Is my company's wellness program legal?

March 25, 2009 3:31 PM

Is my company's new, highly Orwellian, wellness program legal? How can I get them to stop?

Posting anonymously to avoid employer retribution if I end my making a complaint.

My spouse and I are insured by her employer's health care plan. Recently, she was informed about a new wellness program they are implementing. The plan is called voluntary but it seems anything but. If you refuse to enroll, $90/month is deducted from your paycheck. If you enroll, you have two choices: the "no monitoring" plan which costs $65/month and the "monthly monitoring" plan with costs $30/month. Under terms of the monthly monitoring plan, you agree to health screenings of weight, cholesterol, diabetes, smoking, etc. every 30 days. If you have a negative screening, such as your weight going up instead of down, your rate climbs to $65/month until corrected.

In general, I have no problem with wellness programs, and all for healthy living. However, I don't like the fact that they are penalizing people who don't want to participate, and I don't like the idea of anyone being forced to pay "fat fees." I did a little research on the EEOC site and came up with this:

"The Equal Employment Opportunity Commission (EEOC) has offered employers some guidance with regard to the ADA's restrictions on medical inquiries and examinations. Under the guidelines, an employer may conduct medical examinations and activities that are part of a voluntary wellness and health screening program. Therefore, offering employees the opportunity to voluntarily participate in health screening programs for high blood pressure and cholesterol monitoring are not likely to violate the ADA, as long as there is no penalty (economic or otherwise) for not participating. Employers must treat any information acquired as a confidential medical record. (source: http://hr.blr.com/whitepapers.aspx?id=19254)"

We have no other access to health insurance, so switching plans isn't an option. I know you're not a lawyer, and you're not my lawyer. But I'd be interested in opinions as to whether this program is legal. And if not, I would also appreciate any tips people may have for how to get the employer to change the program. We live in Georgia, if that helps.

Throw away email address: [e-mail]

posted by anonymous to health & fitness (16 comments total)

Not a lawyer, but it sounds like they're skirting those ADA restrictions because it's the employer's health insurer, not the employer, who is setting up fee tiers based on your willingness to participate. If it were the employer docking your paycheck because of perceived health risk or disability, that would be a no-no. But that's not what's going on. Your premiums are being deducted from your paycheck, and those premiums are changing based on your level of participation in the insurer's wellness program.

And since it's basically the insurer being all actuarial about different rates for different risks, yeah, totally legal.

Can you talk to HR and see if there are other health insurers available to you that they don't advertise? Maybe you can sign up with another and get reimbursement from the employer?

(Sucky situation. Sorry.)
posted by mudpuppie at 3:41 PM on March 25

I suspect it is. (IANAL.)

And from the point of view of the insurance company, it also makes sense. Considered as a risk pool, people who participate in the program and keep their readings within the norms are going to require less extraordinary health care, and thus cost the insurance company less. The company is passing those savings on to that group by reducing their premiums.

Those who participate and exceed the norms will, as a group, have a higher rate of health problems and will require more payments by the insurance company.

And people who refuse to participate become a pool whose risks are difficult to calculate. But given that this is fundamentally a case of self-selection, the most likely reason someone would refuse to participate is because they know they would not pass the test. That means that as a group they're particularly likely to require extraordinary health care, and cost the insurance company the most. So the company is charging them the highest premiums.

Your post implies that you think the varied pricing is fundamentally punitive and coercive. I don't see it that way. I see it as a legitimate response by the insurance company to the fact that the three groups will have different requirements for extraordinary health care, thus costing the insurance company different amounts.
posted by Chocolate Pickle at 3:44 PM on March 25

It would help if you clarify whether the $90/month is on top of the medical insurance premium, or whether it is the premium (or more accurately, the employee contribution to the premium). If so, it sounds like a voluntary discount program: pay $90/month if you want insurance, but you get a $25 discount if you participate in the wellness program without monitoring or a $60 discount with monitoring.
posted by brianogilvie at 3:49 PM on March 25

Is this wellness program actually reducing your premiums though? It sounds like your wellness program is costing you, regardless. Either 90, 65, or 30 dollars extra?

