Wellness Program Compliance Update
By: Jim Pshock, Founder and CEO, Bravo Wellness

EEOC Ordered to Vacate Wellness Rules by 2019
On December 20, 2017, Judge John D. Bates of the United States District Court for the District of Columbia entered a  revised order in a lawsuit brought by the American Association of Retired Persons (AARP) against the Equal Employment Opportunity Commission (EEOC). Effective January 1, 2019, the order vacates the EEOC's long-awaited regulations that clarify when an incentive offered in conjunction with an employee's participation in a company wellness program would be deemed "involuntary."

Although regulations including the Health Insurance Portability and Accountability Act (HIPAA) and the Affordable Care Act (ACA) clearly defined a safe harbor that allowed health plans to offer premium discounts or other changes to cost-sharing mechanisms in the plan (deductibles, co-pays, HSA deposits, etc.) based on an individual's participation and achievement of various goals within a wellness program, these rules did not automatically provide employers with assurances under the Americans with Disabilities Act (ADA) or the Genetic Information Non-Discrimination Act (GINA). The ADA, for example, permits employers to offer wellness screenings and make health-related inquiries in conjunction with a wellness program, so long as the program is "voluntary." For well over a decade, employers have asked the EEOC to indicate what, if any, financial incentive offered in conjunction with the program may render it involuntary. The 2016 rules finally provided some guidance.

A lawsuit filed by the AARP late in 2016 asserted that the EEOC had failed to adequately protect workers who may not want to disclose sensitive information by permitting employers to offer up to 30 percent of health insurance premiums as an incentive or penalty in association with wellness program participation. Judge Bates was not satisfied with the EEOC's explanation of its rules and ordered the agency to re-evaluate its position. Earlier this year, the EEOC indicated that new proposed regulations would be issued by August 2018, with a final rule by October 2019 and an effective date of January 2021. This week's ruling may significantly accelerate that timeline.

While some may surmise that this is a simple issue, it is actually rather complex. There are mountains of data that support both the argument for and against wellness programs, and the use of incentives. In my experience, the success or failure of the initiative is most often determined by the details of the wellness program design itself, including the reasonability of the goals, the level of support offered, the underlying corporate culture, the strength of the communications used and the quality of each program element. Additionally, while the idea of offering a substantial premium discount to those who take a proactive role in their health by not smoking and managing risks like obesity, blood pressure, cholesterol and pre-diabetes is very popular and well received by the vast majority of employers and employees alike, the potential for some employers to assert a large penalty because an employee refused to answer questions that might reveal a disability doesn't sit well with many.

What should you do now? Don't panic.

Remember that wellness programs and incentives have been successfully used for many years prior to the EEOC's attempt to give greater definition to somewhat subjective terms in the regulations. As required by the ACA and HIPAA, plans should be reasonably designed to reduce risk and prevent disease and not be a subterfuge for simply cost-shifting. In Bravo's experience, offering a reward that motivates an individual to achieve an improvement that they and their own physician believe is appropriate and reasonable for them, and offering them the tools, resources and programs to increase their probability of achieving the goal in the time allotted is consistently a winning formula. When plans fail to provide reasonable goals, helpful tools or worthwhile rewards, they risk failure, or even worse, employee backlash. Carefully designed programs that clearly comply with the ACA and HIPAA, as well as the intended spirit of the ADA and GINA, will likely survive as new regulations are crafted.

Bravo remains an active participant in groups like the Population Health Alliance (PHA) and the Health Enhancement Research Organization (HERO) and we are advocating on behalf of our clients and partners. If you are willing to share your program design and success stories publicly, we are happy to provide them to the EEOC to enhance its response and influence potential changes to regulations. Feel free to contact your Bravo account executive or myself directly.