Congress Looks to Provide Clarity on Employee Wellness Programs

By Ilyse Wolens Schuman and Michael J. Lotito

As promised during a Senate hearing conducted earlier this year, members of the House and Senate have introduced a bill seeking to reduce the legal uncertainly in administering employee wellness programs.

The Preserving Employee Wellness Programs Act (H.R. 1189, S. 620) would:

  • Explicitly permit wellness programs to offer a financial incentive to participate;
  • Allow an employee’s spouse to participate; and,
  • Give employees up to 180 days to request and complete an alternative wellness program if it is medically inadvisable or unreasonable to complete the employer’s current wellness program.

At least half of employers offer a wellness program

Many companies offer various types of wellness programs to improve employee health and decrease health care costs.

  • “Participation-only” wellness programs provide a reward — usually in the form of a healthcare cost discount — to employees who attend periodic wellness seminars or complete health risk assessment questionnaires.
  • “Outcome-based” wellness programs condition the reward on the employee meeting a certain health-related benchmark, such an appropriate body mass index (BMI) or blood cholesterol level, or remaining tobacco-free. Biometric screenings are a common part of these wellness and health promotion programs.

According to a study conducted by RAND Health and commissioned by the U.S. Departments of Labor and Health and Human Services, more than half of U.S. employers offer some type of wellness program.

While the Affordable Care Act included provisions designed to promote the use of wellness programs, the Equal Employment Opportunity Commission has recently taken action at odds with this objective. The ACA codified and built upon regulations under the Health Insurance Portability and Protection Act (HIPAA), which provided that a wellness program conditioning a financial incentive on the participant meeting a standard related to a health factor is acceptable so long as it met certain criteria.

Congress is acting because of EEOC lawsuits

Among other stipulations, the regulations specified that the value of the wellness plan incentive could not exceed 20 percent of the cost of coverage. The ACA endorsed the use of financial incentives for health factor-based wellness programs, and increased the incentive limit from 20 to 30 percent of the cost of coverage. The ACA’s regulations also authorize an increase in this maximum amount of up to 50 percent for tobacco cessation programs.

The bill comes in response to lawsuits the EEOC has filed in the past year against employers on the grounds that their programs violate the Americans with Disabilities Act (ADA) and/or the Genetic Information Nondiscrimination Act (GINA).

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In EEOC v. Honeywell International Inc., the EEOC tried to enjoin the employer from implementing its program, claiming it violated both the ADA and GINA by penalizing employees for not participating in biometric screenings. The federal district court rejected the EEOC’s request, noting that “great uncertainty persists in regard to how the ACA, ADA and other federal statutes, such as [GINA] are intended to interact.” The EEOC filed similar lawsuits in August and October of 2014.

According to the sponsors of the Preserving Employee Wellness Programs Act, Sen. Lamar Alexander, R-TN, and Rep. John Kline, R-MN, the bill will reaffirm existing law. The legislation does not limit the EEOC’s authority to investigate and litigate complaints of employment discrimination.

Helping employees choose “health lifestyle choices”

The EEOC plans to issue regulations clarifying the interplay among the ACA, ADA, and GINA, but has yet to do so. In the meantime, employers are left in legal limbo.

In a press release, Sen. Mike Enzi, R-WY, one of the Senate bill’s co-sponsors, said:

With so many employers taking advantage of the benefits that come with offering workplace wellness programs, it is important that Congress acts to clear any legal uncertainty or confusion … By reaffirming existing law, Congress is ensuring that employees can continue to benefit financially when they choose to make healthy lifestyle choices.”

Other co-sponsors of the legislation include Senators Johnny Isakson, R-GA, Tim Scott, R-SC, Orrin Hatch, R-UT, Pat Roberts, R-KS, and Rep. Tim Walberg, R-MI.

Ilyse W. Schuman is a shareholder in the Washington, D.C. office of Littler Mendelson. She provides strategic counsel and representation to clients on a broad array of workplace issues and developments in Congress and executive branch federal agencies.

She is a member of the firm's Government Affairs practice and works with employers in multiple industries, including trade associations. She also leads the firm's Legislative and Regulatory practice.

A former top congressional staffer and policy advisor, Ilyse worked on the Senate Committee on Health, Education, Labor and Pensions from 2001 to 2008, serving as minority staff director and chief counsel. She began her work in the Senate as chief labor counsel for Senator Mike Enzi on the Subcommittee on Employment, Safety and Training, where she led legislative and oversight activities.

After leaving the Senate, Schuman joined a leading trade association of electro-industry manufacturers as vice president, where she served as managing director of the Medical Imaging and Technology Alliance, the collective voice of medical imaging equipment manufacturers. Additionally, she served as in-house counsel at a manufacturer and market and technology leader, where she advised the company on human resource matters. In law school, she was a member of the Journal of Law and Policy in International Business.

