Lest there be any doubt, in the preamble HHS explicitly states: Thus, for example, an issuer that participates in the Marketplace and thereby receives Federal financial assistance, and that also offers plans outside the Marketplace, will be covered by the proposed regulation for all of its health plans, as well as when it acts as a third party administrator for an employer-sponsored group health plan. HHS explains that this sweeping application is “modeled on the definition of ‘Federal financial assistance’ in the regulation implementing Title IX at 45 CFR 86.2(g).” That regulation applies Title IX (one of the statutes referenced in section 1557) to even those educational institutions that only receive federal funds indirectly in the form of fees paid by students receiving federal loans, grants, or scholarships.Thus, HHS states: [W]e have added language to this proposed definition stating that such funds are Federal financial assistance when extended to the entity providing the health insurance coverage or services, whether they are paid directly by the Federal government to that entity or to the individual for remittance to the entity providing health insurance coverage or services. An analysis of enrollment data from insurer regulatory filings finds that, under these criteria, the regulation’s mandates would be imposed on the coverage of over 164 million Americans with unsubsidized private individual or employer group health insurance.
One supporter, writing in [A]nother way to achieve Section 1557 protection against discrimination is for HHS or courts to categorize certain diseases as “disabilities.” Courts have historically been reluctant to do this, defining a “disability” as being restricted to an “impairment that substantially limits one or more major life activities.” However, this was before the passage of the Americans with Disabilities Act Amendments in 2008, and the subsequent final rule in 2011 that broadened the definition of disability to include impairments to bodily functions (such as the immune system, special sense organs, normal cell growth, and digestive, genitourinary, neurological, bowel, respiratory, cardiovascular, endocrine, hemic, lymphatic, musculoskeletal, and reproductive functions, among others).
The reasoning used by the Obama Administration to arrive at its requirement that health plans cover “gender transition” treatments sets a troubling precedent for future de facto coverage mandates.
Indeed, because this process started with what could be called a “hard case”—meaning one for which the Administration had to creatively and laboriously extrapolate its desired conclusion from the underlying statute—should HHS establish a precedent on such tenuous grounds, it would become much easier to subsequently achieve similar results in other areas.
Thus, any insurer that offers, say, Medicare Advantage plans, Medicaid managed-care plans, or ACA exchange plans would be subject to this regulation.
Furthermore, the regulation would apply to the coverage of all of the insurer’s unsubsidized customers, including even self-insured employer plans for which the insurer provides only administrative services.