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October 11, 2020

Sex-Based Discrimination in Healthcare Under Section 1557: The New Final Rule and Supreme Court Developments

By Brietta R. Clark, Professor, Loyola Law School, Los Angeles, CA, Elizabeth Pendo, Professor, Saint Louis University School of Law, Saint Louis, MO and Gabriella Garbero, Saint Louis University School of Law, Class of 2021, Saint Louis, MO


One of the primary goals of the Patient Protection and Affordable Care Act (PPACA)1 has been the reduction and elimination of health disparities, generally defined as population-level health differences that adversely affect disadvantaged groups,2 including disparities associated with sex and gender. Many of PPACA’s general provisions — expanded access to public and private insurance coverage, guarantee issue and pricing reforms, and coverage mandates — were expected to reduce barriers and eliminate discriminatory practices targeting or disproportionately impacting women and transgender individuals. Provisions like the Women’s Health Amendment,3 which mandated women’s preventive healthcare to be covered without cost sharing, and the even broader prohibition of discrimination on the basis of race, color, national origin, disability, age, and sex in Section 1557 of PPACA4 also promote gender equity.    

Prior to PPACA, a patchwork of federal laws targeted only certain areas for sex nondiscrimination protections and enforcement, notably employment (Title VII of the Civil Rights Act of 1964)5 and education (Title IX of the Education Amendments of 1972).6  Such laws had been used to address healthcare access to some degree, but their scope has been limited. For example, Title VII has been used to eliminate coverage exclusions that uniquely harm women, such as pregnancy-related care, but only in employment-based plans.

Section 1557 filled this critical gap by creating a new healthcare-specific prohibition of sex discrimination. Prohibiting sex and gender discrimination was a dominant focus of the May 2016 Final Rule implementing Section 1557 (2016 Final Rule)7 issued by the U.S. Department of Health and Human Services (HHS) Office for Civil Rights (OCR).  Notably, the 2016 Final Rule clarified that Section 1557’s sex discrimination provision would protect transgender individuals from discrimination on the basis of gender identity in healthcare delivery and insurance.

By contrast, in June 2020, OCR issued new regulations that dramatically narrowed Section 1557’s scope, including interpreting the prohibition on sex discrimination to not include discrimination on the basis of gender identity or transgender status (2020 Final Rule).8  In addition, the 2020 Final Rule significantly expanded the grounds for providers of care or insurance to obtain exemptions from nondiscrimination mandates.

The battle over the scope of sex discrimination protection is also playing out in the courts. Indeed, the United States Supreme Court recently weighed in on this issue, though not in the healthcare context. In Bostock v. Clayton County, Georgia,9 a consolidation of three high-profile cases involving claims of sex discrimination in employment under Title VII, the Supreme Court affirmed a definition of sex discrimination consistent with the 2016 Final Rule. In a 6-3 decision, the Court held that an employer that fires an individual merely for being transgender or gay violates the sex discrimination prohibition under Title VII.  Bostock’s implications for Section 1557 are significant, but the fact that it is a non-healthcare case means the battle over the scope of sex discrimination protections under Section 1557 will continue.

This article examines the current regulatory and litigation landscape for defining and enforcing PPACA’s prohibition on sex discrimination in healthcare. It considers three key questions engaging regulators and courts at this time, which are discussed below:  Who is protected? What kind of activity is prohibited or required? How should religious objections to these requirements be balanced against the health and equity interests advanced by nondiscrimination protections? 

Who Is Protected Under the Section 1557 Sex Discrimination Prohibition?

Section 1557 of PPACA is an unusual nondiscrimination statute, in that it extends nondiscrimination protections to healthcare by incorporating several preexisting statutes from other areas, rather than articulating the categories of protection and enforcement mechanisms anew.10 Through the incorporation of Title IX, which prohibits sex discrimination in education, Section 1557 creates a new healthcare-specific prohibition of sex discrimination. This manner of incorporation creates questions about how the jurisprudence linked to the incorporated statutes should apply to the interpretation and enforcement of Section 1557’s nondiscrimination prohibition in healthcare, including the issue of who is protected under Section 1557.

2016 Final Rule Includes Established Sex Stereotyping and Gender Identity Protections

Neither the statutory language in Title IX nor the text of Section 1557 define sex discrimination. Consequently, the 2016 Final Rule issued by OCR under the Obama administration clarified that discrimination “on the basis of sex” included, but was not limited to, “discrimination on the basis of . . . sex stereotyping[] and gender identity.”11 OCR explained that its interpretation relied on longstanding law, specifically the Supreme Court’s holding in Price Waterhouse v. Hopkins.12  Price Waterhouse cemented the sex stereotyping theory of sex discrimination, noting that discrimination based on stereotypical notions of appropriate behavior, appearance, or mannerisms for each gender constitutes sex discrimination. OCR also relied on federal agency regulations, as well as court decisions interpreting a variety of statutes, including Title VII, Title IX, and a then-recent district court opinion in the context of Section 1557. In fact, every district court to consider the issue to date, except one, has agreed.13

In the 2016 Final Rule, OCR also expressed support for a prohibition on sexual orientation discrimination “as a matter of policy” and pointed to existing Centers for Medicare & Medicaid Services (CMS) regulations that expressly prohibited sexual orientation discrimination by most health insurance issuers,14 although it expressly refused to resolve the issue as part of the 2016 Final Rule.15 OCR explained that it did not feel the law was settled on the question, but it highlighted decisions finding discrimination on the basis of sexual orientation to constitute unlawful sex discrimination under other statutes based on a stereotyping theory.16 OCR left the door open to review claims of sexual orientation discrimination on this basis and noted it would continue to monitor evolving law.

