OFCCP Issues Directive On TRICARE Moratorium

by FordHarrison
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Executive Summary:  The Office of Federal Contract Compliance Programs (OFCCP) has issued a Directive officially establishing its five-year moratorium on enforcement of the affirmative action obligations of TRICARE subcontractors. The Directive states that within 30 business days of the effective date of the Directive (May 7, 2014), the OFCCP will administratively close any open compliance evaluations of TRICARE subcontractors affected by the moratorium.  It also provides additional information regarding the moratorium and the agency's proposed outreach efforts during that time period.  Additionally, the Directive provides guidance to TRICARE subcontractors covered by the moratorium who receive an OFCCP Scheduling Letter or Corporate Scheduling Announcement Letter (CSAL).   

Background

As discussed in our prior Alert, in March of this year Labor Secretary Perez announced a five-year moratorium on enforcement of the affirmative action obligations of all TRICARE providers.  On May 7, 2014, the OFCCP published a Directive on its website establishing the moratorium and providing additional information and guidance.  The Directive is available at: http://www.dol.gov/ofccp/regs/compliance/directives/dir2014_01.htm.

Who is Covered by the Moratorium?  The Directive states that the moratorium applies to all health-care entities that participate in TRICARE as subcontractors under a prime contract between the Department of Defense (DOD) TRICARE Management Activity and one of the prime managed-care contractors, including:

  • Health-care entities that participate in TRICARE only as subcontractors;
  • Health-care entities that participate in TRICARE as subcontractors and as subcontractors under any Medicare program;
  • Health-care entities that participate in TRICARE as subcontractors and as subcontractors under the Federal Employee Health Benefits Program (FEHBP); and
  • Health-care entities that participate in TRICARE as subcontractors and as subcontractors under any other federal health program.

The moratorium does not apply to health-care entities who are TRICARE subcontractors and hold a prime contract with a federal agency.  Additionally, it does not apply to TRICARE subcontractors who hold a separate, independent, non-health-care related federal subcontract.

Scope of the Moratorium

The moratorium applies to the OFCCP's enforcement of a covered TRICARE subcontractor's obligations under Executive Order 11246, Section 503 of the Rehabilitation Act, and VEVRAA, including enforcement of obligations related to affirmative action programs and recordkeeping.  It does not apply to the processing of complaints of discrimination under 41 CFR 60-1.24; 41 CFR 60-300.61 and 41 CFR 60-741.61.  Additionally, the moratorium does not apply to obligations a TRICARE subcontractor may have under other federal nondiscrimination laws. 

Administrative Closure of Open Compliance Evaluations

Within 30 business days of the effective date of the Directive (May 7, 2014), the OFCCP will administratively close any open compliance evaluations of TRICARE subcontractors affected by the moratorium.  If a TRICARE subcontractor receives an OFCCP scheduling letter requesting the subcontractor's Affirmative Action Program (AAP) and supporting data, the Directive states that it should send its local OFCCP office a written request that the compliance evaluation be administratively closed, along with a copy of its agreement to participate in the TRICARE program. The Directive further states that TRICARE subcontractors covered by the moratorium who have received a Corporate Scheduling Announcement Letter (CSAL) should not contact the OFCCP.  Instead, the subcontractor should wait to receive a scheduling letter before it contacts the local OFCCP office to request that the compliance evaluation be administratively closed. The OFCCP has provided a list of local offices on its web site at: http://www.dol.gov/ofccp/contacts/ofnation2.htm.

OFCCP's Outreach and Assistance Efforts During the Moratorium

During the moratorium period, the OFCCP will provide technical assistance on compliance with the affirmative action obligations under Executive Order 11246, Section 503 and VEVRAA.  Among other things, the agency will: 

  • Provide information, materials, and technical assistance training to TRICARE subcontractors on how to develop cost effective affirmative action plans and recordkeeping and applicant tracking systems;
  • Conduct regional and national webinars that cover OFCCP's legal authorities, jurisdiction, and federal contractor and subcontractor obligations; and
  • Convene listening sessions to learn about the unique issues facing TRICARE subcontractors in order to provide relevant and targeted technical assistance under all of OFCCP's legal authorities.

The Bottom Line:

While the moratorium provides welcome relief for covered TRICARE subcontractors, that relief is only temporary. In fact, the outreach efforts described in the Directive, which are aimed at helping TRICARE subcontractors comply with the affirmative action obligations the OFCCP enforces, seem to emphasize the agency's claim of jurisdiction over these subcontractors. Thus, absent legislation excluding TRICARE subcontractors from the OFCCP's jurisdiction, health-care entities that receive federal funds should be prepared to comply with the affirmative action obligations the agency enforces when the moratorium has expired.

 

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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