On February 22, 2013, the federal Occupational Safety and Health Administration (OSHA) released an interim final rule concerning the whistleblower protection provisions of The Patient Protection and Affordable Care Act (PPACA). The PPACA whistleblower provision protects employees of health insurance issuers or other employers who report potential violations of the statute’s consumer protections (e.g., the prohibition on denying insurance on account of pre-existing conditions) or affordability assistance provisions (e.g., access to health insurance premium tax credits).
Like recent whistleblower statutes, the PPACA whistleblower provisions adopted the procedures, notifications, burdens of proof, remedies, and statutes of limitations of the Consumer Product Safety Improvement Act of 2008 (CPSIA). The interim final rule sets forth in greater detail the procedures and time frames for employee complaints to OSHA, OSHA investigations, appeals of OSHA determinations to an administrative law judge (ALJ) for a hearing de novo, review of ALJ decisions by the Administrative Review Board (ARB), and judicial review of final decisions of the Secretary.
This summarizes and analyzes these procedures so as to advise employers of their existent and looming compliance obligations under the PPACA whistleblower provision.
The rule discusses and, in some instances, clarifies the expansive coverage of PPACA. PPACA defines “employer” to mean any person acting directly or indirectly in the interest of an employer in relation to an employee (including a public agency, but excluding any labor organization (other than when acting as an employer) or anyone acting in the capacity of officer or agent of such labor organization). “Employee” is defined as any individual employed by an employer (with some exceptions for employees of public agencies), including both prospective and former employees. In addition, starting in 2014, PPACA will prohibit retaliation by health insurance issuers offering group or individual health insurance coverage regardless of whether those issuers were the employer of the person alleging retaliation.
PPACA specifically prohibits employer retaliation against any employee who received a premium tax credit or subsidy for a health plan. Retaliation is further prohibited against an employee who provided (or is about to, or caused to provide) to the employer, the federal government or the attorney general of a state, information relating to any violation (or the employee’s reasonable belief of a violation) of a provision of Title I of PPACA. The employee also receives protection if he or she has testified, assisted or participated (or is about to) in a proceeding concerning such violations. Finally, employer retaliation is prohibited against an employee who objected to (or refused to participate in) any activity that the employee reasonably believed to be in violation of any provision of Title I of PPACA or the regulations and guidance promulgated under it.
In defining “reasonable belief,” the rule adopts the ruling in Sylvester v. Parexel Int’l LLC, ARB No. 07-123, 2011 WL 2165854, at *11-12 (ARB May 25, 2011), applying the Sarbanes-Oxley whistleblower provision. A complainant must have both a “subjective, good faith belief” and an “objectively reasonable belief” that the complained-of conduct violates one of the listed provisions of PPACA. The rule also stresses that, so long as the complainant actually believed that the conduct complained of violated the relevant law, the complainant had a “subjective, good faith belief.”
The rule defines the “reasonableness” of a complainant’s belief to be “based on the knowledge available to a reasonable person in the same factual circumstances with the same training and experience as the aggrieved employee.” The rule emphasizes, however, that the complainant need not show that the conduct complained of constituted an actual violation of law. Accordingly, an employee’s whistleblower activity is protected even where it is based on a reasonable, but mistaken, belief that a violation of the relevant law has occurred.
The rule states that complaints filed under PPACA need not be in any particular form. Again citing Sylvester, the rule stresses that the complaint is not a formal document and need not conform to formal federal pleading standards. Rather, a complaint filed under PPACA is only required to alert OSHA to the alleged retaliation and ask that it conduct an investigation. The rule also notes that, if the complainant cannot file the complaint in English, OSHA will accept it in any language. Moreover, with the consent of the employee, complaints may be filed on the employee’s behalf.
Statute of Limitations
A covered employee must file a complaint with OSHA within 180 days of the alleged retaliatory act. Under the rule, the limitations period commences once the employee is aware or reasonably should be aware of the employer’s decision. Moreover, the rule notes that the time for filing a complaint may be tolled for reasons warranted by applicable case law.
Upon receipt of the complaint, OSHA must provide written notice to the respondents of (i) the filing of the complaint, (ii) the allegations contained therein, (iii) the substance of the evidence, and (iv) the rights afforded to the respondent throughout the investigation. The Secretary must then, within 60 days of receipt of the complaint, afford the complainant and respondent an opportunity to submit a response and meet with the investigator to present statements from witnesses, as well as conduct an investigation.
Burden of Proof
The Secretary only may pursue an investigation if the complainant has made a prima facie showing that the protected activity was a “contributing factor” in the adverse action alleged in the complaint and that the respondent has not demonstrated, through clear and convincing evidence, it would have taken the same adverse action in the absence of such activity. According to the rule, to satisfy this initial burden, the complaint may show, for example, that the adverse action took place shortly after the protected activity.