2020 Final Rule Narrows Protections by Excluding Gender Identity and Sexual Orientation

OCR abruptly reversed course after the 2016 election. First, in litigation that had begun under the Obama administration to challenge the 2016 Final Rule’s definition of sex discrimination, Franciscan Alliance v. Burwell,17 OCR under the Trump administration changed its position to support the challenge. In Franciscan Alliance, eight states and three faith-based providers challenged the 2016 Final Rule, seeking injunctive relief to prevent OCR from requiring them to provide coverage for services related to gender transition and certain reproductive healthcare pursuant to Section 1557.  One of the claims made was that the definition of sex discrimination in the 2016 Final Rule to include gender identity exceeded the grounds incorporated by Section 1557.  The court agreed and issued a nationwide preliminary injunction blocking OCR enforcement of the prohibition of gender identity discrimination, although it did not prohibit private litigation.  Prior to the hearing on the permanent injunction, the court granted a stay of the proceedings in light of OCR’s changed position to give OCR time to review the 2016 Final Rule. This culminated in a 2019 Proposed Rule, whose provisions were finalized in June 2020 in the 2020 Final Rule.

The 2020 Final Rule repealed the 2016 definition relating to sex discrimination without replacing it, intending to “revert[] to, and rel[y] upon, the plain meaning of the term in the statute.”18 OCR interpreted this meaning narrowly, asserting that the “original and ordinary public meaning [of sex] refers to the biological binary of male and female that human beings share with other mammals.”19 It emphasized the distinction between sex on the one hand and gender identity or sexual orientation on the other, concluding that the latter were excluded from Section 1557’s prohibition of discrimination on the basis of sex. OCR also relied heavily on the reasoning in Franciscan Alliance in concluding that the 2016 definition exceeded the scope of what was allowed by Title IX. Specifically, OCR pointed to Title IX’s legislative history, focusing on equal opportunities for women and the absence of an explicit reference to gender identity or sexual orientation in either Title IX or Section 1557. OCR viewed Congress’s willingness to specify gender identity or sexual orientation protection alongside protections for sex in other contexts as evidence that Congress viewed them as distinct protections not covered by the ordinary meaning of sex.20  The 2020 Final Rule also repealed nondiscrimination protections for gay and transgender individuals in 10 other Medicaid, private insurance, and education program regulations outside of the Section 1557 context.

Implications of Bostock’s Sex Discrimination Definition under Title VII

In Bostock, the Supreme Court decided three consolidated cases involving employers firing long-time employees for being transgender in one case21 and for being gay in the other two.22 Justice Gorsuch delivered the opinion of the Court, in which Chief Justice Roberts and Justices Ginsburg, Breyer, Sotomayor, and Kagan joined. The majority conceded the distinction between sex, gender identity, and sexual orientation and assumed for the sake of argument that “sex” referred only to biological distinctions between male and female.  The majority nonetheless concluded that sex discrimination included discrimination based on gender identity and sexual orientation. Justice Gorsuch explained that Title VII’s language is clear in that “it prohibits employers from taking certain actions ‘because of’ sex,” which “incorporates the ‘simple’ and ‘traditional’ standard of but-for causation.”23  In short, “an employer who intentionally treats a person worse because of sex — such as by firing the person for actions or attributes it would tolerate in an individual of another sex — discriminates against that person in violation of Title VII.”24 Indeed, the majority held that “it is impossible to discriminate against a person for being [gay] or transgender without discriminating against that individual based on sex.”25

The Court’s simple, textualist approach meant that its outcome did not depend on legislative history. As a result, Bostock’s holding will almost certainly apply to sex discrimination prohibitions in other statutes, most notably Title IX and Section 1557.26 Indeed, a lawsuit challenging the 2020 Final Rule based on Bostock has already been filed.27

What Actions are Prohibited by or Required under Section 1557?

PPACA’s promise of nondiscrimination protection in healthcare is not only about preventing the exclusion of certain groups, though that is essential. PPACA, and Section 1557 specifically, also created affirmative obligations to ensure equitable treatment both in terms of what care is provided and how it is delivered. But what constitutes unlawful sex discrimination in the context of care that is sex-specific or sex-linked?

Historically, this question first arose in the context of female-specific health exclusions, such as for pregnancy. In 1976, the parties in General Electric v. Gilbert presented the Supreme Court with the question of whether a pregnancy-based exclusion from an otherwise comprehensive disability policy constituted sex discrimination under Title VII.28 The Supreme Court held that a pregnancy exclusion was not a sex-based classification because it did not adversely impact all women compared to men, as not all women would become pregnant. It also emphasized the parity that existed between men and women for the categories of benefits that were covered — that is, conditions that affected men and women.  Congress quickly rebuked the majority’s analysis through the Pregnancy Discrimination Act of 1978 (PDA), which amended Title VII’s definition of sex discrimination to expressly include discrimination on the basis of “pregnancy, childbirth, and related medical conditions.”29 Perhaps more importantly, as the Supreme Court later recognized in Newport News Shipbuilding & Drydock Co. v. EEOC,30 Congress rejected the majority’s narrow reasoning, namely the majority’s failure to recognize that an exclusion that uniquely harms women is sex-linked, and its failure to analyze the employer’s policy as a whole, including sex-specific conditions or treatment, to determine whether men and women were treated equally. This more robust understanding of employers’ obligations under Title VII and the PDA was subsequently used by the Equal Employment Opportunity Commission (EEOC) and courts to strike down exclusions of prescription contraception from otherwise comprehensive prescription plans.31 For example, in 2001 a U.S. district court explained that under the PDA the law “is no longer blind to the fact that “[t]he special or increased healthcare needs associated with a woman’s unique sex-based characteristics must be met to the same extent, and on the same terms, as other health care needs.”32

In the 2016 Final Rule, OCR expressly relied on this Title VII jurisprudence in defining sex discrimination to include “discrimination on the basis of pregnancy, false pregnancy, termination of pregnancy, or recovery therefrom, childbirth or related medical conditions,”33 affirming the importance of ensuring equitable coverage of female-specific care, especially in the area of reproductive health. Nonetheless, Section 1557 has not been the primary tool used to ensure equity in women’s health coverage. This is due in part to the many other tools in PPACA that help ensure gender equity, such as the mandate to cover preventive services without cost sharing, including contraception, arising out of the Women’s Health Amendment.34

The more prominent focus of Section 1557 regulatory action and litigation has been in the area of transgender health, especially around access to transition-related care and the recognition of one’s gender identity. Not surprisingly, the Obama and Trump administrations have taken diametrically opposed positions on what Section 1557 requires.

