Workplace Wellness Programs: Bona Fide Benefit or Prescription for a Lawsuit?

Workplace Wellness Programs: Bona Fide Benefit or Prescription for a Lawsuit? Authors: Jennifer L. Bills, Disability Rights North Carolina Karin S. Feldman, AFL-CIO Patrick C. Hajovsky, BP Corporation North America Inc. Richard G. Moon, Verrill Dana, LLP This paper is intended to address both broadly what constitutes workplace wellness programs and the specifics of what is required for legal compliance with relevant laws and regulations. The paper is organized with an Introduction describing the extent and type of workplace wellness programs and their evolution, as well as pros and cons identified in recent studies over the last decade, and finally, flagging some of the legal issues impacted and concerns from employers and employees. Section 1 reviews the various federal laws and regulations which govern workplace wellness programs, including, inter alia, wellness incentives under the Affordable Care Act 1, and the newly-proposed EEOC regulations dealing with the Americans with Disabilities Act of 1990 ( ADA ). Section 2 discusses the few court cases and decisions addressing the legality of certain workplace wellness programs, including recent EEOC challenges. Section 3 discusses other state and federal laws that may apply to, or affect the nature of, wellness programs, including some implementation issues. Section 4 deals with the history and evolution of wellness programs, including a further discussion and assessment of their effectiveness. Section 5 has a series of short stakeholder perspectives on workplace wellness programs by the authors. The Appendix contains descriptions of four distinct employer wellness programs and the employers assessments of the relative success of such programs, together with a discussion of some of the legal concerns regarding the programs. 1 The Affordable Care Act or ACA refers to the Patient Protection and Affordable Care Act, P.L. 111-148, as amended by the Health Care and Education Reconciliation Act of 2010, P.L. 111-152. 1

INTRODUCTION Wellness as a word by itself conjures up a very wide variety of activities, status, science, etc. Add the words Workplace and Program -- Workplace Wellness Program-- and while the perception may be much narrower, the breadth of what could be included is as extensive. Workplace wellness programs can facilitate employees discovering whether, and to what extent they are well, assist employees trying to stay healthy, or require employees to get healthier. Such programs may create a potentially potent vehicle to predict the costs associated with employer health plans, now and into the future. Indeed, wellness programs in their various forms encompass all four features, and in the United States on a huge scale, with 74 million people covered by employer-based wellness programs. In 2014, 51% of companies with over 50 employees offered some form of wellness program, including HRAs (Health Risk Assessments) or biometric screening, or both; 32% of small employers offered HRAs; and 26% of small companies offered biometric screening. 2 The growth in small employer offerings of wellness programs has continued since 2008, while large employer programs as a percentage has remained fairly constant since 2008. 3 At the same time, some wellness programs may cross the line, intruding into employees personal lives and undermining privacy protections. Additionally, the new incentives for wellness programs permitted under the Affordable Care Act may result in policies that have an 2 Karen Pollitz, Matthew Rae, Workplace Wellness Programs Characteristics and Requirements, The Henry J. Kaiser Family Foundation, Issue Brief June 2015 available at http://files.kff.org/attachment/issue-briefworkplace-wellness-programs-characteristics-and-requirements 3 See Appendices 1 3; Soeren Mattke, Hang Sheng Liu, John P. Caloyeras, Christinia Y. Huang, Kristin R. Van Busum, Dmitry Khadyakov, Victoria Shier, Workplace Wellness Programs Study, Final Report Rand Health,, Rand Corporation (2013) available at http://www.dol.gov/ebsa/pdf/workplacewellnessstudyfinal.pdf ( Rand 2013 ) and Paul Fronstin, PhD EBRI, and M. Christopher Roebuck, PhD, RX Economics, LLC, Financial Incentives, Workplace Wellness Program Participation and Utilization of Health Care Service and Spending, Employee Benefits Research Institute, Issue Brief No. 417, August 2015 available at http://www.ebri.org/pdf/briefspdf/ebri_ib_417.aug15.wellness.pdf. Both Rand 2013 and Rand 2014,infra, discussed and cited herein are extensive analyses of the covered topics and to appreciate all of the nuances and classifications should be reviewed in their entirety. 2

inadvertent disparate impact on people with disabilities or empower errant employers with a subterfuge for discrimination in addition to providing employers with an opportunity to reduce their health care costs by shifting them to workers. The ADA s requirement that employers reasonably accommodate an employee s disability remains in effect to counter possible discriminatory effects of workplace wellness policies. Similarly, an employer s well-meaning desire to improve employee health and manage financial risks must be balanced with the protections afforded workers under the ADA, HIPAA, ACA and other federal and state laws. Our paper provides a background for this discussion and begins to tease out some of these tensions. The Types of Workplace Wellness Programs and The Employers Utilizing Them Most studies and providers of workplace wellness programs divide them into three types: Promoting Health Preventing Disease Managing Disease Health promotion programs can be very inclusive in their activities. The activities range from nutritional advice in newsletters, sponsored activity programs, paid gym memberships, and healthy lifestyle guidance information, to more direct actions such as HRAs and providing individualized feedback to the participants. HRAs also normally provide the employer or wellness program provider, if different, aggregate de-identified feedback for use in selecting advice on lifestyle choices or can even lead to other programs for disease prevention and management. Roughly 80% of employers with wellness programs screen their employees for health risks. Such screenings can be done through a healthcare insurer, a private third party, or an in-house, self-administered questionnaire on health-related behaviors. Many programs stop there, providing the aggregate data to the employer and an insurer to determine how to most 3

effectively design benefits and giving the employee his or her individual data to help them make healthier choices and perhaps voluntarily initiate suggested healthcare actions. Disease prevention programs differ slightly from overall health promotion activities in order to focus on particular high cost and debilitating conditions. For example, the growing popularity of fitness trackers could be used to reduce the harmful effects of metabolic syndrome for a workforce e that is typically desk-bound. As well, and more popular, anti-smoking measures could fall into this category to help participants avoid the documented harmful effects of nicotine and provide a path to reduce, in some cases, addiction to nicotine and similar products. Disease management programs, rather than general wellness approaches, zero in on certain chronic and high cost conditions. These programs are designed to help ensure effective treatment is provided as opposed to wasteful and inefficient care. For example, a diabetic disease management program could entail nutritional counselling to forestall the dangerous effects of diabetes, reducing overall costs of treatment. It could also provide discounts on insulin test strips or, in extreme cases, limited networks of providers with greater benefits coverage inside those networks. Types of Workplace Wellness Programs: Participatory v. Health Contingent First, what are the distinctions between participatory programs and outcome-based or health contingent programs? Participatory programs are those that may offer a reward just for participating or assess a penalty for non-participation. Neither the reward nor the penalty may be related to the participant s health status or achievement of a particular health outcome. Health contingent programs, on the other hand, are generally tied to health factors or outcomes. Two 4

types of health contingent programs 4 are recognized under the 2013 tri-agency rules implementing the Affordable Care Act wellness program provision: activity only programs; and outcome-based wellness programs. Compliance As detailed in Section 1, multiple federal laws deal directly with wellness programs. The federal laws of direct concern are the ADA, the Affordable Care Act, ERISA, HIPAA, the Public Health Service Act, GINA, and the Internal Revenue Code. 5 While there are regulations or questions and answers issued pursuant to each of these laws, open questions remain and there are proposed new regulations pending with others to be proposed. Many state laws also impact wellness programs. Some states allow more permissive individual treatment by insurers. One state requires annual plan evaluations and reporting to the state. And, of course, there are other still broader questions, such as what counts as wages, or what health information must be kept private. Section 1 Federal Laws and Regulations Impacting Workplace Wellness Programs Statutes Title I of the ADA prohibits discrimination based on disability or perceived disability in the terms, conditions, and privileges of employment, as well as retaliation for alleging such 4 Additional detail about the two types of programs are provided in Section 1, infra. 5 HIPAA, the Health Insurance Portability and Accountability Act, set some minimum federal standards for private health insurance, including a prohibition on discrimination based on health status factors. To cover different private sector health coverage and state and local government health programs, HIPAA s group health plan requirements were added to the Employee Retirement Income Security Act of 1974, as amended (ERISA), the Internal Revenue Code of 1986, as amended and the Public Health Service Act. See Jennifer A. Staman, Enforcement of Private Health Insurance Market Reforms Under the Affordable Care Act (ACA), Congressional Research Service (January 2014) available at https://www.hsdl.org/?view&did=749209. The Affordable Care Act, in turn, also amended each of these three laws. For simplicity, we will refer to HIPAA and the Affordable Care Act (or ACA), and unless otherwise noted, refer only to the applicable ERISA sections and Department of Labor regulations, rather than all three statutory sections and regulatory guidance. Recognizing that the three agencies the Departments of Labor, Treasury and Health and Human Services work together to issue parallel regulations in connection with HIPAA, the Affordable Care Act and GINA, we use the term tri-agency regulations when discussing relevant regulations. 5

discrimination. 6 This proscription extends to employers contractual relationships with fringe benefit providers that have the effect of discriminating against employees with disabilities. 7 The ADA also restricts employers generally from inquiring about employees disabilities, medical information, or health status. Specifically, it prohibits an employer from conducting examinations or inquiries unless they are job-related and consistent with business necessity. 8 Certain exceptions apply, such as for voluntary medical exams and medical histories, which are part of an employee health program available to employees at that work site. 9 The ADA s restrictions on medical inquiries and examinations prevent employers from uncovering hidden disabilities that could become the basis for workplace discrimination. The ADA also requires employers to engage with workers who disclose their disability and provide reasonable accommodations to enable them to perform the essential functions of their job or to participate in the privileges and benefits of employment (e.g., health insurance, workplace wellness programs), unless they prove an undue burden. 10 The Genetic Information Nondiscrimination Act (GINA) provides federal protection against genetic discrimination 11 in the workplace (Title II) and by group health plans and health insurance 12 providers (Title I). GINA prohibits employment and insurance discrimination based on genetic information and similarly restricts employers and insurers from inquiring about employees genetic information. Both the ADA and GINA provide exceptions for employers to conduct certain medical inquiries, including as part of some voluntary workplace wellness 6 42 U.S.C. 12112(a). 7 42 U.S.C. 12112(b)(2). 8 42 U.S.C. 12112(d)(4). 9 Id. 10 42 U.S.C. 12112(b)(5)(A) 11 Genetic information is broadly defined and includes information about genetic tests of an individual and family members and the manifestation of a disease or disorder in family members. ERISA Section 733(d)(6) and 42 U.S.C. 2000ff(4). 12 Life, disability and long-term care insurance are not governed by GINA s protections. 6

