HHS Final Rules Expand Enforcement of Federal Conscience Protections for Health Care Entities

Practical Law Legal Update w-020-2540 (Approx. 6 pages)

HHS Final Rules Expand Enforcement of Federal Conscience Protections for Health Care Entities

by Practical Law Employee Benefits & Executive Compensation

Anti-Discrimination Protections Under the Final Regulations

The final conscience regulations are intended to promote awareness of, and compliance with, numerous federal laws protecting the conscience rights of health care entities (collectively, the federal conscience laws). These federal conscience laws include:

The Church Amendments (42 U.S.C. § 300a-7).
The Coats-Snowe Amendment, which prohibits federal, state, or local governments from discriminating against any health care entity because the entity:
- refuses to undergo training, provide training, or provide referrals for training to perform abortions;
- refuses to perform or provide referrals for abortions; and
- attended a training program that did not include training to perform abortions.
(42 U.S.C. § 238n.)
The Weldon Amendment, which prohibits DOL and HHS appropriations from being made available to a federal agency or program, or to a state or local government, if the federal agency/program or state or local government discriminates against a health care entity because the entity does not provide, pay for, provide coverage of, or refer for abortions (see Definition of Protected Health Care Entities).
Section 1553 of the Affordable Care Act (ACA), which prohibits discrimination based on a health care entity's refusal to provide services related to assisted suicide (42 U.S.C. § 18113).
The exemption from the ACA's individual mandate for certain religious organizations (26 U.S.C. § 5000A(d)(2); see Practice Note, Affordable Care Act (ACA) Overview: Individual Mandate).

Key Provisions Under Final Regulations

Definition of Protected Health Care Entities

The final regulations protect health care entities from discrimination and coercion by promoting enforcement of the federal conscience laws. Under the proposed regulations, a "health care entity" included:

Health insurance plans, including group health plans and individual market coverage (see Group Health Plans Toolkit).
Plan sponsors and third-party administrators (TPAs).
Health insurers.

In finalizing its regulations, HHS expressly addressed the scope of the "health care entity" definition. Adopting a bifurcated definition for this term, HHS concluded that a health care entity should not be the same for the Weldon Amendment, ACA Section 1553, and the Coats-Snowe Amendment. Under the final regulations, the definition of "health care entity":

For purposes of the Weldon Amendment and ACA Section 1553, is the same as the proposed definition with minor additions.
For purposes of the Coats-Snowe Amendment, omits:
- plan sponsor and TPAs;
- health insurance plans and health insurers; and
- "any other kind of health care organization, facility, or plan."

(45 C.F.R. Part 88.2.)

In HHS's view, this bifurcated approach is appropriate because whereas the Weldon Amendment and ACA Section 1553 deal with coverage and payment for abortions, the Coats-Snowe Amendment addresses performing, training for, and making referrals for abortions.

HHS specifically addressed commenters' concerns that including plan sponsors in the health care entity definition would subject all employers that sponsor group health plans to the federal conscience laws. HHS clarified that a health care entity under the federal conscience laws refers to entities that are protected from discrimination (rather than entities that must comply with the laws).

Definition of "Workforce"

Under the proposed regulations, the definition of "workforce" included employees, volunteers, trainees, and contractors. HHS received comments challenging the inclusion of volunteers, trainees, and contractors as overly broad. Disagreeing with the commenters, HHS:

Reasoned that volunteers, trainees, and contractors had to be included for the definition to be comprehensive.
Noted that the definition is based on the "workforce" definition found in HIPAA regulations (45 C.F.R. § 160.103; see Practice Note, HIPAA Privacy Rule).

Obligations of Qualified Health Plans Offered Through ACA Health Exchanges

The final regulations also impact qualified health plans (QHP) offered on the ACA health insurance exchanges (see Article, Health Insurance Exchange and Related Requirements Under the ACA). For example, HHS may not require a QHP to provide coverage for abortion or abortion-related services as part of the plan's essential health benefits for any plan year (see Practice Note, Lifetime Limits, Annual Limits, and Essential Health Benefits Under the ACA). Also, a QHP may not discriminate against any individual health care provider or health care facility because of the provider's or facility's unwillingness to provide, pay for, provide coverage of, or refer for abortions.

The proposed regulations required HHS to provide a certification documenting a religious exemption from the ACA's individual mandate and related penalties under the ACA for individuals who are exempt from the mandate due to membership in an exempt religious organization or health care sharing ministry. In finalizing this requirement, HHS acknowledged that the penalty for violating the individual mandate has been reduced to zero (Tax Cuts and Jobs Act (TCJA), Pub. L. No. 115-97 (2017); see Tax Cuts and Jobs Act (TCJA) Compliance for Fringe Benefits and Health Plans Toolkit). However, HHS noted that the ACA still requires individuals to submit proof of adequate coverage or be certified as exempt.

Notice of Federal Conscience Laws

The proposed regulations would have required HHS and recipients of HHS funds to notify workforce members, other individuals, and the public of protections and obligations under the federal conscience laws. To comply with this requirement, HHS and the recipients would have needed to post the notice included in Appendix A of the proposed regulations in specified locations within a certain timeframe.

HHS received comments challenging the notice requirement as burdensome. In response, HHS modified the notice provision to permit, rather than require, recipients to provide notice. Recipients that choose to provide notice may use the notice included in the Appendix or draft their own. HHS may consider a posted notice as evidence of compliance during an investigation or compliance review (see generally Health Plan Notices and Disclosures Chart).

Severability Clause

The final regulations include a severability clause that applies if a court determines that any provision of the final regulations is invalid or unenforceable. HHS included the severability clause in recognition that the final regulations may be challenged in court (45 C.F.R. Part 88.10).

Enforcement Responsibility Over Final Regulations

The final regulations also delegate enforcement responsibilities regarding the regulations to HHS's Office for Civil Rights (OCR). The final regulations authorize OCR to:

Initiate compliance reviews.
Conduct investigations.
Supervise and coordinate compliance by HHS and its component entities.
Use other enforcement tools (that is, in existing regulations) to address violations and resolve complaints.

OCR may also remediate the consequences of discrimination, which could include withholding federal funds.

Litigation Involving HHS Final Rules to Enforce Federal Conscience Protections

HHS's final regulations on enforcing federal statutory conscience protections for health care entities are already the topic of litigation. On May 2, the City and County of San Francisco filed a complaint asserting that the final regulations violate the Administrative Procedure Act (APA), because—among other reasons—the regulations are arbitrary and capricious and contrary to law. San Francisco also argues that the final regulations violate Due Process, the Establishment Clause, and the Spending Clause.

Regarding the status of other recent health plan litigation, see Legal Update, First Circuit Lets Challenge to ACA Contraceptives Rules Proceed; Other Health Plan Litigation Moves Forward: Health Plan Litigation Round-Up.

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