Transgender Health Discrimination Prohibited by the 2016 Final Rule

The last couple of decades have seen increased attention to gender-based disparities in healthcare, especially for transgender individuals.35 Transgender individuals have reported being denied medically necessary care outright because of their transgender status, including denial of transition-related care,36 which can lead to an increased chance of depression and suicide, and physical and mental health risks for those who attempt to self-medicate.37 In one survey, 70 percent reported being treated poorly by healthcare providers in other ways that create serious dignitary harms and potentially jeopardize health.38 This included the persistent use of inappropriate pronouns, refusal to touch or the use of excessive precautions, inappropriate questions or exams, and the use of harsh or abusive language.

The 2016 Final Rule provided an unusually comprehensive discussion of the type of actions that constitute sex discrimination under Section 1557. First, OCR adopted a robust definition of sex stereotypes as “encompass[ing] not only stereotypes concerning the biological differences between the sexes, but also includ[ing] stereotypes concerning gender norms.”39 Consistent with Title IX’s prohibition of harassment that creates a hostile environment, OCR noted that “the persistent and intentional refusal to use a transgender individual’s preferred name and pronoun and insistence on using those corresponding to the individual’s sex assigned at birth constitutes illegal sex discrimination if such conduct is sufficiently serious to create a hostile environment.”40  Although Section 1557 is understood as creating affirmative requirements on covered entities to treat individuals in accordance with their gender identity or expression, there is an important caveat: this cannot be used to deny or delay medically necessary care.41 For example, a covered entity could not deny treatment for ovarian cancer based on an individual’s identification as a transgender male where that treatment is medically indicated.

The 2016 Final Rule also addressed Section 1557’s role in eliminating barriers to transition-related care. OCR resisted making categorical statements that certain practices as a matter of law were “always” or “never” permissible, because it viewed these questions as typically “nuanced” and “fact-dependent.”42 It also explained that in evaluating a claim of insurance discrimination, OCR would determine whether the exclusion is “evidence-based and nondiscriminatory,” and whether it is based on “the same neutral, nondiscriminatory criteria that [a covered entity] uses for other conditions.”43

Nonetheless, OCR emphasized that the categorical exclusion or denial of “transition-related treatment as experimental or cosmetic... [is] outdated and not based on current standards of care,”44 and the 2016 Final Rule included a regulation specifically prohibiting categorical limits on all health services related to gender transition.45 Additionally, OCR clarified that if a plan ordinarily covers a particular treatment, whether medically necessary or elective, it must apply the same standards to its coverage of comparable procedures related to gender transition.46 This approach to scrutinizing denials or exclusions of transition-related care is consistent with the Supreme Court’s treatment of other sex-based classifications under Title VII, and the 2016 Final Rule expressly relied on Title VII precedent.47

Transgender Health Discrimination Not Recognized in the 2020 Rule

As noted earlier, the Trump administration has rejected the foundational premise that discrimination based on gender identity qualifies as sex discrimination under any federal statute. Alternatively, it claimed that even if sex discrimination includes gender identity discrimination, this would not necessarily alter how care is provided because “the binary biological character of sex (which is ultimately grounded in genetics) takes on special importance in the health context.”48 It distinguished the problematic use of sex in employment and education from “the field of healthcare [which] necessarily may contain many more ‘commonplace practices that distinguish between the sexes … [by] account[ing] for real physiological differences between the sexes without treating either sex less favorably.’” OCR used this difference to justify what it asserted were “reasonable distinctions between the sexes” as opposed to unlawful stereotyping or harmful discrimination. Specifically, the 2020 Final Rule rejected the view that using pronouns based on sex assigned at birth, when different from a patient’s gender identity, could constitute discrimination, claiming instead that this was a reasonable sex-based difference.49

The 2020 Final Rule also rejected the view that categorical exclusions of transition-related care could be a form of sex discrimination.50 It justified its position, in part, by rejecting the dominant scientific standards for transition-related care established by relevant experts.51 OCR also erred in suggesting that a nondiscrimination provision could be used to force a provider to harm patients by disregarding relevant standards of care52 because the 2016 Final Rule made clear that services could be lawfully denied based on neutral, nondiscriminatory criteria, such as an evidence-based determination that a service is not medically indicated in a particular circumstance.5

Finally, in the 2020 Final Rule OCR listed many examples of sex-specific programming or classifications that have been allowed under Title IX for education and in healthcare as well, apparently to support its position that covered entities should be allowed to make distinctions based on sex. Notably, the 2016 Final Rule also acknowledged that sex-specific classifications or programs may be clinically necessary in some cases, such as clinical trials designed to determine whether sex differences exist in the manifestation of or efficacy of treatment for certain illnesses or diseases.54 But the two rules differed in terms of the standard applied to determine whether such difference is permissible. The 2016 Final Rule noted that sex-based classifications should be permitted only when “the covered entity can show an exceedingly persuasive justification for it, that is, that the sex-based classification is substantially related to the achievement of an important health-related or scientific objective” as supported by objective evidence and empirical data, if available.55  The 2020 Final Rule, on the other hand, eliminated this standard for scrutinizing sex-based classifications to ensure they are not discriminatory and seemed to treat sex-based distinctions as presumptively reasonable.56

