Stephen Danz and Associates is a law firm that is comprised of attorneys throughout California. Notably, it has attorneys based in and around Orange County to represent local private individuals (or relators) in Qui Tam actions on behalf of the government. The attorneys’ unique background and decades of experience are crucial in ensuring that whistleblowers are guided through the complex areas of the law. Our success rate in bringing Qui Tam lawsuits based on the False Claims Act (“FCA”) is partly due to the resources and the years of representing employees in employment law litigation.
Over the last decade or so, the FCA health care sector landscape has dramatically changed. One of the main laws affecting the FCA was the Affordable Care Act (“ACA”). The ACA added Section 18C to the Fair Labor Standards Act (“FLSA”) to protect employees from retaliation regarding certain protected activities under the ACA (29 U.S.C. § 218c; Section 1558 of the Patient Protection and Affordable Care Act (PPACA). Section 18C protects employees from retaliation by employers for receiving a tax credit or cost-sharing reduction involving the ACA’s health insurance exchanges or reporting potential violations of Title I of the ACA.
Because large employers can be assessed a penalty if their employees receive a premium tax credit (“PTC”) through the ACA health insurance exchanges, a potential incentive exists for employers to retaliate against employees who receive the PTC (26 U.S.C. §§ 36B and 4980H). In addition, the ACA’s retaliation and whistleblower protections include information such as
- Who are covered employers and employees for Section 18C purposes.
- What activities are protected under Section 18C.
- Retaliation complaint procedures.
- How the whistleblower rules interact with other federal laws, including the Employee Retirement Income Security Act of 1974 (ERISA).
Under the ACA, employees are protected from retaliation if they receive a PTC under Code Section 36B or a cost-sharing reduction. They are also protected if they provide, or are about to provide, information to their employer, the federal government, or a state attorney general relating to a violation of, or an act or omission that the employee reasonably believes is a violation of, any provision of Title I of the ACA. This is similar to the FCA anti-retaliation provisions.
In addition, employees are protected if they testify, or are about to testify, in a proceeding about a violation, assist or participate, or are about to assist or participate, in a proceeding about a violation, or object to or refuse to participate in any activity, policy, practice, or assigned task that the employee reasonably believes was a violation of any provision of Title I of the ACA or order, rule, regulation, standard, or ban under Title I of the ACA.
Reasonable Belief Requirement
Under the ACA (and similar to FCA), to have a reasonable belief which is a requirement, an employee must have: (i) a subjective, good faith belief that a relevant law was violated (This means that the employee must actually believe that the conduct was a violation), or an objectively reasonable belief that the complained-of conduct violates a listed category (based on a reasonable person standard). However, there is no requirement that an employee demonstrates that the conduct at issue actually violated the law. Also, an employee’s whistleblowing is protected when it is based on a reasonable, though mistaken, belief that a violation of the law occurred (or is likely to occur).
Examples of Prohibited Activities
In line with FCA and employment discrimination statutes, an employer violates the ACA if an employee’s protected activity is a contributing factor in the employer’s decision to take unfavorable employment action against the employee. Prohibited activities include:
- Firing, laying off, demoting, or disciplining.
- Denying benefits.
- Failing to hire or rehire.
- Denying overtime or a promotion.
- Reducing pay or hours.
- Intimidation or threats to take action if an employee engages in Section 18C protected activities.
Similarly, according to the Occupational Safety and Health Administration (“OSHA”), an employer also may not engage in further retaliation against employees who pursue whistleblowing activities based on workplace unsafe environments. Citing to relevant case law, OSHA officials have shown that prohibited retaliation includes intimidating an employee for engaging in Section 18C protected activity if the intimidation would deter a reasonable employee from engaging in the activity.
Reductions in Hours
As another component of Section 18C protected activity, OSHA believes that an employer cannot reduce an employee’s work hours in retaliation for engaging in Section 18C protected activity. The government uses the example of an employer that reduces the hours of an employee that it knows or suspects of receiving a PTC. This may be a Section 18C violation if the employee’s receipt of the PTC or subsidy was a contributing factor in the employer’s decision to reduce the hours, or the employer cannot show by clear and convincing evidence that it would have taken the same action in the absence of the protected activity.
DOL Statistics Indicate Increased Whistleblower Claims
According to statistics (2008 to 2018) compiled by the DOL’s OSHA, which enforces 22 separate federal whistleblower statutes (including the ACA), the number of whistleblower claims has generally increased in recent years. Although there have been fewer ACA-related whistleblower claims than claims under other statutes enforced by OSHA, the number of ACA claims doubled from 2012 to 2015, from 14 claims to 28, and increased to 34 claims in 2016, but then decreased in 2017 and 2018 (respectively, 20 and 15 claims).