My employer offers a discount if you meet certain criteria. I don't have to pay extra, not even 30 dollars, to enter the screening program. I guess this thirty dollars is to cover screening costs?
posted by Fairchild at 3:50 PM on March 25

Sounds like the Hershey plan. It's almost 20 years old.
posted by klarck at 3:56 PM on March 25

And since it's basically the insurer being all actuarial about different rates for different risks, yeah, totally legal.

Pretty sure this isn't legal at all, actually, for a health insurance plan you're getting through an employer. Part of the protections you get under HIPAA are that your employer or your employer's chosen health plan cannot charge you differently from "similarly situated individuals," which are generally people who work the same number of hours (e.g., part-time workers vs. full-time) in the same geographic location.

This sounds all sorts of wrong to me, and it seems highly improbable that any program where you are "encouraged" to participate by having $90 subtracted from your paycheck probably doesn't meet the voluntary standard. However, I am neither a lawyer nor a state/federal regulator. You should talk to one of those people, because they will be able to answer your question for sure and let you know if your employer is crossing the line.

While a lawyer is always an option, I think there's not any particular reason to start out with that route (which costs money) when you can call up the Department of Labor and ask them whether this is a violation. They're the experts, they interpret the law, and best of all they're free. (Well, taxes, but whatever.) Since Georgia isn't *cough* well-known for its strong consumer advocacy in state government, I might go straight to the federal Department of Labor with my question. Here's a brochure they put out explaining protections under HIPAA. Page 19 has the relevant bit. They also provide a phone number to call if you have questions about permissible stuff your employer can do with a wellness program: 1-866-444-EBSA or http://askebsa.dol.gov. That's what your tax dollars pay for; might as well use 'em.
posted by iminurmefi at 4:18 PM on March 25 [7 favorites has favorites]

Holy shit. I would be screwed under that Hershey plan -- due to some, let's say, questionable behavior by a surgeon in my past, my blood pressure shoots up like a rocket ANY time I enter ANY doctor's office now. Drops the second I leave -- I can feel it. It's totally psychosomatic. But pow, I'd be penalized for my bad in-office readings with something like this.

Your post implies that you think the varied pricing is fundamentally punitive and coercive. I don't see it that way. I see it as a legitimate response by the insurance company to the fact that the three groups will have different requirements for extraordinary health care, thus costing the insurance company different amounts.

Chocolate Pickle, how is it NOT fundamentally punitive and coercive? Whose baseline numbers are they using here? Using weight as an example, I'm an exceptionally large framed, tall woman who used to play sports and has quite a bit of muscle. At my very thinnest, when I was playing tennis competitively, I had a BMI that is considered "overweight" on the standard scale. So whose numbers are they going to use? Are they going to take into account a wide variety of body types, or just say "My chart says you are overweight and so you must be overweight"?

It's one thing to offer discounts in exchange for voluntary activity, but another altogether to punish those who don't want to participate. (Every 30 days? Seriously? Like you don't have enough to do at work?)

Here's hoping the OP finds a solution to this incredibly obnoxious problem.
posted by bitter-girl.com at 4:24 PM on March 25 [2 favorites has favorites]

It would help if you clarify whether the $90/month is on top of the medical insurance premium, or whether it is the premium [...] If so, it sounds like a voluntary discount program

Is there a difference between the $90 being on top of the premium; and a $90 premium increase with these voluntary discount opportunities being announced at the same time?
posted by Mike1024 at 4:32 PM on March 25

IANAL, but iminurmefi basically said what I would say about this. Definitely check into it. It seems pretty odd, but I wouldn't be surprised if the insurance company's legal department (and her employer's) have investigated this very thoroughly and found what they're doing to be legal.

I'm guessing that the charge is NOT on top of the existing health insurance premium, but rather is a way of structuring the health insurance premium. And, if so, those are very low health insurance premiums, nothing to complain about at all (unless the coverage is shitty).

