Health Care Reform Comes with New Employee Anti-Retaliation Protections

In March 2010, President Barack Obama signed the health care reform bill into law. The Patient Protection and Affordable Care Act of 2009 (PPACA) includes several important whistleblower protections for employees who report abuse or suspected abuse of the new rights and obligations created under it.

Some of the most significant of these anti-retaliation protections include:

Section 1558: FLSA Whistleblower Protection

The health care reform bill amended the Fair Labor Standards Act (FLSA) and added a new anti-retaliation section to the law. This new section prohibits employers like hospitals, clinics, physicians and other care providers from taking retaliatory action against employees like nurses, administrators, technicians and fellow doctors who:

  • Report or are about to report a suspected violation of Title I of the PPACA to their employer, the federal government or the state attorney general’s office
  • Participate in an investigation of a suspected violation of Title I
  • Refuse to participate in any activity the employee reasonably believes violates the Act

Title I includes things like prohibiting denial of coverage for pre-existing conditions, discriminating against those who receive health insurance subsidies under the health care reform bill.

Retaliation is broadly defined in Section 1558 and prohibits employers from not only firing employees who engage in protected conduct (like reporting that their employer is purposefully denying coverage to a potential insured based on a pre-existing condition), but also from discriminating against them in any manner with respect to their compensation, terms, conditions or other privileges of employment. The scope of prohibited retaliation under Section 1558 is purposefully broad — incorporating much of the language used in other whistleblower protection provisions of federal law.

Additionally, employees need only have a “reasonable belief” that a violation of Title 1 has occurred to be entitled to the protections under Section 1558.

Section 1558 also includes an employee-friendly burden of proof. The employee must prove by a preponderance of the evidence that his or her participation in a protected activity was a contributing factor in the action taken against him or her by the employer. The burden then shifts to the employer to prove by clear and convincing evidence – a much more difficult burden of proof – that the employer would have taken the same action against the employee if the employee had not engaged in the protected conduct.

Employee rights in Section 1558 cannot be waived and are not subject to arbitration, regardless of whether or not the employee has signed a mandatory arbitration agreement.

Section 10104(j)(2): Changes to the FCA’s Original Source Rule

The PPACA also amends the False Claims Act (FCA) by changing the definition of “original source” to make it more favorable to those who may want to bring qui tam actions.

Under Section 10104(j)(2), the original source exception now applies to:

  • A person who, prior to public disclosure, has voluntarily disclosed information to the government on which allegations or transactions in the claim are based; or
  • A person who has knowledge that is independent of and materially adds to publically disclosed allegations or transactions and who has voluntarily provided this information to the government before filing an action under the FCA

Under the FCA, qui tam actions cannot be based on information taken from the public record or other public source, unless it falls within the original source exception. By increasing the scope of the type of information that falls within this exception, the changes to the FCA also will increase the number of potential people who can bring qui tam actions.

The expansion of original source exceptions will hopefully help uncover fraudulent billing practices — employees can now maintain a qui tam action for retaliation for revealing information that will eventually be publicly disclosed or discovered by the government, provided they reported that information prior to its public disclosure. An example of this would be if one of an insurance company’s employees reported fraudulent claims being submitted to Medicare for reimbursement and suffered a detrimental result prior to that information becoming public knowledge.

New Protections for Long-Term Care Facility Employees

The health care bill also includes two provisions that protect employees who work at nursing homes and other long-term care facilities. Section 6709(b)(3) requires long-term care facilities that receive a minimum of $10,000 in federal funding to report any reasonable suspicion of a crime committed against one of the facility’s residents to the US Department of Health and Human Services (DHHS). Failure to do so can result in a fine up to $300,000.

Additionally, the section also prohibits employers from retaliating against employees who file reports of suspected crimes with the DHHS. Employers who violate the anti-retaliation provision may be fined up to $200,000 and may be excluded from federal programs, including social aide programs like Medicaid and Medicare, for up to two years.

Section 6105 requires each state to make federally standardized complaint forms available to all nursing home residents by March 2011. The section also requires each state to create a complaint resolution process to investigate the complaints and make sure that those filing the complaints are not retaliated against.


The new retaliation protections included in the health care reform law are meant to protect those who are in the best position to report violations of the law. Employers may not retaliate or otherwise punish employees who step forward to report what they reasonably believe to be an abuse by firing them, demoting them, docking their pay or taking other adverse employment action.

Employees who have been subjected to retaliation for engaging in a protected activity may be entitled to job reinstatement, back wages and other damages.

For more information on whistleblower, qui tam or other employment-related claims, contact us.