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The US Department of Labor (DOL) has issued final regulations that prohibit employers from retaliating against employees who receive a federal subsidy when they purchase individual coverage in an online health insurance exchange, or “marketplace.” Under the Affordable Care Act (ACA), when a full-time employee qualifies for subsidies (premium tax credits) to purchase coverage in a marketplace, his or her employer may incur a penalty under the employer play-or-pay mandate if the employer failed to offer the employee minimum value and affordable coverage, and the employee was a full-time employee for ACA purposes. The new, final regulations are substantially similar to interim final regulations in effect since 2013 (please see blog post from Feb. 6, 2015).

The ACA amended the Fair Labor Standards Act to prohibit employers from retaliating against employees who either: report violations of the ACA’s insurance reforms or receive subsidies for coverage purchased in a marketplace. An aggrieved employee can get the ball rolling by filing a complaint online. If a violation has occurred, the employer is potentially required to reinstate the employee, as well as provide back pay (with interest), compensatory damages and attorney fees. These “whistleblower” protections are enforced by the DOL’s Occupational Health and Safety Administration (OSHA). Although OSHA is typically absent from ACA issues, the agency is tasked with enforcing the anti-retaliation provisions of most federal laws, including the ACA.

The final regulations explain the procedural hoops that apply once an individual files a complaint, but the rules do not explain the factors OSHA will consider in assessing whether retaliation has occurred. The good news, if any, is that the DOL declined to adopt some suggestions for the final rules including:

  • A suggestion by labor unions to require employers to post a new notice regarding anti-retaliation protections.
  • A request that the final rules definitively state that an employer’s decision to reduce an employee’s hours from full-time to part-time is unlawful retaliation. According to DOL, the employer play-or-pay mandate “does not prohibit an employer from reducing an employee’s hours of service in order to avoid a potential employer shared responsibility payment.”

Many employers have received notices from the ACA’s online marketplaces, including, apprising the employers that one or more of their employees have received premium subsidies. One way that an employer might help assure compliance with the final anti-retaliation rules is to treat any notice it receives from an online marketplace as if it were information about a disability (e.g., filing it separately from other HR records, not disclosing it internally except as needed, etc.). If practicable, an employer might wish to insulate anyone who will make employment decisions about an employee from knowing whether the employee is receiving subsidies.

Given all the vagaries of retaliation claims, the best advice is that employers should exercise common sense when dealing with employees who have qualified for ACA marketplace subsidies or who complain that an employer practice violates the ACA. For employers that have existing anti-retaliation policies, those policies should be revised to address these ACA-related protections.