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40 States Sue Generic Drug Makers for Collusion

The heat is growing on the pharmaceutical industry after more than 40 US states filed a lawsuit accusing generic drug makers of engaging in a massive price-fixing scheme.

The lawsuit accuses 20 companies of conspiring to fix prices of more than 100 generic drugs, including some that are used to treat cancer and diabetes. The defendants include the largest producer of generic medicine in the world: Teva Pharmaceuticals.

The new lawsuit comes after a five-year investigation that uncovered a scheme through which “coordinated price hikes on identical generic drugs became almost routine,” according to an investigative report by the Washington Post. The suit covers the period from July 2013 to January 2015.

The companies and executives would “routinely communicate with one another directly, divvy up customers to create an artificial equilibrium in the market” to keep generic drug prices artificially high, the lawsuit says.

The scale of the alleged collusion was summed up by Joseph Nielsen, an assistant attorney general and antitrust investigator in Connecticut, whose office has taken the lead in the investigation: “This is most likely the largest cartel in the history of the United States,” he told the Washington Post last December.

In announcing the recent lawsuit, he cited e-mails, text messages, telephone records and testimony from former company executives that indicate a “multi-year conspiracy to fix prices and divide market share for huge numbers of generic drugs.”

This is not the only litigation. Pharmacies and other businesses have filed their own lawsuits against the generic drug makers. One such suit documents huge price hikes – like a 3,400% increase in the price of an anti-asthma medication – and investigators believe that generic drug producers colluded to raise prices in tandem or not make their products available in some markets or through specific pharmacy chains.

Significance of the states’ suit

The multi-state lawsuit is important because generics account for 90% of pharmaceutical spending in the U.S. Despite that, they only account for 23% of the total drug spend in the country, according to the Association for Accessible Medicines.

With so many prescriptions being written, the savings to consumers could be huge if the drug makers are found to have fixed pricing and they subsequently change their ways. What’s not clear, though, is whether it would actually spur changes in pricing by the companies.

According to the lawsuit, the drug companies allegedly conspired to manipulate prices on dozens of medicines between July 2013 and January 2015.

It accuses Teva and others of “embarking on one of the most egregious and damaging price-fixing conspiracies in the history of the United States.”

Connecticut Attorney General William Tong, who filed the suit, said the investigation had exposed why the cost of health care and prescription drugs was so high in the U.S.


Help Your Employees Save Money on Drugs

Most employers are doing all they can to keep their employees’ health insurance and health care outlays to a minimum.

And while most of those efforts are focused on the upfront cost of insurance, co-pays and deductibles, many employers fail to help their employees control the very costs they actually have the most control over and one of those areas is medicine.

Helping your employees become wise consumers of health services can also cut your overall insurance costs as well as help your employees conserve more of their own funds if they have high co-pays and deductibles.

The cost of drugs can vary greatly between pharmacies to a shocking degree. And while your employees may have low co-pays for some drugs, if they go to the most expensive option when the insurance is covering the tab, it basically adds to the cost drivers for your insurance plan.

Here’s how wild the price swings can be. Consumer Reports recently surveyed pharmacies to price out a basket of five popular generic prescription drugs and here are the prices:

  • Healthwarehouse.com: $66
  • Costco:  $150
  • Various independents: $107
  • Sam’s Club: $153
  • Walmart: $518
  • Kmart: $535
  • Grocery stores: $565
  • Walgreens: $752
  • Rite Aid: $866
  • CVS/Target: $928

It also pays to shop around from store to store and ask for discounts.

“A Rite Aid store near our headquarters in Yonkers, N.Y., was able to get the price of atorvastatin, the generic version of Lipitor, down to just $18 from $300 through a combination of in-store and external discount programs,” the report states. “But at another Rite Aid, we were told the cost could only be lowered to $127.”

