Ruling Over Workplace Wellness Rules 2015

Ruling Over Workplace

Wellness Rules

Barbara J. Zabawa, JD, MPH

The Center for Health Law Equity, LLC

Agenda

• Preventive Law

• Worksite Wellness Program Laws

– HIPAA/ACA

– ADA

– EEOC Proposed Rules

– GINA

– EEOC Cases

– Other Federal/State

• Preventive Law Checklist

Compliance Anxiety

Compliance Ignorance

Discovering Your

Noncompliance

Preventive Law

Preventive Law

• Law has 2 purposes:

– Protection from those who do wrong

– Facilitate human interaction and purpose

• Preventive law focuses on second

purpose

• Leads to using law proactively as tool

– Sensitizes designers of wellness programs

to diverse employee needs

Who Enforces?

Use Law to Prevent

Ruffling Feathers

Wellness Program Laws

DISCRIMINATION (Insensitive to needs/privacy)

(Equal Opportunity)

Examples

• Workers must pay higher premiums if can’t

meet BMI standard or refuse to participate. – Female employee with Type 1 diabetes and breast feeding

unable to meet BMI standard.

– Employer reduced her weight-loss goal.

– Employee’s doctor advised her not to lose weight.

– Employer required that she work out with trainer at company

gym for 130 minutes/week at her own cost. Unable to meet

alternative standard, premium increased from $175/month to

$320/month.

Examples

• Penn State – “Take Care of Your Health” in Summer 2013

– Used an outside vendor to administer health

questionnaire

• Asked questions about:

– Problems with supervisor

– Separation or divorce

– Finances

– Fear of job loss

– Female employees whether they plan to become pregnant

over the next year

– $100/month surcharge for nonparticipation

We Can’t All Be Triathletes

We All Want to Feel Good

Preliminary Question

Group health

plan?

HIPAA

• HIPAA Nondiscrimination

– Overseen by HHS, DOL and Treasury

– Generally prohibits discrimination by group

health plans based on “health factors.”

– Carves out exception for wellness

programs

• Can vary benefits (including cost-sharing)

based on whether person meets standards of a

wellness program.

HIPAA

• ACA changes to HIPAA (eff. 1/1/14): – Codifies 2006 wellness program rules into 42 USC

s. 300gg-4(j).

– Extends nondiscrimination rule to individual health

insurance (but not wellness program rule).

– Increases the “reward” from 20% to 30% of the

cost of coverage (50% for tobacco use prevention

programs).

– Adds stricter requirements for health-contingent

plans.

HIPAA

• To qualify for wellness program

exception, must meet certain conditions:

– Participatory programs must only be

offered to “similarly situated” individuals.

• No limit on financial incentives.

– Benign discrimination provision

– Health-contingent programs must meet 5

factor test.

HIPAA

• Participatory program examples:

– Fitness center membership reimbursement

– Reward for participating in health

assessment

– Waiver of health plan cost-sharing for

preventive items or services

– Smoking cessation program

reimbursement

– Reward for attending health education

seminar

HIPAA

• Distinction between participatory and

“health contingent” is whether reward is

tied to:

HEALTH STATUS

HIPAA

• Two types of health-contingent

programs:

– Activity

• May seek verification from physician that health

factor makes it unreasonably difficult or

medically inadvisable to satisfy activity.

– Outcomes-based

• May not seek verification

• Both must meet 5 factor test.

HIPAA

• Examples of Activity-Only:

HIPAA

• Examples of Outcomes-based:

HIPAA

• Five factors:

1. Qualify for the reward at least once/year.

2. Total reward may not exceed 30% (50%

for tobacco prevention programs) of total

cost of coverage.

3. Reasonable design to promote health or

prevent disease.

HIPAA

• Five factors (cont.)

4. Full reward must be available to all

similarly situated individuals.

• Must provide reasonable alternative standard

(or waiver of standard)

5. Disclosure of reasonable alternative

standard (or waiver) in plan materials

describing the wellness program terms.

ADA and GINA

ADA

• Prohibits discrimination by employers on basis of

disability in regard to terms, conditions and privileges

of employment.

– Discrimination includes:

• Requiring medical examinations; and

• Making inquiries as to whether employee has disability

unless such exam or inquiry is:

– Job-related and consistent with business necessity

• Particularly pertinent for HA’s and Biometric Screens.