Few Court Decisions Addressing Transgender Care

To date, there have only been a handful of cases under Section 1557 relating to transgender care. The earliest — Rumble v. Fairview Health Services57 — predated the 2016 Final Rule and involved repeated misclassification of the patient’s gender along with a series of other discriminatory actions that resulted in delayed and poor quality care. In Rumble, a Minnesota district court found that the nature and degree of defendants’ “unprofessional” and “assaultive” actions were sufficient to raise an inference of discriminatory intent under Section 1557.58 Two years later, in Prescott v. Rady,59 a California district court allowed a similar claim. In Prescott, a mother alleged that emergency room staff discriminated against her son by continuously referring to him with female pronouns, despite knowing that he was a transgender boy in acute psychological distress.60 According to the complaint, this conduct caused her son to suffer severe emotional distress and depression, which continued after his discharge until he committed suicide one month later.

Similarly, only a handful of cases have specifically addressed whether the exclusion or denial of transition-related care from Medicaid or private insurance constitutes sex discrimination under Section 1557,61 though there is a longer history of such exclusions being challenged under Title VII.62 Under both laws, courts’ approaches seem consistent with the balancing approach adopted in the 2016 Final Rule. Specifically, cases interpret sex discrimination prohibitions as preventing the categorical exclusions of all transition-related care based on gender stereotyping or outdated notions that such care can never be legitimate or medically necessary; at the same time, they affirm insurers’ ability to apply neutral, evidence-based criteria to determine whether care should be covered in individualized cases. 

Franciscan Alliance
did allow categorical exclusions of transgender care on two limited grounds.63 The first ground — that gender identity discrimination was not protected by Section 1557 — is likely moot after the Bostock decision. The other ground was based on religious liberty. As Franciscan Alliance illustrates, even if conduct constitutes unlawful sex discrimination in the first instance, courts may have to consider whether covered entities objecting to compliance on religious or moral grounds can nonetheless avoid Section 1557 mandates. Both the 2016 and 2020 Final Rules have acknowledged that Section 1557 does not displace federal religious liberty or other conscience laws, though the exact scope of this protection is contested.

How Are Religious Objections to Nondiscrimination Mandates in Healthcare Resolved?

Religious liberty and other conscience protections have long played an important role in shaping healthcare access, and this remains true under PPACA. Perhaps the most well-known religious liberty law is the federal Religious Freedom Restoration Act of 1993 (RFRA), which generally prohibits government action that imposes a substantial burden on religious exercise, unless that action is narrowly tailored to serve a compelling government interest. 64 There are also myriad statutory or regulatory conscience protections that target particular health services or activities. Exemptions for abortion are the most ubiquitous. But the most prominent are likely the regulatory conscience protections relating to the contraceptive mandate because of the scrutiny they have endured:  both the Obama and Trump administrations issued several iterations of conscience regulations relating to contraception; numerous suits concerning how to balance religious objections against this mandate have been filed nationwide, and legal challenges to both administrations’ rules have reached the Supreme Court.65 Nonetheless, questions remain about whether and under what circumstances religious objectors should be able to avoid nondiscrimination mandates.

The 2016 Rule Affirmed RFRA’s Applicability to Section 1557

As noted above, Franciscan Alliance was a preemptive challenge to Section 1557, and religious objections featured prominently in the case. Three of the plaintiffs were religious entities that provided care and insurance, and they asserted their refusal to provide or pay for transition-related care was based on their sincerely-held religious beliefs that sex is determined at birth and cannot be changed.66 One of the issues in the case was whether Section 1557 should be interpreted as including the blanket religious exemption contained in Title IX or if instead RFRA is the only protection. Title IX includes a provision exempting educational institutions controlled by religious organizations from the prohibition of sex discrimination, if the application would be inconsistent with the religious tenets of the organization. Some religious entities requested that HHS incorporate this blanket exemption for Section 1557 because they worried RFRA would not provide adequate protection.

In the 2016 Final Rule, OCR rejected incorporating Title IX’s blanket religious exemption. OCR emphasized it was not necessary because of the myriad religious and conscience protections that already exist in the healthcare context, including RFRA. OCR also cautioned that Title IX’s blanket exemption was inappropriate because of the significant consequences for health not implicated in education.67  OCR determined that RFRA was the better fit for Section 1557 given its finding that “the government has a compelling interest in ensuring that individuals have nondiscriminatory access to health care and health coverage” and that religious liberty questions often require individualized and fact-sensitive analyses. Even if a law substantially burdens one’s exercise of religion, RFRA requires taking into account the strength of the government’s interest and whether there are less restrictive alternatives that can serve that interest—a more nuanced approach that allows the delicate balancing of important interests.

Indeed, OCR and many commenters pointed to the Supreme Court’s decision in Burwell v. Hobby Lobby68 as an example of the type of balancing RFRA facilitates. In Hobby Lobby, plaintiff owners of closely held religious, for-profit companies brought a RFRA claim to challenge the application of PPACA’s preventive services mandate to require coverage of prescription contraception. They believed that certain forms of contraception terminated life and that complying with the mandate would make them complicit in a sin in violation of their religious beliefs.  Although the Court found that the law substantially burdened the plaintiffs’ religious beliefs, the Court assumed that ensuring access to contraception was a compelling government interest and considered whether the law was narrowly tailored to achieve that interest. The Court found there was a less restrictive alternative as evidenced by the opt-out program the government created for other religious nonprofits, which accommodated their religious objections without impeding access to contraception. Indeed, the Court emphasized that its holding was specific to the facts of this challenge, including the fact that the existing accommodation would ensure no adverse impact on women.69