Consumer Reports recommends that your employees:

  • Use online discounts. There are a number of websites that can provide you with discount coupons or vouchers for drugs, including:
    • GoodRx
    • Blink Health
    • WeRx.org

On these sites you enter the name of the drug, dosage and quantity and where you live and it will provide coupons or vouchers and identify which pharmacies you can use them at.

  • Expand your shopping horizons. As you can see on the list above, prices vary tremendously. And combining shopping around with a good plan for using coupons and your employees can save themselves and your health plan boat loads of money.
    They should also check out their local warehouse discount store as both Costco’s and Sam’s Club’s pharmacies were also quite reasonable.
    Not to be outdone, neighborhood pharmacies and grocery store pharmacies were also much cheaper than the large regional drug store chains. “The absolute lowest prices we found in each city we called were almost always at these kinds of stores,” Consumer Reports wrote.
  • Ask pharmacies if they will honor online coupons. Pharmacies will almost always honor them, Consumer Reports found. But Consumer Reports mystery shoppers had to be persistent in getting the pharmacies to use them, since they often run prescriptions through insurance automatically, even when paying the retail cash price and using discount coupons would cost less.

One last thing

Consumer Reports recommended that once someone settles on pharmacy that consistently gives them good deals on pharmaceuticals, they should fill all of their prescriptions there.

That way it’s easier for them to spot “potentially dangerous interactions and other safety concerns.”

But if your employees notice that their pharmacy bills start rising noticeably, it may be time for them to start shopping around again. To stay on top of this requires regular checks to make sure that they are not seeing prices creep up.


Insurers Will Pay Record Amount of Rebates to Small Group Plans

While most businesses rarely get rebate checks from their group health insurer, this year may be different as insurance companies are expected to pay back record excess premiums, as required by the Affordable Care Act.

The landmark insurance law requires that insurers spend at least 80% of their premium income on medical care and medications, but expected payouts in 2018 came in way below expectations. That means they have to pay out rebates for the overcharge.

Analysts expect that insurers will pay out $1.4 billion in rebates, $600 million of which would be paid to small and large group health plans, according to a report by the Kaiser Family Foundation.

The reason for the sizeable expected rebate is that insurers raised rates substantially for 2018, which was right after Congress had passed a law that eliminated the individual mandate penalty, as well as uncertainty about the law after the Trump administration introduced regulations to expand the use of short-term health plans and association plans.

As mentioned, plans must spend 80% of premiums they collect on medical claims or quality improvements if they are in the individual or small group market. The threshold is 85% in the large group market. The rest can be spent on claims administration, marketing and other overhead, as well as set aside for profit.

Rebates to small group plan and large group plan members have typically overshadowed rebates to those who purchase plans individually on government-run exchanges. In 2017, according to the Centers for Medicare and Medicaid Services, insurers paid out nearly $707 million in ACA rebates, as follows:

  • $132.5 million to individual market enrollees.
  • $309.4 million to small group market enrollees.
  • $264.8 million to large group market enrollees.

But this year, rebates to the individual market are expected to be $800 million, while the remaining $600 million would be paid to enrollees in group plans.

The premium increases that many insurers pushed through led to much higher rates – benchmark premiums were up 34% going into 2018 – because of market uncertainties, such as:

  • In October 2017, the Trump administration ceased payments for cost-sharing subsidies, which led some insurers to exit the market or request larger premium increases than they would have otherwise.
  • The administration reduced funding for advertising and outreach.
  • Congress repealed the individual mandate penalty, effective for 2019.
  • The administration introduced regulations extending the time people could be on short-term plans, and also introduced association health plans as an alternative for the small group market.

But the insurers’ fears didn’t materialize. Despite payments per enrollee growing 26% to $559 in 2017 on exchanges, per person claims increased only 7% to $392 year over year.

Also, the repeal of the penalties and increased premiums did not drive younger, healthier consumers out of the marketplace as had been expected.

How to disburse rebates

If you are one of the employers whose health plan gets to receive a rebate, the big question that always comes up is “how do you distribute the funds?”