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6 Comments on “Congress Looks to Provide Clarity on Employee Wellness Programs

  1. Except that none of these “pry, poke, prod and punish” programs work, all of the savings are made up, and they ignore government clinical guidelines and lead to overscreeninng, overdiagnosis and overtreatment. see http://www.theysaidwhat.net

  2. This bill is a travesty and an embarrassment. It insults the intelligence of the employees who are forced to live under the heavy hand of wellness programs designed to “reward” us for making healthy lifestyle choices, and it makes the sponsors of the bill look like fools or cronies of big insurance and big business. I work for Highmark Health, the country’s third largest integrated [health care] delivery and financing system (IDFS). Better get used to that acronym because, if Highmark has its way, one of these mega corporations will be coming to an insurance company/hospital system near you very soon. But that’s a story for another time and venue.

    Over the past several years, I have been penalized by my employer for not participating in its wellness program. In 2015, my family is paying $4200 more for our health insurance simply because I and my spouse choose not to 1) complete a health risk assessment, 2) submit to a biometric screening for cholesterol, glucose, blood pressure, BMI, and tobacco use, and 3) certify that we have had or will have a wellness exam by a physician within a specified time period. The personal data collected from employees under this program will be stored in an on-line account with WebMD, where its security is not guaranteed.

    I objected to this invasion of my family’s privacy, the intrusion into the relationship with our family physician, and the requirement to have medical screenings that were neither medically necessary nor in ompliance with the US Preventive Services Task Force Guidelines. My husband and I are in very good health, we don’t smoke, and we have always been very involved in our own health care. We already do the things that the wellness program is supposed to incentivize, but because we do not wish to give our personal data over to our insurance carrier and WebMD, we are forced to pay a $4200 penalty. This is what this law will really do – give insurance companies and employers the right to use financial coercion to force employees to turn over their personal health data and then to use that data to further pressure employees to change their behavior. The employee is not empowered by this process, rather, they are stripped of their right to self-determination.

    Why would my employer do this to me, you ask? Because there is money in it – for my employer and for my insurance company. The “bipartisan” provision in the Affordable Care Act (ACA) that this bill will strengthen was put in the law specifically to get insurance companies and big corporations to support Obamacare. This little provision is saving insurance companies hundreds of millions of dollars every year by allowing them to apply the money spent implementing wellness programs toward the ACA requirement that 85% of premium revenues be spent directly on patient care.

    It benefits employers in a number of different ways – it allows employers to shift more of the cost of an employee’s health benefit to the employee if they choose not to comply with the program, and it can result in lower premiums for the employer if they implement a workplace wellness program. Originally, employers were told that they would recover the cost of implementing the programs, which are very expensive, through health care cost savings. Unfortunately, studies have shown that the cost savings just aren’t there, so now they are selling the programs as ways to attract talent, boost employee productivity, and reduce absenteeism. But there is no evidence to support the claims that forcing people to answer personal health questions, submit to biometric screenings, or have an annual physical will produce any of these outcomes.

    Ironically, it is the Republicans in Congress who are now pushing this bill to strengthen a provision in Obamacare. While a majority of Americans want Obamacare repealed, the Republicans are trying to make it stronger!
    I agree that the EEOC needs to clarify the rules, but not by taking away
    the rights of employees to opt out of employer wellness programs without being
    slapped with a costly financial penalty. Many employees can’t afford to pay an extra $4200 a year for health insurance (without any additional benefit to them), so they submit to the invasive requirements of their employer’s wellness program.

    During the Senate hearing on wellness programs, held on January 29, 2015, one of the witnesses said that the EEOC needed to define what “voluntary” means, in the context of the Americans with Disabilities Act, which says that employees cannot be forced to submit to medical tests, including screenings, through the use of penalties or incentives. It says that submission to such testing must be “voluntary”. I don’t know what part of “voluntary” the witness and the members of the committee don’t understand, but let me offer the dictionary definition of the word:

    Voluntary – done, made, given, undertaken, entered into, etc. of one’s own free will; not forced or compelled.

    The meaning seems pretty clear to me. But apparently it is not clear to many
    members of Congress. I am sure that some of the co-sponsors of this bill are well-intentioned, but they are woefully uninformed on this subject. I encourage
    them to take another look at this bill, the original provision in Obamacare, and
    the Americans with Disabilities Act (ADA), and then ask themselves and the corporate CEOs who are lobbying for this bill why any employer would need a law passed by Congress so they can “reward” their employees. Obviously, they don’t need a law passed by Congress to “reward” their employees, but they do need a law passed by Congress to allow them to discriminate against, through financial penalties, employees who choose not to participate in wellness programs. That’s
    exactly what this bill does.

  3. But what about those who pay for their own health insurance? Shouldn’t they be allowed the same opportunity to gain rewards for good health behavior. Under PPACA it is illegal to give premium discounts or other rewards for individuals who take pro-active, measurable steps, to improve their health. Law needs to change; and when it does, consumers will be firmly engaged.