programs. The Equal Employment Opportunity Commission (EEOC) enforces both the ADA and GINA. EEOC Enforcement Guidance for the ADA clarifies that whether an employee is required to participate, or penalized for not participating, affects the determination of voluntariness. 13 The HIPAA and many other state privacy laws require health plans and insurers to protect the privacy of personal health information, including information that may be collected by workplace wellness programs or health insurers. Wellness programs that are part of group health plans must comply with the non-discrimination provisions of HIPAA, as amended by the Affordable Care Act, which permit incentives for some workplace wellness programs. HIPAA prohibits group health plans and health insurance issuers from discriminating on the basis of health status-related factors. 14 As an exception to the general prohibition, group health plans and issuers offering group health coverage could offer as part of a program of health promotion and disease promotion premium discounts or rebates or modify co-payments or deductibles. 15 Section 1201 of the ACA amended the discrimination prohibition included in HIPAA 16 to provide more detailed directives regarding wellness programs. Section 2705(j) of the PHSA generally incorporates the provisions of the 2006 regulations issued by HHS, DOL and Treasury 17 with one significant exception. Section 2705(j)(3) permits the reward under any wellness program requiring satisfaction of health status related factor to be increased from a 13 Enforcement Guidance: Disability-Related Inquiries and Medical Examinations of Employees under the Americans with Disabilities Act (ADA) available at http://www.eeoc.gov/policy/docs/guidance-inquiries.html 14 The statutory sections listed eight factors, including health status, medical condition, and claims experience. See, e.g., ERISA Section 702(a)(1). 15 ERISA Section 702(b)(2)(B). 16 The ACA amended the Public Health Service Act to add a new Section 2705, and that change is included in both ERISA and the Code through other statutory changes. See ERISA Section 715(a)(1) and Code Section 9815(a)(1). 17 Nondiscrimination and Wellness Programs in Health Coverage in the Group Market; Final Rules, 71 Fed. Reg. 75014 (December 13, 2006) available at http://www.gpo.gov/fdsys/pkg/fr-2006-12-13/pdf/06-9557.pdf. 7

maximum of 20 percent of the cost of coverage up to 30 percent. 18 In addition, DOL, HHS and Treasury were permitted to increase the available reward to up to 50 percent of the cost of coverage if the Secretaries determine that such an increase is appropriate. Regulatory Guidance EEOC Americans with Disabilities Act Regulations and Guidance Current ADA Act regulations 19 explain that risk assessments do not discriminate even if they result in limitations on individuals with disabilities, provided that these activities are not used as a subterfuge to evade the purposes of this part. They continue, [A]n employer or other covered entity cannot deny an individual with a disability who is qualified equal access to insurance or subject an individual with a disability who is qualified to different terms or conditions of insurance based on disability alone, if the disability does not pose increased risks. Part 1630 requires that decisions not based on risk classification be made in conformity with non-discrimination requirements. 20 The EEOC has also issued specific Enforcement Guidance on Disability-Related Inquiries and Medical Examinations of Employees under the ADA, 21 explaining when it is permissible for employers to make disability-related inquiries or require medical examinations of employees, and specifically regarding inquiries that are part of voluntary wellness and health screening programs. 22. May an employer make disability-related inquiries or conduct medical examinations that are part of its voluntary wellness program? Yes. The ADA allows employers to conduct voluntary medical 18 The cost basis would be employee-only coverage unless dependents could participate in the program when it would be the cost of coverage including those dependents. 19 29 CFR Part 1630. 20 See Senate Report at 84-86; House Labor Report at 136-138; House Judiciary Report at 70-71; 29 CFR 1630.5 Limiting, Segregating and Classifying. 21 http://www.eeoc.gov/policy/docs/guidance-inquiries.html 8

examinations and activities, including voluntary medical histories, which are part of an employee health program without having to show that they are job-related and consistent with business necessity, as long as any medical records acquired as part of the wellness program are kept confidential and separate from personnel records. These programs often include blood pressure screening, cholesterol testing, glaucoma testing, and cancer detection screening. Employees may be asked disability-related questions and may be given medical examinations pursuant to such voluntary wellness programs. A wellness program is voluntary as long as an employer neither requires participation nor penalizes employees who do not participate. 22 Currently, the guidance lacks more clarity around voluntariness and an explication of what constitutes a penalty in this context. The privacy protections serve a separate purpose from the disability discrimination prohibitions ensuring robust workplace rights for people with disabilities. Apart from protecting against disparate treatment or adverse employment actions, the limits on inquiries and examinations also serve to prevent social stigma and stereotyping by guarding employees right to privacy. Tri-Agency Wellness Program Regulations and Guidance Regulations implementing the Affordable Care Act wellness program provisions were issued jointly by the DOL, Treasury, and HHS. 23 The 2013 final regulations build on the original 2006 wellness programs rules and continue to recognize two types of wellness programs: (1) participatory programs, meaning no reward or penalty is based on the result or outcome; and (2) health-contingent programs which provide a reward only if workers meet a health-related standard. Participatory programs must be available to all similarly situated individuals regardless of their health status. In addition, there is no limit on the amount of any potential reward available or penalty. 22 23 Id. Incentives for Nondiscriminatory Wellness Programs in Group Health Plans; Final Rule, 78 Fed. Reg. 33158 (June 3, 2013) available at http://www.gpo.gov/fdsys/pkg/fr-2013-06-03/pdf/2013-12916.pdf 9

The final regulations permit two types of health-contingent wellness programs: (1) activity-only programs and (2) outcome-based programs. Examples of activity-only programs include walking, diet or exercise programs but without any requirement to attain or maintain specific health outcome. Outcome-based programs, on the other hand, require the attainment or maintenance of a specific health outcome, such as attaining certain results on biometric screenings. Both activity-only and outcome-based programs must satisfy additional requirements in order to avoid being considered discriminatory. First, eligible individuals must be able to qualify for the reward at least once each year. Second, the total reward or penalty under all available health-contingent programs cannot exceed the applicable percentage of the total cost of coverage. The maximum percentage is 50 percent for smoking-cessation programs and 30 percent for all other types of health-contingent programs. The total cost of coverage is the sum of the premium shares paid by the individual and the employer for self-only coverage unless other family members, such as spouses and other dependents may participate in the program. In those cases, the total cost is based on the coverage in which the worker and dependents are enrolled. 24 Third, health-contingent programs must be reasonably designed to prevent disease and promote health, a determination made on a case-by-case basis. Fourth, the reward must be available to all similarly situated individuals and to satisfy this requirement, reasonable alternative standards for obtaining the reward or waivers must be available in the case of activity-based programs to individuals if it is unreasonably difficult due to a medical condition to satisfy the standard or medically inadvisable for the individual to attempt to satisfy it and to 24 29 C.F.R. 2590.702(f)(3)(ii) and 2590.702(f)(4)(ii). 10

individuals who do not meet the initial standard for outcome-based programs. 25 Last, plan materials describing the wellness program must disclose the availability of alternative ways to qualify for the reward and the agencies provide sample language. 26 Outcome-based programs must satisfy additional requirements with respect to the reasonable alternative with some limitations on when verification from the individual s physician may be requested. Genetic Information Nondiscrimination Act Regulations and Guidance Tri-agency 27 and EEOC regulations provide guidance on how GINA affects wellness program incentives. The tri-agency rules address what group health plans may do while the EEOC regulations are more directed at employers though they also impact benefit plan terms. Under the tri-agency rules, any HRA or other tools asking questions about family medical history considered to be protected genetic information are limited. These questions are permitted only if they are asked after plan enrollment and no reward is provided for the completion of the HRA (or penalty assessed for failure to complete it). HRAs may include questions that do not directly seek genetic information as long as clear instructions advise the employees to not provide such information. 28 The EEOC regulations include a broad prohibition on the acquisition of genetic information with an exception for voluntary wellness programs. 29 To be considered voluntary, there must be no requirement that the genetic information be provided or penalty for choosing 25 The rule includes some factors to be considered in determining whether alternatives are reasonable, including making available an educational program and the required time commitment. 26 29 C.F.R. 2590.702(f)(6). 27 The interim final regulations were issued on October 2009 (74 Fed Reg. 51664) available at http://www.gpo.gov/fdsys/pkg/fr-2009-10-07/pdf/e9-22504.pdf and the EEOC issued its final rule on November 9, 2010 (75 Fed. Reg. 68912), available at http://www.gpo.gov/fdsys/pkg/fr-2010-11-09/pdf/2010-28011.pdf. 28 The example language included in the rules provides that: In answering this question, you should not include any genetic information. That is, please do not include any family medical history or any information related to genetic testing, genetic services, genetic counseling or genetic diseases for which you believe you may be at risk. 29 C.F.R. 2590.702-1(d)(3), Example 7. 29 29 C.F.R. 1635.8(b)(2). 11

not to provide it. The EEOC makes clear that no financial inducements to provide genetic information may be offered, although they may be offered for completion of [HRAs] that include questions about family medical history or other genetic information, provided the covered entity makes clear, in language reasonably likely to be understood that the inducement will be made available whether or not the participant answers questions regarding genetic information. 30 Proposed EEOC Regulations As we have noted, different agencies regulate the many laws impacting these programs and EEOC, HHS, Treasury and DOL have endeavored to coordinate their regulatory and enforcement efforts to prevent conflicting federal guidance. 31 On April 20, 2015, the EEOC promulgated proposed regulations to modify ADA requirements for workplace wellness programs. 32 Proposed regulations to modify GINA s requirements for these programs are expected later in 2015. The EEOC s proposed rule tracks some of the requirements of the tri-agency ACA rules. For example, it requires wellness programs that involve medical inquiries to be reasonably designed to promote health, rather than acting as a subterfuge for discrimination. 33 Such programs cannot be overly burdensome and cannot shift costs onto employees based on their health. 34 The proposed EEOC rule provides guidance on the extent to which the ADA permits employers to offer incentives to promote participation in wellness programs that include 30 29 C.F.R. 1635.8(b)(2)(ii). 31 Indeed, the 2013 tri-agency final regulations made no changes to the regulatory provision included in the final 2006 wellness program regulations regarding the effect of the complying with its provisions. Paragraph (h) of each agency s rule stated, in relevant part, that Compliance with this section is not determinative of compliance with any other provision of the Act or any other State or Federal law, such as the Americans with Disabilities Act. See 29 C.F.R. 2590.702(h) (2006). 32 80 Fed. Reg. 21659 (April 20, 2015) available at http://www.gpo.gov/fdsys/pkg/fr-2015-04-20/pdf/2015-08827.pdf. 33 34 Proposed 29 C.F.R. 1630.14(d)(1). Id. 12

disability-related inquiries and/or medical examinations. 35 The rule clarifies the Commission s position that employee health programs that include disability-related inquiries or medical examinations (including inquiries or medical examinations that are part of a HRA or medical history) must be voluntary [particularly] in light of the amendments made to HIPAA by the Affordable Care Act. 36 Under the proposed rule, voluntary is defined to mean that (1) employees are not required to participate, (2) coverage is not denied under any group health plan or benefit package or limited due to non-participation, and (3) employers do not take any adverse employment action as a result of an employee s lack of participation. 37 The rule requires robust notice regarding what medical information is sought, where it will be stored, who will have access, how it will be used, and methods that will ensure against unauthorized disclosure or use, which must comply with the HIPAA Privacy Rule. 38 Disclosure of medical information obtained by wellness programs to employers may be made only in aggregate form, except as needed to administer the health plan. 39 The rule clarifies that an offer of limited incentives to participate in wellness programs that are part of a group health plan and that include disability-related inquiries and/or medical examinations, will not render the program involuntary. 40 It further proposes to extend the 30 percent limit on incentives to participatory programs, so long as it is available to all similarly situated employees, regardless of any health factor. 41 Importantly, the Commission is considering whether to instruct employers that incentives offered to promote participation in wellness programs must not render the cost of health insurance unaffordable to employees, such 35 36 37 38 39 40 41 80 Fed. Reg. at 21660. 80 Fed. Reg. at 21663. 80 Fed. Reg. at 21662; Proposed 29 CFR 1630.14(d)(2). Proposed 29 C.F.R. 1630.14(d)(2)(iv). Proposed 29 C.F.R. 1630.14(d)(6). Proposed 29 C.F.R. 1630.14(d)(3). Id. The EEOC proposal bases its 30 percent limit on the total cost of employee-only coverage. 13

