New Interim Rules for Affordable Care Act Retaliation Claims
By Daniel Finerty, Lindner & Marsack, S.C., Posted with permission
The Affordable Care Act (ACA) created a new retaliation claim for employees to file with the Department of Labor, and in federal court, against their employer. Because of the relatively short timeframes associated with these claims, it is critical for employers to carefully document the reasons for any adverse employment decision which affects an employee who may be engaged in activity the ACA views as protected.
This summary provides additional information regarding these ACA retaliation claims, the Department of Labor’s Occupational Safety and Health Administration (OSHA) procedure, and the employee’s option to withdraw the complaint and proceed in federal court and and the employee’s option to proceed in federal court.
The “Protected Activity” Component
The ACA provides incentives to both individuals without health insurance, and to employers who do not provide health insurance, to obtain or provide health insurance. In order to carry out these mandates, Section 1558 of the ACA prohibits employers from retaliating against any employee for engaging in any activity that is protected by the ACA.
Generally, to establish a claim for retaliation under the ACA, an employee must establish (1) that s/he engaged in protected activity, (2) was subject to an adverse employment action by the employer, and (3) that the protected activity, alone or in combination with other factors, affected in some way the outcome of the employer’s decision. An employee can bring a claim for retaliation if they have suffered some adverse employment action because: • The employee receives a subsidy to purchase health insurance; •The employee provides information to an employer or a government agency regarding a real or perceived violation of the ACA; •The employee testifies in a proceeding regarding a violation of the ACA; •The employee assists or participates in an investigation of a possible violation of the ACA; or •The employee objects to or refuses to participate in any activity, policy, practice or assigned task which the employee reasonably believes to be a violation of the ACA.
The “protected activity” element may be established by the employee in a number of ways, as explained in the following examples:
Example 1: After reviewing the health insurance plan benefits offered by the employer, an employee informs the employer that s/he does not believe any of the plans offer the minimum required coverage. The employee has likely provided information to the employer regarding a real or perceived violation of the ACA and, in doing so, engaged in protected activity. If the employer subsequently disciplined or terminated the employee adverse shortly after protected activity, the action may create an inference that the protected activity was a contributing factor in the adverse action.
Example 2: After informing the employer that its health insurance plans do not provide the required minimum coverage, the employee informs the employer that s/he will secure coverage through the state’s health insurance exchange and obtain the tax credit for doing so. Because the employee has informed the employer of his or her intent to seek the subsidy, if the employer subsequently disciplines or terminates the employee as a result of a belief that the employee will seek and receive the subsidy, a finding of retaliation may result.
Example 3: After the employee obtains the tax credit and the employer is charged a penalty for failing to provide minimum coverage which pushed the employee toward the exchange. After receiving notice of the tax penalty, the employer attempts to “charge back” the penalty to the employee by reducing the employee’s wages. The employer may have just violated the ACA retaliation provision because the employee’s receipt of the tax credit is protected activity and the receipt of the tax penalty caused the employer’s decision to “charge back” the penalty against the employee’s wages.
The Department of Labor regulations specifically note that the area of employee’s receipt of the tax credit may be fertile ground for retaliation claims. Because some employers who do not offer affordable health insurance may be assessed a tax penalty by virtue of an employee’s receipt of the tax credit, “the relationship between the employee’s receipt of a credit and the potential tax penalty imposed on an employer could create an incentive for an employer to retaliate against an employee.” 78 Fed. Reg. 13,222 (Feb. 27, 2013).
The OSHA Procedure
OSHA has issued interim rules establishing the procedure for bringing these claims. To pursue a claim, an employee must file the complaint with OSHA within 180 days of the alleged violation. After filing, OSHA will share the complaint with the IRS, the Treasury Department, the Department of Health and Human Services, and/or any other relevant branches of the Department of Labor.
Initially, retaliation complaints are screened to determine if the employee has made a plausible argument that retaliation has occurred. If OSHA believes a violation may have occurred, it can issue a preliminary order reinstating the employee. Regardless of whether such an order is issued, employers typically will have twenty (20) days to submit a position statement. Sixty (60) days after filing that position statement, OSHA will issue its findings and conclusions.
If OSHA determines a violation has occurred, it can order reinstatement, back pay, compensatory damages (for emotional distress), interest on the damages awarded, attorney fees and costs. Alternatively, OSHA may find that no relation occurred and can dismiss the claim. Within 30 days of either finding, the losing party can file objections or a request for a hearing. Employers should note that OSHA may order reinstatement, even when the employer has filed objections to a finding of a violation.
An appeal of an adverse decision, including retaliation claims on which OSHA found no violation to have occurred, will lead to a hearing before an administrative law judge. At this hearing, the employee must prove that protected activity was a contributing factor in the challenged adverse employment decision.
If the employee establishes that the protected activity was one of several factors leading to the challenged employment decision, the employer then must prove, by clear and convincing evidence, that the same employment decision would have been made regardless of any protected activity.
After the hearing, the ALJ will issue a written decision. This decision becomes final unless either party files objections with the Department of Labor’s Administrative Review Board (ARB) within 14 days of the decision. The ARB has the right to accept or reject the request for review. If the ARB does not accept the request for review, the parties can appeal the ALJ’s decision to the relevant federal court of appeals. If the ARB elects to review the decision, it must issue its own decision within 120 days after all briefs have been submitted. After the ARB issues a decision, the parties then have 60 days to appeal any aspect of the ARB’s decision to the court of appeals.
The Federal Court Option
Employees also have the right to go into federal court any time before a final decision has been issued by the Department of Labor. Employees simply dismiss their administrative claim and pursue it in federal court.
One reason an employee may elect to go to federal court is that an ACA retaliation claim, if it survives an employer’s attempts to dismiss, will be tried to a jury. A jury can award the employees the same remedies in federal court, along with those the court can order, including reinstatement, back pay, compensatory damages, attorney fees and costs.
The retaliation provisions of the ACA create another avenue for current and former employees to challenge discharge, discipline, or any other employment decision with which they disagree. Because of the relatively short timeframes associated with these claims, it is critical for employers to carefully document the reasons for any adverse employment decision which affects an employee who may be engaged in activity the ACA views as protected.
Daniel Finerty of Lindner & Marsack, S.C. can be contacted at (414) 273-3910 or by e-mail to email@example.com. For more information, employers can visit the Department of Labor’s website, where the Department has posted information on filing ACA retaliation complaints at http://www.osha.gov/Publications/whistleblower/OSHAFS-3641.pdf.
© Lindner & Marsack, S.C. 2013. All Rights Reserved. The foregoing is a general discussion of a legal issue and is not intended to be, nor should it be construed as, legal advice.