Publication

May 18, 2018Client Alert

OFCCP Expands & Extends Moratorium on Audit of TRICARE Contractors

Continuing its contractor friendly actions, on May 18, 2018 the OFCCP announced that it was extending the moratorium on enforcement of the affirmative action and record keeping obligations otherwise imposed on companies who are subcontractors on a contract between the Department of Defense TRICARE Management Activity and one of the prime managed-care contractors. The Agency also expanded the group of subcontractors protected by the moratorium to subcontractors with the Veterans Health Benefits Program. The moratorium will now expire on May 7, 2021.

In May 2014, citing a “difference in understanding between the Department of Labor and some entities affiliated with the TRICARE community as to who is a covered subcontractor” the OFCCP issued Directive 2014-1 which established a five-year moratorium on enforcement with regard to TRICARE subcontractors during which the agency would engage in outreach and technical assistance with the health care community about their obligations under Executive Order 11246, the Rehabilitation Act, and the Vietnam Era Veterans Readjustment Assistance Act.

Although Directive 2014-1 does not expire until May 2019, citing the current difficulty that active-duty and retired service members and families currently have accessing health care, the Agency concluded it is important to give providers certainty about their obligations if they participate in these federal programs. The OFCCP also noted that the additional time provided by the extension would provide it with more time to receive feedback from stakeholders and give the Agency an “opportunity to evaluate and address legislation that may be enacted on this issue.”

Although the Directive is commonly referred to establishing the TRICARE moratorium it now applies to entities that participate in:

  • TRICARE and/or the Veterans Health Benefits Program ONLY as subcontractors;
  • TRICARE and/or the Veterans Health Benefits Program as subcontractors AND as subcontractors under any Medicare program;
  • TRICARE and/or  the Veterans Health Benefits Program as subcontractors AND as subcontractors under the Federal Employee Health Benefits Program (FEHBP);
  • TRICARE and/or the Veterans Health Benefits Program as subcontractors under any other federal health program.

The Directive does NOT include:

  • TRICARE and/or the Veterans Health Benefits Program subcontractors who also hold prime contracts with other federal agencies;
  • TRICARE and/or the Veterans Health Benefits Program subcontractors that hold a “separate, independent non-health-care-related federal subcontract.”
  • Investigation of discrimination complaints against TRICARE or Veterans Health Benefits Program subcontractors.
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