Are You Familiar with the Affordable Care Act’s Anti-retaliation Rules?
Are you familiar with Fed-OSHA’s regulations on whistleblowing and employer retaliation under the Affordable Care Act.
The rules set forth procedures and time frames for reporting and processing whistleblower complaints by employees against their employers and expand the instances in which an employee can sue their employer for retaliation under the ACA.
OSHA has set a low bar for what it considers retaliation in these regulations.
The biggest threat to an employer is if they have employees who may file complaints if they feel slighted after their employer change their health plans or greatly increase the cost-sharing burden on them.
The rules
The ACA whistleblower regulations prohibit employers from retaliating against employees for, among other things:
- Receiving a subsidy for a marketplace plan;
- Raising concerns regarding employer practices that the employee believes violate the ACA;
- Reporting ACA violations;
- Cooperating with a federal investigation;
- Participating and/or cooperating in a proceeding associated with an alleged or actual violation;
- Refusing to participate in a policy or practice that would violate the ACA; and
- Receiving a premium tax credit or a cost-sharing reduction for enrolling in a qualified health plan.
An employee who believes that he or she has been retaliated against in violation of Title I of the ACA has 180 days after the alleged retaliation to file a complaint with OSHA.
What constitutes retaliation?
Retaliation can include several types of action, such as:
- Firing or laying off
- Reducing pay or hours
- Blacklisting
- Demoting
- Denying overtime or promotion
- Disciplining
- Denying benefits
- Failing to hire or rehire
- Intimidating
- Making threats
- Job reassignment that affects prospects for promotion
OSHA has published the “Filing Whistleblower Complaints under the Affordable Care Act” factsheet on the complaint process. As an employer you should read it to understand the rules. You can find them here: https://www.osha.gov/Publications/whistleblower/OSHAFS-3641.pdf
Employer best practices
Make sure that managers and HR personnel ensure strict confidentiality for employees’ ACA-related information and do not share it with other managers and supervisors.
Cover the regulations in your training and meetings for HR personnel, who in turn should train managers to ensure they understand the consequences of taking actions that may be construed as retaliatory.
Train managers on how to respond if an employee complains about their health insurance in light of the ACA. In such cases, the manager should refer the complaint to the HR or benefits personnel responsible for the company’s health insurance plan.
Retaliation scenario
Your HR department is notified by the Department of Health and Human Services that an employee has purchased coverage on a public insurance exchange and received tax subsidies to help pay for it.
An HR manager goes to the employee’s manager to complain, saying that it could cost the company a $2,000 penalty. The manager finds an excuse to reduce the employee’s hours and reassign him to a lesser position.
First Association Plans Comply with ACA and Offer Lower Premiums, Report Finds
As the first association plans start gaining traction, trade journals are reporting that many of the plans they are offering are not as skimpy as many had predicted they would be.
The rules enacted for these plans allow them to skirt certain requirements of the Affordable Care Act, specifically that they cover 10 essential benefits, and still qualify as plans that satisfy the requirement that employers provide their staff with coverage.
Under the new rules, association plans can be formed across state or nationwide by letting employers band together (and act like one large employer) based on:
- Geography (all have a principal place of business in a state [or portion of a state, such as a city or county] or in the same metropolitan area, even if the metropolitan area spans more than one state).
- Industry (be from the same trade, industry, line of business, or profession).
The old Obama-era regulations made it difficult for association plans to meet ERISA’s large-employer insurance requirements. The Department of Labor estimates that some 4 million people could be covered under association plans in the coming years.
A surprise development
Yet, despite these plans having fewer restrictions on them, most of the new association plans are actually compliant after all and are not skimping on benefits as many pundits had predicted, according to press coverage.
The trade journal Modern Healthcare reports that most of the first association plans that are being formed are not charging people different premiums based on their health conditions or barring people with pre-existing conditions from enrolling.
It also notes that plan sponsors report that the plans cover all of the essential benefits outlined under the ACA, and even provide broad networks of doctors. The ACA also requires that plans do not impose annual or lifetime limits on coverage, and the plans coming out of the gates also comply with that aspect of the law.
Modern Healthcare’s reporting also found that despite all that, the plans’ premium levels are lower than what individuals can buy on government-run exchanges.
Farmer-owned cooperative Land O’Lakes, several Nevada chambers of commerce, and the National Restaurant Association have formed association plans this year and are expanding them now.
Modern Healthcare reported on Land O’Lakes farmer-owned cooperative’s self-insured association plan, which now covers two states (Nebraska and Minnesota) and is continuing to expand into other states.
The co-op said that its plans cost 25% to 35% less than comparable exchange plans in Nebraska, and about 12% less than plans on the exchange in Minnesota.
The magazine reviewed the plan documents for Land O’Lakes’ eight Nebraska plans, comprising a platinum-level plan, one gold plan, and three silver and three bronze options.
“They feature a range of deductibles and appear to provide coverage for each category of essential health benefits including prescription drugs, maternity care and mental health and substance abuse treatment,” it reported.