• Must provide equal opportunity for disabled

employees to participate in programs and offer

reasonable accommodations.

ADA

• Carves out exception for “voluntary”

wellness programs.

– According to EEOC Enforcement

Guidance, a wellness program is voluntary

as long as employer neither:

• Requires participation; nor

• Penalizes employees who do not participate.

• Must keep exam/inquiry records

confidential.

ADA

• Safe harbor for administering terms of

bona fide benefit plan

– Based on underwriting risks, classifying

risks or administering such risks.

– Applies whether exam/inquiry is voluntary

or not.

– Seff v. Broward County, 691 F.3d 1221

(11th Cir. 2012).

EEOC Proposed ADA Rules

• Three primary changes:

1. Aligns ADA with ACA by imposing 30%

incentive

2. Imposes incentive limit on participatory

programs

3. Requires employee notice and

privacy/security protections with regard to

wellness information


• Aligns with ACA incentive rules

– 30% max incentive


• Special treatment for tobacco cessation


• May not deny/limit coverage for

nonparticipants.


• Programs that collect medical

information must provide employees

with notice.


• Employers and vendors must protect

health information confidentiality


EEOC expects group health plan programs to

abide by HIPAA privacy/security rules

• Employer certification requirements for those who

administer programs

• Best practice: separate those who handle

individually identifiable health information from

those who make employment-related decisions

• Use of a third-party vendor may help


• Employers and Vendors should have

clear privacy policies and procedures

related to medical information:

– Collection

– Storage

– Disclosure

• Include employee training


• Reasonably designed to promote

health/prevent disease

– Should provide follow-up after collecting

medical information

– Should not be about collecting information

only.


• Must provide reasonable

accommodations (Equal Opportunity)


Equal Opportunity applies to both participatory

and health contingent programs.


• Compliance with ADA rules does not mean

compliance with other laws:

– Title VII

– Equal Pay Act

– ADEA

– GINA

– Other ADA sections

• Proposed rules to align GINA with ACA

incentive rules forthcoming (presumably)


• EEOC welcomes comments by Friday,

June 19, 2015

GINA Title I

• Title I generally prohibits group health

plans from:

– Adjusting premium or contribution amounts

based on genetic information;

– Requesting/requiring genetic testing;

– Requesting/requiring/purchasing genetic

information for underwriting purposes or

in connection with open enrollment.

GINA Title I

• “Genetic information”

– Genetic tests of individual or family

members

– Manifestation of disease or disorder in

family members (“family medical history”)

• “Family” includes spouses and adopted

children and dependents of spouses.

– Receipt of genetic services

GINA Title I

• Helpful tips for HRA administration:

– Do not ask questions about genetics and

family history;

– If open-ended questions could invite

disclosure of genetic information, include

disclaimer to not provide genetic

information.

• Examples: “Have you had any lab tests this

year?” or “Any other information about your

health you would like to share?”

Recent Cases

• EEOC v. Orion Energy Systems, 2:14-

cv-1019

• EEOC v. Flambeau, Inc., 3:14-cv-638

• EEOC v. Honeywell International, Inc.,

14-cv-4517

Recent Cases

• Case similarities: – All still pending as of early 2015

– All brought to EEOC attention by employees

– All dealt with participatory wellness programs

involving HRAs and/or biometric screens

– All tied reward to health plan contributions

– In all cases, EEOC claimed wellness program

violated ADA and/or GINA, even though program

complied with HIPAA

– In all cases, defendants raised ADA safe harbor

Recent Cases

• EEOC arguments in Honeywell:

– Reward “too substantial” to be “voluntary”

under ADA. Nonparticipants:

• Do not qualify for $250-$1500 HSA

• Pay $500 surcharge

• Assessed $1000 tobacco surcharge unless: – Enroll in cessation program (actual cessation not required);

– Submit physician report about no tobacco use; or

– Work with health advocate.

Recent Cases

• EEOC argued Honeywell violated GINA

because Honeywell:

– Will contribute to HSA if employee’s

spouse participates;

– Imposes $1000 tobacco surcharge if

spouse refuses to participate.

