Wellness in the Land of Confusion
While HR leaders want to know just how the definition of "voluntary" applies to company wellness programs, the Equal Employment Opportunity Commission is having trouble coming up with a firm position. Experts weigh in on ways employers can manage their wellness plans, regardless of a solid definition from the commission.
By Jill Cueni-Cohen
Backed into a corner on May 8 by a panel of experts representing business, advocacy groups and providers, the U.S. Equal Employment Opportunity Commission is being pressed to state its position on issues of discrimination within company wellness programs. Until they do, employers may be at risk of violating anti-discrimination laws.
Panelists testified before the commission that the legality of wellness programs can be challenged in a variety of ways. Some wellness programs, they said, could be considered discriminatory even though they're voluntary, falling under regulations from a variety of federal statutes, including the Americans with Disabilities Act, the Genetic Information Non-Discrimination Act of 2008, Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act, the Equal Pay Act, Health Insurance Portability and Accountability Act, the Patient Protection and Affordable Care Act, and Sections 503 and 504 of the Rehabilitation Act.
In the past decade, wellness programs have become an integral and accepted part of many companies' cultures. Clear guidelines from the ADA and HIPAA include the provision that employers can offer an incentive of up to 20 percent of an individual employee's health insurance premium. HIPAA also provides that employers can discount the employee's portion to incentivize them to join their wellness program. And the Affordable Care Act clearly endorses employer-sponsored wellness programs, mandating that employees who participate can receive a discount up to 30 percent.
However, some advocacy groups claim wellness programs that use monetary incentives to get employees to participate are being unfair to those employees who choose not to participate. The EEOC stands somewhere between the two, flip-flopping from opinions that call into question whether any discount incentives would penalize non-participating employees to saying that truly voluntary programs are fine.
"The EEOC has raised these specters of violations, but it wouldn't take a firm stand one way or the other, and this has left employers with a dilemma," says Nina Stillman, a partner in Morgan Lewis's labor and employment practice in Chicago. "I think the EEOC doesn't take a stand, because they recognize that the clear trend of employers and this administration is in favor of wellness programs. They're bucking the trend, and that's not a position they want to be in. They don't have the desire to take this on as an issue, but you can't stand back and say you're concerned and not do anything."
Stillman says that employers who want to implement wellness programs should not be afraid to proceed, because there are ways to minimize the potential for problems with the EEOC. "The first is to put your wellness program under your benefit program . . . and make clear to employees that it is voluntary."
Stillman says the lack of a firm position is causing the EEOC to lose its credibility, which will translate into the courts. "Judges usually give deference to a federal agency, but that deference can be set aside if the agency has not been clear or keeps changing its mind," she says. "Do everything you can to comply with all the other regulations, because this puts you in a strong position to say the EEOC is wrong."
Myra Creighton, a partner at Fisher & Phillips in Atlanta, says only one court case clearly addresses the issue of whether wellness plans violate the ADA: Seff v. Broward County. On August 20, the Eleventh Circuit upheld a ruling by the U.S. District Court for the Southern District of Florida that an employer group health plan's wellness program did not violate the Americans with Disabilities Act's prohibition on non-voluntary medical examinations and disability-related inquiries, because the program falls within the ADA's safe harbor for bona fide benefit plans.
"If you're in the Eleventh Circuit, you're in a good place," Creighton says. "If you're multi-state, this might not work in another circuit."
Karen McLeese, a Kansas City-based vice president of employee benefit regulatory affairs for CBIZ Benefits & Insurance Services Inc., a division of CBIZ Inc., advises HR leaders to work closely "with professionals who can help you to design programs that are best suited to achieving health goals," and make sure they're available to everyone, she adds.
McLeese says that it's especially important that wellness programs are set up to include all employees. "To the best of your ability, make certain programs don't unfairly target people with disabilities or are based on age or sex," she says. "The key now is to design the program so that it achieves the goal you want in a fair way. This means you must provide a reasonable alternative for those who find it medically inadvisable to achieve the goal."
According to EEOC Acting Associate Legal Counsel Christopher Kuczynski, the potential for discrimination occurs when company-sponsored wellness programs require medical exams or ask disability-related questions.
He says that, while the ADA allows employers to ask for medical information in connection with voluntary wellness programs, the commission really needs to clarify the meaning of "voluntary." But until they do, employers should think twice about implementing wellness programs that ask for health histories or use financial incentives. "One thing we think would render a program involuntary is if an employer says you won't get health insurance if you don't participate. Do not have a program like that."
Programs that don't have disability-related questions or don't require a medical exam are the safer bet, he says.
"Offer incentives to engage in some sort of physical activity, like a walking program," he says. "Participation in a program like that would be considered a benefit of employment, so some people with disabilities would need a reasonable accommodation so they can take advantage of that program and earn whatever reward is offered.
"I can't give you something that would represent the commission's position," he says, "but what some employers tell me they do is they avoid really large incentives, even though they fit HIPAA and the ADA. [Instead] they do something small, something different."
But Callan Carter, a San Francisco-based partner at Fisher & Phillips, says she's seen employers pull the plug on new wellness programs because they're afraid of violating ADA regulations.
"One client was so close to implementing what was going to be a fantastic wellness program, but they didn't go forward," she says, noting that the lawyer who advised this particular client regarding ADA laws warned of impending doom. "The program was going to be widespread and would have been significant for the company, but with 10,000 employees, [the client] was so hesitant about this voluntary issue that they were too scared to roll out the whole program. They instituted a little bit of it, but nothing like it was going to be, which is a shame. It would have improved their employees' health and given them a better quality of life."
Carter advises employers to consider their employee population to get a feel for whether a particular wellness program will cause ripples in their workforce.
"Some companies are small enough that employers know exactly who they're dealing with," she says, "but some are so large, they don't know the demographics or if some employees have disabilities they haven't previously disclosed."