ACA regulations require insurers to pay rebates directly to the group health plan policyholder, who will be responsible for ensuring that employees benefit from the rebates to the extent they contributed to the cost of coverage.  

But remember, since you as the employer also contributed to the premiums, you are entitled to your portion of the rebate. Your take should be in the same proportion as the premium you pay compared to your employees.

The way that you disburse the rebate is up to you, but whatever you do, it must be in accordance with ERISA’s general standards of fiduciary conduct.

Typically, if the rebate works out to be small for each participant, it would likely not be worth your time to cut each employee a check.

The preferred method in most cases is to provide the rebate in the form of a premium reduction or discount to all employees participating in the plan at the time the rebate is distributed.


Protecting Your Workers in the Rain

Employees working in the rain face specific hazards, such as poor visibility and wet, slippery surfaces.

When it’s wet and windy, potential hazards at a worksite can be exacerbated. Working in the rain can cause slippery surfaces and limited visibility. It’s also riskier to use heavy equipment in the rain, particularly when moving heavy loads, putting workers on the ground – and even the public – in danger.

However, steps can be taken to mitigate such hazards.

It’s imperative that you as an employer ensure your employees’ safety, especially during this heavy year for rain. When working in the rain, train your employees to:

  • Move cautiously – While workers may be tempted to move fast in the rain to avoid getting wet, this can be dangerous, especially on slippery surfaces. If anything, they should work more slowly and deliberately in all of their tasks.
  • Use the correct equipment – If workers must use electrical tools or equipment, they need to check that they are specifically rated for outdoors. Also, the tools should have textured, no-slip grips and handles.
  • Don proper footwear – Workers should wear footwear with heavy treads that can reduce the chances of slipping.
  • Remember rain gear – Proper rain gear includes rain pants and a raincoat. The best clothing is ventilated to help your workers stay comfortable. If it’s cold and rainy, they should also wear wool or synthetic materials that can stay warm even when wet.
  • Wear non-slip gloves – Workers should wear gloves that provide a sticky grip even when wet. Gloves should be snug and long enough for a jacket sleeve to prevent water from entering.
  • Keep vision clear – Workers who wear glasses (if they must wear goggles for certain jobs) should apply anti-fog spray to them. It’s also advisable to wear a hat to keep rain from their eyes. They shouldn’t use headgear that narrows their field of vision.
  • Work in proper lighting – When working at night, workers should make sure lighting is adequate and the lights used are rated for outdoor use.
  • Ensure visibility – When it’s raining, visibility decreases and it’s easy for motorists and machine operators to have trouble seeing properly. Workers should wear high-visibility clothing, especially in areas with vehicle traffic and heavy machinery. Don’t wear rain gear or vests that have become dull or are no longer reflective.

Cold stress

When it rains, it’s often cold, too – and wet clothing can exacerbate the cold.

Employees working outdoors for prolonged periods of time when it’s cold must be protected from cold stress. Cold stress can cause frostbite, hypothermia and trench foot.

OSHA advises that cold stress is not limited to freezing temperatures, but can occur in outdoor temperatures in the 50-degree Fahrenheit range when rain and wind are present.

OSHA requires addressing this hazard by using protective clothing, in particular the use of layers with an outer material that protects against wind and rain. Although OSHA generally requires employers to pay for their workers’ protective equipment, employers are not required to pay for ordinary clothing such as raincoats.

Heavy-work dangers

Rain makes operating cranes, derricks and hoists more dangerous as well, particularly when moving large and heavy objects. Heavy rain combined with wind speed can make loads difficult to control.

Also, if a rainstorm is accompanied by lightning, equipment such as a crane can become a lightning rod.

If you feel you cannot adequately protect your workers during a storm, you should not conduct operations in the rain.


DOJ Tells Court to Nullify ACA; What’s Next?

After a period of relative stability, the future of the Affordable Care Act has once again been thrown into uncertainty.

