By: Lisa A. Zaccardelli, Robert T. Ferguson, Jr., Christopher W. Morog, Mark D. Hochberg

Last month, we reported that uncertainty concerning the federal government’s vaccine mandate efforts would continue at least into the new year, when the Supreme Court would hear challenges to two of the mandates. The Supreme Court has now spoken. In written decisions dated January 13, 2022, the Supreme Court: (1) stayed OSHA’s vaccine-or-test mandate that would have applied to employers with more than 100 employees; but (2) allowed the healthcare worker mandate, generally requiring employers that receive Medicare or Medicaid reimbursement to require their employees to be vaccinated. The Supreme Court did not address the federal contractor mandate, which remains in a nationwide stay while under review in the courts.

OSHA Emergency Temporary Standard (“ETS”): Vaccine or Test

One of the most expansive components of the President’s “Path Out of the Pandemic” action plan was the Administration’s directive that OSHA develop a new rule (applicable to all employers with 100 or more employees) requiring employees to either: (1) get vaccinated; or (2) test weekly for COVID-19. OSHA did so, issuing its vaccine-or-test mandate in the fall of 2021. If upheld, the OSHA ETS would apply to roughly 84 Million workers. After review, the Supreme Court stayed the OSHA ETS, concluding that it likely exceeds OSHA’s statutory authority.

Although OSHA acknowledged that its authority is limited to “work-related dangers,” OSHA argued that “COVID-19 qualifies as such a danger.” The Supreme Court disagreed, concluding that COVID-19 is not just an “occupational” hazard, it is a “universal” one. The Court reasoned that “[p]ermitting OSHA to regulate the hazards of daily life – simply because most Americans have jobs and face those same risks while on the clock – would significantly expand OSHA’s regulatory authority without clear congressional authorization.”

Although the Supreme Court granted the stay of the OSHA ETS, the Supreme Court did acknowledge that “targeted regulations are plainly permissible.” As a result, while employers may not have to comply with the deadlines set forth in the OSHA ETS in light of the Supreme Court’s decision, it is possible that OSHA pursues a more targeted approach to carry out the Administration’s “Path Out of the Pandemic” plan.

Healthcare Worker Mandate

The President’s action plan also directed the Centers for Medicare and Medicaid Services (“CMS”) to require vaccination of those who work in healthcare facilities receiving Medicare/Medicaid reimbursement. In contrast to the OSHA ETS, the Supreme Court declined to stay the CMS healthcare worker mandate.

The Court concluded that the applicable statutory scheme allowed the Secretary of Health and Human Services to impose conditions on facilities participating in Medicare/Medicaid programs “in the interest of the health and safety” of patients receiving health services. According to the Court, these conditions have historically included measures to prevent transmission and infection of communicable diseases like COVID-19. As a result, the Court rejected arguments that the government’s authority was limited to simply imposing “bureaucratic rules regarding the technical administration of Medicare and Medicaid.”

In light of the Court’s decision, employers receiving Medicare/Medicaid reimbursement should expect to comply with the vaccine requirements of the CMS’s Interim Final Rule. As the Court pointed out, while the Interim Final Rule generally requires vaccination, the rule also requires providers “to offer medical and religious exemptions, and does not cover staff who telework full-time.” Importantly, failure to comply “may lead to monetary penalties, denial of payment for new admissions, and ultimately termination of participation in the programs.”

Conclusion

While the Supreme Court has now weighed in on these mandates, the challenges may well continue in the lower courts. As a result, the situation remains fluid and subject to change. But at least for now, the OSHA ETS is stayed, while the healthcare worker mandate is not.