Wellness: The Pit and the
Pendulum...and the Carrot?!?
Presented by
Karen Kirkpatrick
OM22
4/4/2017
10:15 AM – 11:15 AM
The handouts and presentations attached are copyright and trademark
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Wellness: The Pit and the Pendulum … and the Carrot?!?
What is the balance, both legally and health-wise?
Wellness: The Pit and the Pendulum … and the Carrot?!?
WHAT IS THE BALANCE, BOTH LEGALLY AND HEALTH-WISE?
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• Recognize the various types of wellness plans (participatory vs. healthcontingent) and determine what your staff would be most motivated by •
Discuss how to manage Health Risk Assessments (HRAs) legally •
Explain what health history you can or cannot require from employees,
spouses, dependents and adoptees • Outline how to implement a
wellness plan to engage employees, lower plan costs and increase
morale
What is your wellness plan missing?
Karen L Kirkpatrick - On Your Mark Consulting
What is a Wellness Program?
We commonly associate a wellness program as being designed to promote health
and prevent disease. Examples commonly include:
• Health fairs
•
Blood pressure, sugar and cholesterol screenings
•
Additional biometric testing
•
Health risk assessments
•
Smoking cessation programs
•
Weight-loss programs
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What is a Wellness Program?
•
If a company offers a disease management program, it might target
individuals who have high blood pressure and make case managers
(sometimes licensed) available to them to monitor compliance with
medication protocols
•
Wellness and disease management programs are often structured to
provide a financial reward for participating
What else could be part of a Wellness Program?
We commonly associate a wellness program as being designed to promote health
and prevent disease. Additional examples of this could include:
• Annual flu shots
•
Chiropractic
•
Yoga
•
Massage
•
Financial health of employees (see next)
•
EAPs
•
Identity theft programs
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Financial health components
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•
•
•
An overview of the financial problem that employees are
facing that no one is talking about.
How employees with low credit scores can be helped with
financial wellness benefits.
Why payday loan programs are the worst options for
employees in a financial emergency.
How financial wellness programs integrate with other
employee benefits.
HIPAA Nondiscrimination Rules
•
HIPAA prohibits group health plans (GHPs) from discriminating against
persons based on their health status
– Cannot deny individuals eligibility for benefits because of a health
factor
– Cannot charge individuals more for coverage because of a health
factor
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Wellness Program Exception to HIPAA Nondiscrimination Rules
•
HIPAA nondiscrimination rules don’t prevent GHPs from
establishing premium discounts or rebates or modifying
otherwise applicable copayments or deductibles in return for
participation in wellness programs
•
Two types of wellness programs allowed by HIPAA:
– Participatory Wellness Programs
– Standard-Based Wellness Programs
HIPAA- Types of Wellness Programs
Participatory Wellness Programs:
–
–
–
Enrolled employees must
participate in a health related
activity
However, the reward is not
attached to the results of
participation
Examples:
•
•
Reimbursement for fitness
club membership
Diagnostic testing program
that rewards participation,
not results
Standard-Based Wellness Programs
–
–
–
The reward is generally based
upon various factors including
meeting a designated health
related standard
5 requirements
Examples:
•
•
Premium discount for
participants who quit
smoking
Diagnostic testing program
that provides rewards for
good results
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HIPAA- Standard-Based Wellness Programs
•
•
•
•
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Maximum reward of now 30% of cost of coverage;
Reasonable design: Must be designed to promote
health or prevent disease;
Annual opportunity: Must give individuals an opportunity
to qualify for reward at least once a year;
Required disclosure; and
Reasonable alternative standard: Must disclose that
alternative standards or waivers are available.
ADA Considerations
Many Wellness programs involve disability-related inquiries and medical
examinations
– Employers must be educated on the broad definition of disability under
ADA Amendments Act
Disability-related inquiries and medical examinations must generally be jobrelated and consistent with business necessity.