that it is deemed coercive or involuntary forcing employees to disclose otherwise protected information. 42 Section 2. Case Law Actual case law related to enforcement of wellness programs is scarce. The only federal case directly on point, and perhaps the seminal case from which all future wellness program litigation will derive, is Seff v. Broward County, (778 F.Supp.2d 1370, S.D. Fla. 2011). In Seff, a Florida federal district court granted Broward County s (Broward) motion for summary judgment against a complaining class of employees finding that Broward s employee wellness program fell within the ADA s safe harbor provision for insurance plans. The 11 th Court of Appeals affirmed the summary judgment in 2012 (691 F. 3d 1221). Faced with escalating health care costs, Broward County ( Broward ) sought to stem the tide by implementing a wellness program within and as a part of its health care plan. The strategy contemplated that, via the wellness program, plan participants would be provided tools they need to live healthier lives and, as a direct byproduct, lead to lower health care costs for Broward taxpayers and employees. As a part of the plan s open enrollment process in 2009, Broward asked all participants to complete both a health risk assessment (HRA) and a biometric screening. The HRA could be completed online, while the biometric screening consisted of a finger stick blood test to measure glucose and cholesterol. Both the HRA and the biometric screening results would be kept confidential and not used against the participant in any way. Participation in the plan was not dependent on completion of either element; however, should the participant be identified by the plan s contract administrator as having any one of 5 chronic conditions, the participant would be 42 80 Fed. Reg. at 21664. 14

eligible for a disease management coaching program and access to certain medications at no cost to the participant. In 2010, Broward sought to increase participation in the wellness program. Beginning in June of that year, the plan instituted a rule that any employee who did not complete both wellness components would incur a $20.00 charge on each biweekly paycheck. It is at this point that Plaintiff Bradley Seff and other participants in the Broward health plan objected legally. Seff alleged that the employee wellness program s biometric screening and online HRA ADA s prohibition on non-voluntary medical examinations and disability-related questions not related to the employee s ability to perform his/her essential job functions. Broward rebutted those allegations by arguing that its wellness program was a part of its health care plan and, therefore, was exempt from these ADA prohibitions. Recall that, under the ADA, a covered entity is prohibited from requiring a medical examination and making inquiries of an employee as to whether such employee is an individual with a disability or as to the nature or severity of the disability, unless such examination or inquiry is shown to be job-related and consistent with business necessity. 43. However, the ADA has a safe harbor provision that exempts health care plans from the ADA s general prohibitions, including the prohibition on required medical examinations and disability-related inquiries. 44 The safe harbor provision states that the ADA shall not be construed as prohibiting a covered entity from establishing, sponsoring, or observing or administering the terms of a bona fide benefit plan that are based on underwriting risks, 43 44 42 U.S.C. 12112(d)(4)(A). 42 U.S.C. 12201(c)(2). 15

classifying risks, or administering such risks that are based on or not inconsistent with State law. 45 The Florida U.S. District Court granted summary judgment in Broward s favor based on its conclusion that the employee wellness program fell within the ADA s safe harbor provision. They also stated that the employee wellness program qualified as a term of a bona fide benefit plan within the meaning of the safe harbor provision because the employee wellness program constituted a term of Broward s group health plan. Seff argued this could not be the case since the wellness program did not dictate whether (employees) were eligible to receive insurance benefits. 46 The District Court disagreed, stating that the $20.00 surcharge for non-participation made the wellness program a condition of receiving full benefits. Additionally, even if the program were optional, health plans containing optional features do not divorce such features from the plan. 47 The District Court then turned its attention to whether the wellness program was based on underwriting risks, classifying risks or administering such risks, key elements in determining whether or not the ADA safe harbor applies. The court referenced two cases examining whether underwriting risks similarly falls under the ADA safe harbor. In Zamora-Quezada v. Health- Texas Medical Group of San Antonio, 34 F.Supp.2d 433 (W.D.Tex. 1988), a Federal District Court in Texas defined underwriting as the application of the various risk factors or risk classes to a particular individual or group for the purposes of determining whether to provide coverage. 48 In Barnes v. Benham Group, Inc., 22 F.Supp.2d 1013, 1020 (D.Minn. 1998), a federal district court in Minnesota found that the purpose of the ADA safe harbor was to permit 45 46 47 48 Id. Seff, at 1373. Id. Zamora-Quezada, at 433. 16

the development and administration of benefit plans in accordance with accepted principles of risk assessment. From this, the court in Seff concluded that the safe harbor provision was specifically aimed to protect the process of developing insurance plans. Relying on these cases, the Seff court concluded that the wellness program at bar was nothing other than an initiative designed to identify and mitigate risks, on the theory that encouraging employees to get involved in their own healthcare leads to a more healthy population that costs less to insure. 49 Furthermore, the court pointed out that the penalties at hand here were far worse than what the Minnesota court concluded was permitted in Barnes. There, the Benham Group required employees to complete health questionnaires for coverage in the Benham group health plan. When Barnes refused, he was fired for insubordination. The court found this action was clearly protected by the ADA s safe harbor provision given the information was used strictly for underwriting purposes and not as a pretext to receive information about a person s continued employment. 50 The Broward plan, by comparison, merely charged employees a $20.00 sanction biweekly. It is important to note that the District Court in Seff took pains to point out that all personally identifiable information obtained by both the Broward plan and the Benham Group plan was kept strictly confidential. The implication here is that this is a key element in establishing that gathering the information was for underwriting purposes exclusively, and not meant as a pretext to use the information for prohibited disability discrimination. While this Court did not mention it, this protection of confidentiality would also be a requirement under the privacy provisions of both the Health Insurance Portability and Accountability Act (HIPAA) and the ADA. 49 50 Seff, at 1374. Barnes, at 1020. 17

On appeal to the 11 th Circuit Court of Appeals, Seff and his fellow class members argued that the district court ignored the testimony of Broward s business manager, Lisa Morrison, who had stated that the wellness program was not a term or provision actually contained in any of the Broward benefit plan s governing plan documents. The 11 th Circuit was unpersuaded. In a brief two page opinion, the Court stated that there is no authority suggesting that a wellness program must be explicitly identified in a benefit plan s written documents to qualify as a term of the benefit plan. Seff presented no substantive argument that the issue of whether the employee wellness program was a written term contained within the plan document was material to the determination of the safe harbor applicability. The facts that the wellness program was available only to plan participants, and that Broward broadly communicated the terms of the program as part of its group plan in at least two employee handouts were sufficient. The 11 th Circuit upheld the decision, and Seff did not appeal to the U.S. Supreme Court. The Circuit Court decision did not address the underwriting issue. Subsequent Cases In 2014, the EEOC determined that it had an obligation under the ADA to pursue cases where wellness programs created barriers to health plan entry for individuals with disabilities, notwithstanding the safe harbor s limited exception. The EEOC filed three lawsuits EEOC vs. Honeywell International, Inc., Case No. 14-4517 (D.Minn., filed Oct. 27, 2014), EEOC v. Orion Energy Systems, Inc., Case No. 14-1019 (E.D. Wis filed Aug. 201, 2014) and EEOC v. Flambeau, Inc., Case No. 14-638 (W.D. Wis filed Sept. 30, 2014). The case that brought the most direct interest, which was also the shortest lived, was Honeywell. The Honeywell program provided that if the participating employee did not complete a biometric screening, the employee would be subject to a $1,500 premium surcharge 18

and would not be eligible for employer contributions to the employee s health savings account. Additionally, if the employee s covered spouse did not complete the biometric screening, the plan s tobacco use premium surcharge would be applied, increasing the employee s health plan premiums by an additional $1,000. The EEOC filed a request for a temporary restraining order and preliminary injunction claiming that Honeywell s employees would be irreparably harmed by participating in Honeywell s wellness program. Similar to Broward County, the Honeywell wellness program was made a part of the Honeywell medical plan, thus attempting to avail itself of the ADA safe harbor. Honeywell further argued that the use of surcharges in wellness programs was specifically endorsed by the Affordable Care Act. Honeywell contended, Congress would not expressly endorse in one federal statute what is illegal under another pre-existing federal statute. The federal District Court in Minnesota ruled that the EEOC could not establish a threat of irreparable harm for three reasons. First, the EEOC could easily meet its enforcement obligations by merely continuing the investigation into the lawfulness of Honeywell s program. Second, there was no threat of actual injury since the plaintiffs had already submitted to the biometric screening. In actuality, should the EEOC subsequently lose the suit, employees who did not submit to the biometric screening could be penalized retroactively for failing to do so. Third, as the results of the biometric tests were not shared in any identifiable way with Honeywell, the EEOC failed to demonstrate any right to privacy had been jeopardized. In fact, the EEOC never even alleged that Honeywell s program violated any privacy laws. While coming to no conclusion on the merits of the EEOC s overall arguments, the Court spent several pages outlining how the Honeywell program seemed to comply with both ACA and the ADA, citing Seff. In its Memorandum in Support of the Motion for a Preliminary Injunction, 19

the EEOC proactively attempted to distinguish Seff. Disputing the District Court s conclusions in Seff that surcharges and wellness programs furthered the concept of the development and administration of benefit plans in accordance with accepted principles of risk assessment, 51 the EEOC stated that the legislative history and purpose of the safe harbor does not force one to conclude that wellness programs fall under concepts of actuarial studies and legitimate classifications of risk. To do so, argued the EEOC, would be to find the safe harbor so broad that any health-based inquiry designed as a cost-saving measure would be permitted. After the District Court denied the motion for a temporary injunction, the EEOC dismissed this case on November 6, 2014. Although this case implicated the issue of the ADA safe harbor provision, the EEOC instead focused on the other two cases addressing this issue: Orion and Flambeau. 52 In Orion, the employer s wellness program was also embedded within its health plan, similar to Broward County s. However, Orion took this several steps further by requiring enrollees not only to complete a health risk assessment but also to complete a fitness test using a Range of Motion Machine in Orion s physical fitness room, with a further requirement to complete a medical history form. Failure to complete the HRA resulted in the employee being responsible for the full premium cost of the Orion health plan without an employer subsidy, should the employee choose to enroll. Additionally, failure to complete the fitness test would cost the employee an additional $50 per month in premiums. It should be noted that the complainant was the only employee who did not participate in the wellness program. Finally, 51 Seff, at 1374. 52 It was reported in several news outlets that the EEOC commissioners did not review and approve of the Honeywell case before it was filed, in contrast to the Orion and Flambeau cases. (See Is EEOC Wellness Program Litigation Making You Sick? ) 20

her employment was terminated due to what Orion claims were non-related performance reasons. The Flambeau case presented a similarly aggressive program. Here, while also a part of the Flambeau medical plan, the employee was required to complete both an HRA and a biometric screening to be eligible. Additionally, if the employee did not complete both at the appointed time, the employee would be subject to disciplinary action, up to and including termination of employment. The complainant in this case was unable to complete the tests on the appointed date due to being in the hospital for cardiomyopathy and congestive heart failure. Upon his return to work, the complainant requested additional time to complete the tests due to his prior unavailability. These requests were denied, and his medical coverage was cancelled soon thereafter. He was, however, offered COBRA coverage. Both Orion and Flambeau have contended that their wellness programs fall squarely under the ADA s safe harbor provisions and invoked Seff while making those arguments. Clearly, these two programs attempt to apply Seff aggressively, perhaps too much so, raising important questions whether these are actual wellness programs related to accepted principles of risk assessment. For example, both the Seff and Honeywell courts emphasized the importance of privacy. In Orion, it is unclear who was present while the employees were completing the Range of Motion Machine fitness test. It will be important for the court to determine whether those individuals were representatives of the medical plan, and thus covered by HIPAA s privacy protections, or were other Orion employees. Other relevant considerations will undoubtedly include whether Orion maintained the wall of protection between employer and employee and whether the medical history form contained family medical history in violation of GINA. 21