In a surprise move, the Department of Justice announced that it would not further pursue an appeal of a ruling by U.S. District Court Judge Reed O’Connor, and instead asked the 5th U.S. Circuit Court of Appeals to affirm the decision he made in December 2018.

O’Connor had ruled that Congress eliminating the penalty for not complying with the law’s individual mandate had in fact made the entire law invalid.

But, even though the DOJ won’t be pursuing defense of the law and challenging the ruling on appeal, a number of states’ attorneys general have stepped up to fight the ruling.

What this means for the future of the employer mandate is unclear, as the court process still has a long way to go. The ruling could be overturned on appeal and invariably whatever the 5th Circuit decides, the case will likely be appealed to the U.S. Supreme Court.

Already there has been fallout in the private health insurance market since the individual mandate penalty was eliminated, but the employer mandate, which requires that organizations with 50 or more full-time or full-time-equivalent workers offer health coverage to their employees, remains intact.

As the case winds on, it will be some time before anything changes. The 5th Circuit has not yet scheduled arguments. The DOJ has asked for a hearing date for July 8, and Democratic states’ attorneys general agreed.

Despite the DOJ’s announcement, the law stands and applicable large employers must continue complying with its requirements.

Analysis

The move was surprising because in the past President Trump had signaled that he wanted to keep parts of the ACA, particularly the barring of insurers from denying coverage based on pre-existing conditions. If the entire law is scrapped, so will that facet – as well as other popular provisions, like allowing adult children to stay on their parents’ policy until the age of 26.

Trump said his administration has a plan for something much better to replace the ACA.

Democrats have introduced some legislation to try to stabilize markets and improve on some ACA shortfalls. Their legislation aims to cut premiums for individuals buying on exchanges by expanding premium tax credits. Another bill would reaffirm the pre-existing condition protections, and restore enrollment outreach resources, which have been cut back under the Trump administration.

But with a divided Congress, the likelihood of anything reaching Trump’s desk are slim to none.

Meanwhile, the success of the ACA has been spotty. In some parts of the country, usually in areas with high population density, competition among plans ensures lower prices for people shopping on exchanges. But in smaller regions, cost increases are rampant.

A new analysis by the Urban Institute, a liberal-leaning think-tank, finds that more than half (271) of the country’s 498 rating regions have only one or two insurers participating in the ACA marketplace. Those regions are disproportionately in sparsely populated areas.

Regions with little competition tend to have much higher premiums. In a region with only one insurer, the median benchmark plan for a 40-year-old nonsmoker is $592 a month. That compares to $376 for the same consumer in a region with at least five plans.


Regulators Take Steps to help Grandfathered Plans

Regulators are in the early stages of creating rules that make it easier for health plans that were grandfathered in before the Affordable Care Act took effect to continue providing coverage.

The number of workers enrolled in plans that were in effect before the ACA was enacted in 2010 has been shrinking, and as of 2018, some 16% of American workers who were enrolled in group health plans were in grandfathered plans.

Under the ACA, those plans do not have to abide by the same regulations as plans that took effect after the law’s implementation.

In February 2019, the Internal Revenue Service, the Employee Benefits Security Administration and the Health and Human Services Department issued a request for information from grandfathered plans. The goal is to determine whether there are opportunities for the regulators to assist plans to preserve their grandfathered status in ways that would benefit employers, employees, and their families.

While the effort will only affect a small amount of employer-sponsored plans, the move is significant as it looks like the ultimate goal is to further loosen rules for grandfathered plans.

A plan is considered grandfathered under the ACA if it has continuously provided coverage for someone (not necessarily the same person, but at all times at least one person) since March 23, 2010 and if it has not ceased to be a grandfathered plan during that time.

Grandfathered plans have certain privileges that other group health plans that were created after that date do not have, as the latter are all required to comply with all of the rules under the ACA.

Under the ACA, grandfathered plans do not have to comply with certain provisions of the law.

These provisions include coverage of preventive health services and patient protections (for example, guaranteed access to OB-GYNs and pediatricians).

