The Department of Labor recently published final rule2016-24559, solidifying the previously speculative Affordable Care Act (ACA) whistleblower-styleemployee protections. The announcement can be found at the Department of Labor’s website. The final ruleis intended to discourage employer retaliation against employeeswho interact with the ACA in a way that calls into questionemployer mandate compliance.

The Occupational Safety and Health Administration (OSHA), whichenforces similar protections under many other federal laws andregulations, will also be managing enforcement of the DOL finalrule. Final rule 2016-24559 provides a remedy to an employee,former employee, or job applicant where it is demonstrated that heor she engaged in a protected activity (e.g., filing a complaintabout employer’s ACA noncompliance, applying for subsidizedexchange coverage, or inquiring into employer coverage for anexchange application) and suffered retaliation from the employer.According to the language of the rule, should the employee, formeremployee, or applicant suffer an adverse employment actionsuggesting that the employee’s protected activity was a“contributing factor,” the employer bears burden of proof todemonstrate that any employment action taken on these employees wasnot retaliatory, was unrelated, and was otherwise justified.

The rule states that the protections only apply where theemployer “knows or suspects” that the protected action was taken,which will generally come from the employer’s receipt of anexchange notice. These notices give employers a chance to refutethe claim that the employer failed to offer sponsored coveragemeeting the ACA’s minimum essential coverage, minimum value, andaffordability requirements. Exchange notices have already been sentby many federal and state exchanges.

To avoid gaining the knowledge of the employee who triggered anotice, employers may choose to immediately forward any envelopesfrom state or federal exchanges directly to outside counsel, their third-partyadministrator, or a benefit service provider. This kind of exchangenotice outsourcing is a way for employers to take steps to avoidthe knowledge required for the employee protections to apply. Theemployer may also be put on notice by an employee inquiring as tothe details of the employer sponsored coverage during theemployee’s exchange application process. Where an employee requeststhe employer assist with completion of exchange coverageapplication paperwork, it is extremely likely that the ACA’sretaliation protections would apply due to the potential ACAcompliance implications.

Although an exchange notice is not a penaltydetermination, because Section 4980H employer penalties only applyif a full-time employee receives a premium tax credit or a subsidyon an exchange, employees named in such notices are protected fromany adverse retaliatory employment action. The kinds of adverseemployment actions prohibited by the DOL final rules includetermination, intimidation, threatening, restraining, coercing,blacklisting, disciplining, or the adjustment of compensation,hours, terms, conditions, or privileges of employment. Since thefirst round of exchange notices is currently working through theappeals process, employers very likely already “know” of employeesto whom these protections apply, and these final rules demonstratethe care employers must take with any employment actions that couldbe construed as retaliation in violation of the ACA’sprotections.