OSHA Issues Interim Final Rule on Whistleblower Protections under the Affordable Care Act

by Ballard Spahr LLP

As the 2014 implementation date for the most controversial provisions of the Affordable Care Act (ACA) draws closer, most businesses are focused on ensuring that their group health plans meet the ACA's requirements. But there are other aspects of the law that employers must keep in mind as health care reform takes effect, including little-publicized "whistleblower" provisions enforced by the Occupational Health & Safety Administration.

On February 22, 2013, OSHA issued an interim final rule addressing whistleblower complaints filed under Section 1558 of the ACA. Section 1558 protects employees against retaliation by their employers for: (1) reporting a violation of Title I of the ACA; (2) refusing to participate in an activity the employee reasonably believes to be a violation of Title I; (3) assisting or participating in a whistleblower proceeding under Section 1558; or (4) receiving a tax credit or cost-sharing reduction as a result of participation in a Health Insurance Exchange or Marketplace. Title I of the ACA relates to consumer protections, such as prohibitions on lifetime coverage limits, and preexisting conditions exclusions, requirements to cover preventive services without cost sharing, and prohibitions on using certain factors to set premium rates.

In 2014, the anti-retaliation provisions of Section 1558 will be expanded to apply to group health plans and health insurance issuers offering group or individual health insurance coverage. That is, employees will be protected from retaliation by their employers and by the insurance carrier that provides the health coverage. For example, employees will be protected from acts such as issuers limiting or canceling their health insurance coverage.

An employee who believes he or she has been the victim of retaliation in violation of the ACA may file a complaint with OSHA within 180 days of the claimed retaliation. OSHA will review the employee's evidence and may choose to conduct an investigation. Under the final interim rule, OSHA has the power to negotiate settlements or enter an order awarding damages and other remedies, including reinstatement.

Parties who disagree with an order may appeal to an administrative law judge through the U.S. Department of Labor’s Administrative Review Board and finally to the appropriate circuit court. Although an appeal will stay the entry of most relief contained in OSHA’s order, it will not stay an order of reinstatement. Thus, an employer may be required to re-employ an alleged whistleblower during the pendency of an appeal.

Similar to the process for EEOC charges, an employee may withdraw his or her claim from OSHA and sue in federal court if the agency does not act on the complaint within 210 days of its filing. Additionally, if OSHA does not enter an order on its findings within 90 days (presumably because the agency is attempting to resolve the case through conciliation efforts), the employee may choose not to wait and may bring suit in federal court within 90 days of receipt of OSHA's decision.

Finally, the interim rule sets out an "employee friendly" burden of proof. A complaining employee must demonstrate, by a preponderance of the evidence, direct or circumstantial, that the protected activity was a motivating factor (not the motivating factor) in the alleged retaliatory action. The employer then has the burden to show, by clear and convincing evidence (a higher standard than a preponderance of the evidence), that the business would have taken the same action in the absence of the protected activity. This standard adopts the “mixed-motive” analysis of Title VII jurisprudence, but, under Title VII, the standard is reserved for cases where an employee makes an initially stronger showing of illegal employer action―where there is direct evidence of discrimination.

Thus, under this rule, if it does become final, employers will find it more difficult to defend ACA retaliation claims than the typical employment discrimination case.

OSHA has published a fact sheet providing an overview of the final interim rule. OSHA is accepting comments on the interim final rule for 60 days, through April 28, 2013. The interim rule is effective in the meantime.

Members of Ballard Spahr’s Labor and Employment Group are available to assist you in navigating whistleblower retaliation claims brought under the Affordable Care Act and other statutes. Additionally, members of our Health Care Reform Initiative have launched the Health Care Reform Dashboard, an online resource center for news and analysis on developments under the Affordable Care Act.

If you have questions on the ACA’s whistleblower provisions or any other implications of the law, contact Denise M. Keyser at keyserd@ballardspahr.com or 856.761.3442, Amy L. Bashore at bashorea@ballardspahr.com or 856.761.3402, or the member of the Health Care Reform Initiative with whom you work.

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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