After investigating a complaint, the Secretary is to issue written findings. If, as a result of the investigation, the Secretary finds that there is reasonable cause to believe that retaliation has occurred, the Secretary must notify the respondent of those findings, along with a preliminary order requiring the respondent to, where appropriate: (i) take affirmative action to abate the violation; (ii) reinstate the complainant to his or her former position together with the compensation of that position (including back pay) and (iii) restore the terms, conditions, and privileges associated with his or her employment; and (iv) provide compensatory damages to the complainant, (v) as well as all costs and expenses (including attorney fees and expert witness fees) reasonably incurred by the complainant (hereinafter, the “appropriate relief”).
ALJ Hearing and Decision
The complainant and the respondent have 30 days after the date of the Secretary’s notification to file objections to the findings and/or preliminary order and request a hearing before an ALJ. The filing of objections is to stay any remedy in the preliminary order except for preliminary reinstatement (unless there are “exceptional circumstances”). If a hearing before an ALJ is not requested within 30 days, the preliminary order becomes final and is not subject to judicial review.
If a hearing is held, PPACA requires an “expeditious” hearing. If the ALJ concludes that the respondent has violated the law, the ALJ must issue an order requiring the appropriate relief. If the ALJ determines that the respondent has not violated the law, the complaint must be denied. And if, upon the request of the respondent, the ALJ determines that a complaint was frivolous or brought in bad faith, the ALJ may award to the respondent a reasonable attorney’s fees not to exceed $1,000.
Any party seeking review (including judicial review) of an ALJ decision or a respondent alleging that the complaint was frivolous or brought in bad faith so as to warrant an award of attorney’s fees, must file a written petition with the ARB within 14 days of the date of the ALJ decision.
With the filing of a timely petition for review, the ALJ decision is to become the final order of the Secretary unless the ARB, within 30 days of the filing of the petition, issues an order accepting the case for review. If accepted, the ALJ decision is “inoperative” unless and until the ARB issues an order adopting the decision (except that any order of reinstatement is to be effective while under ARB review, unless the ARB grants a motion by the respondent to stay that order based on exceptional circumstances).
The ARB is to issue its final decision within 120 days of the conclusion of the hearing, which is to be 14 days after the date of the ALJ decision (unless a motion for reconsideration has been filed with the ALJ in the interim). In such case, the conclusion of the hearing is the date of the ruling on the motion or 14 days after the issuance of a new decision. If the ARB concludes that the respondent has violated the law, the ARB is to issue a final order providing appropriate relief to the complainant.
Within 60 days of the issuance of the final order, any person adversely affected may file an appeal with the United States Court of Appeals for the circuit in which the violation occurred or the circuit where the complainant resided on the date of the violation.
The PPACA whistleblower provision also permits the employee to seek de novo review of the complaint by a United States district court in the event that the Secretary has not issued a final decision within 210 days after the filing of the complaint, or within 90 days after receiving a written determination. The court has jurisdiction over the action without regard to the amount in controversy, and the case is to be tried before a jury at the request of either party.
The rule also notes that, until the Secretary’s final order is issued, the Secretary, the complainant, and the respondent may enter into a settlement agreement that terminates the proceeding. Nothing, however, is to diminish the rights, privileges, or remedies of any employee under any Federal or State law or under any collective bargaining agreement, and the rights and remedies may not be waived by any agreement, policy, form, or condition of employment.
OSHA has requested comments on the rule, which are due by April 29, 2013. The substance and procedural components of the rule should not come as a surprise, as they are consistent with recent rules implementing other recent whistleblower statutes, such as Section 806 of the Sarbanes-Oxley Act of 2002. Nevertheless, because of the complex and unchartered nature of PPACA, covered employers need to address a host of issues to prepare for and handle internal complaints and claims raising PPACA violations.
As with other federal whistleblower programs, employers likely will face an uphill battle in PPACA whistleblower actions at the agency level. Therefore, employers must focus on detection and prevention. It is increasingly important for employers to implement effective compliance, notification and investigation programs. Employers should adopt and implement clear policies addressing the conduct prohibited by PPACA and prohibiting retaliation against employees who raise concerns about policy violations. Employers also should consider implementing a hotline to encourage employees to first raise any concerns directly with their employer before taking their claims to OSHA.
Moreover, companies should implement training programs to inform managers about the scope of PPACA’s protections and the policies prohibiting retaliation. Employers also should consider developing procedures and processes for monitoring compliance with PPACA. It is imperative that timely, complete, and accurate records are maintained of unsatisfactory employee conduct to defeat an inference that an adverse employment action was caused by an employee’s PPACA report. In addition, it is advisable to consult with counsel and undertake a comprehensive investigation before making any adverse employment decision against any employee who has engaged in activities protected by PPACA.