In Flambeau, it will be important whether any reasonable accommodation was afforded the employee due to his medically related inability to complete the wellness program, as is required by HIPAA and the ADA. If there was not a reasonable modification offered pursuant to the ADA, or a reasonable alternative for the HRA and biometric screening under HIPAA, the non-compliance might render the program automatically unrelated to accepted principles of risk assessment. Moreover, if the programs are unrelated, the court might not even need to reach whether the ADA safe harbor applies since the programs would, by their nature, fall outside the safe harbor. 53 These are important questions for the courts to address, before one even gets to the new proposed EEOC wellness program rules, and their viability in the face of the ADA safe harbor. Pleadings and arguments are ongoing in these cases, and final decisions may not be issued for some time. State Court Case While no other federal court to date has cited Seff, an Oregon state court recently faced a similar fact pattern and, following Seff, ruled the employer s use of a health assessment questionnaire did not violate the ADA. See Patten v. State of Oregon, --- P.3d --- (Oregon Ct. App 2015), 2015 WL 5146081 September 8, 2015. In Patten, an Oregon trial court granted the State s motion for summary judgment against complaining employees finding that the Public Employees Benefit Board s ( PEBB ) health assessment questionnaire did not violate the ADA, its state analog, or the Fourth or Fourteenth Amendments of the U.S. Constitution. 53 It is important to note that the reasonable alternative standard under HIPAA differs from the reasonable accommodation standard of the ADA, and just because a plan complies with one, the other could present a challenge to compliance. 22

PEBB s insurance program urged state employees who wanted to obtain (or maintain) state-subsidized health insurance to fill out an on-line health risk assessment questionnaire. The questionnaire contained questions that are highly personal and could indicate the presence of a disability. However, employees were informed that they need not answer all of the questions, although they were urged to do so. PEBB used the aggregated results to help design future health plan offerings. It also used the program itself as a way to encourage employees to adopt beneficial health habits, which they hoped, in turn, would reduce insurance costs. The assessment was to be filled out privately, online, and then automatically forwarded to a third party administrator, who aggregated the responses, securely stored the individual questionnaires (until they are destroyed) and forwarded the aggregated data to PEBB. PEBB and state employers received only a list of employees who had taken the assessment and a summary of the aggregated, anonymized or de-identified data. PEBB used the program to encourage employees to adopt beneficial health habits by requiring each assessment taker to agree to undertake two health actions. The agreement was not policed. Assessment takers were simply asked to report whether they took the health actions. They were not required to submit proof or to identify which actions they took. Although an employee's eligibility for state-sponsored health insurance did not depend on whether the employee had completed the assessment, those who failed to complete it paid more for their insurance than those who did. The difference was $17.50 per month for individuals or $35.00 per month for couples. Nonparticipants also had a deductible that is $100.00 larger than participants. Plaintiffs alleged that the self-assessment questionnaire violates the ADA and Oregon s analog statute by requiring them to disclose disabilities. PEBB rebutted those allegations by 23

moving for summary judgment on the grounds that the assessment did not contain disability inquiries; that, even if it contained such inquiries, they fell within statutory safe harbor provisions that permit certain inquiries used by insurance providers for underwriting purposes; and that the assessment was neither a search nor an unlawful invasion of any constitutionally protected privacy interest. Plaintiffs argued that summary judgment was improper because a fact issue remained as to whether PEBB used the aggregated data to design future health plan offerings. The Court of Appeals disagreed. Kapowich s (PEBB's administrator) sworn declaration that the aggregated data enables PEBB to understand the overall health trends of the population it insures was uncontradicted in the record. Additionally, plaintiffs argued that there was a disputed issue of fact as to whether an employee's responses to the assessment were revealed to defendants; however, they presented no evidence regarding this alleged factual issue. Plaintiffs primary legal argument was that requiring employees to take the risk assessment questionnaire violates the ADA, which provides: A covered entity shall not make inquiries of an employee as to whether such employee is an individual with a disability or as to the nature or severity of the disability, unless such examination or inquiry is shown to be job-related and consistent with business necessity. 54 The court concluded that the assessment asked employees to answer questions but in context the questions were not inquiries and the risk assessment questionnaire was not a prohibited disability inquiry. This conclusion obviates the need to address defendant s alternative argument that, if the assessment poses disability inquiries, they fall within the ADA's so-called insurance safe harbor provision. By this holding, the Oregon court went well beyond the Seff court. Even if this position does not hold up on appeal or is not followed by other courts reviewing the ADA, 54 42 U.S.C. 12112(d)(4)(A). 24

the Oregon court would likely follow Seff s lead and hold the safe harbor applicable. In fact, the judges here wrote, tellingly: We note in passing, however, that we find persuasive the reasoning in the only case addressing the insurance safe harbor in the context of a wellness program identical to PEBB s in all relevant respects [then quoting extensively from Seff]. The plaintiffs made three other claims. First, the plaintiffs argued that the risk assessment questionnaire violated Oregon s analog statute, which provides that an employer may not require that an employee submit to a medical examination, may not make inquiries of an employee as to whether the employee has a disability, and may not make inquiries of an employee as to the nature or severity of any disability of the employee, unless the examination or inquiry is shown to be job-related and consistent with business necessity. 55 The court concluded that this argument was invalid because plaintiffs failed to address the question of whether the assessment makes disability inquiries in the first place. Therefore, PEBB s risk assessment questionnaire does not violate the ADA or Oregon s analog to that federal statute. Second, the court reached a similar conclusion regarding plaintiffs Fourth Amendment claim. Plaintiffs contended that, by requiring them to reveal medical information, for which they have a reasonable expectation of privacy, defendants conducted a prohibited warrantless search. The court concluded that there is no such thing as a Fourth Amendment right to be free from intrusive questioning and plaintiffs provided no reason why this court should be the first to find one. Finally, plaintiffs argued that the assessment violated their Due Process right to the privacy of their personal medical information. The court concluded that that government s interest as an employer in managing its internal affairs, combined with protections against public dissemination, outweighed the plaintiffs interest in nondisclosure. In the end, the court held that 55 Oregon Revised Statutes 659A.136. 25

defendants' health assessment questionnaire did not violate the ADA, its state analog, or the Fourth or Fourteenth Amendments. Section 3. Other Laws The legal focus regarding wellness programs does not rest solely on HIPAA and the Affordable Care Act modifications, the ADA and GINA. Practitioners and employers need to be aware that a myriad of other laws, both state and federal, can apply. For example, the general rule under the Fair Labor Standards Act (FLSA) is that the employer is responsible for paying employees for all work required or suffered to be done. Thus, assuming a wellness program is voluntary, an employer needs to determine if attendance at the activity is not required by the employer; the activity is conducted outside normal working hours; the activity is not related to the employees normal job duties or responsibilities; and, the activity is not performing productive work or work for the employer s direct benefit as part of the employer s normal activities. Such voluntary activities would not be considered compensable work, but an argument could be made with some workplace programs that attendance is, in fact, required by the employer and, if so, the FLSA s requirement to pay the employee for the attendance would be implicated. Another concern arises under the National Labor Relations Act (NLRA), which provides that wages, benefits and conditions of employment are mandatory subjects of bargaining. Has the collective bargaining agreement been negotiated in a way that workplace wellness programs can be implemented without bargaining? While health care plans and the employees wages as related to payment for such plans are mandatory subjects of bargaining, what about break times for voluntary exercise or even changes in cafeteria food to promote healthy eating? All of this could be, and would be, swept up in the bargaining process. Additionally, requiring employees 26

to submit to a health risk assessment and participation in health contingent wellness programs or suffer consequences with regard to health care premium contributions or cost-sharing under the health plan would be mandatory subjects of bargaining. As a generality, employers with unions might see this as an opening to enhance engagement in the wellness program, while unions might be inclined to agree to such programs by emphasizing additional subsidization and incentives, rather than penalties for nonparticipation or failure to meet a standard where there is a participation or health status requirement for receiving a reward. Whatever the case, ignoring the bargaining requirements under the NLRA will be a major mistake in wellness program rollout. Rewards for participation in wellness plans present the greatest issue of possible tax consequences under the Internal Revenue Code (the Code ). Whether it is gift cards, subsidization for gym club memberships, or minor activity rewards, or in some cases, major group activity rewards, all raise questions of whether there is taxable income to the employee. Typically, fringe benefits are taxable unless they meet enumerated exclusions in the Code. For example, benefits received through an employer health or accident insurance plan are tax-free if they derive from a qualified welfare benefit pursuant to Code Sections 105 and 213(d). Code Section 132(d) presents de minimus thresholds of taxability for working condition fringe benefits. The taxability of on-premises athletic facilities is addressed in Code Section 132(j)(4). These are just three examples of potential federal tax issues, while state tax laws may also be implicated when designing wellness programs. A fourth area of ancillary concern, which could become a primary concern, is the potential discriminatory impact of the wellness program. While discrimination under the Code is primarily focused on highly compensated employees, actual workplace discrimination can take 27

place under the aegis of wellness programs, whether they are part of a health plan or not. The Age Discrimination in Employment Act (ADEA) prevents discrimination in the workplace based on age, and the fact that many of the most expensive medical claims comes from just this group could implicate this law. Certain medical issues are differentially implicated by race, sex and national origin, with other concerns related to one s religion or whether the participant is pregnant. Discrimination on any of these grounds is barred by Title VII of the Civil Rights Act of 1964. Employers must be cognizant of their obligation to be able to establish clearly that their wellness programs, particularly those requiring employee participation or based on health-related outcomes, do not directly discriminate against some protected category or do not have a disparate impact on a protected class of workers. If there is disparate impact, it is probable that there will have to be accommodations for the program to survive. In the case of men and women, it is obvious that any plan with specific status outcomes needs to take into consideration the ordinary statistical differences between men and women, just as the plan has to do with regard to age. There are likely to be the same issues with regard to an employee s religion regarding participation in certain types of activities, the taking of certain medications, or eating certain types of foods. State laws present numerous challenges to wellness program implementation, whether dealing with privacy, various forms of discrimination, protected status, smoking and drug usage laws, and in some cases, even laws that deal directly with workplace wellness programs. Anyone considering or designing a wellness plan must review the applicable state laws. It is far too much for this paper to try to delineate all or even a substantial number of individual state laws which could or do impact workplace wellness programs. It should be noted, however, that 28

some states such as New Hampshire, Rhode Island, and Michigan, have laws directly promoting the use of workplace wellness plans through discounts, rebates, and other incentives. 56 Other states, such as New York, Wisconsin, Alaska, and Georgia provide a safe harbor from the state s discrimination and unfair trade practice statutes, for workplace wellness programs that conform to the federal HIPAA regulations. 57 The effect of wellness incentives on the affordability of health care coverage under the Affordable Care Act should also be considered. Whether health care coverage is affordable is significant for three different purposes under the ACA: the individual shared responsibility requirement (generally referred to as the individual mandate) under Code Section 5000A; eligibility for premium tax subsidies under Code Section 36B and cost sharing reductions under Affordable Care Act Section 1402; and the employer shared responsibility requirement under Code Section 4980H. For taxable years beginning with 2014, Code Section 5000A requires most Americans to maintain minimum essential coverage or pay a penalty. Minimum essential coverage includes a wide range of different types of health care coverage, including public programs such as Medicare and Medicaid, employer-sponsored plans and individual market coverage (coverage generally now purchased through the marketplaces established under the Affordable Care Act). 56 See New Hampshire Revised Statutes Annotated, 420-G:4-b (2015) (requiring wellness programs as part of insurance plan offerings); Rhode Island General Laws, 27-50-10 (2013) (providing for the process for setting requirements for wellness plans for small groups and individuals); Michigan Comp Laws, 550.1414b (2013) (providing that discounts and premiums and other incentives may be provided in both group and non-group healthcare plans.) 57 See New York Insurance Law, 3239 (Consolidated Laws 2015) (authorizes the creation by health insurers, HMOs and others to create wellness plans and incentives for programs); Wisconsin Statutes, 628.34 (13) (2015) (permits insurers to offer or market wellness programs); Alaska Statutes, 21.36.110 (2015) (provides for certain exceptions to discrimination prohibitions based on actual savings achieved through plans); and Georgia Code Annotated, 33-24-59.13 (2012) (permitting issuance by insurers of wellness plans consistent with federal requirements, including incentives if part of the approved master insurance policy). 29

