On February 27, 2013, the Department of Labor (“DOL”) published interim final regulations regarding employee whistleblowing complaints under the Patient Protection and Affordable Care Act (“ACA” a.k.a. the healthcare reform act). The regulations allow employees to file complaints with the Occupational Safety & Health Administration (“OSHA”) against their employers (and health insurance providers) for certain violations of the ACA.
Section 1558 of the ACA provides protection to employees against retaliation by an employer for (1) reporting violations under Title I of the ACA, or (2) for receiving a health insurance tax credit or cost sharing reduction as a result of participating in a health insurance exchange created pursuant to the ACA.
Title I of the ACA implemented consumer protections in the health insurance market such as prohibitions on annual and lifetime coverage limits, prohibitions on exclusions based on pre-existing conditions, expansion of coverage to dependents to age 26, and coverage of preventative services.
Under the ACA, large employers (generally those with 50 or more full-time equivalent employees) will be required to offer their full-time employees (those averaging 30 or more hours per week) with affordable and qualifying health insurance coverage starting on January 1, 2014. A large employer that does not offer affordable and qualifying health insurance may face penalties assessed by the Internal Revenue Service (“IRS”) if a full-time employee purchases health insurance from an exchange and obtains a subsidy from the government. The regulations contemplate that assessment of such penalties will create incentive for employers to retaliate against employees.
An employer may be found to have violated the ACA anti-retaliation provision if an employee’s protected activity was a contributing factor in the employer’s decision to take unfavorable employment action against the employee. Such unfavorable actions may include: firing or laying off; blacklisting; demoting; denying overtime or promotion; disciplining; denying benefits; failure to hire or rehire; intimidation; making threats, reassignments affecting prospects for promotion; or reducing pay or hours.
Under the procedure, employees will have 180 days after an alleged violation to file a complaint with OSHA. Employers will have 20 days from receipt of notice of the complaint to show by clear and convincing evidence that it would have taken the same action in absence of the protected activity. If the employer fails to establish this evidence, OSHA will proceed with its investigation, with the power to request documents and conduct interviews.
After completing its investigation, OSHA will issue a preliminary order. If adverse to the employer, the order may require reinstatement, back wages, restoration of benefits, and other possible relief to make the employee whole, including attorneys’ fees and expert witness fees. On the other hand, if OSHA finds the employee’s complaint is frivolous or brought in bad faith, OSHA may award the employer a reasonable attorneys’ fee not exceeding $1,000.
The order becomes final unless appealed within 30 days to the Secretary of Labor. If appealed, an Administrative Law Judge (“ALJ”) will conduct a hearing, and will issue a decision.
Either party may appeal the ALJ’s decision within 14 days to the DOL’s Administrative Review Board (“ARB”). The ARB has 30 days to decide whether to review. If it does not review, the ALJ decision will become final. If the ARB grants review, it will be required to issue its final decision within 120 days.
Within 60 days of the ARB’s final decision, an aggrieved party may file an appeal with the United States Court of Appeals for the circuit in which the violation occurred or the circuit where the employee resided on the date of the violation.
Alternatively, if a final order is not issued within 210 days from the date the employee files the initial claim with OSHA, or within 90 days of the employee receiving OSHA’s preliminary findings, the employee may file a complaint in U.S. District Court for de novo review, which may be tried before a jury at either party’s request.
Whether an employee recently filed a complaint regarding health insurance coverage, or if the employer is penalized because the employee received subsidies under the ACA to purchase health insurance will become additional factors that employers will need to review before taking adverse action against employees. Documentation will be key to establishing the required clear and convincing evidence for early resolution of such complaints.
The interim final regulations are currently subject to a 60-day comment period from the date of publication in the Federal Register. The DOL will issue final regulations once the comment period closes and it has reviewed the submitted comments.