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OFCCP/TRICARE Update: Five-Year Reprieve

on Tuesday, 1 July 2014 in Health Law Advisory: Zachary J. Buxton, Editor

On May 7, 2014, the OFCCP published Directive 2014-01, which establishes a five-year moratorium on its enforcement of obligations related to affirmative action programs and recordkeeping under Executive Order (E.O.) 11246, Section 503 of the Rehabilitation Act of 1973 (Section 503), and the Vietnam Era Veterans’ Readjustment Assistance Act of 1974 (VEVRAA). The moratorium directive is effective immediately and applies to all healthcare entities that participate in TRICARE as subcontractors under a prime contract between the Department of Defense (DoD) TRICARE Management Activity and one of the prime managed-care contractors.

To the extent that there are any open compliance evaluations of TRICARE subcontractors covered by the moratorium, OFCCP will administratively close those cases within 30 business days of the effective date of the directive.

While the OFCCP issued its most recent scheduling list on January 24, 2014, and because the moratorium will be implemented subsequent to the issuance of that list and the previous scheduling list, dated March 2013, a TRICARE subcontractor establishment may still receive an OFCCP scheduling letter requesting an Affirmative Action Program (AAP) and supporting data. Should this occur, the TRICARE subcontractor can respond in writing that it participates in the TRICARE program (and provide a copy of that agreement), and ask that its compliance evaluation be administratively closed.

During the moratorium period, the OFCCP has indicated that its staff will engage in outreach and technical assistance to provide greater clarity to the TRICARE subcontractor community about their obligations to prohibit discrimination and take affirmative action to improve employment opportunities for qualified women, minorities, people with disabilities, and protected groups of veterans.

What does this mean for healthcare institutions?

The moratorium does not apply to healthcare institutions that are direct contractors with the federal government or TRICARE subcontractors that have a separate, non-healthcare-related federal subcontract. The moratorium also does not apply to investigations of discrimination complaints against healthcare providers.

For TRICARE-only subcontractors, while you have a reprieve from the OFCCP’s enforcement efforts for five years, this does not mean that you can ignore your obligations. The OFCCP is giving you this time to get your affirmative action compliance efforts together, not to sit by and wait a few years before starting the process. Make no mistake that the OFCCP will aggressively audit healthcare institutions following the end of the moratorium period, so there will be no excuses for non-compliance at that time. The OFCCP can also change its mind and rescind this directive at any time.

Please contact Baird Holm LLP to discuss your affirmative action obligations in more detail, or to determine whether your healthcare institution falls under OFCCP jurisdiction.

Kelli P. Lieurance

1700 Farnam Street | Suite 1500 | Omaha, NE 68102 | 402.344.0500