Transgender Rights, ACA Section 1557

We’re gonna be talking about two things that have happened in the last week. On June 15th, the Supreme Court issued some landmark federal civil rights laws, rulings that have affected Title VII of the Civil Rights Act of 1964. It prohibited discrimination based on sex. But they have now determined that that includes gay and transgender employees. So we’re gonna talk about how that affects things. However, on June 12th, the US Department of Health and Human Services issued a final rule implementing Section 1557. That’s a civil rights provision of the Affordable Care Act that’s related to nondiscrimination in all federally funded health care. 

So what are these things do? Alright. Section 1557 on the ACA limited the ways you discriminate internally with benefits. So benefits can’t unduly benefit men over women, different races, those sorts of things. In the original language, it also included gender identity and termination of pregnancy as being included in sex discrimination. And it had a requirement that health programs and activities distribute nondiscrimination notices in at least 15 languages to all patients and customers. So there’s a lot of different pieces to this. That rule has now been issued, but it removed gender identity and termination of pregnancy from being included as sex discrimination. 

So Section 1557 specifically has come out. Been put into place. A couple of things are, that it will be effective on August 18, 2020. But it no longer includes gender identity and termination of pregnancy as things that are limiting for healthcare providers under Section 1557. You can discriminate based on those things. But then three days later, on June 15th, the Supreme Court ruled that Title VII of the Civil Rights Act prohibits discrimination based on sex, that you cannot discriminate against gay or transgender employees without discriminating based on sex for activities that are done by a man makes him gay. 

Previously we said, “Alright, being gay is not a protected class necessarily.” But now they’re saying, “Hey, because to be gay, you have to be a man, or to be a lesbian you have to be a woman, some activities are done by a specific gender. Therefore, it is a sex-based discriminatory item.” They did the same for transgender issues. So this is a big surprise. It was kind of, I mean, I’m not gonna go into the politics of it, but it was 6-3 included Neil Gorsuch and Justice John Roberts, which were both conservative appointees, but 6-3 ruling, that is now the law of the land came out three days after Section 1557. 

So what Section 1557 has to do with anything we don’t know, right? Because three days after it was out, they said no one can discriminate based on gender identity. So that’s going to be revised. So for those of you in the medical profession, you probably saw a lot about Section 1557 last week, but of course, now, that’s all changed. So we’re going to see how that plays out. 

What you need to know internally as a small business owner, just like discrimination based on race, or gender or age is a protected class. This means, for example, you can’t do things that are going to unduly screw up the employment of people based on those classes. You can no longer do that either based on sexual orientation, or transgender orientation. So both gender and sexual orientation are now a protected class. 

So this is important. This is based around a case in which I may go into more depth. If y’all care about me going into the actual cap, I’ve read the entire Supreme Court Justice ruling. It’s both the majority opinions, concurring opinions, and dissenting opinions. And it’s fascinating to me, but I think it’s a bit beyond the scope of an HR podcast. But there’s a couple of cases that were combined, but one of these, for example, was a funeral parlor, where one of their frontline employees who interacts with clients. I guess the client is the family of the deceased, so not the deceased, but the family of the deceased decided to transition after working there for 4 years. So he became she or she was always, she will work on how these words work in the future. Please don’t be angry at me. But that transitioning the company argued, “Hey, look, this is interfering with our business interests. I can’t have this transgender person out front, it ruins funerals,” whatever was a major problem. And so they terminated them. That was one of the many cases that went into this. And the Supreme Court has ruled that NO, that is a protected class. Just like 50 years ago, maybe someone said, “Hey, I can’t have a black woman or a black guy greet my people at the funeral home. It causes distress and upsets them.”That same argument has now been outlawed for transgender and gay, for that matter. So you cannot terminate people in those.

Now, I’ve read the entirety of the case and I do not know. I’m sure we’ll get questions from this from our churches, that our clients, as a rule, most of the time, some of these sorts of pieces are exempted from religious institutions. Having to said that, there’s nothing in the case about that. So we will see what happens. And we will take a close look at them. Now, there will be administrative law that comes out after this. 

Ladies and Gentlemen, I hope this was interesting to you. So, two recaps. One, Section 1557 of the ACA that went into effect on the 12th. Basically, ignore it. Although we don’t know. I’m sure there will be an update coming out there. I’m sure many of you took action in the medical profession over this. Nothing you need to do at this point, I think you need to just hang on and wait for some updates. And the Supreme Court ruling has changed a lot of employment law. It’s very important now. Just like if you need to terminate somebody or you’re taking disciplinary action, gay and transgender is a protected class, you have to make sure that what you’re doing does not have a disparate impact on those classes, and that what you’re doing is not because someone is a member of one of those classes. 

Ladies and Gentlemen, thank you for tuning in today. I will see you in the next one.

About the author, Rhamy

Rhamy grew up watching and working with his mother and grandmother in the senior insurance market. This familiarity with the struggles faced by people trying to navigate the incredibly complicated and heavily regulated healthcare market led him to start Poplar Financial while working on his degree at the University of Memphis. After completing his MBA and Bachelors in Finance and Economics, Rhamy guided Poplar Financial through the disruptive opportunity that is the Affordable Care Act. Since then Poplar Financial has received numerous awards from major insurance carriers and has completed its fourth year in a row of doubling in size. Now his team focuses on the processes around human resources and specializes in providing companies with between 20 and 1000 employees with the payroll, benefits, and HR needs.