On June 2, 2026, HHS issued a notice of vacatur, announcing that it will not enforce a provision of its 2024 final rule that implemented Section 1557 of the ACA. Among other things, Section 1557 prohibits health programs and plans receiving federal assistance from discriminating based on sex. The 2024 final rule expanded this prohibition to include a prohibition based on gender identity.
Shortly after HHS published its 2024 final rule, the United States District Court for the Southern District of Mississippi issued a nationwide injunction against enforcing that provision, while allowing the remaining provisions of the 2024 Section 1557 Rule to stay in effect. The court later issued an order vacating the provision. Review our article on this case in the July 16, 2024, edition of Compliance Corner.
HHS concluded that the order renders the vacated provisions unenforceable, so the agency cannot and will not enforce them.
Employer Takeaway
Employers and plans subject to Section 1557 should be aware that the gender identity provisions of the 2024 rule will not be enforced; however, the rest of the 2024 final rule remains in effect.
For additional information, read the HHS Notice of Vacatur.