The ADAAA, Affirmative Action, and
Other Hurdles Faced by Health Care
Employers
HCRAMD & MiAHCR 2014 Fall Conference
Presented By:
Brad Taormina
September 26, 2014
Americans with Disabilities Act of
1990 (ADA)
 Prohibits discrimination against qualified
individuals with mental or physical disabilities
 Enforced by the EEOC
 Requires employers to provide reasonable
accommodations to employees with disabilities
Who is “Disabled” ??
 A person who is . . .
 A person who was . . .
 A person who is “regarded as”
. . . substantially limited in one or more
major life activities.
ADA Amendments Act - ADAAA
Congress now says:
“The definition of Disability shall be construed in
favor of broad coverage…”
“The question of whether an individual's impairment is
a disability under the ADA should not demand
extensive analysis"
"Major Life Activity" includes:
Caring for oneself
Manual tasks
Seeing
Hearing
Eating
Sleeping
Walking
Standing
Lifting
*not an exhaustive list
Learning
Reading
Concentrating
Working
Bending
Speaking
Breathing
Communicating
"Major Bodily Functions" include:
Immune system
Normal cell growth
Digestion
Bowel
Bladder
Neurological
Brain
Respiratory
Circulatory
Endocrine
Reproductive
*not an exhaustive list
Disability exists without regard to
"Mitigating Measures"
Medication
Medical supplies, equipment & appliances
Low vision devices (not eyeglasses or contacts)
Prosthetics
Hearing aids
Mobility devices
Oxygen therapy
Accommodation, auxiliary aids, learned behavior
Reasonable Accommodation –
Recognizing the Request
 Not required to be on any particular form, or
in any particular format
 Employee request linked to a medical
condition should trigger the interactive
process
Reasonable Accommodation –
Recognizing the Request
For Example:
 Completion of employer’s reasonable
accommodation form
 Work restrictions
 Employee tells supervisor, “I’m having trouble
getting to work at my scheduled starting time
because of the side effect of my medication.
Can we work something out?”
Interactive Process
 Informal dialogue and interaction between
employer and employee to determine whether
accommodation is needed because of a
disability and, if needed, whether the
accommodation will be effective
 Often when will obtain physician statement
verifying disability and outlining
restrictions/accommodations
Accommodations That Are
NOT Reasonable
Employers are not required to:
 Create position
 Eliminate or transfer essential job functions
 Convert necessary full-time positions to parttime positions
 Provide personal need items (hearing aids,
eyeglasses)
“Reasonable” Accommodations
Include:





Acquire or modify equipment
Modify policies, exams, training
Provide readers or interpreters
Make workplace accessible
If employee cannot perform duties of
current position, may need to place
into a vacant position where work
restrictions can be accommodated
Undue Hardship
 Accommodation is not “reasonable” where it
creates an “undue hardship” for the employer
 EEOC describes standard as “stringent”
 Whether a particular accommodation is
reasonable must be assessed on case-bycase basis
Undue Hardship
 Consider the nature and cost of the
accommodation needed
 Focus on resources and circumstances of the
particular employer in relationship to the
cost/difficulty of providing specific
accommodation

Significant financial difficulty


Significant administrative difficulty
Relationship between facility and employer
Undue Hardship Considerations
(cont’d)
 Impact on employer and employer operations




Overall financial resources
Size/Number of employees
Structure/functions of work force
Types/geographic location of other facilities
Affirmative Action Basics
What Is an Affirmative Action Program?
 HR management tool designed to ensure equal