If so, here is a way I can see this being "fair," or at least how they could try to rationalize it-

Say the base rate for the health insurance premium is somewhere between $65 and $90 if they didn't have this program at all. Because the company offers this program, they are giving a "discount" to people for being healthy. If you don't meet their health "standards," you don't get the "discount."

Thing is, insurance companies charge people with pre-existing conditions, or people with unhealthy habits like like smoking extra all the time. HOWEVER, if it's a group plan, those generally don't require any kind of health screenings for open enrollment, especially if the person did not have a lapse in health coverage of more than 62 days.
posted by fructose at 5:17 PM on March 25

I'm guessing that the charge is NOT on top of the existing health insurance premium, but rather is a way of structuring the health insurance premium.

Just kidding. I reread this and now I'm thinking it is on top of the premium. If so, that's messed up and should DEFINITELY be checked into.

Again, though, it would not be surprising if it is legal if the company pays part of the premium.
posted by fructose at 5:19 PM on March 25

If the plan is subject to HIPAA nondiscrimination rules (ERISA part 7), they have to follow the wellness program rules, administered by US Dept of Labor:

The HIPAA nondiscrimination rules generally prohibit group health plans from charging similarly situated individuals different premiums or contributions or imposing different deductible, copayment or other cost sharing requirements based on a health factor. However, there is an exception that allows plans to offer wellness programs.

Wellness programs that condition a reward on an individual satisfying a standard related to a health factor must meet five requirements described in the final rules in order to comply with the nondiscrimination rules.

1. The total reward for all the plan's wellness programs that require satisfaction of a standard related to a health factor is limited generally, it must not exceed 20 percent of the cost of employee-only coverage under the plan. If dependents (such as spouses and/or dependent children) may participate in the wellness program, the reward must not exceed 20 percent of the cost of the coverage in which an employee and any dependents are enrolled.

2. The program must be reasonably designed to promote health and prevent disease.
3. The program must give individuals eligible to participate the opportunity to qualify for the reward at least once per year.
4. The reward must be available to all similarly situated individuals. The program must allow a reasonable alternative standard (or waiver of initial standard) for obtaining the reward to any individual for whom it is unreasonably difficult due to a medical condition, or medically inadvisable, to satisfy the initial standard.
5. The plan must disclose in all materials describing the terms of the program the availability of a reasonable alternative standard (or the possibility of a waiver of the initial standard).

You can call the US Dept of Labor 1.866.444.EBSA (3272) to ask them about your plan.
posted by Pax at 5:26 PM on March 25 [2 favorites has favorites]

I know I read something about this a while back, and I wish I could find you a better source for it now, but according to this site, at least, Georgia enacted a law last May that legalizes "incentive programs" that reward people for "quitting smoking, losing weight and participating in health management programs which improve health outcomes and therefore decrease costs." I would assume that your wife's health insurance provider is enacting their program under the banner of this law, even if it sounds like they're taking the notion of "incentive" to extremes.

(*wince* I apologize for the Newtiness of the link but it might at least serve as a starting point as you delve more deeply into this matter)
posted by DingoMutt at 6:21 PM on March 25

While the concept of a wellness program is legal, I think that the fact that they charge you for monitoring may be a problem. The tricky thing is how few lawyers are really competent in this area. It will not be easy to get good answers. The EBSA recommendation actually sounds pretty good here.
posted by caddis at 10:28 PM on March 25

(I used to work at EBSA at DOL in Washington. I helped right these regulations. Memail me if you want).
posted by Pax at 6:08 AM on March 26

(write)
posted by Pax at 6:08 AM on March 26

I'm pretty sure that health insurance is an ongoing negotiation/contract with your employer. The employer is not beholden to any health insurer, especially not when they are changing the terms of their contract. If the employees are all unanimous or near-unanimous in opposing this, you all should get your HR to step in and renegotiate or choose another insurer. I wouldn't want to do this program... not because I couldn't lose a few pounds or because I am generally healthy but because it sounds like a pain in the ass. Would this monitoring be on your own time or during employers' time?

Go to your HR and complain. Ask your officemates to complain.
posted by amanda at 11:27 AM on March 27