Sponsored Content: Allied World

Whistleblower Claims under the Patient Protection and Affordable Care Act: An Emerging Concern for Employers and Insurers

The ACA contains whistleblower protection provisions that could spark an increase in claims filed with OSHA, the EEOC and the DOL.
By: | March 2, 2015 • 6 min read


For years, retaliation claims have been the bane of many employers’ existence. Under Title VII, these claims have risen 72 percent from 22,278 charges filed with the Equal Employment Opportunity Commission (EEOC) in 2005 to 38,539 charges in 2013. While many employers are aware of EEOC retaliation investigations, less are likely to be aware that the Occupational Safety & Health Administration (OSHA), as part of the United States Department of Labor (DOL), is also tasked with investigating and enforcing the whistleblower provisions of more than 20 federal statutes. This includes the politically charged Patient Protection and Affordable Care Act (ACA) passed by Congress in 2010 and now commonly referred to as “ObamaCare.”

Although the number of complaints investigated by OSHA pales in comparison to those investigated by the EEOC, the numbers are clearly on the rise. In 2005, 1,934 whistleblower complaints were filed with OSHA. By 2014, that number had grown to 3,060; close to a 60 percent increase. In February, the Obama administration released its proposed 2015 budget seeking a 10 percent increase in the DOL’s budget — some of which will likely go to enforcing whistleblower laws. It is also worth noting that in 2014, OSHA was seeking to add 47 new positions to investigate whistleblower claims before its budget was finalized.

Although most employers are aware that the ACA may dramatically affect the way they provide health insurance benefits to their employees, few may recognize that the ACA also establishes whistleblower protections for employees who voice concern or complain about their employer’s reaction to the ACA. Section 1588 of the ACA created 29 U.S.C. § 218c which provides that no employer shall discharge or discriminate against any employee with respect to his or her compensation, terms, conditions, or other privileges of employment, because the employee has engaged in activity protected by the ACA.

The list of protected activity under the ACA is not limited and Congress intended that the statute be broadly interpreted to encompass many activities. Such protected activities include:

  • providing information related to an actual ACA violation to the employer or government agency
  • providing information relating to any act or omission the employee reasonably believes to be a violation of the ACA to the employer or government agency
  • assisting an employer or governmental agency in the investigation of an actual or purported violation of the ACA
  • providing testimony concerning an actual or purported violation of the ACA
  • refusing to participate in or objecting to any policy or procedure that the employee reasonably believes to be in violation of the ACA
  • receiving a tax credit under Section 36B of the Internal Revenue Code of 1986 or a tax subsidy under section 1402 of the ACA

The law protects employees or potential employees from an adverse employment action because of their protected activities. Examples of adverse employment actions that an employee, or potential employee, may claim caused them harm include, but are not limited to, termination, failing to hire, demotion, blacklisting, failing to promote, intimidation or harassment, disciplining, a reduction in pay or hours, the denial of overtime pay, and/or the reassignment of work responsibilities or duties.

As we know, the passage and implementation of the ACA was met with a great deal of political controversy from members of both political parties as well as confusion on the part of the public as to what the ACA meant for them. This controversy and confusion are, for employers, likely to lead to a growing number of whistleblower claims.

On one hand, many employers are likely confused as to their obligations under the ACA and may implement policies, practices or procedures in an effort to comply with the ACA’s mandates which, in fact, violate the ACA or which an employee believes violates the ACA. Based on their confusion or misguided understanding, those same employers may unwittingly create a whistleblower claim after reacting to that employee’s complaints.

On the other hand, the political objections to the ACA have been so significant that it would not be surprising to find some employers, vehemently opposed to the ACA, trying to stretch the boundaries of the requirements of the law. In doing so, they may enact policies or procedures that employees believe violate the ACA and lead them to file complaints about their employer’s activities – acts which could prompt those same employers to respond with an adverse employment action. Further, some employees may, due to their own personal politics, be so motivated to see the ACA succeed that they may regularly and loudly voice complaints about even the slightest perceived violation, which again may lead their employers to take action in violation of the ACA’s whistleblower protections.

SponsoredContent_AlliedWorld“The cost of litigating and defending complaints being investigated by multiple governmental agencies… could be significant and have an impact on employers and their insurers.”

— Kevin M. Fisher, Assistant Vice President, employment practices and governmental claims, Allied World

Plaintiff’s attorneys may also find ACA retaliation claims more appealing when compared to traditional Title VII claims, as recent United Supreme Court rulings have made those traditional claims more difficult to prove. In 2013, the U.S. Supreme Court issued its decision in Univ. of Texas Southwestern Medical Center v. Nassar, finding that in Title VII cases, plaintiffs must show that the causal link between their injury and the wrongful act is so close that the injury would not have occurred “but for” the act. This standard, theoretically, should make it much more difficult for plaintiffs to prove their Title VII retaliation claims.