opportunity
Encourages outreach and positive recruitment of
minorities, females, veterans and individuals with
disabilities
Involves specific data tracking, reporting, analyses and
self-auditing of nearly all HR functions
Compliance will require financial and personnel resources
and executive level support
Most companies partner with an AA vendor
Affirmative Action Basics
What Is the Legal Source?
 Executive Order 11246 (1965)
 Affirmative action for women and minorities
 Section 503 of the Rehabilitation Act of 1973
 Affirmative action for individuals with disabilities
 Vietnam Era Veterans Readjustment Assistance
Act of 1974
 Affirmative action for protected veterans
Affirmative Action Basics
Who Enforces Affirmative Action Laws?
 Office of Federal Contract Compliance Programs
("OFCCP")
 Stand alone branch of U.S. Department of Labor
 Has compliance audit and sanction authority
 Seeks “Title VII-type” remedies if finds discrimination

in hiring, promotions, terminations, compensation
Enforcement through administrative procedure
subject to review by federal courts
Affirmative Action Basics
Who Is Covered by Affirmative Action Laws?
 Direct (or Prime) Federal Contractors – Provide
goods or non-personal services to a federal agency
 www.usaspending.gov
 www.fedspending.org
 https://www.fpds.gov/fpdsng_cms/
 Covered Federal Subcontractors – Either (1) provide
goods or non-personal services that are necessary
to the performance of a prime federal contract; or
(2) perform or assume any portion of the obligations
under a prime federal contract
Affirmative Action Basics
What About Grants?
 Grants are considered "federal financial
assistance" and do not cause recipients to be
covered by OFCCP’s jurisdiction
 Distinguish:
 Contracts: Federal government expects specific

good or service in return for federal monies
Grants: Federal monies usually offered to promote
research, training or other general funding for the
nation's general betterment
Affirmative Action Basics
 Medicare/Medicaid?
 TRICARE?
 Certain HMOs?
Affirmative Action Basics
Jurisdictional Thresholds
 For “Basic Coverage” (which means you must ensure
nondiscrimination and take affirmative action):
-
Must have $10,000 of contracts (in aggregate) in any 12-month period
No minimum number of employees threshold
 For “Full (AAP) Coverage” (which means you must
also prepare written AAPs for each establishment):
-
-
Must have at least 50 employees and at least one $50,000 contract at any
location in organization
If “open-ended” (indefinite quantity) contract, OFCCP will aggregate
transactions over the life of the contract
Affirmative Action Basics
What About Separate but Related Entities?
 Separately incorporated organizations may be
considered a “single employer” for purposes of
OFCCP jurisdiction and AA compliance
 OFCCP Uses a “5 Factor Test”
1.
2.
3.
4.
Common Ownership;
Common Directors and/or Officers;
De Facto Exercise of Control;
Unity of Personnel Policies Emanating from Common Source;
and
5. Dependency of Operations
Affirmative Action Basics
What Does It Mean to Be Covered?
 Must prepare and maintain written affirmative action
plans for each "establishment.” This means, among
other things:
− Divide employees into "job groups" and compare "incumbency" to
−
−
−
−
−
"availability"
Set “hiring goals” (NOT quotas) for minorities, females, veterans, disabled
Engage in and track affirmative action "outreach" efforts
Develop applicant tracking system and recordkeeping practices that comply
with OFCCP’s "internet applicant rule”
Regularly self-audit personnel activity (hires, promotions, terminations,
compensation)
Share all of this data with OFCCP if selected for a compliance review
Affirmative Action Basics
What Is at Stake?
 OFCCP compliance reviews tend to be long,



