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TRICARE Participation Does Not Subject Hospital to OFCCP Jurisdiction

    Client Alerts
  • November 02, 2012

Hospitals and other health care employers that participate in the Defense Department's health care program for military members (TRICARE) received good news last week from the Department of Labor's Administrative Review Board. The Board concluded that TRICARE participation does not trigger affirmative action and other federal contractor employment obligations.

In OFCCP v. Florida Hosp. of Orlando, DOL's Office of Federal Contract Compliance Programs (OFCCP) contended that the hospital was a federal subcontractor subject to Executive Order 11246 because it was a network member for a national insurer providing services under TRICARE. The Board concluded that the National Defense Authorization Act excludes such providers from the definition of federal subcontractors.

The Board declined to rule on a separate OFCCP argument for alternative jurisdiction over such health care providers. This leaves the door open for the agency to attempt to require such providers to comply with affirmative action requirements. Most health care providers never considered that network participation would subject them to such burdensome requirements. Health care employers that participate in TRICARE networks should keep a careful eye on additional developments in this jurisdictional battle.