Section 1558 of the Affordable Care Act (ACA) protects employees against retaliation by an employer for reporting alleged violations of Title I of the Act, which is the portion of the ACA that includes the prohibition of lifetime dollar limits on coverage, the requirement for most plans to cover recommended preventive services with no cost-sharing and, starting in 2014, guaranteed issue protections ensuring coverage without regard for pre-existing conditions and the prohibition of the use of factors such as health status, medical history, gender and industry of employment to set premium rates. In addition, employees are protected against retaliation for receiving a health insurance tax credit or cost-sharing reductions as a result of participating in a Health Insurance Exchange. Under the ACA’s whistleblower provisions, an employee who engages in protected activity and believes that he or she was retaliated against as a result may file an administrative complaint with the U.S. Department of Labor (DOL) seeking monetary and injunctive relief.
Recently, the DOL released an interim final rule setting forth procedures and time frames for handling whistleblower complaints. The rule was published in the Federal Register on February 27, 2013, by DOL’s Occupational Safety and Health Administration (OSHA), which is the administrative body authorized to investigate and administer such claims under the ACA.1 Although the rule went into effect immediately following publication, OSHA will be accepting public comments on the interim final rule for 60 days following publication, until April 29, 2013.
The procedures established by the new rule are similar to ones found under other whistleblower protection regulations, such as those enacted pursuant to the Sarbanes-Oxley Act. An employee must file a complaint within 180 days of when he or she becomes aware, or reasonably should have become aware, of the retaliatory action. Under the rule, the complaint does not have to be in writing, and written complaints need not be in English. Any person can file a complaint on the employee’s behalf as long as the employee consents.
Importantly, OSHA has taken the position that an ACA retaliation complaint is not a “formal document” and thus is not subject to the same pleading standards as a complaint filed in federal district court. In accordance with the DOL Administrative Review Board’s 2011 decision in Sylvester v. Parexel International LLC, OSHA’s comments to the interim rule state that ACA whistleblower complaints do not have to meet the pleading requirements articulated in the U.S. Supreme Court’s holding in Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007), and affirmed and extended in Ashcroft v. Iqbal, 556 U.S. 662 (2009). Under those cases, “a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face . . . [such that it] allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Iqbal, 556 U.S. at 678. By contrast, a whistleblower complaint under the ACA merely serves to alert OSHA that the employee is alleging retaliation and wants the agency to investigate.
After receiving a complaint, OSHA will determine whether “the complaint, supplemented as appropriate by interviews of the complainant” alleges “the existence of facts and evidence to make a prima facie showing.” 29 CFR § 1984.104(e). Under § 1984.104(e), if the supplemented complaint alleges a prima facie case of retaliation, the employer must then offer clear and convincing evidence that the employee would have received the same treatment regardless of the whistleblowing conduct. If there remains lingering uncertainty regarding the sufficiency of the employer’s proffered explanation for the employment action in question, OSHA will proceed in its investigation into whether there is reasonable cause to believe the employee was retaliated against for protected activity. If the complaint does not make a prima facie showing, or the employer is able to provide sufficient evidence that retaliation did not occur, OSHA must cease investigating and dismiss the complaint.
In either case, OSHA must determine whether there is reasonable cause to believe the complaint has merit and respond in writing within 60 days. If reasonable cause is found, OSHA may then issue a preliminary order for various forms of relief, including preliminary reinstatement of a terminated employee, affirmative action to abate the violation, back pay with interest, front pay and compensatory damages. See 29 CFR § 1984.105. After OSHA issues its findings, the parties have 30 days to file objections and request a hearing before an administrative law judge (ALJ), which will stay all the provisions of the preliminary order (except those requiring reinstatement). Alternatively, a complaining employee who receives an unfavorable determination from OSHA and makes a timely objection may file a retaliation suit in federal district court within 90 days of receiving OSHA’s written determination. The same is true if OSHA does not issue a final decision within 210 days after the complaint is filed. If no objections are filed, however, then the findings and/or preliminary order become a final decision not subject to judicial review.
Finally, beginning in 2014, employees will be protected from retaliation not only by their employers, but also by the insurance company that provides employer-sponsored health insurance coverage to the employee. In other words, while health insurance providers have been prohibited from retaliating against their own employees since the enactment of the ACA, in 2014 they will also be prohibited from retaliating against persons who are not their employees with respect to such persons’ compensation, terms, conditions or other privileges of employment with their employer, including their employersponsored health insurance—for example, by limiting or ending health insurance coverage for a complaining employee.
Given the complexity of the ACA, the increasing incentives for employees to report employer violations (willful or inadvertent) and the minimal pleading standards for complaints set out in the new rule, employers should be extra vigilant in familiarizing themselves with the rules and requirements of Title I of the Act and ensuring compliance. As the ACA continues to be implemented over the coming years, whistleblower claims will likely increase, and as with all areas where the law provides for whistleblower protections, employers must be careful to ensure that, when and if a violation is reported, no adverse actions are taken against the whistleblowing employee without clear and convincing evidence of a legitimate, nonretaliatory justification for the decision.
The interim final rule can be viewed at http://www.dol.gov/find/20130222/.
OSHA’s fact sheet on filing whistleblower complaints under the ACA can be found at http://www.osha.gov/Publications/ whistleblower/OSHAFS-3641.pdf.