Administrators of a public-sector health-assessment program plan to expand their wellness program as the issue of whether they can legally surcharge employees who refuse health assessments plays out in federal court.
On April 11, U.S. District Judge Kevin Michael Moore of the Southern District of Florida ruled against employees of Broward County, Fla., who alleged that a surcharge levied against them by the county for refusing a health-assessment screening violated the Americans with Disabilities Act of 1990.
The employees have appealed, and the case is getting attention from many corners because it delineates the battleground between the conflicting clauses of the recently amended ADA, the Health Insurance Portability and Accountability Act of 1996, and the Patient Protection and Affordable Care Act, which became law in March 2010.
Health-plan administrators really have to keep their eye on this one, because the health benefits of millions of workers are affected and the government hasn't provided much in the way of guidance on what to do in the places where the laws intersect -- and, in some cases, even contradict one another.
"You do have to consult legal counsel, but I think there is a necessity for the law to be clearer as to what is permissible and what is not permissible," says J.D. Piro, a Norwalk, Conn.-based principal and national practice leader with the health law consulting group for Aon Hewitt.
Here's the crux of the dispute: HIPAA allows employers to levy a 20-percent surcharge on the healthcare-premium payments of employees who are poor health risks because of factors such as tobacco use and obesity.
Furthermore, the Patient Protection and Affordable Care Act allows employers to hike that percentage to 30 percent in 2014 and possibly as high as 50 percent eventually.
Both of these provisions seem to be in conflict with the equally broad ADA, which protects employees from involuntary assessments.
In the Broward County case, the judge ruled that the county had a bona fide health-assessment program that offered employees disease-management coaching for five conditions, and he ruled the county's $20 biweekly surcharge on employees who refuse to be screened is justified and doesn't violate the ADA.
The county suspended the surcharge in January.
"We have not made a decision on whether we are going to resume it at this point in time," says Kevin Kelleher, the director of human resources for Broward County.
But the county is going ahead with its health-assessment and management program and is, in fact, expanding it for statistically demonstrable reasons.
Kelleher and Dinah Lewis, Broward County's director of finance and administrative services, say the county is in the third year of a program that has so far identified more than 1,000 employees out of an employee pool of 5,400 who are at some risk of being vulnerable to one of five diseases: asthma, hypertension, diabetes, congestive heart failure or kidney disease.
Of those 1,000 employees, 10 percent to 12 percent were identified as being at moderate-to-high risk in those disease categories.
Not only has the county identified at-risk employees, more employees are participating in its disease-management coaching programs, and the county is expanding the program to include employees infected by hepatitis and HIV.
"We are seeing a lot more engagement of our employees in health and wellness, which was the primary reason for approaching it the way we did," Lewis says.
Ed Fensholt, a director of compliance for the risk and benefits broker Lockton Inc., says that, if the judge's ruling in the Broward County case is upheld, it will represent a victory for corporate wellness programs.
"When we saw this case coming down the line a few weeks ago, we thought, 'Holy Cow, if this thing spins sideways,' " he says.
"By and large, I have not seen an employer that engaged in an effort like this for nefarious reasons," Fensholt also says. "There are good reasons to do this, and that would be the employer's defense if they ever got sued."