Insurance Circular Letter No. 8 (2019)
July 23, 2019
All Insurers Authorized to Write Accident and Health Insurance in New York State, Article 43 Corporations, Health Maintenance Organizations (“HMOs”), Student Health Plans Certified Pursuant to Insurance Law § 1124, and Municipal Cooperative Health Benefit Plans (Collectively “Issuers”)
Discrimination Based on Sexual Orientation, Gender Identity or Expression, or Transgender Status
STATUTORY AND REGULATORY REFERENCES: N.Y. Ins. Law §§ 2607, 3243, and 4330; 11 NYCRR § 52.72; 42 U.S.C. § 300gg-1, et seq.; 42 U.S.C. § 18001, et seq.; 45 C.F.R. Part 92
The U.S. Department of Health and Human Services (“HHS”) submitted a proposed rule entitled “Nondiscrimination in Health and Health Education Programs or Activities” to the Office of the Federal Register that repeals a federal regulation that clarifies that the Affordable Care Act’s (“ACA’s”) non-discrimination protections based on sex include protections based on gender identity. See 84 FR 27846. This circular letter reminds issuers that regardless of actions at the federal level, New York State has its own requirements related to non-discrimination protections based on sexual orientation, gender identity or expression, and transgender status.
II. Federal Non-Discrimination Provisions
42 U.S.C. § 18116 prohibits discrimination on the basis of race, color, national origin, sex, age, or disability in certain health programs or activities. It extends nondiscrimination protections to individuals participating in any health program or activity, any part of which received funding from HHS; any health program or activity that HHS itself administers; and health insurance marketplaces and all plans offered by issuers that participate in those marketplaces. HHS adopted 45 CFR Part 92, effective July 18, 2016. 45 CFR § 92.4 defined discrimination based on sex as including discrimination based on pregnancy, false pregnancy, termination of pregnancy, or recovery therefrom, childbirth or related medical conditions, sex stereotyping, and gender identity. The rule applies to comprehensive coverage in the individual and small group markets, Child Health Plus, Medicaid, the Essential Plan, and any other program that receives funding from HHS. The newly proposed rule published in 84 FR 27846 removes these protections and no longer considers discrimination based on pregnancy, false pregnancy, termination of pregnancy, or recovery therefrom, childbirth or related medical conditions, sex stereotyping, and gender identity to be discrimination based on sex.
III. New York State Non-Discrimination Provisions
Regardless of actions at the federal level, New York state law prohibits discrimination based on sexual orientation, gender identity or expression, or transgender status. Insurance Law § 2607, as amended by Subpart D of Part J of Chapter 57 of the Laws of 2019, prohibits all issuers from refusing to issue insurance policy or contract, or cancel or decline to renew such policy or contract, because of the sex or marital status of the applicant or policyholder. Subpart D amended Insurance Law § 2607 to specifically define “sex” to include sexual orientation, gender identity or expression, and transgender status.
Further, Subpart D of Part J of Chapter 57 added new Insurance Law §§ 3243 and 4330, which prohibit discrimination in health insurance policies or contracts because of sex, marital status, or based on pregnancy, false pregnancy, termination of pregnancy, or recovery therefrom, child birth or related medical conditions. This includes making any distinction or discrimination between persons as to the premiums charged for the policy or contract; demanding or requiring a greater premium than the issuer requires at that time for similar insureds; making or requiring any rebate, discrimination or discount upon the amount to be paid or the service to be rendered on any policy or contract; inserting in the policy or contract any condition or making a stipulation whereby the insured is bound to accept any sum less than the full value or amount of such policy or contract in case of a claim thereon except where such conditions are imposed upon others in similar cases; rejecting any application for a policy or contract; canceling or refusing to issue, renew or sell such policy or contract after appropriate application; fixing any lower rate or discriminating in the fees or commissions of insurance agents or brokers for writing or renewing such a policy or contract; or engaging in sexual stereotyping. Insurance Law §§ 3243 and 4330 similarly provide that “sex” includes sexual orientation, gender identity or expression, and transgender status.
Additionally, § 52.72 of 11 NYCRR 52 (Insurance Regulation 62) prohibits issuers from discriminating based on several factors, including sex. Section 52.72(c)(2) of the regulation provides that discrimination based on sex includes discrimination on the basis of pregnancy, false pregnancy, termination of pregnancy or recovery therefrom, childbirth or related medical conditions, sex stereotyping, sexual orientation, gender identity or expression, and transgender status. The regulation applies to individual, small group, and large group accident and health insurance policies and contracts that provide hospital, surgical, or medical expense coverage, as well as student accident and health insurance policies.
Finally, we remind issuers of three previous circular letters issued by the Department that relate to discrimination based on sexual orientation, gender identity or expression, or transgender status. Insurance Circular Letter No. 7 (2014) advises issuers that the law prohibits them from denying coverage for medically necessary treatment of gender dysphoria. It reminds issuers that an issuer of a policy or contract that includes coverage for mental health conditions may not exclude coverage for the diagnosis and treatment of gender dysphoria. Although an issuer may subject gender dysphoria treatment to a medical necessity review, any such review must be performed consistently with the provisions of Articles 49 of the Insurance Law and Public Health Law.
Insurance Circular Letter No. 12 (2017) clarifies that issuers should not automatically deny claims for transgender individuals because the gender with which the individual identifies does not match the gender of someone to whom those services are typically provided. It reminds issuers that receive claims from insureds of one gender or sex for a service that is typically or exclusively provided to individuals of another gender or sex to take reasonable steps, including requesting additional information, to determine whether the insureds are eligible for the services prior to denying the claims. Insurance Circular Letter No. 7 (2017) addresses health insurance coverage for infertility treatment and advises issuers that the law prohibits them from discriminating based on sexual orientation, marital status, or gender identity with respect to infertility treatment.
Regardless of actions at the federal level, New York State law prohibits issuers from discriminating against individuals based on sexual orientation, gender identity or expression, or transgender status. The Department will monitor compliance with these non-discrimination requirements, including during market conduct exams. The Department will take action against an issuer for any failure to adhere to all statutory and regulatory prohibitions against discrimination.
Please direct any questions regarding this circular letter to Thomas Fusco, Supervising Insurance Attorney, Health Bureau, New York State Department of Financial Services, Walter J. Mahoney Office Building, 65 Court Street, Room 7, Buffalo, New York 14202 or by e-mail at [email protected].
Very truly yours,
Bureau Chief, Health Bureau
 On December 31, 2016, the U.S. District Court for the Northern District of Texas issued an opinion in Franciscan Alliance, Inc. et al v. Burwell, 227 F. Supp. 3d 660 (N.D. Tex. 2016) enjoining the regulation’s prohibitions against discrimination on the basis of gender identity and termination of pregnancy on a nationwide basis. HHS’ Office for Civil Rights has not enforced these two provisions of the regulation implementing these same provisions while the injunction remains in place, but continues to enforce protections against discrimination on the basis of race, color, national origin, age, or disability, as well as other sex discrimination provisions that are not impacted by the court order.