The ACA, however, carries a very different, and much lower, burden on plaintiffs while also imposing a higher burden on employers to rebut the employee’s claims. Known as a “contributing factor” statute, the ACA provides that if an employee shows by a preponderance of the evidence that their protected activity was only a contributing factor in the employer’s adverse employment action, and the employer cannot show by clear and convincing evidence that they would have acted in the same way absent the protected activity, the employee should prevail. This lower burden may make ACA whistleblower claims much more attractive to plaintiff’s attorneys.

Employees who are successful in their complaints will be entitled to reinstatement as well as the recovery of front pay, back pay, compensatory damages for emotional distress, and interest. As with many employment law statutes, employees will also be able to recover their attorneys’ fees.

While there will likely be liability exposure in some of these claims, there will be the potential for large defense costs exposure on all of them. It would not be surprising to see plaintiffs file ACA whistleblower claims with OSHA while they also, and separately, file traditional retaliation or discrimination claims with the EEOC or claims under the Fair Labor Standards Act with the DOL. The cost of litigating and defending complaints being investigated by multiple governmental agencies and then, potentially, being litigated in federal court could be significant and have an impact on employers and their insurers.

While there has been no dramatic increase in the number of ACA whistleblower complaints to date, we are likely to see many more in the years to come as more and more employers become subject to the ACA’s coverage mandates. The impact to employers and insurers based on the liability and defense cost exposures of these claims will need to be considered by the broker and underwriting communities as we move forward.

Kevin M. Fisher is an assistant vice president employment practices and governmental claims with Allied World. The opinions expressed in this article belong solely to Mr. Fisher and are not necessarily shared by Allied World. Visit alliedworldinsurance.com for more information.


This article was produced by the R&I Brand Studio, a unit of the advertising department of Risk & Insurance, in collaboration with Allied World. The editorial staff of Risk & Insurance had no role in its preparation.

Allied World is a global provider of innovative property, casualty and specialty insurance and reinsurance solutions.

More from Risk & Insurance

More from Risk & Insurance

Exclusive | Hank Greenberg on China Trade, Starr’s Rapid Growth and 100th, Spitzer, Schneiderman and More

In a robust and frank conversation, the insurance legend provides unique insights into global trade, his past battles and what the future holds for the industry and his company.
By: | October 12, 2018 • 12 min read

In 1960, Maurice “Hank” Greenberg was hired as a vice president of C.V. Starr & Co. At age 35, he had already accomplished a great deal.

He served his country as part of the Allied Forces that stormed the beaches at Normandy and liberated the Nazi death camps. He fought again during the Korean War, earning a Bronze Star. He held a law degree from New York Law School.


Now he was ready to make his mark on the business world.

Even C.V. Starr himself — who hired Mr. Greenberg and later hand-picked him as the successor to the company he founded in Shanghai in 1919 — could not have imagined what a mark it would be.

Mr. Greenberg began to build AIG as a Starr subsidiary, then in 1969, he took it public. The company would, at its peak, achieve a market cap of some $180 billion and cement its place as the largest insurance and financial services company in history.

This month, Mr. Greenberg travels to China to celebrate the 100th anniversary of C.V. Starr & Co. That visit occurs at a prickly time in U.S.-Sino relations, as the Trump administration levies tariffs on hundreds of billions of dollars in Chinese goods and China retaliates.

In September, Risk & Insurance® sat down with Mr. Greenberg in his Park Avenue office to hear his thoughts on the centennial of C.V. Starr, the dynamics of U.S. trade relationships with China and the future of the U.S. insurance industry as it faces the challenges of technology development and talent recruitment and retention, among many others. What follows is an edited transcript of that discussion.

R&I: One hundred years is quite an impressive milestone for any company. Celebrating the anniversary in China signifies the importance and longevity of that relationship. Can you tell us more about C.V. Starr’s history with China?

Hank Greenberg: We have a long history in China. I first went there in 1975. There was little there, but I had business throughout Asia, and I stopped there all the time. I’d stop there a couple of times a year and build relationships.

When I first started visiting China, there was only one state-owned insurance company there, PICC (the People’s Insurance Company of China); it was tiny at the time. We helped them to grow.

I also received the first foreign life insurance license in China, for AIA (The American International Assurance Co.). To date, there has been no other foreign life insurance company in China. It took me 20 years of hard work to get that license.