The 2020 Final Rule Substitutes Title IX’s Broader Religious Exemption 

Once again the Trump administration reversed course. The 2020 Final Rule interpreted Section 1557 as incorporating the religious exemption from Title IX, relying heavily on the Franciscan Alliance reasoning.  Both the 2020 Final Rule and Franciscan Alliance relied on the plain language of Section 1557 that limits the prohibition of Section 1557 to “the ground prohibited under … title IX,” arguing the religious exemption narrows “the ground” on which a religious entity is subject to the prohibition.70

In the 2016 and 2020 Final Rules, it was clear the Title IX exemption was viewed as more expansive than RFRA. Yet, Franciscan Alliance held that even if RFRA applies, plaintiffs would still likely be entitled to an exemption. The court applied an almost limitless standard to the question of whether less restrictive alternatives existed, pointing to the fact that the government could assume the cost of providing this care itself or otherwise help transgender individuals find and pay for care from private providers. This approach, which would effectively require the government to create a completely different and new system of providing care for transgender individuals, seems inconsistent with the majority’s approach in Hobby Lobby, especially the Court’s emphasis on an existing accommodation that prevented disruption in care.

Expanded Exemptions for Objections to the Contraceptive Mandate

Since PPACA’s enactment, religious objections in the area of reproductive health have focused primarily on women’s access to abortion and prescription contraception. Longstanding exemptions allowing providers to refuse to provide abortion and allowing insurers to refuse to pay for most of them were extended as part of PPACA. With the creation of the contraceptive mandate, however, new concerns arose about religious liberty protection. Initially, the Obama administration provided a very narrow exemption for churches, houses of worship, and religious schools organized to inculcate religious views and designed for attendance by coreligionists only.  This “church” exemption excluded the vast majority of religious entities, namely religiously affiliated colleges and social service organizations that employ and/or serve people of all faiths. This triggered a major backlash that led the Obama administration to extend protection to the religious nonprofits previously left out.

The Obama administration created a regulatory accommodation that allowed these religious non-profits to opt out of participation in any services they found to be morally objectionable, but opting out would trigger a process by which the health insurer or other third party would be required to provide the coverage with no cost sharing by the employee and without the employer having to pay for it or help arrange for its provision. Unlike an exemption, this accommodation protected religious liberty, on the one hand, while on the other hand preserving contraceptive coverage, which HHS found to be a compelling health and gender equity interest. For-profit companies were originally excluded from this accommodation, but as noted above, Hobby Lobby effectively required extending this accommodation to religious, closely held for-profit companies.

The fate of this delicate balance is uncertain. Even after Hobby Lobby, some religious entities continued challenging the form of the accommodation, including in ways that would potentially undermine insurers’ ability to comply. This too reached the Supreme Court in Zubik v. Burwell but was remanded to give the parties an opportunity to try to develop an approach that would accommodate the employers’ concerns while providing women full and equal coverage.71

In addition, the Trump administration issued two new rules expanding the prior conscience protections in significant ways.  One rule allows any objecting religious employer or university, even those that expressly hire and recruit people from diverse religious and ideological backgrounds, to get an exemption from the law that deprives women of coverage, as opposed to requiring them to follow the opt-out process for an accommodation that preserves access.72 The other rule creates a new “moral exemption,” allowing those not previously eligible for either an exemption or accommodation to get an exemption, based solely on moral objections to the rule.73 This means the exemption is no longer specifically linked to religious exercise, which is the basis of RFRA protection. It also increases the number of entities that can deny contraceptive coverage to its employees or students, including potentially large publicly held companies.

These rules have been challenged on procedural and substantive grounds. In December 2017, two district courts granted preliminary injunctions against the rules,74 and the Third Circuit affirmed a nationwide injunction.75 The Third Circuit decision was appealed to the Supreme Court in Little Sisters of the Poor Saints Peter and Paul Home v. Pennsylvania.76 In a 7-2 decision by Justice Thomas, the Court held that PPACA provided statutory authority for the government to promulgate religious or moral exemptions to the preventive services mandate, and it rejected claims of procedural defects under the Administrative Procedure Act (APA).77  The Court reversed the Third Circuit and remanded the case; for now, the rules can take effect.

Outstanding questions remain, however. The Supreme Court did not consider substantive challenges to the rules under the APA, namely that the rules are arbitrary and capricious because they are unduly broad and inconsistent with PPACA’s health and gender nondiscrimination provisions, including Section 1557. It is clear from the opinion that at least four justices are skeptical that the administration could satisfy the reasoned decision-making requirement for administrative action in light of its failure to require an accommodation process that protects women’s health and access to contraceptive care.78 Thus, challenges are certain to continue on this basis.  Given that both Hobby Lobby and Zubik emphasized the importance of preserving women’s access to care in crafting a religious accommodation under RFRA, the breadth of these latest exemptions may make them vulnerable to a substantive challenge.  On the other hand, the Trump administration now claims the mandate does not serve a compelling government interest, and Justices Alito and Gorsuch expressly agreed in the concurrence.79 In the majority opinion, Justice Thomas gives a nod to the concurrence’s discussion of the government interest, never acknowledges the gender nondiscrimination interests at stake, and in dicta suggests the rules may be consistent with RFRA.  Consistent with Chief Justice Roberts’ role this past term, he could very well be the deciding factor on this issue.80   

What’s Next?

This article provides a map to three key questions regarding the scope of sex-based discrimination in healthcare under Section 1557, all of which will continue to be contested.  The first question is whether Bostock’s holding that Title VII sex discrimination includes discrimination on the basis of gender identity and sexual orientation will be extended to healthcare under Section 1557.  The second is how courts will define the type of conduct that is prohibited or required under Section 1557 in healthcare delivery and insurance.  Third, with respect to religious objections to certain requirements of Section 1557, two questions seem destined for the Supreme Court. The first is whether Title IX’s blanket exemption or RFRA’s more nuanced inquiry will apply. The second is if RFRA does apply, how will the Court balance the competing interests: Will it follow Hobby Lobby, in which the existence of an accommodation that preserved access seemed important to the decision? Or will it look more like Franciscan Alliance, in which hypothetical and dramatically different alternatives for providing care could be used to grant exemptions without regard for disruption in care? 

