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HHS Resolves the Conflict – Sex Discrimination Includes Sexual Orientation and Gender Identity

By: Andrew Silverio, Esq.

Recently, HHS resolved a conflict which arose last year between the position of the Office for Civil Rights (OCR) and the Supreme Court decision Bostock v. Clayton County.  This new interpretation reverses the position outlined in HHS’s June 12, 2020 final rule that Section 1557’s nondiscrimination protections did not include protections based on gender identity or sexual orientation, and brings the position of OCR into accord with Bostock in holding that protection under Section 1557 does indeed extend these protections.

Notably, HHS stresses in the release (available at https://www.hhs.gov/sites/default/files/ocr-bostock-notification.pdf) that it will comply with the Religious Freedom Restoration Act in enforcing Section 1557, and the Religious Freedom Restoration Act has indeed been a primary factor in many challenges to the broader interpretation of Section 1557.  It will be interesting to see how the two interact in lawsuits and regulatory interpretations going forward.

For now, our guidance regarding Section 1557 has not changed.  Entities subject to Section 1557 should continue to apply neutral plan document benefits and exclusions and not discriminate based on gender identity or sexual orientation.  For entities not subject to Section 1557, the prudent approach is still to comply with these same requirements – HHS has previously outlined that it will refer potential discrimination matters falling outside its jurisdiction to the U.S. Equal Employment Opportunity Commission (EEOC) for investigation and enforcement.