On July 2, 2020, The Office of Federal Contract Compliance Programs (OFCCP) published the Final Rule, “Affirmative Action and Nondiscrimination Obligations of Federal Contractors and Subcontractors: TRICARE Providers” in the Federal Register. The final rule aims to clarify the scope of OFCCP’s authority over TRICARE providers, which has generated a considerable amount of agency guidance, litigation, and Congressional action over the past several years.

  1. What is TRICARE?
  2. Who does OFCCP consider to be TRICARE providers?
  3. How is the TRICARE moratorium impacted by the final rule?
  4. How are TRICARE providers with other federal contracts or subcontracts treated under the amended regulations?
  5. Why did OFCCP decide to issue this final rule?
  6. What is the purpose of the National Interest Exemption for TRICARE providers in the Final Rule?
  7. If my company participates in the Federal Employees Health Benefits Program (FEHBP), are we covered under the amended regulations?
  8. If my company has a U.S. Department of Veterans Affairs Health Benefit Provider (VAHBP) agreement, are we covered under the amended regulations?

What is TRICARE?

TRICARE is the health care program for uniformed service members, retirees, and their families around the world. TRICARE is managed by the Defense Health Agency under leadership of the Assistant Secretary of Defense (Health Affairs). Additional information is located at the TRICARE website.

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Who does OFCCP consider to be TRICARE providers?

OFCCP classifies TRICARE providers as health care entities with agreements to furnish medical services and supplies to individuals participating in TRICARE.

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How is the TRICARE moratorium impacted by the final rule?

The final rule completely removes TRICARE providers from OFCCP’s authority. Therefore, TRICARE providers are exempt from complying with Executive Order 11246, Section 503 of the Rehabilitation Act of 1973 (Section 503), and the Vietnam Era Veterans’ Readjustment Assistance Act of 1974 (VEVRAA). However, TRICARE providers remain subject to all other Federal, state, and local laws prohibiting discrimination and providing for equal employment opportunity.

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How are TRICARE providers with other federal contracts or subcontracts treated under the amended regulations?

OFCCP will retain authority over health care providers participating in TRICARE if they hold a separate covered Federal contract or subcontract that is not for providing health care services under TRICARE.

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Why did OFCCP decide to issue this final rule?

OFCCP reconsidered its legal position and determined that the agency lacks authority to regulate health care providers solely because they participate in TRICARE. OFCCP believes that Congress intended to remove OFCCP’s authority over TRICARE providers when it enacted the 2012 National Defense Authorization Act, and it is a proper use of OFCCP’s regulatory authority to reconsider its previous position and conform its regulations to that legislative effort.

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What is the purpose of the National Interest Exemption for TRICARE providers in the Final Rule?

The national interest exemption provides an alternative basis, in addition to the agency’s reconsidered legal position removing TRICARE providers from OFCCP’s authority, that releases TRICARE providers from having to comply with laws and regulations administered by OFCCP. The exemption is in the national interest because it will improve uniformed service members’ and veterans’ access to medical care and provide greater uniformity, certainty, and notice for health care providers participating in TRICARE.

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If my company participates in the Federal Employees Health Benefits Program (FEHBP), are we covered under the amended regulations?

OFCCP did not adopt any regulatory changes related to FEHBP providers. OFCCP plans to issue sub-regulatory guidance to address concerns regarding FEHBP providers.

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If my company has a U.S. Department of Veterans Affairs Health Benefit Provider (VAHBP) agreement, are we covered under the amended regulations?

OFCCP did not adopt any regulatory changes related to VAHBP agreements. However, VAHBP agreements are still exempted from OFCCP jurisdiction through May 7, 2021 under Directive 2018-02, TRICARE Subcontractor Enforcement Activities. OFCCP will consider additional sub-regulatory guidance to provide certainty and clarity to those with VAHBP agreements.

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