Federal Court Blocks HHS Rule on Sexual Orientation

August 18, 2020 | Eric D. Fader | Affordable Care Act | Hospitals | Legislation and Public Policy | Litigation

The U.S. District Court for the Eastern District of New York has blocked the U.S. Department of Health and Human Services (HHS) from enforcing a new rule that limited sex discrimination in healthcare to discrimination based on gender as determined by biology. The rule, discussed in detail here in June, did not recognize sexual orientation as a protected category under Section 1557 of the Affordable Care Act (ACA), which prohibits covered healthcare entities from discriminating on the basis of race, color, national origin, disability, age or sex. The lawsuit was brought by The Human Rights Campaign (HRC), with two transgender women of color as named plaintiffs.

The now-blocked rule was finalized only three days before the U.S. Supreme Court issued its ruling in Bostock v. Clayton County, Georgia. In Bostock, the Court held that discrimination on the basis of sexual orientation or transgender status is included within the definition of sex discrimination for the purpose of Title VII of the Civil Rights Act, which addresses workplace discrimination. Section 1557 of the ACA falls under Title IX of the Civil Rights Act, which bans discrimination in education and federally funded programs, rather than under Title VII. In the HRC case, however, the New York Court noted that case law related to Title VII is often applied to Title IX as well.

“The timing [of the now-blocked rule] might even suggest to a cynic that the agency pushed ahead specifically to avoid having to address an adverse decision,” the New York Court said. “But whether by design or bureaucratic inertia, the fact remains that HHS finalized the 2020 Rules without addressing the impact of the Supreme Court’s decision in Bostock.”

The HRC is interpreting the decision as a nationwide injunction against the HHS rule. Other lawsuits have also been filed against the rule, including one in which 22 states and the District of Columbia are plaintiffs.

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