We also introduced an agency system in China. They had none. Their life company employees would get a salary whether they sold something or not. With the agency system of course you get paid a commission if you sell something. Once that agency system was installed, it went on to create more than a million jobs.

R&I: So Starr’s success has meant success for the Chinese insurance industry as well.

Hank Greenberg: That’s partly why we’re going to be celebrating that anniversary there next month. That celebration will occur alongside that of IBLAC (International Business Leaders’ Advisory Council), an international business advisory group that was put together when Zhu Rongji was the mayor of Shanghai [Zhu is since retired from public life]. He asked me to start that to attract foreign companies to invest in Shanghai.

“It turns out that it is harder [for China] to change, because they have one leader. My guess is that we’ll work it out sooner or later. Trump and Xi have to meet. That will result in some agreement that will get to them and they will have to finish the rest of the negotiations. I believe that will happen.” — Maurice “Hank” Greenberg, chairman and CEO, C.V. Starr & Co. Inc.

Shanghai and China in general were just coming out of the doldrums then; there was a lack of foreign investment. Zhu asked me to chair IBLAC and to help get it started, which I did. I served as chairman of that group for a couple of terms. I am still a part of that board, and it will be celebrating its 30th anniversary along with our 100th anniversary.


We have a good relationship with China, and we’re candid as you can tell from the op-ed I published in the Wall Street Journal. I’m told that my op-ed was received quite well in China, by both Chinese companies and foreign companies doing business there.

On August 29, Mr. Greenberg published an opinion piece in the WSJ reminding Chinese leaders of the productive history of U.S.-Sino relations and suggesting that Chinese leaders take pragmatic steps to ease trade tensions with the U.S.

R&I: What’s your outlook on current trade relations between the U.S. and China?

Hank Greenberg: As to the current environment, when you are in negotiations, every leader negotiates differently.

President Trump is negotiating based on his well-known approach. What’s different now is that President Xi (Jinping, General Secretary of the Communist Party of China) made himself the emperor. All the past presidents in China before the revolution had two terms. He’s there for life, which makes things much more difficult.

R&I: Sure does. You’ve got a one- or two-term president talking to somebody who can wait it out. It’s definitely unique.

Hank Greenberg: So, clearly a lot of change is going on in China. Some of it is good. But as I said in the op-ed, China needs to be treated like the second largest economy in the world, which it is. And it will be the number one economy in the world in not too many years. That means that you can’t use the same terms of trade that you did 25 or 30 years ago.

They want to have access to our market and other markets. Fine, but you have to have reciprocity, and they have not been very good at that.

R&I: What stands in the way of that happening?

Hank Greenberg: I think there are several substantial challenges. One, their structure makes it very difficult. They have a senior official, a regulator, who runs a division within the government for insurance. He keeps that job as long as he does what leadership wants him to do. He may not be sure what they want him to do.

For example, the president made a speech many months ago saying they are going to open up banking, insurance and a couple of additional sectors to foreign investment; nothing happened.

The reason was that the head of that division got changed. A new administrator came in who was not sure what the president wanted so he did nothing. Time went on and the international community said, “Wait a minute, you promised that you were going to do that and you didn’t do that.”

So the structure is such that it is very difficult. China can’t react as fast as it should. That will change, but it is going to take time.

R&I: That’s interesting, because during the financial crisis in 2008 there was talk that China, given their more centralized authority, could react more quickly, not less quickly.

Hank Greenberg: It turns out that it is harder to change, because they have one leader. My guess is that we’ll work it out sooner or later. Trump and Xi have to meet. That will result in some agreement that will get to them and they will have to finish the rest of the negotiations. I believe that will happen.

R&I: Obviously, you have a very unique perspective and experience in China. For American companies coming to China, what are some of the current challenges?


Hank Greenberg: Well, they very much want to do business in China. That’s due to the sheer size of the country, at 1.4 billion people. It’s a very big market and not just for insurance companies. It’s a whole range of companies that would like to have access to China as easily as Chinese companies have access to the United States. As I said previously, that has to be resolved.

It’s not going to be easy, because China has a history of not being treated well by other countries. The U.S. has been pretty good in that way. We haven’t taken advantage of China.

R&I: Your op-ed was very enlightening on that topic.

Hank Greenberg: President Xi wants to rebuild the “middle kingdom,” to what China was, a great country. Part of that was his takeover of the South China Sea rock islands during the Obama Administration; we did nothing. It’s a little late now to try and do something. They promised they would never militarize those islands. Then they did. That’s a real problem in Southern Asia. The other countries in that region are not happy about that.

R&I: One thing that has differentiated your company is that it is not a public company, and it is not a mutual company. We think you’re the only large insurance company with that structure at that scale. What advantages does that give you?