– Employer must have a reasonable belief based on objective evidence
that either
• an employee’s ability to perform an essential job function will be
impaired by a medical condition; or
• an employee will pose a direct threat to the business and
operations due to a medical condition.
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ADA Considerations
Wellness plans/programs seem to be a one-size-fits-all, without regard to
an employer’s belief based on objective evidence.
– Therefore, wellness programs don’t typically meet the “job-related
and consistent with business necessity standard.”
EEOC guidance indicates that ADA also permits disability-related inquiries
or medical examinations that are not job-related and consistent with
business necessity provided they are voluntary.
ADA- Voluntary Wellness Program
Voluntary Wellness Program:
– Employer may not require participation nor penalize non-participants
– Information gathered:
• must be maintained according to confidentiality requirements set
forth in the ADA and
• may not be used to discriminate against an employee.
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ADA- Financial Incentives for Wellness Programs
Permitted Financial Incentives
– No specific guidance about level of financial incentive that can be
provided before wellness program is rendered involuntary.
– EEOC guidance:
• ADA violation to require an employee to complete an HRA as a
condition of participation in an employer’s group health plan.
• ADA violation to require an employee to complete an HRA as a
condition of receiving medical expense reimbursements from
employer’s health reimbursement account.
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EEOC Informal Discussion Letters (June 24, 2011), (March 6, 2009), (Aug. 10, 2009).
ADA- Financial Incentives for Wellness Programs
Satisfaction of HIPAA 30% standard does not necessarily make the
wellness program voluntary
Structure of Financial Incentive
– Reward is more likely to be permissible than penalty
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ADA Safe Harbor for Bona Fide Wellness Programs
Prohibition on disability discrimination should not be construed to prohibit or
restrict “a person or organization covered by this chapter from establishing,
sponsoring, observing, or administering the terms of a bona fide benefit plan
that are based on underwriting risks, classifying risks, or administering such
risks that are based on or not consistent with state law.” 42 U.S.C.
12201(c).
Exception “shall not be used as subterfuge to evade the purposes of the [ADA].”
ADA Safe Harbor for Bona Fide Wellness Programs
ADA interpretive regulations indicate that this rule “is a limited exception that
is only applicable to those who establish, sponsor, observe, or administer
benefit plans, such as health and life insurance plans….The purpose of
this provision is to permit the development and administration of benefit
plans in accordance with accepted principles of risk assessment.” 29
CFR 1630.16(f)
Regulations further state the “activities permitted by this provisions do not
violate [the ADA] even if they result in limitations on individuals with
disabilities, provided that these activities are not used as subterfuge to
evade the purposes of this part.”
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GINA Title I Considerations
Prohibits GHPs from:
– Discriminating against individuals on the basis of their genetic
information
– Collection of genetic information prior to or in connection with
enrollment or at any time for underwriting purposes
This broad scope does extend to wellness programs
GINA- Definition of Genetic Information
Genetic Information includes information about:
•
An individual’s genetic tests or that of a family member;
•
The manifestation of a disease or disorder in an individual’s family
member (i.e., family medical history); and
•
An individual’s request for, or receipt of, genetic services
.
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GINA- Definition of Underwriting Purposes
“Underwriting Purposes” include:
– Rules for and determination of eligibility;
– Computation of premium and contribution amounts; and
– Application of broader preexisting condition exclusions.
Broad definition, includes:
– Changing deductibles or other cost-sharing mechanisms;
– Providing discounts, rebates, or payments in kind; and
– Other differential mechanisms in return for completing an HRA
or participating in a wellness program
GINA Title I- Interaction with HIPAA Wellness Program Rules
Wellness programs that provide rewards for completing HRAs that
request genetic information, including family medical history, violate
the prohibition against requesting genetic information for underwriting
purposes although the rewards comply with the applicable HIPAA
requirements.