Other ACA provisions apply to grandfathered plans, such as the ACA’s waiting period limit.

Grandfathered status

Grandfathered health plans may make routine changes to their coverage and maintain their status.

However, plans lose their grandfathered status if they choose to make significant changes that reduce benefits or increase costs for participants.

Some of the questions that the three departments are asking plan administrators are:

  • What actions could the departments take to assist group health plan sponsors and group health insurance issuers to preserve the grandfathered status of a group health plan or coverage?
  • What challenges do health plans and sponsors face regarding retaining the grandfathered status of a plan or coverage?
  • What are your primary reasons for retaining grandfathered status?
  • What are the reasons for participants and beneficiaries remaining enrolled in grandfathered group health plans if alternatives are available?
  • What are the costs, benefits and other factors when considering whether to retain grandfathered status?
  • Is preserving grandfathered status important to group health plan participants and beneficiaries? If so, why?

Responses to the request for information are due by March 27.


As Drug Prices Skyrocket, This Top 10 List Will Shock You

It’s no secret that the cost of pharmaceuticals is going through the roof. You’ve heard the stories of price-gouging by some companies that have jacked up prices thousands of percent.

Drug costs are starting to weigh heavily on the cost of care, in turn driving up health insurance premiums, which individuals, employees and employers are all feeling. The cost of some medications is so extreme that a single dose may far surpass the total premium paid for coverage.

Also, most people never really know the true price of a drug unless they are 100% on the hook for medications under their health plan. Often, you may have a copay that may differ depending on the type of drug, so people usually only see what they pay. However, every year more people are on the hook for the price of their drug due to high-deductible insurance plans and formulary changes.

The website Goodrx.com, a service for comparing and locating the best prescription prices, publishes a list every year of the most expensive drugs in the country.

While few individuals will pay these full amounts, some do because of their poor choice of health plans (like ones that saddle them with 100% of drug costs) or because they have been placed in a high-deductible health plan. The following is the top 10 list, in reverse order, of monthly prices that are set by the drug companies and known as the wholesale acquisition cost:

  1. Cuprimine – $31,426

Cuprimine removes copper build-up caused by Wilson’s disease. Patients take one capsule of Cuprimine after every meal. The list price is $261.89 per pill.

  1. Harvoni – $31,500

Harvoni is the first, once-daily combination drug used to treat Hepatitis C. Patients usually take it for 12 weeks. The cost per tablet: $1,125.

  1. Firazyr – $32,468.40

Firazyr is an injectable medicine used after an attack of hereditary angioedema. The typical patient suffers two to four attacks per month. A pack of three syringes costs $32,468.

  1. Juxtapid – $36,992

Juxtapid is used to treat people with homozygous familial hypercholesterolemia, a gene mutation that leads to cardiovascular disease. The dosage is about one day. The cost per capsule: $1,321.

  1. H.P. Acthar – $38,892

Also referred to as Acthar, this medicine is used to treat multiple conditions, including lupus, rheumatoid arthritis, multiple sclerosis, infantile spasms, ophthalmic conditions, and psoriatic arthritis. The dosage is one vial a month, which costs $38,892 (for perspective, a vial cost $40.17 in 2001 and the price shot up after a new manufacturer took over).

  1. Myalept – $42,137

Myalept is used to treat leptin deficiency in patients with generalized lipodystrophy. Myalept is self-administered once a day in measured doses from vials, each one of which lasts about three days. The cost per vial: $4,213.

  1. Chenodal – $42,570

Chenodal is used to dissolve gallstones. Dosing varies and pills are manufactured at different strengths. Sadly, while this medicine is off-patent, which means that other manufacturers could legally produce generics, Chenodal is protected under what is referred to as a “closed distribution system.” That prevents generic drug-makers from purchasing a brand name drug. The list price for a month’s supply of Chenodal is $42,570.

