Executive Summary: On May 18, 2018, the U.S. Department of Labor (DOL) issued a press release announcing an Office of Federal Contract Compliance Programs (OFCCP) Directive that extends by two years the enforcement moratorium pertaining to the affirmative obligations of TRICARE providers. TRICARE is a health care program through the U.S. Department of Defense (DOD) that pays health care benefits to active duty and retired military service members and their families. The moratorium, which had previously been in effect for four years and was set to expire this month, will now expire on May 7, 2021. The OFCCP also expanded coverage under the moratorium to apply to Veterans Affairs Health Benefits Program providers, in addition to TRICARE providers.

History: In 2014, a five-year moratorium was put in place regarding the enforcement of affirmative obligations of health care providers considered by the OFCCP to be TRICARE subcontractors. The OFCCP also offered outreach and technical assistance to providers regarding their obligations under the laws administered by the OFCCP. Following the enactment of the 2014 moratorium, the OFCCP administratively closed any open compliance evaluations of TRICARE health care providers subject to the moratorium. For a more detailed discussion of the moratorium, please see our May 8, 2014 Alert.

Purpose of the Moratorium Extension: In support of the extension, the OFCCP noted the challenges faced by active and retired military service members and their families in obtaining access to health care, and the added uncertainty regarding the extent to which OFCCP requirements apply to TRICARE health care providers. The extension is intended to relieve this uncertainty, allow more time for the OFCCP to receive stakeholder feedback, and permit the OFCCP to evaluate potential legislation that could be enacted on the issue. OFCCP Director, Ondray T. Harris, explained that “[b]y providing greater regulatory certainty to TRICARE providers and Veterans Affairs Health Benefits Program providers, the Administration can help ensure that America’s veterans and their families can access quality health care.”

The Bottom Line:

While the moratorium extension provides welcome relief for covered TRICARE subcontractors, that relief is still only temporary. 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 continued 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 in 2021.