Given the opposing views of the current and past administrations, resolution of these issues — as well as the fate of the entire PPACA — will undoubtedly be impacted by the 2020 election.81  While the Trump administration is likely to continue to pursue its current legal and policy positions, a different administration may take very different positions in revised regulations, policies, and litigation.  In any event, careful attention to these continuing challenges is warranted.82

  1. Patient Protection and Affordable Care Act, Pub. L. No. 111–148, 124 Stat. 119–1025 (2010) (codified at 42 U.S.C. § 18001 et seq.).
  2. See Phase I Report: Recommendations for the Framework and Format of Healthy People 2020, Healthy People 2020: Sec’ys Advisory Comm. on Health Promotion & Disease Prevention Objectives for 2020, 28 (Oct. 28, 2008),
  3. Group Health Plans and Health Insurance Issuers Relating to Coverage of Preventive Services Under the Patient Protection and Affordable Care Act, 77 Fed. Reg. 8725, 8727-8729 (Feb. 15, 2012). Federal regulators acknowledged the gender disparities that existed in the insurance market prior to  PPACA and noted that “[t]he contraceptive coverage requirement is . . . designed to serve . . . compelling public health and gender equity goals . . . .”
  4. 42 U.S.C. § 18116 (2010).
  5. 42 U.S.C. § 2000e et seq.
  6. 20 U.S.C. § 1681 et seq.
  7. Nondiscrimination in Health Programs and Activities, 81 Fed. Reg. 31,375 (May 18, 2016) (codified at 45 C.F.R. pt. 92).
  8. Nondiscrimination in Health and Health Education Programs or Activities, Delegation of Authority, 85 Fed. Reg. 37,160 (June 19, 2020) (to be codified at 42 C.F.R. 438, 440, 460, 86, 92, 147, 155, 156).
  9. Bostock v. Clayton County, Georgia, 140 S. Ct. 1731 (2020).
  10. Section 1557 provides: "an individual shall not, on the ground prohibited 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 794 of title 29, 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, or under any program or activity that is administered by an Executive Agency or any entity established under this title (or amendments). The enforcement mechanisms provided for and available under such title VI, title IX, section 794, or such Age Discrimination Act shall apply for purposes of violations of this subsection.”  42 U.S.C. § 18116(a) (2010).
  11. 45 C.F.R. § 92.4. Gender identity is defined in the regulation 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.” 45 C.F.R. § 92.4. Some courts have held that individuals with “gender dysphoria” could also be protected under the Americans with Disabilities Act (ADA) based on the addition of  “gender dysphoria” to the DSM-5,  Blatt v. Cabela's Retail, Inc., No. 5:14-CV-04822, 2017 WL 2178123 (E.D. Pa. May 18, 2017)Doe v. Mass. Dep't of Corr., No. 17-12255-RGS, 2018 WL 2994403 (D. Mass. June 14, 2018), but at least one court has disagreed, Doe v. Northrop Grumman Sys. Corp., 418 F. Supp. 3d 921 (N.D. Ala. 2019).
  12. Price Waterhouse v. Hopkins, 490 U.S. 228, 109 S. Ct. 1775, 104 L. Ed. 2d 268 (1989).
  13. See, e.g., Flack v. Wis. Dept. of Health Servs., 2019 WL 3858297 (W.D. Wis. 2018); Tovar v. Essentia Health, 342 F.Supp.3d 947 (D. Minn. 2018); Boyden v. Conlin, 341 F.Supp.3d 979 (W.D. Wis. 2018); Prescott v. Rady, 265 F.Supp.3d 1090 (S.D. Cal. 2017). The only court coming to a different conclusion was Franciscan Alliance v. Burwell, 227 F. Supp. 3d 660 (N.D. Texas 2016).
  14. Nondiscrimination in Health Programs and Activities, 81 Fed. Reg. 31,375, 31,388 (May 18, 2016) (codified at 45 C.F.R. pt. 92). See Bostock v. Clayton County, Georgia, No. 17–1618, slip op. at 10 (U.S. June 15, 2020) (“[T]ake an employer who fires a transgender person who was identified as a male at birth but who now identifies as a female. If the employer retains an otherwise identical employee who was identified as female at birth, the employer intentionally penalizes a person identified as male at birth for traits or actions that it tolerates in an employee identified as female at birth....[T]he individual employee’s sex plays an unmistakable and impermissible role in the discharge decision.”).
  15. Nondiscrimination in Health Programs and Activities, 81 Fed. Reg. at 31,388.
  16. See e.g., Videckis and White v. Pepperdine Univ., No. 15-00298, 2015 WL 8916764 (C.D. Cal. Dec. 15, 2015) (concluding that the distinction between gender stereotyping and sexual orientation discrimination is illusory and artificial, and that sexual orientation discrimination is not a category distinct from sex or gender discrimination under Title IX); U.S. Equal Employment Opportunity Comm’n Appeal No. 0120133080, Agency No. 2012-24738-FAA-03 (July 15, 2015) (finding that sexual orientation is inseparable from and inescapably linked to sex and an allegation of discrimination based on sexual orientation is necessarily an allegation of sex discrimination under Title VII).  Other courts have disagreed, however. See, e.g., Hinton v. Virginia, 185 F. Supp. 3d 807 (E.D. Va. 2016) (rejecting the Equal Employment Opportunity Commission’s 2015 interpretation of Title VII as encompassing sexual orientation discrimination claims).
  17. Franciscan All., Inc. v. Burwell, 227 F. Supp. 3d 660 (N.D. Tex. 2016).
  18. Nondiscrimination in Health and Health Education Programs or Activities, Delegation of Authority, 85 Fed. Reg. 37,160, 31,178 (June 19, 2020) (to be codified at 42 C.F.R. 438, 440, 460, 86, 92, 147, 155, 156).
  19. Id.
  20. Id.
  21. R.G. & G.R. Harris Funeral Homes Inc. v. Equal Employment Opportunity Commission, 884 F.3d 560 (6th Cir. 2018), cert. granted. No. 18-107 (U.S. Apr. 22, 2019).
  22. Bostock v. Clayton County, Georgia, 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).
  23. Bostock v. Clayton County, Georgia, 140 S. Ct. 1731, 1739 (2020) (quoting Univ. of Texas Sw. Med. Ctr. v. Nassar, 570 U.S. 338, 346, 360 (2013)).
  24. Id. at 1740 (2020).; See also Altitude Express, Inc. v. Zarda, 883 F.3d 100 (2d Cir. 2018), cert. granted, No. 17-1623 (U.S. Apr.22, 2019).
  25. Bostock, 140 S. Ct. at 1741.
  26. See, e.g., Grimm v. Gloucester Cnty. Sch. Bd., 400 F. Supp. 3d 444, 448 (E.D. Va. 2019), aff'd, 19-1952, 2020 WL 5034430 (4th Cir. Aug. 26, 2020), as amended (Aug. 28, 2020); Adams v. Sch. Bd. St. Johns Cnty., 968 F.3d 1286 (11th Cir. 2020).
  27. Complaint, Whitman-Walker Clinic v. HHS, No. 1:20-cv-01630 (D.D.C. filed June 22, 2020).
  28. 429 U.S. 125 (1976).
  29. See Pregnancy Discrimination Act of 1978, Pub. L. No. 95-555, 92 Stat. 2076 (codified at 42 U.S.C. § 2000e).
  30. 462 U.S. 669, 676 (1983).
