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February 28, 2013

HRB 67 - Whistleblower Protections for ACA Violations; Final Health Insurance Market and Rate Review Rules

Released February 28, 2013I Download as a PDF

February 28, 2013 -- In what is becoming a weekly or even semi-weekly occurrence, the government is once again issuing guidance to further the implementation of the Affordable Care Act (“ACA”).


Of particular note for employers is the guidance relating to the “whistleblower” provisions of the law (Section 1558 of the Affordable Care Act).  As background, the ACA includes a whistleblower provision, protecting employees from adverse employment action or retaliation from either obtaining government assistance through premium assistance or a cost share by participating in the Exchange (Marketplace), as well as protection from reporting alleged violations of ACA compliance by employers.  The Department of Labor’s Occupational Safety and Health Administration (OSHA) issued interim final rules on February 27, 2013, along with a fact sheet for filing whistleblower complaints, and invites public comment until March 19, 2013.

An employee may not be punished or retaliated against for challenging an employer’s compliance with the Title I, or market reform provisions of the ACA.  Included among these provisions are:

  • Coverage of dependents;
  • Discrimination based on health status;
  • Coverage for pre-existing conditions (beginning in 2014); and
  • Annual and lifetime limits for health plans

Further, the whistleblower law protects individuals from retaliation for seeking government assistance, which would come in the form of health coverage premium assistance or a cost share by purchasing coverage through the exchange (marketplace).  Individuals who fall below 400% of the poverty level may be entitled to such government assistance if their employers do not offer adequate coverage at an affordable rate, as is more fully described in Shared Responsibility Guidance (CBIZ Health Reform Bulletin, 1/9/13)

Adverse employment action or retaliation includes anything that affects any of the terms, conditions or privileges of employment, including the provision of benefits.  Examples are: threatening or refusing to hire or re-hire; firing; demoting; reducing hours, or denying employee benefits.  These are but a few examples of what might constitute retaliation.

These regulations set out the procedures that an individual would follow to file a complaint.  The complaint must be filed with OSHA within 180 days of alleged retaliation. OSHA then has 60 days to respond to the complaint.  The individual may also file a lawsuit if OSHA fails to make a decision within 210 days of the filing date of the complaint, or within 90 days following OSHA’s written determination.

While these regulations are interim, employers must comply with them now. These rules do not, in any way, limit an individual’s rights under other laws, such as ERISA Section 510 that prohibits interference with one’s protected rights.


Final rules relating to the ACA’s market reform and rate review provisions were also issued on February 27, 2013.   These final rules, similar to the proposed rules issued last year (see Proposed Regulations: Rating Restrictions, Guaranteed Issue and Renewal Rules, 11/28/12),  address the provisions that will soon take effect relating to guaranteed availability and guaranteed renewal of health insurance and premium rate restrictions, and is applicable to non-grandfathered plans.

Permissible Rate Bands

Health insurance premiums in the individual and small group market can only be based on:

  • Family size (individual or family coverage)
  • Geography
  • Age.  Following are permitted age-bands:  
    • Child age bands. A single age band for individuals aged 0-20.
    • Adult age bands. One-year age bands for individuals aged 21-63.
    • Older adult age bands. A single age band for individuals aged 64 and older.
  • Tobacco use.  Such rate band cannot vary by more than 1.5:1 and may only be applied with respect to individuals who legally use tobacco, as permitted under federal and state law. For purposes of this section, tobacco use means use of tobacco on average four or more times per week within a 6-month period. This includes all tobacco products with the exception of tobacco used for religious or ceremonial purposes.

These rules apply to small insured plans offered in or outside the marketplace.  The rules will also apply to large insured plans, but only if offered through the marketplace.

The rules provide insurers with guidance on the restrictions that apply to rate hikes, as well as guidance relating to the single risk pool applicable in the individual market and small group market.  A state can decide to combine its individual and small group market into one risk pool.

In addition, the regulations provide guidance relating to catastrophic policies available in certain situations, as well as rules relating to student health coverage. 

While these rules primarily apply to insurers, they may be anecdotally interesting to employers.  It should also be noted that these regulations, similar to the rating regulations issued in 2011, provide that in the case of an Association Health Plan (AHP) or a multiple employer welfare arrangement (MEWA), that employer size is determined on an employer-by-employer basis.  Therefore, a small employer participating in an AHP would be subject to the small group health insurance rules.

These final rules apply to health plans with plan years beginning on or after January 1, 2014.



About the Author:  Karen R. McLeese is Vice President of Employee Benefit Regulatory Affairs for CBIZ Benefits & Insurance Services, Inc., a division of CBIZ, Inc.  She serves as in-house counsel, with particular emphasis on monitoring and interpreting state and federal employee benefits law.  Ms. McLeese is based in the CBIZ Leawood, Kansas office.




The information contained herein is not intended to be legal, accounting, or other professional advice, nor are these comments directed to specific situations. The information contained herein is provided as general guidance and may be affected by changes in law or regulation. The information contained herein is not intended to replace or substitute for accounting or other professional advice. Attorneys or tax advisors must be consulted for assistance in specific situations.


This information is provided as-is, with no warranties of any kind. CBIZ shall not be liable for any damages whatsoever in connection with its use and assumes no obligation to inform the reader of any changes in laws or other factors that could affect the information contained herein. s required by U.S. Treasury rules, we inform you that, unless expressly stated otherwise, any U.S. federal tax advice contained herein is not intended or written to be used, and cannot be used, by any person for the purpose of avoiding any penalties that may be imposed by the Internal Revenue Service.


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