Federal District Court Vacates Sections of the ACA’s Nondiscrimination Rule

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On October 15, 2019, Judge Reed O’Connor issued a ruling in Franciscan Alliance v. Azar, which has been pending since 2016. In this ruling, Judge O’Connor vacated parts of the Affordable Care Act’s Sec. 1557, which prohibited health plans from discriminating on the basis of gender identity and termination of pregnancy because they violated the Administrative Procedure Act (APA) and Religious Freedom Restoration Act (RFRA). The U.S. Department of Health and Human Services (HHS) has been enjoined from enforcing this provision since Judge O’Connor issued a preliminary injunction in 2016. In addition to vacating these parts of the nondiscrimination rule, Judge O’Connor also granted a motion from the ACLU of Texas and the River City Gender Alliance to intervene in the lawsuit to defend the rights of transgender people and women because the Trump Administration has demonstrated that it is unable to adequately defend the interests of those groups. This will allow the ACLU of Texas and the River City Gender Alliance to appeal Judge O’Connor’s ruling to the Fifth Circuit Court of Appeals.

This ruling will permit health plans and providers to discriminate on the basis of termination of pregnancy and gender identity by denying coverage for certain health care services or refusing to provide them. However, other courts have reached opposite conclusions, which means that the outcome of this issue will be reached after the case is appealed to a higher court.

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