    1. So it begs the question, why are there different rules for people who
      get their insurance through their employer vs on their own? It’s
      because the PPACA is not a law designed to protect the interests of
      individual Americans. It was designed to protect the interests and
      power of big corporations (employers and insurers) and big government, in a controlled market vs a
      free market. And this new bill is designed to strengthen the position
      of big corporations and big government. It takes away the rights of the
      individual employee to even challenge the employer wellness programs
      incentivized by the PPACA. And this bill is being supported by
      Republicans who claim to be opposed to the PPACA! Furthermore, I will
      not be at all surprised if this bill is opposed by some Democrats who
      supported the PPACA, because it removes protections provided by the
      Americans with Disabilities Act. What this tells me is that this is not
      a Democrat vs Republican issue. This is a Progressive vs the rest of
      us issue. There are Progressives in both parties and they are just a
      dangerous, no matter which letter, D or R, they have behind their name.
      They think they are smarter than most people and that they know what
      is best for us, and they will force their way on us, whether we want it
      or not (I will acknowledge that some of this legislation’s supporters are not Progressives, they are just uninformed on this issue, but that is almost as bad. They should not be supporting a bill the ramifications of which they do not understand. That is how we got the PPACA in the first place!).

      And this goes far beyond the issue of wellness programs. I made a reference to Integrated [health care] Delivery and Financing Systems (IDFS) in my previous comment,
      but I did not expanded upon it. Let me do that now. IDFSs are what
      you get when you merge insurance companies with hospital systems. You
      get giant corporations that provide both your health insurance and your
      health care. This is the solution to America’s health care problems
      that Steven Brill proposes in his new book “America’s Bitter Pill”.
      Ironically, Brill points to hospitals as one of the main causes of the
      out-of-control rise in health care costs, and then proposes that more
      power be ceded to hospitals by giving them control of the insurance side
      of the equation. To keep these new mega-corporations in check, Brill
      proposes a litany of new government regulations. When Brill was
      describing IDFSs to Jon Stewart on the Daily Show, Jon said, “But that
      sounds like a monopoly,” to which Brill responded, “yes, but a heavily
      regulated monopoly!”

      I mention this here because Highmark Health is one of these newly formed IDFSs, and it sees itself as a
      model for the future of America’s health care. In recent comments, Highmark’s CEO, David
      Holmberg, appears to have embraced Brill’s “solution” and is actively promoting Highmark’s IDFS model to the CEOs of the other Blue Cross Blue Shield licensees around the
      country. If this model is emulated in every market, small independent
      insurers, hospitals, and doctors will be put out of business or
      assimilated by the newly formed IDFSs. Competition will virtually cease
      to exist. In a contradiction to his own comments on the Daily Show,
      Brill suggests in his book that the first new regulation put into place
      should “require any market to have two big, fully integrated
      provider-insurance company players. This would eliminate any threat of
      monopolies”. That is like saying that in order to guarantee affordable
      food for everyone, every market should have a McDonald’s and a Burger
      King, only a McDonald’s and a Burger King. You would be free to eat
      anywhere you want to, as long as it’s at McDonald’s or Burger King. And
      to prevent these two “oligopolies” (a condition in which so few
      producers supply a service or commodity that each of them can influence
      its price, with or without an agreement between them) from acting like a monopoly and increasing
      the price of the burgers and fries they produce, the government would
      put price, wage, and profit controls in place (of course, the
      government would also eventually need to put rules in place about what
      kind of food was served at these establishments, because the government
      obviously knows what’s best for us). There would be no incentive for the
      IDFSs to work harder or smarter, or to innovate, because the government
      wouldn’t let the IDFSs benefit from their efforts, beyond the strict
      profit controls established by the regulations.

      This is the
      danger of the “solution” offered by Brill and Highmark. In the end, it
      would lead to fewer choices and poorer quality of care. Yes, insurance
      and health care might be more affordable, but your choice of doctors and hospitals would be severely limited and your care would be of
      lower quality. We would have government-controlled health care with
      the façade of capitalism. We would finally have socialized medicine,
      just by another name – Integrated [health care] Delivery and Financing Systems (IDFS).

  4. Most wellness plan “incentives” are really penalties for those participants who are NOT taking care of themselves and are costing the plan and the other plan participants more. if you are taking care of yourself and keeping your BMI where is should be, don’t have high blood pressure, don’t have high glucose levels, don’t smoke or have high cholesteral, why wouldn’t you want those who are NOT taking care of themselves paying more of the costs? Do you really want to subsidize those individuals who are sitting on the couch 24/7 and eating only junk food? Why is this any different from car insurance? If you drive like a maniac and have tickets and wrecks you pay more! Shouldn’t this be the same way too? I understand that some illnesses are not related to these 5 measurements but many are. And since they are, why shouldn’t we make participants accountable? I haven’t been exercising lately and know I might be a little more motivated if I had to pay more for my insurance. But I’m not made accountable for my health. It’s only 20 years from now when heart disease, diabetes or lung cancer catches up to me that I will say, If only I had exercised/eaten right/not smoked/etc., I wouldn’t be in the situation I’m in now. And for those who chose to pay the ‘penalty’ and not take care of themselves, at least the healthy plan participants don’t have to pay more to cover the extra costs the plan WILL pay for these individuals.

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