burdensome and costly to defend
OFCCP looks at your data for evidence of systemic
discrimination, especially re hiring and compensation
If there are statistical indicators of discrimination that
cannot be effectively explained, OFCCP will seek back
pay remedies for the affected “class”
OFCCP settlement demands are routinely in the six to
seven figure range when the contractor is unprepared
History of OFCCP in Health Care
It Started Off Good…
 1993 OFCCP “Directive 189”:
 Receiving reimbursement under Medicare Parts A and B or
Medicaid does NOT cause coverage. Medicare/Medicaid = federal
financial assistance (like a grant)
 2003 Bridgeport Hospital Case
 Fee-for-service health insurer (BCBS) contracts with federal
government (OPM) to provide reimbursement to federal
employees for their medical care costs in exchange for premiums.
BCBS contracts with hospital to provide covered medical services
under the insurance policy. Hospital is NOT covered (because
BCBS prime contract was for insurance only, and not medical
services).
History of OFCCP in Health Care
But Then…
 2007 UPMC Braddock case
 UPMC Health Plan, an HMO, contracts with federal government
(OPM) to provide health insurance and medical services to
federal employees in exchange for premiums; HMO contracts
with three area hospitals to provide some of those medical
services
 ALJ, ARB and (last year) D.C. District Court all said hospitals ARE
covered because their subcontracts with HMO were necessary
for the HMO to meet its obligations under the prime contract
 2010 Florida Hospital of Orlando case
 Hospital participating as TRICARE network provider IS covered
 “Ping pong” litigation ensues
OFCCP in Health Care Summary
When are Health Care Providers Covered?
 Common and “non-controversial” arrangements
include direct contracts or subcontracts involving:
−
−
−
−
−
Federal Bureau of Prisons
Department of Defense
Department of Veterans Affairs
Department of Health and Human Services
Centers for Medicare and Medicaid Services
 Uncertainty exists (litigation still pending) about:
 Provider contracts with HMOs that include federal employees as beneficiaries
 TRICARE network agreements
 OFCCP has hinted but no litigation yet about:
 Medicare C and D
Why Is This Important for Recruiters?
 OFCCP’s main focus during the course of an
audit continues to be systemic discrimination in
hiring
 Failure to hire cases – 66% of all cases
 OFCCP is targeting the health care industry
Forms of Systemic Discrimination
 Disparate Treatment – Pattern or Practice
 Intentional discrimination
 Members of one group are treated differently
 Company’s standard operating procedure (i.e., typical rather than

exception)
The employer must justify each decision to show that it wasn’t intentional
discrimination
 Disparate Impact
 Unintentional discrimination
 When a facially neutral process (e.g., a test, interview, residency
requirement) screens out a substantially higher percentage of one group
than another
 Can be justified via showing that the screening mechanism was job-related
and/or business necessity
Hot Topics in Affirmative Action
 Internet Applicant Recordkeeping Rule
 Recordkeeping requirements regarding the internet
hiring process and the solicitation of race, gender, and
ethnicity of “Internet Applicants”
 What is an Internet Applicant?
 Individual submitted expression of interest in



employment through the internet
Employer considered individual for employment
Expression of interest indicated basic qualifications
Individual did not withdraw him/herself from
consideration
Hot Topics in Affirmative Action
1. Individual submitted expression of interest in
employment through the internet or related
electronic data technologies
 Rule applies to paper applications and all other applicants
considered if the employer considers expressions of interest for
the position via internet
 Difference between advertising a position on the internet and
expressions of interest
 Broad Scope- Applies to email, resume databases, job banks,
scanning technology, applicant screeners, and even resumes
received by fax
Hot Topics in Affirmative Action
 Internet Applicant Recordkeeping Rule
2. Employer considers the individual for employment in a
particular position.
 Triggered if the employer “assesses the substantive


information provided” in the expression of interest
May establish protocol to refrain from considering
expressions of interest not submitted in accordance with
standard procedures (e.g. unsolicited resumes not
submitted for a particular position)
May use data management techniques such as random
sampling or numerical limits, as long as the sampling
procedure is appropriate
Hot Topics in Affirmative Action
 Internet Applicant Recordkeeping Rule
3. Individual’s expression of interest indicates the basic
qualifications for the position:
 Qualifications that the employer advertised or



established in advance
Basic qualifications must be objective (e.g. bachelor’s
degree vs. bachelor’s degree from ‘good’ school)
Basic qualifications must be noncomparative (e.g. three
years experience vs. among top ten candidates in terms
of years of experience)
Make and maintain a record of the basic qualifications
Hot Topics in Affirmative Action
 Internet Applicant Recordkeeping Rule
4. Individual did not remove himself or herself from the
selection process prior to receiving an offer of
employment:
 Includes express statement from applicant or “passive




demonstration of disinterest”
Declining an invitation for an interview
Declining a job offer
Repeatedly failing to respond to phone calls or emails
regarding his or her interest in the job
Can also be based on individual’s responses (e.g.
willingness to travel) as long as consistent
Hot Topics in Affirmative Action
 Internet Applicant Recordkeeping Rule
 Must solicit demographic information of Internet