Section 5000A also provides a number of exemptions from the requirement to maintain coverage, including one based on the unavailability of affordable coverage based on income. For employer-offered coverage, the exemption applies if the required contribution for coverage is greater than 8 percent of household income. 58 Workers may become eligible for premium credits under Code Section 36B if their household income is between 100 and 400 percent of the Federal Poverty Level for the applicable year, and their employer either does not offer coverage or offers coverage that is not affordable or does not provide minimum value. 59 Under the law, employer coverage is not affordable if the required premium contribution for single coverage (even if the worker has a spouse or other dependents) is more than 9.5 percent of household income. 60 A large employer, generally defined as one with more than 50 full-time employees, will be subject to an employer shared responsibility assessable payment under Code Section 4980H if one or more full-time employees qualify for premium credits under Code Section 36B. Thus, large employers offering coverage must offer coverage that is affordable and provides minimum value to avoid any potential penalty assessment. In determining whether coverage is affordable for purposes of premium credit eligibility, the related employer shared responsibility penalty, and the individual responsibility penalty, only certain wellness incentives that affect any required employee premium contribution are taken into account. Only those incentives related to tobacco use will be assumed to have been earned. 61 For wellness program incentives affecting cost-sharing under the employer health plan, 58 The 8 percent threshold is indexed based on the rate of premium growth as provided in Code Section 5000A(e)(1)(D), and it is 8.05 percent for 2015. Revenue Procedure 2014-37 available at 59 IRC Sec. 36B (c)(2)(c). 60 The 9.5 percent threshold is indexed based on the excess rate of premium growth over the rate of income growth as provided in Code Section 36B(c)(2)(C)(iv), and it is 9.56 percent for 2015. Revenue Procedure 2014-37. 61 See proposed rules regarding Minimum Value of Eligible Employer-Sponsored Plans and Other Rules Regarding the Health Insurance Premium Tax Credit, 78 Fed. Reg. 25909 (May 3, 2013) available at 30

the same rule applies in determining whether the minimum value requirement applicable under Code Section 36B is satisfied. Section 4. History and Evolution of Wellness Programs Why the overall growth of wellness programs? If the Rand 2013 is correct, it is not because they actually save employer healthcare costs. The follow-up report ( Rand 2014 ) 62 found that participation in lifestyle management programs was not associated with significant changes in overall cost or utilization of healthcare services 63 Rand 2014 also found no evidence of cost saving among participants of either the smoking cessation or pre-disease management programs. 64 Other studies, while acknowledging many difficulties in creating valid statistically significant results 65 also have reached a similar conclusion that there are marginal cost savings, if any, from workplace wellness programs. 66 So, why are wellness programs increasingly popular with employers -- so popular and believed to be so efficacious for so many goals, including improving employee health, cutting employer healthcare costs, reducing absenteeism, reducing workers compensation claims, and increasing worker productivity? http://www.gpo.gov/fdsys/pkg/fr-2013-05-03/pdf/2013-10463.pdf and final rules on Minimum Essential Coverage and Other Rules Regarding the Shared Responsibility Payment for Individuals, 79 Fed. Reg. 70464 (November 26, 2014) available at http://www.gpo.gov/fdsys/pkg/fr-2014-11-26/pdf/2014-27998.pdf. 62 Soeren Mattke, Kandice Kapinos, et al., Workplace Wellness Programs: Services Offered, Participation and Incentives (2014) available at http://www.dol.gov/ebsa/pdf/wellnessstudyfinal.pdf 63 Rand 2014, p. xiv. 64 Rand 2014, p. xv. 65 Studies suffer from a multitude of problems: self-selection of participants in the programs; creating a participant bias; too few participants or too short a time period to be a statistically reliable conclusion, or the unreliability of tying to apply the results obtained by one employer to another. 66 See Framingham Heart Study, http://www.framinghamheartstudy.org/risk/gencardio_bmi.xis (references multiple studies and articles); Gautam Gowrisan Karan, Karen Norburg, Steven Kymes, Michael E. Chernew, et al., A Hospital System s Wellness Program Linked to Health Plan Enrollment Cut Hospitalization Costs But Not Overall Costs, Health Affairs, Vol. 32, No. 3, 2013, pp. 477-485; Paul Fronstin, Christopher Roebuck, Financial Incentives, Workplace Wellness Program Participation, and Utilization of Health Care Services and Spending, Employee Benefit Research Institute, Issue Brief No. 417, August 2015 (limited to one year analysis). 31

The studies versus the belief begs the question, is there something that the studies are missing or are they inherently faulty because they work in the aggregate rather than with the individual company results on different factors. If most employers with wellness programs encompassing more than just a newsletter for healthier eating believe they are getting a net positive result, are the researchers missing something? Or, are the employers just engaged in wishful thinking? One possibility is that the studies do not discuss worker presenteeism, workers compensation premiums, or even absenteeism, but the impact of these workplace costs is not necessarily related to the ongoing cost of employer-provided health care coverage. Employers and employees may debate the causes of America s healthcare issues and increasing costs, but they most certainly include increasing stress (often related to work, income inequality, and, ironically, lack of access to adequate and affordable health care). The prudence or success of existing wellness programs notwithstanding, the seemingly inconsistent conclusions could also be the result of three factors: (1) low participation rates averaging only 40% unless there is significant economic incentive offered; (2) only 3% of the wellness programs are reported to be comprehensive in their offerings, i.e., health screening, lifestyle management, and disease management; and (3) insufficient time horizons to determine real effectiveness, as comprehensive wellness programs are still not sufficiently widespread with comparable designs, making it extremely difficult to obtain a sufficient sample size for a study of effectiveness. Thus, it is possible that self-selection for participation, narrow programs, and low overall participation are responsible for the Rand 2014 conclusions. Higher participation rates in comprehensive, employer-sponsored workplace wellness programs could theoretically lead to lowered costs overall or merely to a cost shifting to less healthy workers and workers with 32

disabilities, diminished access to quality care for the neediest (who cannot afford it), and even to disability or genetic based discrimination. The reported statistics indicate that fewer than half (46%) of employees undergo a clinical screening and/or complete an HRA to identify possible lifestyle or disease management issues. And, of those with an identified issue, such as smoking, fewer than 20% chose to participate in a program to address the issue. 67 Still, a solid majority of employers believe their wellness programs are generating a positive Return on Investment ( ROI ). But, while firmly held, is it really just a belief rather than a fact, as only 2% of the employers with wellness programs report doing a formal assessment of the effects of their program? 68 So net-net, what do the studies tend to tell an interested party trying to make a choice about whether to expend the money and time in developing a wellness program, and what type of program, including, what types of incentives, will likely give a good ROI? Rand 2013 predicts there is likely to be a cost savings over a five-year period of wellness program usage in decreased health care costs and decreasing health care use, but it also concludes those savings are not statistically significant. At the same time, if Rand 2013 is right, then getting all worker smokers to stop smoking, could alone achieve large cost savings. This is because tobacco is reported to kill approximately 1,200 Americans each day 69, is a leading generator of numerous healthcare issues, and may be unique in its preventability. If Rand 2013 is right that other studies demonstrate program participants showed improvement in physical activity, higher fruit and vegetable consumption, lower fat intake, and reduction in body weight, cholesterol levels, and blood pressure, then arguably 100% participation should be every 67 See Appendix 4, Rand 2013, p. xvii, Figure 5.3. 68 Rand 2013. 69 Making Our Next Generation Tobacco Free, U. S. Dept. of Health and Human Services, http://www.surgeongeneral.gov/videos/2012/03/nextgeneration.html 33

program s goal. But, even then, different plans will be appropriate for different employers, because everyone agrees that one size does not fit all. But again, if Rand 2013 is right, as seen in the table at Appendix 4, less than 14% of the employee population involved in wellness programs is initiating the desirable activities to address identified health issues. The question then becomes whether and at what cost does the employer consider including in its wellness program either disease prevention or disease management activities, or both, and whether and at what level to provide incentives or requirements to participate. As of 2013, intervention programs were in approximately 77% of the workplace wellness programs. 70 At the same time, the studies referred to above suggest statistically insignificant cost benefits in direct healthcare cost savings from engaging in these activities. Indeed, some studies conclusions would suggest that due to greater amounts of healthcare service usage for addressing identifiable risks and greater medical prescription usage, that there is at least during the initial period of a program an increase in the average healthcare costs. 70 Rand 2013, p. XV, Figure 5.1. All Rand graphs reprinted with permission. 34

But, other studies and many employers have concluded that keeping someone from developing a disease, or a worsening chronic condition, such as diabetes 2, or from high blood pressure to a stroke or depression, to extensive absenteeism and hospitalization, is worth the effort. 71 Researchers in 2010 from Harvard University and Harvard Medical School, after reviewing literature on programs from every industry, concluded that large employers, those with over 1,000 employees, achieved substantial ROI from wellness programs with decreased medical costs of $3.27 for every dollar spent, and that absenteeism costs decreased by $2.73 for every dollar spent. 72 71 Harvard Study 2010 in Health Affairs Journal. Baicker, et al., Workplace Wellness Programs Can Generate Savings, (published online January 14, 2010; 10.1377/hlthaff.2009.0626) Health Affairs, 29, no.2 (2010):304-311, available at http://content.healthaffairs.org/content/29/2/304.full.pdf+html 72 3 Policies and Practices, 201.21, Thomson Reuters 2015, original article by Tiffani L. McDonough, Esq., Obermayer, Rebmann, Maxwell & Hippel, LLP, in the GC Mid-Atlantic Column of The Legal Intelligencer, on August 29, 2012. 35