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GINA Title II Considerations
Applicable to wellness programs provided outside GHP
Includes a wellness program exception that allows employers to request
genetic information if:
• Employee provides prior, knowing, voluntary, and written
authorization;
• Only employee and licensed health care professional or boardcertified genetic counselor receives individually identifiable
information concerning the results; and
• Individually identifiable information is only available for purposes of
the program and is not disclosed to employer except in aggregate
terms.
GINA Title II Considerations
Wellness programs seeking medical information must be “voluntary”
•
•
•
Same as ADA wellness program requirement
Voluntary only if employer neither requires participation nor penalizes
employees who do not participate
Title II regulations indicate that offering a $150 financial inducement for
wellness program participation is permissible
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Other Considerations
Employee Retirement Income Security Act (ERISA)
•
•
If wellness program constitutes an “employee welfare benefit plan”
under ERISA 3(1) (e.g., EAP or certain on-site medical facilities
providing more than first-aid type benefits), then it will be subject to
requirements of Title I of ERISA.
Where wellness programs are provided through the employer’s larger
GHP this should not be an issue.
Other Considerations
Consolidated Omnibus Budget Reconciliation Act (COBRA)
•
•
•
If wellness program constitutes a group health plan separate from the
regular GHP, then it will be subject to COBRA.
The scope of medical care is broad. Many plans are not properly
offered under COBRA.
A wellness program that provides sugar or cholesterol screenings
might be subject to COBRA because this service is considered
medical care under
Code 213(d).
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Other Considerations
Age Discrimination in Employment Act (ADEA)
•
If an employer terminated or decreased wellness incentives, imposed
a surcharge, or otherwise discriminated against any employee or
group of employees over the age of 40 with respect to its wellness
program, an ADEA violation could occur.
Title VII
• If wellness program makes race, color, sex, religion, or natural origin
distinctions, it will likely violate Title VII.
• Title VII discrimination could also be asserted under
disparate impact theory.
Other Considerations
Fair Labor Standards Act (FLSA)
Employers requiring participation in wellness programs should carefully
review under FLSA and any similar state laws whether the wellness
program is mandatory, which may result in time spent completing the
program being compensable time.
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Other Considerations
Internal Revenue Code
– Benefits provided outside the GHP by an employer to its employees
through a wellness program, e.g. $100 gift card; are includable in
employee’s gross income.
– Premium discounts and other similar rewards are generally not taxable
to the employee.
– Employer’s cost in creating or administering wellness program may
generally be deducted as a business expense.
HOW DO YOU KNOW IF IT’S WORKING?
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•
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Reduced medical spending
Reduced risk (as seen by biometrics)
Increased employee satisfaction (as seen by recruitment and retention)
Do employees trust that the organization cares about them?
Do employees believe that working at the organization is beneficial to their
health?
Some goals that a company called Vital Incite uses are:
•
•
•
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Engaging 80 percent of persons with high risk biometrics
Reduction in weight of persons overweight or obese by greater than 5 percent in
30 percent of the engaged population
Of diabetics with an A1c greater than 7 percent, 80 percent will reduce their A1c
by 1 percent in one year
Of persons with blood pressure in the high-risk range, 40 percent will have
achieved controlled blood pressure without adding medications in one year
Of persons who take fewer than 10,000 steps per day, 70 percent will
increase their average step count by 20 percent or more
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How do you know If it’s working?
According to Happify CEO, there are personal, seasonal and business
stressors that employers need to be aware of. Key ingredients of a year
round emotional well being plan are:
• Organize a momentum-building event for an effective launch
• Sustain your momentum
• Seek the right digital tools
• Don’t underestimate the power of grassroots communications
• Focus on frequent outreach
• Measure your progress regularly
– Tracking key metrics of activation, engagement and outcome
On Your Mark Consulting
Karen Kirkpatrick, Owner
Reach me on LinkedIn, or
Twitter @comply4success
Phone 248.219.0712
[email protected]
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