The ACA generally requires issuers of non-grandfathered health insurance coverage offered in the group and individual markets to guarantee availability of coverage. The final regulations related to this requirement equate discrimination in marketing practices or benefit designs with a violation of the guaranteed availability requirement. Specifically, 45 CFR § 147.104(e) states that:

(e) Marketing. A health insurance issuer and its officials, employees, agents and representatives must comply with any applicable state laws and regulations regarding marketing by health insurance issuers and cannot employ marketing practices or benefit designs that will have the effect of discouraging the enrollment of individuals with significant health needs in health insurance coverage or discriminate based on an individual’s race, color, national origin, present or predicted disability, age, sex, gender identity, sexual orientation, expected length of life, degree of medical dependency, quality of life, or other health conditions.

Id. (emphasis added). On March 14, 2014, CMS issued a FAQ to clarify that as the term “sexual orientation” is used in this regulation, an issuer is considered to employ marketing practices or benefit designs that discriminate on the basis of sexual orientation if:

• the issuer offers coverage for an opposite-sex spouse, and

• does not offer coverage on the same terms and conditions to a same-sex spouse, provided

• the same-sex marriage was validly entered into in a jurisdiction where such marriages are legal, regardless of the laws of the jurisdiction where the insurance policy is offered, sold, issued, renewed, in effect, or operated, or where the policyholder resides.

The regulation is not intended to require an issuer to change terms of eligibility for coverage under a plan, or otherwise interfere with a plan sponsor’s ability to define a dependent spouse for purposes of coverage eligibility under the plan. It requires only that if coverage is made available to an opposite-sex spouse, it must also be made available on the same terms and conditions to same-sex spouses.

Enforcement of this nondiscrimination requirement is delayed until plan or policy years beginning on or after January 1, 2015, because CMA “recognize[s] that some issuers may not have understood the prohibition as described [in the FAQ] when designing their policies for the 2014 coverage year.” States also will be expected to enforce the regulation for plan or policy years beginning on or after January 1, 2015.

–         Dorman Walker