The Nebraska Farm Bureau is also rolling out an association plan for its members starting in 2019, and based on early figures, its premiums are 25% less than comparable individual plans on the state’s insurance exchange.
These plans also cover all of the essential benefits and do not charge more for people with pre-existing conditions, Modern Healthcare reported.
Also, a number of local chambers of commerce banded together in Nevada to form a fully insured association HMO plan with premiums that are about 20% less than similar plans on the exchange.
Proposed Rule Would Allow Employers to Reimburse Staff for Health Premiums
The Trump administration is moving ahead with new regulations that would make it easier for employers to enter into health reimbursement arrangements (HRAs) with their employees, a practice that can be severely penalized under the Affordable Care Act.
Under the proposed regulations – issued by the departments of Labor, Treasury and Health and Human Services – employees would be allowed to shop and pay for their own coverage using tax-free HRAs that are set up by their employers.
Under the proposed rule, employers that offer traditional health insurance would be allowed to fund an HRA with up to $1,800 per year. The money in the HRA could be used to reimburse employees for certain medical expenses, as well as for premiums for health insurance policies or stand-alone dental benefits.
And offering HRAs used to help employees pay for individual health insurance premiums would count as an offer of coverage to satisfy the employer mandate under the ACA.
More options, lower costs
Administration officials said expanding HRAs would give employees more options in terms of health coverage, and it also would reduce costs and administrative burdens on employers.
If enacted, the new regulations would undo Obama administration guidance (as it was not actually written into the regulations) barring employers from paying into HRAs to help workers pay for health insurance premiums from policies they buy on the open market or on government-run exchanges.
Companies that were caught in such arrangements faced a hefty fine of up to $36,000 a year.
The employer mandate would stay intact but the proposed rule would allow an employer to satisfy the mandate by funding HRAs for its workers. Under the employer mandate, organizations with 50 or more full-time or full-time-equivalent employees are required to purchase “affordable” health coverage that covers at a minimum 10 essential benefits as outlined under the law.
HRAs must be affordable
The key is that the HRA must also be affordable under the proposed rules. That would depend in part on the amount the employer contributes to the HRA.
The agencies proposing the new regulations said in an announcement that they would provide further guidance on the HRA-specific affordability test.
Funds going into HRAs would be exempt from federal income and payroll taxes. Additionally, employers would be able to deduct the amount they put into HRAs from their taxes.
The proposed rule would also require employers that offer HRAs to allow a worker to opt out and instead claim a federal premium tax credit to purchase coverage on the individual exchanges.
This is the early part of the rule-making. The proposed regulations will have to go out for public comment before final rules are written and implemented.
Bill Would Make 40 Hours a Week Full Time for ACA Purposes
House Republicans are taking another stab and cutting around the edges of the Affordable Care Act with new legislation that would change the definition of “full-time” workers to individuals who work 40 hours a week, instead of the current 30 hours under the law.
The effort addresses one of the biggest points of contention among employers concerning the ACA, since employers with 50 or more full-time workers must offer them health plans that comply with the law. The legislation, HR 3798, is currently in play in the House of Representatives, although it has yet to be debated in committee.
The bill comes as another measure that would completely eliminate the mandate that all applicable large employers (those with 50 or more full-time employees or the equivalent in part-time workers’ hours) provide health coverage that is affordable and covers the minimum essential benefits as prescribed by the ACA.
What would it do?
Specifically, the bill would:
- Establish that full-time employee means someone who works 40 hours or more a week.
- Eliminate penalties for organizations that don’t offer health insurance to staff who work less than 40 hours a week, but more than 30. This would greatly ease the reporting requirements on employers.
- Suspend the employer mandate for the years 2015 to 2018, in order to suspend any penalties that may have been imposed on employers during that period.
- Halt the IRS’s current attempts to enforce the mandate and open the door for employers to obtain refunds from the IRS for any penalties already paid.
- Further delay implementation of the “Cadillac tax.” This is a 40% excise levy that would be applied to premiums over and above a certain maximum premium threshold. The tax has already been delayed a number of times and is scheduled to take effect in 2022.
- Change ACA reporting requirements. Employers currently must provide IRS Form 1095-B for fully insured group plans to employees who receive ACA-compliant coverage. The bill would only require employers to provide the form to workers that ask for it. That said, employers would still be required to report to the IRS every year.
The outlook
For now, the bill has yet to be debated in committee and with the legislative session drawing to a close in the coming months, it’s unclear if this measure could be passed out of committee and then the House floor in time for it to be debated in the Senate.
It joins the ranks of a few measures that are once taking aim at the ACA.
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Legislation Takes Aim at ACA Taxes, Penalties
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With Health Insurance Laws in Flux, Flexible Spending Accounts Can Save Your Workers Money
The Internal Revenue Service is reminding eligible employees that now is the time to begin planning to take full advantage of their employer’s health flexible spending arrangement for next year.
If you don’t offer a flexible spending account (FSA) for your employees, you should consider starting one as they allow them to use tax-free dollars to pay medical expenses not covered by their health plan, including deductibles, copays and any pharmaceuticals.Read More