  31. See, e.g., id. at 1266; Mauldin v. Wal-Mart Stores, Inc., CIV.A.1:01-CV2755JEC, 2002 WL 2022334, at *1 (N.D. Ga. Aug. 23, 2002); Alexander v. Am. Airlines, Inc., 4:02-CV-0252-A, 2002 WL 731815, at *1 (N.D. Tex. Apr. 22, 2002); E.E.O.C. v. United Parcel Serv., Inc., 141 F. Supp. 2d 1216 (D. Minn. 2001).
  32. Erickson v. Bartell Drug Co., 141 F. Supp. 2d 1266, 1271 (W.D. Wash. 2001).
  33. 45 C.F.R. § 92.4.
  34. Group Health Plans and Health Insurance Issuers Relating to Coverage of Preventive Services Under the Patient Protection and Affordable Care Act, 77 Fed. Reg. 8725, 8727-8729 (Feb 15, 2012). Federal regulators acknowledged the gender disparities that existed in the insurance market prior to  PPACA and noted that “[t]he contraceptive coverage requirement is . . . designed to serve . . . compelling public health and gender equity goals . . . .”
  35. Grant, J.M. et al. with  Harrison, J.  et al., Nat’l Ctr. for Transgender Equal. & Nat’l Gay & Lesbian Task Force, Injustice at Every Turn: A Report of the National Transgender Discrimination Survey 5–6 (2011).
  36. See Lamba Legal, When Health Care Isn’t Caring: Survey on Discrimination Against LGBT People and People Living with HIV (2010),
  37. Id.
  38. Id. at 5.
  39. See Nondiscrimination in Health Programs and Activities, 81 Fed. Reg. 31,375, 31,392 (May 18, 2016) (codified at 45 C.F.R. pt. 92).
  40. Id. at 31,406.
  41. 45 C.F.R. § 92.206.
  42. See Nondiscrimination in Health Programs and Activities, 81 Fed. Reg. 31,375, 31,377 (May 18, 2016) (codified at 45 C.F.R. pt. 92).
  43. Id.
  44. Id. at 31,429.
  45. 45 C.F.R. § 92.207(b)(4); see also discussion in Nondiscrimination in Health Programs and Activities, 81 Fed. Reg.  at 31,435.
  46. Id. at 31,435. When evaluating denials or limitations of coverage: “OCR will evaluate whether coverage for the same or a similar service or treatment is available to individuals outside of that protected class or those with different health conditions and will evaluate the reasons for any differences in coverage. Coverage entities will be expected to provide a neutral, nondiscriminatory reason….” Id. at 31,433.
  47. Id. at 31,388.
  48. Nondiscrimination in Health and Health Education Programs or Activities, Delegation of Authority, 85 Fed. Reg. 37,160, 37,184 (June 19, 2020) (to be codified at 42 C.F.R. 438, 440, 460, 86, 92, 147, 155, 156).
  49. Id. at 37,185.
  50. Id. at 37,187, 37,196–99.
  51. See id. at 37,196.
  52. See id. at 37,196–99.
  53. Nondiscrimination in Health Programs and Activities, 81 Fed. Reg. 31,375, 31,427–28  (May 18, 2016) (codified at 45 C.F.R. pt. 92).
  54. Id. at 31,408.
  55. Id. at 31,409.
  56. Nondiscrimination in Health and Health Education Programs or Activities, Delegation of Authority, 85 Fed. Reg. at 37,184.
  57. Rumble v. Fairview Health Services, No. 14-CV-2037 (SRN/FLN), 2015 WL 1197415 (D. Minn. Mar. 16, 2015).
  58. Id. at *16, *18, *31.
  59. 265 F. Supp. 3d 1090 (S.D. Cal. 2017).
  60. Id. at 1096–97.
  61. See, e.g., Flack v. Wis. Dept. of Health, 2019 WL 3858297 (W.D. Wis. 2018); Tovar v. Essentia Health, 342 F.Supp.3d 947 (D. Minn. 2018); Boyden v. Conlin, 341 F.Supp.3d 979 (W.D. Wis. 2018).
  62. See, e.g., Baker v. Aetna Life Insurance Co., 228 F. Supp. 3d 764 (N.D. Tex. 2017). An employee who suffered from gender dysphoria brought an action against her employer for denying coverage for breast augmentation surgery.  The court denied the employer’s motion to dismiss, holding that the plaintiff plausibly alleged that she was denied coverage for medically necessary surgery based on her gender in violation of Title VII.  Ultimately, however, the court rejected the plaintiff’s discrimination claim for insufficient evidence.  After noting that the plan did cover surgeries and other medically necessary care to treat gender dysphoria, the court highlighted the fact that the plan made an individualized determination that breast augmentation surgery was not medically necessary in light of the breast enhancement already achieved through hormone therapy.
  63. Franciscan All., Inc. v. Burwell, 227 F. Supp. 3d 660, 687, 693 (N.D. Tex. 2016).
  64. 42 U.S.C. §§ 2000bb–1(a), (b).
  65. See Sobel, L., & Salganicoff, A., Round 3: Legal Challenges to Contraceptive Coverage at SCOTUS, Kaiser Fam. Found. (May 4, 2020),
  66. Franciscan All., Inc. v. Burwell, 227 F. Supp. 3d 660, 675 (N.D. Tex. 2016). For a RFRA claim to stand, plaintiffs must prove that (a) there is a sincerely held religious exercise, and (b) the challenged rule has substantially pressured them to abstain from the exercise. Id. at 691 (citing Burwell v. Hobby Lobby Stores, Inc., 134 S.Ct. 2751, 2760 (2014)).
  67. For a more detailed discussion supporting this position, see generally  Sepper, E. &  Roberts, J.L., Sex, Religion, and Politics, or the Future of Health Care, Marquette Benefits & Soc. Welfare L. Rev. 217 (2018).
  68. 134 S.Ct. at 2751 (2014).
  69. Id. at 2759-60 (2014).
  70. Nondiscrimination in Health and Health Education Programs or Activities, Delegation of Authority, 85 Fed. Reg. 37,160, 37,193 (June 19, 2020) (to be codified at 42 C.F.R. 438, 440, 460, 86, 92, 147, 155, 156).
  71. 578 U.S. ___, 136 S. Ct. 1557; 194 L. Ed. 2d 696 (2016).
  72. Religious Exemptions and Accommodations for Coverage of Certain Preventive Services Under the Affordable Care Act, 83 Fed. Reg. 57,536 (Oct. 13, 2017) (to be codified at 26 C.F.R. pt. 54, 29 C.F.R. pt. 2590, 45 C.F.R. pt. 147).
  73. Moral Exemptions and Accommodations for Coverage of Certain Preventive Services Under the Affordable Care Act, 83 Fed. Reg. 57,592 (Oct. 13, 2017) (to be codified at 26 C.F.R. pt. 54, 29 C.F.R. pt. 2590, 45 C.F.R. pt. 147).
  74. Pennsylvania v. Trump, 281 F. Supp. 3d 553 (E.D. Pa. 2017); California v. Health & Human Services, 281 F. Supp. 3d 806 (N.D. Cal. 2017).
  75. Pennsylvania v. President of United States, 930 F.3d 543 (2019).
  76. 591 U.S. ___ , 140 S. Ct. 2367 (2020).
  77. 5 U.S.C. § 551 et seq. (1946).
  78. 91 U.S. ___ , 140 S. Ct. at 2397-2400 (Kagan, J., concurring); Id. at 2407-2409 (Ginsburg, J., dissenting).
  79. See id. at 2387-2397 (Alito, J., concurring).
  80. See Liptak, A., John Roberts Was Already Chief Justice. But Now It’s His Court., N.Y. Times (June 30, 2020),
  81. For an overview of cases challenging PPACA, see, for example, Keith, K., ACA Litigation Round-Up: Part I, Health Affairs Blog (July 20, 2020),; Keith, K., ACA Litigation Round-Up: Part II, Health Affairs Blog (July 21, 2020),; Keith, K., ACA Litigation Round-Up: Part III, Health Affairs Blog (July 22, 2020),
  82. For ongoing analysis of legal and regulatory development relating to PPACA, see Keith, K., Following the ACA, Health Affairs Blog (last accessed Aug. 10, 2020).
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Brietta Clark