Applicants
Preferred method of solicitation is voluntary selfreporting or self-identification
Must maintain the demographic information separately
from the resume or application that will be reviewed
during the selection process - this should be
communicated to applicants
Hot Topics in Affirmative Action
 Disability Inquiries and Interaction with ADAAA
 Effective March 24, 2014—or whenever their AAP is next

up for renewal following March 24, 2014—covered
federal contractors will be required to invite applicants to
voluntarily self-identify disability status at the pre-offer
stage of employment.
BUT, making pre-employment disability inquiries is
unlawful under the ADA.
Hot Topics in Affirmative Action
 Disability Inquiries and Interaction with ADAAA
 The EEOC has recently confirmed, however, that

employers are not liable under the ADA “for an action
that it is required to take by another federal statute or
regulation.”
HOWEVER, there is a significant legal risk if the
voluntary invitation to self-identify disabled status is
made available to applicants of employers not subject to
the jurisdiction of the OFCCP. This is another reason
why the analysis of coverage is so important.
Veterans
 Several federal and state laws that affect the

recruitment and hiring of veterans
USERRA provides the broadest coverage
 Protects past and present members of uniformed
services from discrimination in hiring and employment
 Requires employer to reinstate employees that were
absent by reason of service, under certain conditions;
employees must be restored to the position and benefits
they would have attained if not for their absence due to
military service
Veterans
 Michigan Reemployment Protection Act
 Designed to strengthen the protections of USERRA as

applied to Michigan employers
Eliminates the USERRA exceptions to the duty to
reemploy returning service members
 Other State Laws:
 Michigan statute permits public employees to add the

time spent in military service to the period of
employment
Michigan statute affords returning employees the
seniority they would have attained
Veterans
 Michigan Veterans Preference Act
 Requires that honorably discharged veterans (who meet



certain criteria) are given preference for appointment
and employment with public employers.
The Act provides that the veteran must be qualified for
the job, be of “good moral character,” and a Michigan
resident for at least two years
The Act does not establish or define the strength of the
“preference”
Michigan Court of Appeals has said that the veteran’s
qualifications do not need to be “equal” to non-veteran
in order to trigger the preference, but veteran’s
qualifications must be at least comparable
Veterans
 Vietnam Era Veterans’ Readjustment Assistance
Act (VEVRAA) New Rules:
 New rules are designed to strengthen affirmative action


requirements related to the recruitment and hiring of
protected veterans, including disabled veterans
Enforced by the OFCCP
Protections are not limited to Vietnam era veterans,
protects:
 “Special Disabled Veterans”
 Recently Separated Veterans (3 years or less); and
 Those who served on active duty during a war
Veterans
 Vietnam Era Veterans’ Readjustment Assistance
Act (VEVRAA) New Rules:
 Set a benchmark for measuring success in recruiting and



hiring veterans by adopting affirmative action goal
Invite voluntary self-identification (remember earlier
ADA warning)
Retain, measure, and report data regarding the number
of veterans that apply and number that are hired
Find and use resources to reach out to and recruit
protected veterans
Brad Taormina
Attorney at Law
Hall, Render, Killian, Heath & Lyman, P.C.
btaormina@hallrender.com
DISCLAIMER: This information is not intended as legal advice or
as a substitute for the particularized advice of your own counsel
and should not be relied upon as such, as the advice appropriate
for you will be dependent upon the particular facts and
circumstances of your situation. The transmission or receipt of
this information does not create an attorney-client relationship.