Earlier this year, the Department of Health and Human Services (“HHS”) released a final rule under Section 1557 of the Affordable Care Act (“ACA”), which prohibits discrimination in health programs and activities.  The 2024 final rule includes new administrative requirements for covered entities (which may include group health plans to the extent the plan receives federal financial assistance), as explained below.  

How did we get here?                                                                                                    

Section 1557 is the nondiscrimination provision of the ACA.  It prohibits discrimination on the basis of race, color, national origin, sex, age, or disability in a health program or activity that receives federal financial assistance.  Although Section 1557 has been around since the ACA was enacted, its impact has depended on guidance issued through agency rulemaking, which has varied across different presidential administrations.  The 2024 final rule generally reverses the final regulation previously issued in 2020 and reinstates many of the provisions in the final regulation released in 2016.

Additionally, the 2024 final rule clarifies that discrimination on the basis of sex includes (but is not limited to) discrimination on the basis of sex stereotypes, sex characteristics (including intersex traits), pregnancy or related conditions, sexual orientation, and gender identity.  Earlier this year, a few different federal district courts enjoined various parts of the 2024 final rule with respect to the rule’s interpretation of the meaning of discrimination on the basis of sex, which we discuss in more detail below.

Are group health plans required to comply with the 2024 final rule?

It depends.  The 2024 final rule applies to covered entities, which are defined as:

  • Health programs or activities that receive direct or indirect federal financial assistance;
  • Health programs or activities administered by HHS; and
  • State and federally facilitated health insurance exchanges.

Accordingly, the 2024 final rule applies to group health plans that receive federal financial assistance.  However, as HHS noted in the regulatory preamble, a group health plan that does not receive federal financial assistance would not become covered under Section 1557 solely by virtue of the plan sponsor’s or the third-party administrator’s receipt of federal financial assistance.  (This is a departure from the 2016 final rule, where group health plans were listed as covered entities.) However, when a plan receives federal financial assistance, the plan becomes covered under the 2024 final rule. 

That said, virtually all health insurance issuers and third-party administrators (“TPAs”) are likely to constitute covered entities under the 2024 final rule.  As a practical result, the expectation is that group health plans may fall in line with the provisions detailed in the final rule, even if the group health plan is not technically a covered entity under the 2024 final rule.  

Does the 2024 final rule impose any benefit coverage mandates on covered group health plans?

No.  Although the 2024 final rule requires that covered group health plans comply with the nondiscrimination rules, the 2024 final rule does not impose specific benefit coverage mandates on health plans in furtherance of this prohibition.  

What are the administrative requirements for covered plans in the 2024 final rule?

The 2024 final rule imposes a number of administrative requirements on covered plans, in addition to the core nondiscrimination requirements summarized above.  Although some of these reinstate provisions of the 2016 final rule, there are new requirements.  To the extent a group health plan is a covered entity on account of its receipt of federal financial assistance, the following requirements will apply, as shown in the table below:

ProvisionRequirementEffective Date
Designation of Section 1557 CoordinatorCovered group health plans with 15 or more employees must designate a “Section 1557 Coordinator” to coordinate the plan’s compliance with its responsibilities under Section 1557, including investigation of any grievances regarding noncompliance with Section 1557.November 2, 2024
Notice of NondiscriminationCovered group health plans must issue this notice to participants, beneficiaries, and enrollees annually, upon request, and the plan must post the notice on its website, if a plan website is maintained.   November 2, 2024
Notice of Availability of Language Assistance Services and Auxiliary Aids and ServicesCovered group health plans must issue this notice to participants, beneficiaries, enrollees, and applicants annually, upon request, and post on its website, if a plan website is maintained.  The notice must be included in certain written and electronic communications (including but not limited to the annual notice of nondiscrimination, HIPAA notice of privacy practices, explanation of benefits (“EOBs”), notice of appeal and grievance rights, and communications relating to eligibility, benefits, or services that require or request a response).  The notice must be translated into the 15 most prevalent non-English languages in the applicable state or states.  Additional requirements are outlined in the 2024 final rule.    July 5, 2025
Section 1557 Policies and ProceduresCovered group health plans are required to adopt several written policies and procedures related to compliance with Section 1557 and the 2024 final rule, as summarized below:
Nondiscrimination Policy
Covered group health plans must implement a written nondiscrimination policy that, at minimum, provides: (i) a statement that the plan does not discriminate on the basis of race, color, national origin (including limited English proficiency and primary language), sex (including pregnancy, sexual orientation, gender identity, and sex characteristics), age, or disability; (ii) a statement that the plan provides language assistance services and appropriate auxiliary aids and services free of charge consistent with applicable law; (iii) a statement that the plan will provide reasonable modifications for individuals with disabilities; and (iv) contact information for the Section 1557 Coordinator (if required).
Section 1557 Grievance Procedures
Covered group health plans with 15 or more employees must implement written grievance procedures to address investigation and record retention regarding grievances relating to alleged noncompliance with Section. 1557.
Language Access Procedures
Covered group health plans must implement written language access procedures describing the plan’s process for providing language assistance services to individuals with limited English proficiency.
Effective Communication Procedures
Covered group health plans must implement written effective communication procedures describing the plan’s processes for ensuring effective communication for individuals with disabilities.
Reasonable Modification Procedures
Covered group health plans must implement written procedures describing the plan’s process for making reasonable modifications to its policies, practices, and procedures to avoid discrimination on the basis of disability. Note: HHS has made sample policies available at its website here.
July 5, 2025
Training on Section 1557 Policies and ProceduresCovered group health plans must train relevant employees on the Section 1557 Policies and Procedures and contemporaneous documentation of the employees’ completion of such trainings must be maintained for at least three calendar years.30 days after implementation of the Section 1557 Procedures, but in no event later than July 5, 2025*

*Discrepancy in regulation suggests May 1, 2025 effective date might apply instead of July 5, 2025.

