Kristin Madison, "Wellness Incentives, the ADA, and GINA"

4th Annual Health Law Year in P/Review: Wellness Incentives, the ADA, and GINA

Kristin Madison Professor of Law & Health Sciences

Northeastern University January 29, 2016

Wellness Program Initiatives Among Firms

Offering Health Benefits (2015)

Program type

Small Firms

(3-199

workers)

Large Firms

(200+

workers)

Smoking cessation programs 41% 71%

Weight loss programs 39% 61%

Other lifestyle/behavioral 39% 68%

At least one program 49% 81%

Source: THE KAISER FAMILY FOUNDATION AND HEALTH RESEARCH & EDUCATIONAL TRUST, EMPLOYER HEALTH BENEFITS 2015 ANNUAL SURVEY, Exhibit 12.11.

Wellness Program Initiatives Among Firms

Offering Health Benefits (2015)

Program type

Small Firms

(3-199

workers)

Large Firms

(200+

workers)

Smoking cessation programs 41% 71%

Weight loss programs 39% 61%

Other lifestyle/behavioral 39% 68%

At least one program 49% 81%

Of firms with programs, percent

offering incentives for participation

or completion

15% 38%

Source: THE KAISER FAMILY FOUNDATION AND HEALTH RESEARCH & EDUCATIONAL TRUST, EMPLOYER HEALTH BENEFITS 2015 ANNUAL SURVEY, Exhibits 12.11 and 12.12.

Of Firms Offering Health Benefits

Small Firms Large firms

% Offering Health Risk Assessment 18% 50%

Of firms with HRAs, % offering incentives 29% 62%

% Offering Biometric Screening 13% 50%

Of firms with screening

% incentivizing completion 56%

% incentivizing biometric outcomes 20%

Of these firms

% targeting blood pressure 93%

% targeting BMI 87%

% with rewards > $500 43%

Source: THE KAISER FAMILY FOUNDATION AND HEALTH RESEARCH & EDUCATIONAL TRUST, EMPLOYER HEALTH BENEFITS 2015 ANNUAL SURVEY, Exhibits 12.1, 12.3, 12.5, 12.6, 12.8, and 12.9.

Affordable Care Act on

Health Contingent Wellness Programs

• Program must be reasonably designed to promote health

• Reward must be:

– Limited to 30% of total cost of insurance coverage

(50% for programs targeting tobacco use)

– Offered at least once per year

– Available to all similarly situated individuals

• Must offer alternative standards in some cases and

must disclose availability of alternative

Equal Employment Opportunity Commission Challenges Wellness Programs

o September 2014: Flambeau Inc.

o October 2014: Honeywell International Inc.

– Alleged that if employee/spouse fail to take biometric tests,

• Employee loses up to $1500 of Honeywell HSA contribution

• Employee charged $500 surcharge

• Employee & spouse each face $1000 tobacco surcharge

– Claim 1: Biometric testing is an involuntary and therefore unlawful medical exam under Americans with Disabilities Act

– Claim 2: Honeywell violates Genetic Information Nondiscrimination Act (GINA) by offering inducement for medical info from spouse

Last Year's Health Law in Preview: Questions

o Under what circumstances do incentives render a medical examination or inquiry involuntary, potentially running afoul of the Americans with Disabilities Act?

o Could wellness programs be protected by an ADA safe harbor for organizations that establish or administer the terms of a benefit plan that are based on administering risks (see 11th Circuit case, Seff v. Broward County)?

o Will GINA prevent biometric testing-based wellness programs from reaching employees’ family members?

o Will the EEOC issue a rule clarifying whether the ADA permits employers to offer incentives for wellness programs?

YES

NO

MAYBE

IT'S COMPLICATED

Wellness Incentive Regulations: Year in Review

The Americans with Disabilities Act

o Prohibits medical examinations and disability-related inquiries unless job-related and consistent with business necessity. 42 USC 12112(d)(4)(A).

o But prohibition does not apply to

“voluntary medical examinations, including voluntary medical histories, which are part of an employee health program” 42 USC 12112(d)(4)(B).

ADA Proposed Rule on Wellness Programs with Medical Exams or Disability-Related Inquiries

o Employee health program is voluntary if

– No requirement for participation

– No denial of coverage under group health plan or benefit package to nonparticipants

– No adverse employment action against nonparticipants

– Appropriate notice regarding use and disclosure of medical information is provided (for health plan-based programs)

o Only aggregate medical info provided to ADA-covered entity

o Plan-based incentives, together with other plan-based incentives, total no more than 30% of employee-only coverage cost

ADA "Safe Harbor" Provision

o Certain ADA provisions, including the prohibition on medical exams, shall not restrict an organization from

– "establishing . . . or administering the terms of a bona fide benefit plan that are based on underwriting risks, classifying risks, or administering such risks . . ."

42 U.S.C. 12201(c)(2)

o In Flambeau, federal district court found that:

– Using wellness data, consultant classified risks/projected costs

– Consultant provided recommendations about

• Charges for maintenance drugs & preventive care

• Plan premiums, including higher premiums for smokers

– Defendants purchased insurance as shield from large claims

Does GINA Limit Incentives to Spouses?

o GINA prohibits employers from requesting genetic information, including family medical history

– There is an exception for voluntary wellness programs, but no inducements are allowed

o Spouses are included in definition of family members

o So while it is acceptable to offer incentives to employee to provide non-genetic information related to the employee's own health status

– Programs cannot offer the same incentives to the spouse, because the information would constitute family medical history -- genetic information -- with respect to the employee

Some provisions of GINA Proposed HRA Rule

o Covered entity may offer inducement for provision of information regarding spouse's health (not spouse's genetic information), if spouse is covered by health plan

o Total inducements cannot exceed 30% of cost of coverage of plan in which employee and dependents are enrolled

o If employer offers inducement to employee & spouse to participate in wellness program that requests spouse's health information, inducement for that information cannot exceed

– 30% cost of coverage of plan covering employee, less

– 30% of cost of self-only coverage

o Maximum employee inducement for inquiries/examinations is 30% of cost of self-only coverage

o Inducements for children's information are prohibited

Wellness Incentive Regulations: Year in Preview

Questions

o Assuming that the Flambeau decision is appealed, will the appeals court uphold the lower court's decision?

o Will the EEOC finalize the ADA and GINA proposed rules this year, and, if so, what changes will it make?

o Will increased certainty about legal constraints accelerate wellness program adoption?

o Or will continued uncertainty about program effects slow wellness program adoption?