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Employee Wellness Programs Prompt AARP Lawsuit AARP Sues U.S. Over Rules for Wellness Programs
(about 4 hours later)
Employers have raced to offer workers a hefty financial incentive to sign up for programs meant to improve their health, submitting personal medical details in the process. But as these programs have spread, so has resistance — with employees dubious about sharing that information with employers. Employers have raced to offer workers a hefty financial incentive to sign up for programs meant to improve their health, submitting personal medical details in the process. But as these programs have spread, so has resistance from employees dubious about sharing that information with employers.
On Monday, that tension erupted in a federal lawsuit against the government agency that handles the rules on these so-called wellness programs. It is the first major legal challenge of the rules, and will add fuel to one of the hottest debates in health care. On Monday, that tension erupted in a federal lawsuit against the government agency that handles the rules on these so-called wellness programs. It is the first major legal challenge of the regulations, and will add fuel to one of the hottest debates in health care.
The suit, filed by AARP, the large consumer advocacy group that represents older Americans, argues that these programs violate anti-discrimination laws aimed at protecting workers’ medical information. It also questions whether the programs are truly voluntary, because the price of not participating is high for some workers. The suit, filed by AARP, the consumer advocacy group that represents older Americans, argues that the programs violate anti-discrimination laws aimed at protecting workers’ medical information. It also questions whether the programs are truly voluntary when the price of not participating can be high.
The target of the suit is the Equal Employment Opportunity Commission, the federal agency responsible for issuing the rules governing what employers can do. The agency issued new rules on the programs in May. The target of the suit is the Equal Employment Opportunity Commission, the federal agency responsible for issuing the rules governing what employers can do. When the agency issued new rules on the programs in May, it said employers could set the incentive as high as 30 percent of the annual cost of a worker’s health insurance coverage.
The final rules issued by the commission allow an employer to set the incentive as high as 30 percent of the annual cost of a worker’s health insurance coverage. The rules sought to clarify uncertainty over how employers can plan wellness programs. They go into effect in 2017. The cost of individual coverage averages $6,435 a year, according to the Kaiser Family Foundation, which means refusing to participate could cost workers nearly $2,000.
The AARP is seeking a preliminary injunction. The commission declined to comment on the suit, which was filed in Federal District Court in Washington. Claiming that the commission reversed its longstanding position to protect employees’ privacy, the AARP described its members as facing “imminent harm flowing directly from the rules.” Older people would have to either incur significant financial penalties or divulge medical information that “once revealed, will never be confidential again.”
Many employers have instituted wellness programs, which might include initiatives to help workers stop smoking or manage a chronic condition like diabetes. Under the Affordable Care Act, the law that overhauled the health care system, companies can use financial incentives as a carrot — or stick, depending on one’s vantage point — to entice more employees to participate in these programs. The goal is to reduce overall health costs. The AARP is seeking a preliminary injunction to stop the new rules, which go into effect in 2017.
The commission declined to comment on the suit, filed in Federal District Court in Washington.
Many employers have instituted wellness programs, which might include initiatives to help workers stop smoking or manage a chronic condition like diabetes. Under the Affordable Care Act, the law that overhauled the health care system, companies can use financial incentives as a carrot — or stick, depending on one’s view — to entice employees to participate in these programs. The goal is to reduce overall health costs.
At issue is whether some programs that require an employee to fill out a health risk assessment or undergo biometric testing for conditions like high blood pressure are forcing workers to hand over private medical or genetic information.At issue is whether some programs that require an employee to fill out a health risk assessment or undergo biometric testing for conditions like high blood pressure are forcing workers to hand over private medical or genetic information.
Critics, which have included the Equal Employment Opportunity Commission, say some programs violate anti-discrimination provisions under other laws like the Americans with Disabilities Act. Those provisions are meant to protect someone with depression or a genetic predisposition for breast cancer, for example, from having to tell an employer about a condition. Critics say some programs have violated anti-discrimination provisions under other laws like the Americans with Disabilities Act. Those provisions are meant to protect someone with depression or a genetic predisposition for breast cancer, for example, from having to tell an employer about a condition.