So, who is right? And, how to know? Rand 2014 concluded that even telephonic wellness program healthcare coaches have not improved outcomes. 73 However, the contrary conclusion was reached by Johnson & Johnson in a study of its longrunning wellness program. In its third party administered study, Johnson & Johnson was found to achieve an ROI in the range of $1.88-3.92 saved for every dollar spent. 74 Again, this suggests that when the wellness program is comprehensive, has been in place for a long time (more than five years), and has high participation rates, successful outcomes are achievable. In other words, telling employees about possible medical issues that could seriously negatively impact their lives and providing opportunities and the assistance to avoid or reduce those negative outcomes will 73 Rand 2014, p. xvii. 74 Rachel M. Henke, Ron Z. Goetzel, Janice McHugh, and Fin Isaac, Recent Experience in Health Promotions at Johnson & Johnson: Lower Health Spending, Strong Return on Investment. 36

change behaviour, which will affect the outcomes. And, as many who have been in the workplace wellness effort for a long time will say, the biggest goal is not to get worse, i.e., to keep the employee s current medical status from deteriorating. That is because getting worse usually means greater healthcare costs and absenteeism, decreased productivity, and more workplace injuries. So, whether the direct healthcare cost savings are statistically insignificant or not, taking steps to help a workforce at least maintain whatever is its current health status seems logical and consistent with all the studies. But, that decision has its own issues, such as how to obtain participation, particularly a high level of participation, in prevention activities, and whether to make obtaining an incentive contingent on outcome versus only participation in a program or activity. The decision also leads to additional legal issues, including whether a voluntary program is in fact voluntary, whether it meets multiple requirements of the ACA and its regulations, Americans with Disabilities Act and existing regulations, the existing regulations under GINA, HIPAA, and the soon to be in place new regulations of the EEOC for the ADA. Moreover, disability and employee advocates have cautioned that forcing or coercing workers into disclosing personal health information can lead to privacy violations and even discrimination, particularly in programs that are shoddily designed or administered. Employees who fear misuse or abuse of this information have cause for concern, and fears of differential treatment or ostracization can be well-founded. There are also concerns about the affordability of health care coverage if premium contributions, deductibles or cost-sharing percentages and co-payments are increased as permitted under existing regulations. 37

Section 5. Stakeholder Perspectives WORKPLACE WELLNESS PROGRAMS PURPOSE, SUCCESS, AND THE FUTURE, AS SEEN BY MANAGEMENT EMPLOYMENT ATTORNEY Richard G. Moon, Verrill Dana, LLP What is going on does anybody understand the crisis with the health status of America? The Affordable Care Act clearly recognized that America has a health problem. The health problem involves not just the health of the populace, but the consequences to the populace in trying to provide healthcare to that populace. The ACA expanded the amount of reward or penalties that an employer could force on an employee for failure to engage in a healthier lifestyle and/or achieve certain healthier statuses. Most significant is the 50% differential in healthcare premiums that an employer may apply to an employee who smokes. At the same time, however, the EEOC seems bent on undermining ACA s purpose by attacking or minimally allowing workplace wellness programs that do set goals and/or have contingency health requirements in order to achieve the reward or not suffer a penalty. And, of course, political correctness and special interests have come to the workplace wellness program issue. In what has to be considered an absolute upside-down argument, some commentators are suggesting that it is discriminatory to have those whose health status requires much greater expenditure for healthcare shoulder some or all of that greater expenditure. This is the case, despite the fact that no one is arguing that if an individual is truly unable to achieve a certain health status, either genetically, due to a disability, or for some other legitimate reason, that individual must still meet that health status. Indeed, employers have not balked, by in large, at the notion of a reasonable alternative methodology for achieving a particular health status. What employers do balk at and what they find objectionable as political correctness, is the self-righteous assertion that it is somehow unfair for people who choose to act in less healthy ways when they could legitimately 38

choose to act in healthier ways to pay their fair share. For over 50 years, the healthier portion of the population in group health plans has been subsidizing the less healthy population. Indeed, President Obama has made very clear that he needs the young and healthier portion of society to enroll in health plans, because their funds are necessary to subsidize the less healthy people who will get or already have health insurance. This is a simple acknowledgement that the system will collapse if the healthy do not support the unhealthy. But, what is fair about that? And, not only is it unfair, it has the disastrous results of encouraging or condoning an ever-increasing less healthy population. Some of the Facts In the United States, one in five deaths each year is attributable to tobacco, accounting directly or indirectly for approximately one in five deaths each year. 75 Smoking accounts for at least 30% of all cancer deaths and 87% of lung cancer deaths. 76 Lung cancer accounts for over 220,000 cases of cancer each year, comprising about 14% of cancer diagnoses, and accounts for more cancer deaths than any other cancer. 77 It is not just the problem of illnesses and deaths caused by tobacco and enormous healthcare cost, there is also the loss of activity attributed to smoking, which runs in the tens of billions of dollars annually. 78 Drinking too much alcohol is responsible for 80,000 deaths each year. 79 About half of U.S. adults (47%) have at least one of the following major risk factors for heart disease or stoke: 75 American Cancer Society, Cancer Facts and Figures 2013, 38 (American Cancer Society 2013), and http://www.cdc.gov/tobacco/data_statistics/fact_sheets/fast_facts/. 76 Id. 77 Id. at 15 78 Id. at 38 79 Centers for Disease Control and Prevention. Alcohol and Public Health: Alcohol-Related Disease Impact (ARDI) hhtp://nccd.cdc.gov/dphardi/default/default.aspx. 39

uncontrolled high blood pressure, uncontrolled high LDL cholesterol, or are current smokers. 80 The total costs of heart disease and stroke in 2010 were estimated to be $315.4 billion. 81 Over 75% of healthcare costs in the U.S. are attributable to treating chronic diseases, which are largely driven by four principal lifestyle choices (level of activity, poor nutrition, tobacco use, and frequent alcohol consumption). 82 As of 2012, about half of all adults 117 million people had one or more chronic health conditions. One in four adults had two or more chronic health conditions. 83 The statistics available from the CDC and other federal agencies, as well as private groups, list many more problems with Americans health status, which are attributable to health risk factors that can be influenced by the individual. And, of course, many studies demonstrate that the overwhelming percentage of annual healthcare costs is attributable to what are essentially lifestyle choices. This writer has yet to see anyone present convincing evidence that there is even a significant minority of individuals who could not affect at least some of their healthcare costs by making different choices with regard to healthcare risks. But, we do not require that as a condition of healthcare. The result is that the American healthcare system is at risk of complete collapse. Whether someone believes in a single payer system or the mishmash of government and private payment system that we currently have, the simple fact is there is not enough money to pay for all of the healthcare that everyone will need and want unless America has the will to start holding individuals accountable for their health. And, there should not be a debate, as 80 Fryar CD, Chen T, LiX. Prevalence of uncontrolled risk factors for cardio risk factors for cardiovascular disease: United States, 1999-2010. NCHS Data Brief, No. 103. Hyattsville, MD: National Center For Health Statistics, Centers For Disease Control and Prevention, U.S. Department of Health and Human Services; 2012. 81 Centers for Disease Control and Prevention, Chronic Disease OverviewFn1 citing Ward BW, Schiller JS, Goodman RA, Multiple chronic conditions among US adults: a 2012 update. Prev Chronic Dis. 2014;11:130389.DOI 82 83 Rand 2013, p. 1 Id Fn 76, supra. 40

everyone has seemed to come to the same basic understanding that prevention is much less costly than treatment or cure. What Can and is Being Done First, the government through ACA did recognize the need to hold individuals accountable and provided the economic means to do so. While many programs that employers offer are voluntary, those that are involuntary and provide adequate economic incentive, as well as the personal support, can and do achieve remarkable health benefits for the individuals involved and cost-savings to the healthcare system. One can argue all one wants that there is not, as the Rand Reports of 2013 and 2014 conclude, a statistically significant cost savings from the activities of workplace wellness programs. But, it is this author s strong belief, based on literally dozens of clients with workplace wellness programs, that Rand has missed the forest for the trees, and in some cases, not even counted all the trees. If one looks at the ancillary benefits, other than just direct healthcare costs, it is clear with regard to presenteeism, absenteeism, workplace injuries, and the premiums and costs associated with those, that there is a remarkable amount of savings and benefits achieved by employers with strong workplace wellness programs. But, a strong workplace wellness program requires significant workforce participation, comprehensive services, including not just assessment, but treatment and prevention, and the kinds of incentives and personal support that will get employees who can make lifestyle changes to make those changes and to stick with them. Those employers who actually provided detailed coaching and strongly encourage if not require families to participate in the wellness program have achieved dramatic healthcare cost savings. Some employers report 30 to 40% drops in what would be the normal cost of their 41

healthcare without the wellness programs. Others, while reporting smaller gains, say that they have a more energized workforce, less absenteeism, more productivity, all of which are significant ROI for the employer. But, employers are struggling, because they do not know how far they can go. Virtually no employer has taken full advantage of ACA s 30 and 50% premium discounts. They also struggle to the extent to which they should require certain outcomes, and how to assure that those requirements do not run afoul of federal and state regulations. And, then there is the issue of potential fraud, including that directly by employees with regard to self-reporting and by doctors who will state that an employee cannot achieve a certain goal or for whom it is unreasonably difficult to achieve a certain goal. Indeed, there is already a growing group of medical people, as they have in disability and workers compensation claims, who are ready to assure that employees do not have to attempt to achieve a certain health status. And, while national organizations, such as The Wellness Councils of America (WELCOA), have thousands of members and provide exceptional guidance on workplace wellness plans and results, there are equally powerful vested interests, such as the plaintiff s employment bar, some in the disability rights community and certain segments of the political spectrum, who find reasons or advantages to opposing coercive attempts to improve America s health. A Modest Proposal to Achieve a Rational Result Assuming decent health through fair policies is a goal that virtually everyone can subscribe to, then how can it be achieved? The first step is to acknowledge that there are some individuals who, for legitimate medical reasons, cannot achieve a certain health status that would be considered improved health. 42

But, the second step is not to simply say, okay, we acknowledge that and it is too big a problem to deal with. It is not too big a problem; it simply requires a systematic approach. That approach should be that no one can opt out of a contingent health program unless they have an express qualified healthcare provider-determined basis. That basis should be challengeable by the party who has to bear the cost in most cases, the employer. The employer, at its expense, can challenge the healthcare provider s determination, and if there is a dispute, pay for a neutral third party to resolve it. I challenge anyone to say that it is fair for a person who maintains a healthy life status to have to pay more because of someone who chooses to maintain a less healthy life status. Indeed, this writer believes that it is not even fair if the federal government were running a single payer system, because there is no basis for someone to be taxed just to distribute their money to someone who chooses to cause more cost. The next step is to recognize that whole sectors of the American population can probably be directly precluded from the argument that they have automatically some sort of disability or condition that bars them from necessarily achieving a certain health status. One example would be smoking. You ought to be able to pick an age, say 40, and say anyone who is under the age of 40 who smokes must pay 30, 40, or 50% more for their healthcare benefits than individuals who do not smoke. Everyone under 40 has known since their early teens, if not before, that smoking is very bad for their health and quite possibly may kill them prematurely. And, of course, over the last 15 years, there has been more information and more opportunities to cease smoking. The next step is to say certain body mass indexes, cholesterol levels, general cardiovascular fitness, can also have minimum requirements. In this case, however, presumably there are individuals 43

who will not for medical reasons be able to meet the certain healthcare status. For those legitimate exceptions, there should be alternatives or even a waiver of the standard. My personal preference is not to use the Tax Code to provide incentives for employers to offer workplace wellness programs, but to require that all health plans, self-insured or insured, must contain workplace wellness programs with contingent health requirements. Those requirements must, at a minimum, deal with the major healthcare risks of alcohol, obesity, smoking, lack of physical activity, and I would also suggest stress. I add stress because we all know that a worker who comes to work worried about an unwed teenage daughter s pregnancy or a son s drug addiction or arrest for drug possession, is not going to be a fully focused employee, running the risk of injury and, of course, almost certain lower productivity. Health plans already have dozens of mandated benefits, and a workplace wellness program could be part of the mandated provisions of a health benefit plan. Then, of course, it will be protected from attack on the preclusions of access to private healthcare information pursuant to the safe harbor provisions of the ADA. Conclusion It is time that we stop sticking our heads in the sand, stop acquiescing to political correctness and special interest groups and realize that we have to deal directly with America s healthcare crisis. The experts agree that the best way to do that is through preventative healthcare measures. Let s work hard to keep America from getting any sicker and maybe even help it to get healthier. 44