• Spousal biometric tests=family medical history

• Surcharge made program involuntary

Recent Cases

• Honeywell countered:

– Program was voluntary (no discipline or

loss of coverage)

– Tobacco surcharge had reasonable

alternatives

– Biometric measures did not=genetic

information

– EEOC did not have jurisdiction to enforce

part of bona fide group health plan

– ACA endorses use of surcharges

Recent Cases

• Lessons learned:

1. Complaints originated from employees

a. Create positive wellness culture

b. WELCOA 7 Benchmarks

2. Tie worksite wellness program to group

health plan.

b. Allows for ADA safe harbor and may

eliminate EEOC GINA jurisdiction.

3. 100% premium penalty catches EEOC

attention

Other Federal/State

• Fair Labor Standards Act

• Age Discrimination in Employment Act

• Title VII

• Internal Revenue Code

• State Laws

Other Federal/State

• FLSA

– Generally requires payment for all hours

worked

• Federal minimum wage

• 1.5x for overtime (over 40 hours/week)

Other Federal/State

• FLSA

– To avoid FLSA, wellness program

participation should be:

• Outside of work;

• Voluntary;

• Not job-related;

• No productive work performed

– Tip: Emphasize voluntary nature of

attendance.

Other Federal/State

• ADEA

– Prohibits employers with 20 or more

employees from discriminating based on

individual’s age (40 and over).

• Older workers might have harder time

achieving certain health-related

standards/goals.

• EEOC enforces.

• Lee v. City of Moraine Fire Dept., 2014 WL

1775621 (S.D. Ohio, May 2, 2014)

Other Federal/State

• Title VII prohibits employment

discrimination based on: • Race

• Color

• Religion

• Sex

• National Origin

– Gender and religious discrimination most

likely in wellness program design.

– Enforced by EEOC and DOJ

Other Federal/State

• Internal Revenue Code

– Excludes from gross income amounts

received for “medical care”

• Expenses beneficial to general health or

wellbeing not “medical care” expenses

– E.g. Gym memberships usually taxable

– On-site athletic facilities not taxable

– De minimus benefits excludable

– Cash or cash equivalent incentives not

excludable from gross income

Other Federal/State

• State Laws:

• Scope of practice/licensing

• Flu Shots, Coaching, Diet Advice

• Off-duty conduct protection

– Smoking, Alcohol

• Negligence and Worker’s Compensation

• State Fair Employment Acts

• State insurance laws

• State grant programs

Case Scenario #1

• The WeCARE plan wants its participants to

complete a health/family medical history

questionnaire and measure the participants’

cholesterol, blood pressure, and BMI. The

plan notifies participants that they will be

responsible for paying 100% of the plan

premium if they do not complete the

questionnaire and screen. Is this

permissible?

Case Scenario #2

• Same facts as Scenario #1, but

WeCARE also requires those who do

not meet a certain BMI standard to pay

100% of the premium unless they enroll

in a weight management or exercise

class that meets every day from 4 to 6

pm, Monday through Friday. Is this

program compliant?

Case Scenario #3

• Acme, Inc., employer who offers the

WeCARE plan to employees, decides to

offer free noon-time Insanity workout

classes to all employees. Employees

who attend 80% of the eight-week

session receive a $50 gift card to IHOP.

Are there any compliance issues with

this program?

Preventive Law Checklist

Is program part of group health plan? ACA & new ADA incentive rules vs. not

Does employee get reward regardless of results? Participatory vs. Health Contingent

Is reward tied to health coverage cost sharing? New ADA limits and EEOC cases

If Health Contingent, do we meet ACA 5-factor test?

Does HRA ask about family history or other sensitive

information? If yes, does employee get reward regardless? Think Penn State.


Are there spousal biometric tests? If yes, EEOC may view as family medical history and may want to

omit incentives. See Honeywell case.

Are reasonable accommodations or waivers

available so all employees have equal opportunity to

earn reward?

Did we provide notice of the availability of

reasonable accommodations or waivers?

Do we offer follow-up after collecting health

information?


Is the program sensitive to the varying abilities and

life circumstances of our employees?

Have we reviewed our confidentiality obligations,

policies and procedures?

Has our vendor reviewed its confidentiality

obligations, policies and procedures?

Have we obtained employee buy-in and

communicated the purpose/rationale of the program

before roll-out?

Will this program cause employee discontent?

If yes, what can we do to minimize that?

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Questions?

• For more information, contact:

Barbara J. Zabawa, JD, MPH

The Center for Health Law Equity, LLC

Phone: 608-579-1267

Email: [email protected]

mailto:[email protected]

Health & Medicine

Ruling Over Workplace Wellness Rules 2015