  1. Cinryze – $44,140

Cinryze is used to treat hereditary angioedema, a rare life-threatening genetic condition that causes swelling in various parts of the body, including hands, face and throat. A one month’s supply runs to 16 vials, and the cost per vial is $2,758.

  1. Daraprim – $45,000

Daraprim is commonly given to AIDS and transplant patients to prevent infection, and is used to treat toxoplasmosis in otherwise healthy people. This is the medicine that got Martin Shkreli in hot water after the company at which he was CEO in 2015 raised the price per pill from $13.50 a pop to $750 almost overnight. While Daraprim can now often be obtained for $473 a tablet, the list price remains at around $45,000 for a month’s supply of 60 pills.

  1. Actimmune – $52,321

This is used to treat osteopetrosis and chronic granulomatous disease, which causes the immune system to malfunction. Patients use about 12 single-use vials a month, and each vial costs $4,360.


Employers Say Pharmacy Benefit Manager Contracts too Complex, Opaque

Three in five employers think their contracts with pharmacy benefit managers are overly complex and not transparent, according to a new study.

The study, which found that employers would prefer that PBMs are more transparent with their pricing and would like them to focus less on rebates and value-based designs, comes as PBMs are under increased scrutiny for their opaque pricing practices.

The survey of 88 very large employers, “Toward Better Value: Employer Perspectives on What’s Wrong with the Management of Prescription Drug Benefits and How to Fix It,” was conducted by Benfield and commission by the National Pharmaceutical Council.

The findings drive home some of the common complaints about PBMs:

Poor transparency – Employers said that current pharmacy benefit management models lack transparency:

  • 30% said they understand the details of their PBM contracts.
  • 40% said they fully understand their PBMs’ performance guarantees.
  • 63% said PBMs are not transparent about how they make money.

Complex contracts – Nearly three in five employers surveyed said PBM contracts are overly complicated, ambiguously worded, and often benefit the PBM at the expense of the employer. Tops on employer’s wish list: clearer definitions and simpler contracts.

Focusing less on rebates – Seventy percent of employers said they thought PBMs should offer other ways besides rebates to reduce prices.

Employers also said rebates detract their attention from more important factors, like reducing employee coinsurance or deductibles or getting better access to the most effective pharmaceuticals.

Two suggestions they had: Discounts or point-of-sale rebates, in which patient payments reflect a post-rebate price.

Getting value for employees – Employers want to understand the thought process when PBMs create formularies and exclusionary list decisions, such as the clinical, financial and economic impacts.

Employers had these suggestions:

  • Using value-based insurance design, where high-value drugs cost patients less than low-value drugs.
  • Setting payments based on the effectiveness of a drug.

Proposed Rule Would Allow Employers to Reimburse Staff for Health Premiums

The Trump administration is moving ahead with new regulations that would make it easier for employers to enter into health reimbursement arrangements (HRAs) with their employees, a practice that can be severely penalized under the Affordable Care Act.

Under the proposed regulations – issued by the departments of Labor, Treasury and Health and Human Services – employees would be allowed to shop and pay for their own coverage using tax-free HRAs that are set up by their employers.

Under the proposed rule, employers that offer traditional health insurance would be allowed to fund an HRA with up to $1,800 per year. The money in the HRA could be used to reimburse employees for certain medical expenses, as well as for premiums for health insurance policies or stand-alone dental benefits.

And offering HRAs used to help employees pay for individual health insurance premiums would count as an offer of coverage to satisfy the employer mandate under the ACA.

More options, lower costs

Administration officials said expanding HRAs would give employees more options in terms of health coverage, and it also would reduce costs and administrative burdens on employers.

If enacted, the new regulations would undo Obama administration guidance (as it was not actually written into the regulations) barring employers from paying into HRAs to help workers pay for health insurance premiums from policies they buy on the open market or on government-run exchanges.

Companies that were caught in such arrangements faced a hefty fine of up to $36,000 a year.