Hank Greenberg: Two things. First of all, we’re more than an insurance company. We have the traditional investment unit with the insurance company. Then we have a separate investment unit that we started, which is very successful. So we have a source of income that is diverse. We don’t have to underwrite business that is going to lose a lot of money. Not knowingly anyway.

R&I: And that’s because you are a private company?

Hank Greenberg: Yes. We attract a different type of person in a private company.

R&I: Do you think that enables you to react more quickly?

Hank Greenberg: Absolutely. When we left AIG there were three of us. Myself, Howie Smith and Ed Matthews. Howie used to run the internal financials and Ed Matthews was the investment guy coming out of Morgan Stanley when I was putting AIG together. We started with three people and now we have 3,500 and growing.

“I think technology can play a role in reducing operating expenses. In the last 70 years, you have seen the expense ratio of the industry rise, and I’m not sure the industry can afford a 35 percent expense ratio. But while technology can help, some additional fundamental changes will also be required.” — Maurice “Hank” Greenberg, chairman and CEO, C.V. Starr & Co. Inc.

R&I:  You being forced to leave AIG in 2005 really was an injustice, by the way. AIG wouldn’t have been in the position it was in 2008 if you had still been there.


Hank Greenberg: Absolutely not. We had all the right things in place. We met with the financial services division once a day every day to make sure they stuck to what they were supposed to do. Even Hank Paulson, the Secretary of Treasury, sat on the stand during my trial and said that if I’d been at the company, it would not have imploded the way it did.

R&I: And that fateful decision the AIG board made really affected the course of the country.

Hank Greenberg: So many people lost all of their net worth. The new management was taking on billions of dollars’ worth of risk with no collateral. They had decimated the internal risk management controls. And the government takeover of the company when the financial crisis blew up was grossly unfair.

From the time it went public, AIG’s value had increased from $300 million to $180 billion. Thanks to Eliot Spitzer, it’s now worth a fraction of that. His was a gross misuse of the Martin Act. It gives the Attorney General the power to investigate without probable cause and bring fraud charges without having to prove intent. Only in New York does the law grant the AG that much power.

R&I: It’s especially frustrating when you consider the quality of his own character, and the scandal he was involved in.

In early 2008, Spitzer was caught on a federal wiretap arranging a meeting with a prostitute at a Washington Hotel and resigned shortly thereafter.

Hank Greenberg: Yes. And it’s been successive. Look at Eric Schneiderman. He resigned earlier this year when it came out that he had abused several women. And this was after he came out so strongly against other men accused of the same thing. To me it demonstrates hypocrisy and abuse of power.

Schneiderman followed in Spitzer’s footsteps in leveraging the Martin Act against numerous corporations to generate multi-billion dollar settlements.

R&I: Starr, however, continues to thrive. You said you’re at 3,500 people and still growing. As you continue to expand, how do you deal with the challenge of attracting talent?

Hank Greenberg: We did something last week.

On September 16th, St. John’s University announced the largest gift in its 148-year history. The Starr Foundation donated $15 million to the school, establishing the Maurice R. Greenberg Leadership Initiative at St. John’s School of Risk Management, Insurance and Actuarial Science.

Hank Greenberg: We have recruited from St. John’s for many, many years. These are young people who want to be in the insurance industry. They don’t get into it by accident. They study to become proficient in this and we have recruited some very qualified individuals from that school. But we also recruit from many other universities. On the investment side, outside of the insurance industry, we also recruit from Wall Street.

R&I: We’re very interested in how you and other leaders in this industry view technology and how they’re going to use it.

Hank Greenberg: I think technology can play a role in reducing operating expenses. In the last 70 years, you have seen the expense ratio of the industry rise, and I’m not sure the industry can afford a 35 percent expense ratio. But while technology can help, some additional fundamental changes will also be required.

R&I: So as the pre-eminent leader of the insurance industry, what do you see in terms of where insurance is now an where it’s going?

Hank Greenberg: The country and the world will always need insurance. That doesn’t mean that what we have today is what we’re going to have 25 years from now.

How quickly the change comes and how far it will go will depend on individual companies and individual countries. Some will be more brave than others. But change will take place, there is no doubt about it.


More will go on in space, there is no question about that. We’re involved in it right now as an insurance company, and it will get broader.

One of the things you have to worry about is it’s now a nuclear world. It’s a more dangerous world. And again, we have to find some way to deal with that.

So, change is inevitable. You need people who can deal with change.

R&I:  Is there anything else, Mr. Greenberg, you want to comment on?

Hank Greenberg: I think I’ve covered it. &

The R&I Editorial Team can be reached at [email protected]