Brietta Clark is a Professor of Law and J. Rex Dibble Fellow at Loyola Law School, Loyola Marymount University, Los Angeles, and an expert in health law and policy, civil rights, and reproductive justice. Her research focuses on healthcare access and quality, specifically the structural and individual factors that create inequity in our health care delivery and financing, and she remains active in the health law community through her service to legal, medical and consumer-based organizations. She can be reached at [email protected].

Elizabeth Pendo


Elizabeth Pendo is the Joseph J. Simeone Professor of Law at Saint Louis University School of Law and an expert in disability law and disability legal theory, health law and policy, and bioethics.  Her work has appeared in leading publications in health law and policy, medicine, and ethics, and she is a frequent presenter to academic, professional, and community audiences.  She is a member of the American Law Institute, the ABA Commission on Disability Rights, and the State Bars of California and New York. She can be reached at [email protected].

Gabriella Garbero


Gabriella Garbero is a third-year law student (J.D. anticipated, May 2021) at Saint Louis University School of Law. She is obtaining a concentration in Health Law from the School's Center for Health Law Studies, with a particular interest in disability law and policy. She is a faculty fellow for Health and Disability Law & Policy, and serves as Technical Managing Editor for the Saint Louis University Journal of Health Law and Policy. She can be reached at [email protected].