In issuing the final rules, the commission seemed to reverse course, said Dara Smith, a lawyer representing the AARP, in making sure that giving out private medical information remained strictly voluntary. Employers have typically set the incentives they offer at lower amounts than the rules will allow, and many companies argue that wellness programs are essential to their efforts at improving the health of their work forces. Companies generally gather medical information through third parties as a way to protect the privacy of individual employees.
James Gelfand, senior vice president for health policy for the Erisa Industry Committee, a trade group representing employers on issues like health benefits, was critical of the AARP suit. Employers, which are never told which employees have certain conditions, are not using the information to discriminate, he said.
“There’s no evidence of these things happening,” he said.
Mr. Gelfand also argued that no one was forcing employees to participate, even if the decision meant they would forgo a potential reward of thousands of dollars. “If you don’t have to do it, it’s voluntary,” he said.
In a recent opinion, a federal judge was sympathetic to that viewpoint, he said, siding with the employer, Orion Energy Systems, against the Equal Employment Opportunity Commission, which brought the lawsuit.
While the judge did not rule on all of the agency’s claims, he said that “even a strong incentive is still no more than an incentive; it is not compulsion.”
But the agency has accused companies of overreaching and has aggressively pursued cases in which it argues that employers have violated anti-discrimination laws with specific wellness programs. In the Orion case, the employer required a worker to complete a health risk assessment or pay the full cost of that person’s health insurance premium each month. The commission claimed that the requirement violated the Americans with Disabilities Act because it was so onerous.
AARP, which represents older Americans in the work force who often have medical conditions they wish to keep to themselves, has typically been supportive of the agency’s efforts at policing wellness programs.
“We are virtually always allies with the E.E.O.C.,” said Dara Smith, a lawyer with the AARP Foundation, which is affiliated with the AARP.
But in issuing the final rules, Ms. Smith said, the commission seemed to be reversing course by viewing a stiff penalty as appropriate.
“Everyone expected that the E.E.O.C. would continue its old approach,” she said.“Everyone expected that the E.E.O.C. would continue its old approach,” she said.
The agency has aggressively pursued cases in which it argues employers have overreached with wellness programs. Employers have typically favored more latitude in being able to persuade employees to sign up for wellness programs and provide medical information that will help them better manage any chronic conditions. The commission, on the other hand, has said that some of these efforts violate anti-discrimination laws. While the courts have yet to fully weigh in, the commission has had mixed success in limiting the ability of employers to strong-arm their workers. It also faced pressure from the White House and others to avoid derailing employers’ efforts, which were seen as central to containing health care costs.
The agency has had a mixed legal record, however. It also faced pressure from the White House and others to avoid derailing employers’ efforts, which were seen as central to containing health care costs. But the new rules represent an interpretation the AARP finds problematic since they represent the final word on what the agency finds permissible. They “enable employers to pressure employees to divulge their own confidential health information and the confidential genetic information of their spouses as part of an employee ‘wellness’ program.”
Now, the AARP argues, the agency’s rules “enable employers to pressure employees to divulge their own confidential health information and the confidential genetic information of their spouses as part of an employee ‘wellness’ program.”
The cost of individual coverage averages $6,435 a year, according to the Kaiser Family Foundation, which means workers could be forced to pay nearly $2,000 for refusal to participate.
“On average, these penalties would double or even triple those employees’ individual health insurance costs,” the AARP contends in its lawsuit.“On average, these penalties would double or even triple those employees’ individual health insurance costs,” the AARP contends in its lawsuit.
While the AARP says employers are welcome to offer wellness programs that ask for medical information, it says they should be truly voluntary.While the AARP says employers are welcome to offer wellness programs that ask for medical information, it says they should be truly voluntary.
“It would be very difficult to have an across-the-board number that wouldn’t coerce anybody that wasn’t zero,” Ms. Smith said.“It would be very difficult to have an across-the-board number that wouldn’t coerce anybody that wasn’t zero,” Ms. Smith said.