WORKPLACE WELLNESS PROGRAMS AS SEEN BY UNION REPRESENTATIVE KARIN FELDMAN. AFL-CIO For more than seven decades, unions have bargained with employers over health care benefits for workers and their families, including the continuation of those benefits into retirement. Today, represented workers remain more likely to have access to health care benefits than other workers. According to the most recent National Compensation Survey from the Department of Labor, 95 percent of represented workers have access to health care benefits while only 69 percent of non-union workers do. 84 Workplace health coverage remains an essential component of our patchwork health insurance system, and a critical source of health and financial security for Americans. Three-infive people under age 65 more than 161 million individuals are covered by employmentbased coverage. 85 Another 13.2 million people age 65 and over have such coverage. 86 There is no question that the continued rise in health care costs is an issue confronting the bargaining parties, and it s nothing new. For more than 30 years, cost containment has been the mantra. The flavor of the day has changed over time. First, it was pre-authorization for hospital stays and utilization review and second surgical opinions. Then, it was preferred provider organizations, with and without primary care physicians as gatekeepers, and additional charges for using out-of-network providers. Next up were consumer-directed health plans, including high-deductible plans with or without health savings accounts. And, asking workers to 84 US Department of Labor, Bureau of Labor Statistics, National Compensation Survey: Employee Benefits in the United States, March 2015, Table 9a (Civilian Workers) available at http://www.bls.gov/ncs/ebs/benefits/2015/ownership/private/table09a.pdf If only private industry is considered, the percentages are virtually the same (95 percent of represented workers and 67 percent of non-union workers). Table 9a (Private Industry) available at http://www.bls.gov/ncs/ebs/benefits/2015/ownership/private/table09a.pdf. 85 U.S. Census Bureau, Current Population Survey, 2015 Annual Social and Economic Supplement, t. HI01 Health Insurance Coverage Status and Type of Coverage by Selected Characteristics: 2014, available at http://www.census.gov/hhes/www/cpstables/032015/health/h01_000.htm. 86 Id. 45

contribute more toward health care premiums (or their equivalent in self-funded arrangements) and pay higher deductibles, co-payments or co-insurance were perennial asks from employers. Throughout, the touchstone for labor has been to minimize, to the greatest extent possible, shifting costs to working families and asking them to bear the brunt of cost reduction efforts. In our view, the problem of increasing health care costs is not going to be solved by asking workers to pay more. The problem is and remains the price of health care, what providers and insurance companies charge. As the title of a well-known article put it: It s The Prices, Stupid. 87 We would all be better served by focusing on efforts to rein in what providers charge and do what other countries do. But, there simply doesn t appear to be the political will to move in that direction though interesting work is being done to change how Medicare pays for services. 88 And, the hope is that private sector payers, some of whom have already explored alternate payment forms, will follow in Medicare s footsteps as has often been done with respect to payment reform. Introducing workplace wellness programs appears to be the newest tack by employers to reduce health costs, and there s no question despite evidence to the contrary 89 --they believe these programs will lower future health care plan costs. And, because worker participation in these programs remains low, employers are now adding financial incentives rewards or penalties in an attempt to enhance participation. 87 Gerard Anderson, et al. It s The Prices, Stupid: Why The United States Is So Different From Other Countries, Health Affairs 22, No. 3 (2003): 89-105 available at http://content.healthaffairs.org/content/22/3/89.full.pdf+html 88 U.S. Department of Health & Human Services News Release, Better, Smarter, Healthier: In historic announcement, HHS sets clear goals and timeline for shifting Medicare reimbursements from volume to value (January 26, 2015) available at http://www.hhs.gov/news/press/2015pres/01/20150126a.html 89 See, e.g., Soeren Mattke, Hang Sheng Liu, John P. Caloyeras, Christinia Y. Huang, Kristin R. Van Busum, Dmitry Khadyakov, Victoria Shier, Workplace Wellness Programs Study, Final Report Rand Health,, Rand Corporation (2013) available at http://www.dol.gov/ebsa/pdf/workplacewellnessstudyfinal.pdf (RAND 2013) and Soeren Mattke, Kandice Kapinos, et al., Workplace Wellness Programs: Services Offered, Participation and Incentives (2014) available at http://www.dol.gov/ebsa/pdf/wellnessstudyfinal.pdf (RAND 2014) 46

Labor does not categorically oppose the introduction of workplace wellness programs, and unions across the country in both the private and public sectors have bargained about, and in some cases agreed to, programs of varying types and designs. These decisions are always based on the particular circumstances, the underlying program design and the bargaining dynamics in any negotiation. There are, however, general concerns about the efficacy of these programs and their emphasis. These programs suggest that individual workers and their family members are at fault and to blame for their health conditions. After all, if they just did the right thing, they would be healthier with lower cholesterol, lower blood pressure and lower BMIs, reducing the risk of future heart attacks and strokes. But, that focus ignores the impact of how employers organize their workplaces and the work requirements they impose which may contribute to workers health. From an occupational safety and health perspective, workplace wellness programs seek to shift responsibility for injuries, illnesses and health conditions to workers and ignore how work impacts health. The potential financial impact on workers of including incentives and/or penalties as part of a workplace wellness programs could be significant, particularly in light of the maximum amounts permitted for health-contingent programs under the final Affordable Care Act regulations issued in 2013 by the Departments of Labor, Treasury and Health and Human Service. 90 Depending upon the amount of any penalty, health care coverage could be made unaffordable in real life terms. Workers already pay more for their coverage today through higher premium contributions and deductibles. As the 2015 Kaiser Family Foundation and Health Research & 90 Incentives for Nondiscriminatory Wellness Programs in Group Health Plans; Final Rule, 78 Fed. Reg. 33158 (June 3, 2013) available at http://www.gpo.gov/fdsys/pkg/fr-2013-06-03/pdf/2013-12916.pdf 47

Educational Trust Employer Health Benefits Survey shows, the cumulative increase in workers premium contributions is more than 200 percent since 1999 while wages have increased only 56 percent. 91 The percentage of workers with a deductible for individual coverage has grown from 55 percent in 2006 to 81 percent in 2015. And, the average deductible in single coverage plans with deductibles has more than doubled in that same time period, growing from $584 in 2006 to $1,318 in 2015. 92 Based on the 2015 Kaiser EHBS Survey, the average premium contribution that workers pay for family coverage is $4,955, and the total premium cost is $17,545. If a workplace wellness program uses the maximum health-contingent reward/penalty of 30 percent of the total cost of coverage (ignoring the 50 percent permitted for tobacco cessation), the additional annual cost would be $5,263, if family members are able to participate in the program, more than doubling the total worker contribution. If only the worker is eligible for wellness program participation, the additional 30 percent would be tied to the cost of individual coverage (an average of $6,251), and the worker s contribution would increase from $4,955 to $6,830. While workplace wellness programs have become increasingly prevalent in recent years and are expected to expand even more, the reality is that there is little objective evidence assessing the impact of these programs on health outcomes and cost, particularly with respect to financial incentives and penalties. As RAND 2013 concludes, the savings from workplace wellness programs are modest with almost 90 percent of any savings attributable to disease management programs and only 13 91 Kaiser Family Foundation, Employer Health Benefits Survey 2015 Release Slides available at https://kaiserfamilyfoundation.files.wordpress.com/2015/08/8775-employer-health-benefit-survey-2015- chartpack.pdf 92 Id. 48

percent due to lifestyle management programs, programs encouraging healthier behaviors. 93 Although incentives may be effective in increasing participation, RAND notes that evidence for effectiveness remains weak, and that unintended consequences for vulnerable employees, cannot be ruled out given current evidence. 94 The potential for shifting costs to workers through the use of financial penalties is great, and savings may result from that shift as opposed to health improvements. 95 We recognize that as of today few employers are using incentives or penalties tied to health outcomes and the amounts remain small, but surveys suggest that employers want to move more in that direction. As one of the authors of RAND 2013 notes, [E]xposing the most vulnerable employees to that level of pressure would be sound policy if, and only if, workplace wellness programs were powerful enough to reverse years of deeply engrained behaviors. Yet our data show that they are not even attracting more than a quarter of employees and have a modest impact on those who participate. That is why I believe it is time to start rethinking workplace wellness, and come up with models that are both fairer and more effective. Why do employees, and in particular those at high risk, choose not to participate? We do not yet have the evidence or insight to understand and convincingly answer that question. When we do, we will be able to design attractive and accessible programs. In the meantime, we should not penalize vulnerable employees who are reluctant to join marginally effective programs. 96 Workplace wellness programs relying on health-contingent programs can undermine the risk pooling and fairness in sharing health care costs that has always been a hallmark of group 93 Karen Pollitz and Matthew Rae, Workplace Wellness Programs Characteristics and Requirements (Kaiser Family Foundation June 2015) available at http://files.kff.org/attachment/issue-brief-workplace-wellness-programscharacteristics-and-requirements 94 RAND 2013 at p. 92. 95 In a recent review of health-contingent wellness programs, the authors concluded that program savings were not necessarily the result of health improvements. Instead, they may come from making workers with health risks pay more for their health care than workers without health risks. Jill R. Horwitz, et al, Wellness Incentives In The Workplace: Cost Savings Through Cost Shifting To Unhealthy Workers, Health Affairs 32, No. 3: 468-476 (2013). 96 Soeren Mattke, When It Comes To The Value Of Wellness, Ask About Fairness Not Just About Effectiveness, Health Affairs Blog (March 18, 2015 available at http://healthaffairs.org/blog/2015/03/18/when-itcomes-to-the-value-of-wellness-ask-about-fairness-not-just-about-effectiveness/ 49

coverage made available through work. The Affordable Care Act s market reforms, including the elimination of pre-existing conditions exclusions, the modified community rating in the individual and small group markets allowing premium differentials only for geography, age and individuals covered, are undermined by its expansion of permitted incentives and penalties under workplace wellness programs. The market reforms seek to replicate the availability of health care coverage to all comers that has been embedded within workplace coverage. It is indeed ironic that the potential for undermining just that feature of employer coverage was also included as part of the Affordable Care Act. Workers are also concerned about providing what they consider private, personal medical information to their employers. It is information they would prefer not to disclose and they certainly do not want employers to use it against them. As recent articles in the mainstream media have noted, privacy concerns are real, particularly when multiple vendors are involved in the administration of the wellness program and waivers of privacy rights are routinely included in online HRAs or other forms. 50