What is the impact of recent lawsuits on the 2024 final rule?

After the 2024 final rule was released earlier this year, several advocacy groups filed suit to enjoin enforcement of the new rule.  It is somewhat unclear the extent to which those current litigations, which are primarily focused on the “discrimination of the basis of sex” provisions of the 2024 final rule, would substantively impact the enforcement of the administrative requirements summarized above.  For that reason, at this time, covered group health plans may choose to focus on compliance with the items that have deadlines occurring in 2024 and continue to monitor the situation before taking further action on 2025 requirements. 

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Photo of Jesse T. Foley Jesse T. Foley

Jesse T. Foley is a labor associate and a member of the Employee Benefits & Executive Compensation Group.

Jesse has a diverse practice advising multiemployer and single-employer clients on all aspects related to the legal compliance and tax qualification of ERISA-covered pension and…

Jesse T. Foley is a labor associate and a member of the Employee Benefits & Executive Compensation Group.

Jesse has a diverse practice advising multiemployer and single-employer clients on all aspects related to the legal compliance and tax qualification of ERISA-covered pension and welfare plans, including the treatment of such plans in corporate financings and transactions.

In his multiemployer practice, he represents a number of funds, counseling Boards of Trustees on issues such as healthcare compliance, cybersecurity, government investigations, benefit suspensions, special financial assistance, and withdrawal liability.

In addition, Jesse advises private, public, and not-for-profit employers on all aspects of their non-qualified executive compensation arrangements.  Jesse regularly provides technical and practical advice on the establishment, administration, and continued legal compliance of deferred compensation and supplemental employee retirement plans.  As part of his practice, Jesse routinely negotiates and drafts equity plans and awards, employment agreements, severance agreements, and other compensation arrangements.

Jesse earned his J.D. degree from the University of Southern California, where he was a Senior Editor of the Southern California Law Review.  Jesse also frequently contributes to Proskauer’s Employee Benefits & Executive Compensation Blog.

Photo of Jennifer Rigterink Jennifer Rigterink

Jennifer Rigterink is senior counsel in the Labor Department and a member of the Employee Benefits & Executive Compensation Group.

Jennifer focuses on a diverse array of tax and ERISA issues impacting employee benefits.  Her wide-ranging practice encompasses qualified retirement plans and non-qualified…

Jennifer Rigterink is senior counsel in the Labor Department and a member of the Employee Benefits & Executive Compensation Group.

Jennifer focuses on a diverse array of tax and ERISA issues impacting employee benefits.  Her wide-ranging practice encompasses qualified retirement plans and non-qualified arrangements, health and welfare benefits, and fringe benefit programs.  She counsels single-employer and multiemployer clients on matters pertaining to plan administration, design and qualification, as well as regulatory, legislative and legal compliance.

In recent years, Jennifer has advised employers and plan sponsors with fiduciary and governance matters applicable to defined benefit plans and pension de-risking activities, including lump sum window programs, annuity purchases, and pension plan terminations.

Jennifer frequently counsels clients on health and welfare arrangements, with a particular focus on all matters relating to family building and reproductive health care benefits.  Her experience also includes working with employers and plan sponsors on mental health parity compliance issues.

Prior to joining Proskauer, Jennifer clerked for Judge Jacques L. Wiener, Jr., in the United States Court of Appeals for the Fifth Circuit and Judge Yvette Kane in the United States District Court for the Middle District of Pennsylvania.

Photo of Roberta Chevlowe Roberta Chevlowe

Roberta K. Chevlowe provides advice to employers and boards of trustees of multiemployer benefit plans on a broad range of issues relating to their retirement, health and other employee benefit plans. With three decades of experience practicing in this area, Roberta employs a…

Roberta K. Chevlowe provides advice to employers and boards of trustees of multiemployer benefit plans on a broad range of issues relating to their retirement, health and other employee benefit plans. With three decades of experience practicing in this area, Roberta employs a practical, business-minded approach to helping her clients comply with the various requirements imposed by ERISA, the Internal Revenue Code, COBRA, the Affordable Care Act and other federal and state laws affecting employee benefit programs. Roberta’s practice also includes advising clients in connection with benefit claim appeals, lawsuits and government audits; drafting plan documents, policies and employee communications materials; and negotiating with plan service providers.

Roberta is best known for her work in the area of COBRA compliance and for advising employers in connection with the benefits they provide to employees’ domestic partners and same-sex spouses. She is a co-author of The COBRA Handbook and lectures and publishes articles on a variety of employee benefits topics. In addition, Ms. Chevlowe is a leader of Proskauer’s Task Force on Reproductive Health Care Benefits.