The employer mandate would stay intact but the proposed rule would allow an employer to satisfy the mandate by funding HRAs for its workers. Under the employer mandate, organizations with 50 or more full-time or full-time-equivalent employees are required to purchase “affordable” health coverage that covers at a minimum 10 essential benefits as outlined under the law.

HRAs must be affordable

The key is that the HRA must also be affordable under the proposed rules. That would depend in part on the amount the employer contributes to the HRA.

The agencies proposing the new regulations said in an announcement that they would provide further guidance on the HRA-specific affordability test.

Funds going into HRAs would be exempt from federal income and payroll taxes. Additionally, employers would be able to deduct the amount they put into HRAs from their taxes.

The proposed rule would also require employers that offer HRAs to allow a worker to opt out and instead claim a federal premium tax credit to purchase coverage on the individual exchanges.

This is the early part of the rule-making. The proposed regulations will have to go out for public comment before final rules are written and implemented.


OSHA Stays Serious About Temp Worker Safety

While the Trump administration has eased off a number of regulations and enforcement actions during the past two years, Fed-OSHA continues focusing on the safety of temporary workers as much as it did under the Obama presidency.

This puts the onus not only on the agencies that provide the temp workers, but also on the companies that contract with them for the workers.

As evidence of its continued focus on temp workers, OSHA recently released guidance on lockout/tagout training requirements for temporary workers. This was the third guidance document released in 2018 and the 10th in recent years that was specific to temp workers.

One reason OSHA is so keen on continuing to police employers that use temporary workers, as well as the staffing agencies that supply them, is that temp workers are often given some of the worst jobs and possibly fall through the safety training cracks.

OSHA launched the Temporary Worker Initiative in 2013. It generally considers the staffing agency and host employer to be joint employers for the sake of providing workers a safe workplace that meets all of OSHA’s requirements, according to a memorandum by the agency’s office in 2014 to its field officers.

That same memo included the agency’s plans to publish more enforcement and compliance guidance, which it has released steadily since then.

Some of the topics of the temp worker guidance OSHA has released since the 2014 memorandum include:

  • Injury and illness record-keeping requirements
  • Noise exposure and hearing conservation
  • Personal protective equipment
  • Whistleblower protection rights
  • Safety and health training
  • Hazard communication
  • Bloodborne pathogens
  • Powered industrial truck training
  • Respiratory protection
  • Lockout/tagout

Joint responsibility

OSHA started the initiative due to concerns that some employers were using temporary workers as a way to avoid meeting obligations to comply with OSHA regulations and worker protection laws, and because temporary workers are more vulnerable to workplace safety and health hazards and retaliation than workers in traditional employment relationships.

With both the temp agency and the host employer responsible for workplace safety, there has to be a level of trust between the two. Temp agencies should come and do some type of assessment to ensure the employer meets OSHA standards, and the host employer has to provide a safe workplace.

Both host employers and staffing agencies have roles in complying with workplace health and safety requirements, and they share responsibility for ensuring worker safety and health.

A key concept is that each employer should consider the hazards it is in a position to prevent and correct, and in a position to comply with OSHA standards. For example: staffing agencies might provide general safety and health training, and host employers provide specific training tailored to the particular workplace equipment/hazards.

Successful joint employer relationship traits

  • The key is communication between the temp agency and the host to ensure that the necessary protections are provided.
  • Staffing agencies have a duty to inquire into the conditions of their workers’ assigned workplaces. They must ensure that they are sending workers to a safe workplace.
  • Ignorance of hazards is not an excuse.
  • Staffing agencies need not become experts on specific workplace hazards, but they should determine what conditions exist at the host employer, what hazards may be encountered, and how best to ensure protection for the temporary workers.
  • The staffing agency has the duty to inquire and verify that the host has fulfilled its responsibilities for a safe workplace.
  • And, just as important, host employers must treat temporary workers like any other workers in terms of training and safety and health protections.

For a look at all 10 of the guidance documents OSHA has issued in the last few years, visit the agency’s temp worker page: www.osha.gov/temp_workers/


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