, Inc., (N.D. Cal. Feb. 29, 2024)). The court therefore declined to dismiss the claim.

ACA Section 1557 is a nondiscrimination rule that prohibits individuals from being excluded from participation in, being denied the benefits of, or being subject to discrimination under a health program or activity that receives federal financial assistance on specified grounds. One of the specified grounds under ACA Section 1557 is Title IX, which prohibits discrimination "on the basis of sex" (20 U.S.C. §§ 1681 to 1688; see Practice Note, June 2020 Final Regulations Under ACA Section 1557: Nondiscrimination in Health Programs and Activities: Four Civil Rights Laws Cross-Referenced Under Section 1557 and ACA Section 1557 Compliance for Health Coverage Toolkit). In recent years, Section 1557 has been the basis of numerous participant claims challenging plan denials for gender-affirming care—while relatively few cases have addressed plan coverage of fertility treatments (for example, see Legal Update, In Gender-Affirming Care Litigation, District Court Requires Insurer to Reprocess Claims and Tolls Claims Deadlines).

The participant-plaintiff in this case, a 32-year-old woman, wanted to have children with her same-sex spouse and sought to become pregnant by intrauterine insemination (IUI) (a common form of artificial insemination). However, the insurer denied coverage for IUI treatment under what the participant characterized as a discriminatory infertility policy that provided unequal access to fertility benefits to couples in same-sex partnerships. Specifically, the participant asserted that the insurer's policy discriminated against her—due to her sexual orientation—by imposing additional requirements on same-sex partners.

To become eligible for fertility treatment coverage under the policy, a participant first had to demonstrate infertility. Before 2023, a participant was considered infertile if the participant could not conceive after one year of "frequent, unprotected heterosexual sexual intercourse" (where the female partner was under 35 years of age). Alternatively, the policy considered a woman under age 35 without a male partner to be infertile if she could not conceive after at least 12 cycles of donor insemination. The participant argued that this policy was discriminatory in that it offered heterosexual couples two ways to demonstrate eligibility (heterosexual sex or donor insemination) while affording same-sex female couples only one way to do so (donor insemination).

The insurer revised the policy's language effective beginning in 2023 (for example, by removing references to "heterosexual" and "woman without a male partner"). However, the participant alleged that the policy, as updated, continued to impose different and more onerous burdens on same-sex couples relative to opposite-sex couples. In terms of financial burden, the participant asserted, the insurer's policy imposed no out-of-pocket costs on opposite-sex couples—who could demonstrate infertility by merely representing that they had 12 months of frequent intercourse. Same-sex partners, by contrast, were required to show proof of having completed 12 cycles of costly and intrusive donor insemination.

The participant argued that the insurer's policy therefore discriminated on the basis of sex in violation of Section 1557. The insurer moved to dismiss the complaint.

The district court concluded that the participant adequately alleged a claim under Section 1557 and therefore declined to dismiss the claim on this ground.

The court first recognized that discrimination based on sexual orientation is not permitted under Title IX (one of the four statutory forms of prohibited discrimination under Section 1557). In doing so, the court cited a Ninth Circuit decision concluding that the Supreme Court's Bostock ruling—which held that Title VII of the Civil Rights Act of 1964 (Title VII) prohibits discrimination against employees due to their gay or transgender status—also applies to Title IX (and, by extension, to Section 1557) (140 S. Ct. 1731 (2020); see Legal Update, Supreme Court: Discrimination Based on Sexual Orientation or Transgender Status Is Sex Discrimination Under Title VII and Article, August 2022 Re-Proposed Regulations Addressing Nondiscrimination in Health Programs and Activities Under the ACA (Section 1557): Impact of Supreme Court's Bostock Ruling on Sex Discrimination Under Section 1557).

To raise a viable sex discrimination claim under Title IX (and under Section 1557), the participant was required to show that:

At this stage of the litigation, the court concluded that the participant adequately stated a claim for which relief could be granted. The court agreed with the participant that the insurer's policy, on its face, imposed inherently different and more demanding burdens on same-sex partners (relative to opposite-sex partners). The court observed that under the insurer's policy (as revised) an individual was deemed infertile if the individual could not conceive after one year of "egg-sperm contact" achieved through either:

As a result, the court reasoned, the policy allowed opposite-sex partners to demonstrate infertility without incurring any out-of-pocket costs via the frequent intercourse option. Moreover, this option did not impose any related documentation requirements or showing as to the timing or frequency of intercourse. Same-sex partners, however, the court observed, could only demonstrate infertility by completing expensive cycles of insemination—for which they needed to furnish verifiable proof. The court held that the participant adequately alleged that this differential treatment based on sexual orientation was facially discriminatory in that it placed an unequal burden on same-sex partners relative to opposite-sex partners.

The insurer argued that its policy (as revised):

The court rejected the insurer's argument as failing to recognize the policy's "real-world effect" of applying less favorably to same-sex partners. The court therefore denied the insurer's motion to dismiss the participant's claim.

This decision—though early on procedurally—is one of an emerging set of Section 1557 cases challenging the scope and validity of health plan provisions governing coverage for fertility treatments. In the past, employer limits on infertility treatments have been challenged—with little success—under the Pregnancy Discrimination Act (PDA). It remains to be seen whether the courts will be more receptive to Section 1557-based fertility claims—or whether HHS will offer guidance in this space in its yet-to-be-finalized regulations under Section 1557 (see Article, August 2022 Re-Proposed Regulations Addressing Nondiscrimination in Health Programs and Activities Under the ACA (Section 1557) and ACA Section 1557 Compliance for Health Coverage Toolkit). For now, employers should consider reviewing policies such as the one at issue in this litigation to see whether the policies, on their face or in effect, apply less favorably to one gender and are therefore susceptible to challenge under Section 1557.