Tuesday, May 13, 2014

OFCCP Issues Directive on TRICARE Moratorium

Dana Halvorson and Dianne De La Mare

In March of this year, the Department of Labor Secretary Thomas Perez announced a five-year moratorium on enforcement of the affirmative action obligations of all TRICARE providers. Last week, the Office of Federal Contract Compliance Programs (OFCCP) issued the Directive officially establishing this five-year moratorium.

According to a legal alert from FordHarrison, the Directive states that within 30 business days of the effective date of the Directive (May 7, 2014), the OFCCP will administratively close any open compliance evaluations of TRICARE subcontractors affected by the moratorium. It also provides additional information regarding the moratorium and the agency’s proposed outreach efforts during that time period.

Additionally, the Directive provides guidance to TRICARE subcontractors covered by the moratorium who receive an OFCCP Scheduling Letter or Corporate Scheduling Announcement Letter. The FordHarrison legal alert includes a good summary of who is covered by the moratorium, and the scope of it.

As noted in previous editions of Capitol Connection, AHCA/NCAL supports Rep. Tim Walberg’s legislation, Protecting Health Care Providers from Increased Administrative Burdens Act (H.R. 3633). This legislation clarifies that certain recipients of payments from the Federal Government related to the delivery of health care services to individuals shall not be treated as Federal contractors by the OFCCP based on the work performed or actions taken by such individuals that resulted in the receipt of such payments.

OFCCP enforces the affirmative action and equal employment opportunity requirements that are written into the federal government’s agreements with government contractors or subcontractors. AHCA/NCAL believes it is important to advocate against any further expansion of the U.S. Department of Labor’s OFCCP’s jurisdiction. Implementation costs for initial compliance with OFCCP’s requirements could range from as much as $10K upfront and subsequent compliance could add an additional $5K annually.

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