While many employers have focused on the requirements for health coverage, they must be mindful of the new whistleblower and anti-retaliation protections established by the Patient Protection and Affordable Care Act (the "PPACA"). Section 1558 of the PPACA amends the Fair Labor Standards Act to protect employees from retaliation for (i) reporting alleged violations of the PPACA or (ii) receiving premium tax credits or subsidies for participating in health insurance exchanges. This provision applies to both private and public employers and protects current and former employees as well as applicants for employment. Earlier this year, the Department of Labor, through the Occupational Safety and Health Administration ("OSHA"), issued an interim final rule that governs whistleblower complaints under the PPACA.
The first category of protected activity covers whistleblowers who report employer violations of Title I of the PPACA. Title I includes most of the substantive provisions regarding insurance market reforms such as the elimination of lifetime limits on benefits and pre-existing condition exclusions. The PPACA's whistleblower protections prohibit employers from retaliating against employees for reporting any suspected Title I violation.
The second category of protected activity covers employees receiving certain tax credits and subsidies. This category of protected activity relates to the employer mandate which becomes effective next year. Beginning in 2014, employers with 50 or more full-time employees (including full-time equivalents) must offer "minimum essential" health coverage to full-time employees and their dependents or pay a penalty (commonly referred to as the "play or pay" provisions). Full-time employees who (a) are not offered minimum coverage that complies with certain requirements or (b) are not offered any coverage are eligible to receive a federal subsidy or tax credits in order to purchase insurance through a health insurance exchange. Generally, employers are subject to a penalty if at least one full-time employee qualifies for a premium tax credit or subsidy. Under the PPACA anti-retaliation provisions, an employer cannot take adverse employment action based on the fact that an employee receives a tax credit or subsidy.
Prohibited Employment Actions