WORKPLACE WELLNESS PROGRAMS AS SEEN BY IN HOUSE COUNSEL Patrick C. Hajovsky, BP Corporation North America Inc. It is axiomatic, or should be, that employers, generally speaking, are not in the business of running health care programs. Employers are in the business of producing widgets and, in BP s case, producing the oil that makes those widgets run. Health plans, let alone wellness programs, are in neither the corporate by laws nor any other mission statements produced by employers. The provision of benefits by employers has but one purpose to attract and retain quality employees. Without quality workers, employers do not exist; employers do not make returns for shareholders or do anything of productive value. With quality workers, the goals of the employer are not only achievable; they have the potential to exceed expectations in areas that cannot be anticipated. Thus, the goal is obvious attract and retain quality employees. But quality employees are a scarce resource. Other than the payment of direct wages, the wants and needs of quality employees go well beyond weekly paychecks, and employers have to be invested in meeting those needs. Employees are concerned that their health will be taken away and, with it, their income, their security, their ability to support their families and children and all of their future plans. That is a scary thought, a thought that leaves an opening for an employer to devise an incentive to attract the quality employee. It is precisely this reason that the employer-based health care system has, despite all complaints, survived and continues to thrive. The employer makes a compelling offer whereby the employee looks to the employer to provide an efficient 51

means of addressing that insecurity in a way that a government cannot or will not do with any effectiveness. But the employer has now gotten itself in a pickle. It is in the business of making widgets, and it needs quality employees to do that profitably, but it now also has to be in the business of providing benefits retirement, life insurance, disability, dental and, at long last and sometimes kicking and screaming, health care benefits. The problem? It costs money to do these things. As a threshold question, the employer has no issue with that fact. It is simply part of the investment needed to produce the widget. However, it bastardizes the system to a degree. The employer has effectively agreed to remove the employee from the free market, agreeing to pay the medical bills the employee and his/her covered family members in most cases incurs. If the employee is not in the cost equation, how is the employee expected to govern him/herself? Simply put, a person will move with the incentive system in place for him/her. If the plan has no co-pays, no deductibles, no cost sharing of any sort, then to the question of how much a doctor s visit costs, the employee will happily shout It s free! Of course, medical treatment is not free. And, in fact, any health plan payer has discovered something else, something not intuitive. Simply because some habits will cause a person to be unhealthy, to incur excessive health care, to die early without seeing their children or grandchildren grow up, those facts are not enough to prevent many people from engaging in unhealthy behaviors. For the employer, those unhealthy behaviors are costly. For the employee, they could be deadly, and yet the risk is not enough to prevent the behaviors in many, many cases. 52

It is a truism, but accurate over and over in my 23 plus years of experience with health care plans, that approximately 10% of the people in a health plan account for 90% of the costs. One set of premature twins caused by a mother who smokes or drinks excessively during pregnancy, or who otherwise does not engage in simple prenatal care, can cause a health plan of several thousand participants to incur costs that threaten not only the plan itself, but the employer plan sponsor s financial stability. Five heart attacks from individuals who are obese, where the participants survive in ongoing comas (a not uncommon occurrence with advances in medical treatment), will destabilize a health plan. As a result, thousands of individuals may find themselves without a necessary safety net to meet their medical cost challenges, and the employer risks not only its revenues to the loss of the quality worker and, with them, the ability to continue to be the top widgeter in the market. So the employer has a challenge how to offer a health plan to attract quality employees in a financially sound way? How do you re-introduce the incentive of increased costs to the patient (i.e., the consumer of health care) while providing a quality health plan to attract good employees? In the 1990 s, employers did this with increased deductibles, with co-insurance, copays and other cost shifting mechanisms. However, medical claim trends continued to rise faster than the rate of inflation, and the shock claims of preventable conditions rose seemingly unabated. It was from this foundation that employer plans tried a new tactic get employees engaged in their own wellness. While a health plan is there not to provide medical care but to help employees pay a bill, and potentially life-altering bills at that, it is short-sited to view the medical plan simply through that lens. Faced with ever increasing costs, employers have seized the opportunity to utilize the health plan to help employees engage in their own wellness and, if 53

it is done early enough, interact with employees and their covered family members to avoid medical situations that not only negatively affect their lives and livelihoods but the costs associated with those situations. As with the studies presented in this paper, the fact that these programs cost money comes as no shock to an employer. It is, rather, self-evident. Let s take the heart attack example. There are two types of heart attacks from a plan cost perspective preventable and non-preventable. The non-preventable heart attacks in my example here result from situations beyond the control of the participant. A person with relatively perfect health could have a genetic condition that makes the heart attack inevitable to all but the most extreme measures, without predictability. A wellness program will not only not prevent that heart attack, but the program likely would not even identify the situation as genetic or hereditary conditions are not permissible data elements in wellness program administration due to the Genetic Information Nondiscrimination Act (GINA) and other such laws. As a result, the only effective focus of a wellness program would be on preventable heart attacks. In these situations, and as the program could not due to legal reasons target the genetically predisposed, that prevention activity would likely need to take place early in the person s life. Preventable heart disease, even in many genetically influenced situations, results in high medical claims as a result of not one cigar or one fatty cheeseburger, but, rather, a lifetime of activity, building up inflammation and bad cholesterol to cause an arterial blockage. The wellness program, then, will need to interdict the bad behavior over the course of years, long enough to prevent the heart attack from ever occurring. How does one know whether the program succeeded? After all, you simply do not know if the person, even if he engaged in bad behavior, would have ever had a heart attack in the first 54

place. Any ROI study of the wellness program that does not take long time horizons into account will, inevitably, be inaccurate. The metrics of success must not only take into account long time horizons, but ultimately result in a different measure entirely - a financial predictability that permits the employer to fund the quality health plan without undue variability. Employers are committed to their business. In fact, corporate boards and officers have a fiduciary duty to run their businesses profitably. Financial predictability in all things becomes a cornerstone in that effort. Thus, the main benefit of the wellness program, apart from the promise of lower medical costs, even if that might be a chimera in some cases, is the production of predictability in health plan costs. Increased double-digit trends that defy predictable measures of growth result in drastically scaled back benefits (i.e., unpopular cost shifting to employees) as employers try anything to get those costs under control. A wellness program that reduces the shock claims which spin costs into the upper atmosphere is worth the money on its own, despite any analysis that there is slim to no ROI (a result from the studies mentioned in this paper that many employers would dispute, heatedly). Finally, if they are designed effectively, wellness programs are potent tools for employee engagement and retention of quality staff to further the goals of the organization of the whole. Wellness programs can be used to re-engage the health care consumer in a way that is productive both financially to the participant and inspirationally through better health. In other words, as Crash Davis said in Bull Durham, Have fun! This game is fun, dammit! If an employee enjoys what they are doing, the program can engage the employee in a way that ties them to the employer emotionally, reduces absenteeism and presenteeism and produce value in a way that strict ROI analyses cannot measure. 55

Engagement is the key engage the participant to undertake healthy behaviors, to see the results of living a healthy life, to avoid the call of unhealthy and costly excess and to, ultimately, reduce their medical bills. If that is done, the wellness program will operate in a positive manner as employees see in a concrete fashion that their employer is financially committed to the employees health and well-being. Many employers and wellness vendors overestimate what a wellness program can do, and the time it takes to do it. This results in unrealistic expectations from both employers and employees, and needless resentment. As I stated above, a health plan is not there to provide health care. A health plan is there to help an employee pay a potentially disastrous bill. A wellness program is meant to help the employee, and, as a byproduct, the health plan avoid that bill. By doing so, this helps to give the employer financial predictability in order to continue to provide an effective health plan to attract and retain quality employees. The future of wellness programs requires a frank acknowledgement of what can be done. As an added feature, this is one area where all parties labor, management, government are pulling in the same direction. As long as all parties agree to permit quality measures and motives, and innovation consistent with those measures and motives, then workplace wellness programs can remain an enormously effective and positive tool. 56

WORKPLACE WELLNESS PROGRAMS AS SEEN BY ADVOCATE FOR EMPLOYEES WITH DISABILITIES JENNIFER L. BILLS. DISABILITY RIGHTS NORTH CAROLINA What could be wrong with workplace wellness programs? It all depends on your perspective. To pretend that structures of inequity do not affect health is to falsely separate what goes on in communities from the institutional structures that subtend health outcomes and define health itself. Studies across a spectrum of disciplines including medicine, law, psychology and sociology unanimously establish links between the structures and adverse outcomes to bodies and minds in other words, able-ism, racism and discrimination enact real harm to health. I labor in the trenches of dismal employment statistics for people with disabilities who are able to work and want to work. In 2014, [l]ess than 30 percent of working-age Americans with disabilities participate[d] in the workforce, compared to over 78 percent of non-disabled Americans. 97 The rate of disability in the U.S. workforce is approximately 5.3%. 98 The unemployment rate for people with disabilities, 12.5 percent in 2014, was twice the rate for individuals with no disability, 5.9 percent. 99 Individuals with disabilities face impediments to employment beginning with access to education and training all the way through hiring and 97 Comments on the ADA Proposed Rule, Amendments to Regulations Under the Americans with Disabilities Act, RIN 3046-AB01 by the Consortium for Citizens with Disabilities (June 19, 2015), citing Senate Committee on Health, Education, Labor and Pensions, Fulfilling the Promise: Overcoming the Persistent Barriers to Economic Self-Sufficiency for People with Disabilities, Majority Committee Staff Report 2 (Sept. 18, 2014), at http://www.c-cd.org/fichiers/ccd-comments-on-eeoc-nprm-re-wellness-programs-ada.pdf [hereinafter CCD Comments]. 98 Senate Committee on Health, Education, Labor and Pensions, Fulfilling the Promise: Overcoming the Persistent Barriers to Economic Self-Sufficiency for People with Disabilities, Majority Committee Staff Report 2 (Sept. 18, 2014); See also, Sarah von Schrader & Valerie Malzer & Susanne Bruyère, Perspectives on Disability Disclosure: The Importance of Employer Practices and Workplace Climate, Employ Respons Rights J (2014) 26:237 255 20 July 2013 ( employment rates for people with disabilities remain significantly lower than those of non-disabled individuals, with the employment rate for individuals with a disability being 33.4%, compared to 75.6% for their non-disabled peers. ); see also, U.S. Bureau of Labor Statistics: Persons with a Disability: Labor Force Characteristics Summary, June 16, 2015 (2014: 17.1 % of individuals with a disability and 64.6 % of those without a disability employed.) 99 U.S. Bureau of Labor Statistics: Persons with a Disability: Labor Force Characteristics Summary, June 16, 2015. 57

promotion. 100 These barriers are compounded by race and gender. While women make up approximately 50.8% to men s 49.2% in the U.S. population as a whole, as well as a higher proportion of people with disabilities, men are disproportionately represented among people with disabilities in the workforce. 101 The prevalence of a disability is also higher for blacks and whites than Hispanics and Asians. 102 Although the unemployment rate was the same for men and women with disabilities in 2014 (12.5 percent), [a]s is the case among those without a disability, the unemployment rates for those with a disability were higher among blacks (21.6 percent) and Hispanics (16.1 percent) than among whites (11.2 percent) and Asians (8.6 percent). 103 The barriers and disparities contribute to current employee reluctance to disclose disabilities or health conditions and to participate in workplace wellness programs. But it is not only employees attitudes and experiences; employers themselves should understand this hesitation. In 2007, an employer trade group-sponsored survey documented that a majority of employers still associate shame and stigma with disclosure of mental illness and believe factors that impede employees accessing treatment include lack of access to treatment, lack of faith in the efficacy of treatment, and a belief of negative consequences if employers find out they are in treatment. 104 Despite studies demonstrating that robust workplace screening and treatment for mental illnesses, such as depression, save employers money in the long run, obstacles to their 100 101 102 2015 103 See, e.g., CCD Comments, citing EEOC Guidance, General Principals. U.S Bureau of Labor Statistics, Table 1. U.S. Bureau of Labor Statistics: Persons with a Disability: Labor Force Characteristics Summary, June 16, Id. 104 Innerworkings: A Look at Mental Health in Today s Workplace, 2007 survey report by Partnership for Workplace Mental Health, American Psychiatric Foundation and Employee Benefit News, at http://www.workplacementalhealth.org/innerworkings 58

comprehensive implementation continue. 105 They include a persistent belief by employers that their return on investment is unclear, and employees reluctance to disclose a stigmatizing condition. 106 be abated. Moreover, ample evidence demonstrates that discrimination in the workplace has yet to Historically, many employers asked applicants and employees to provide information concerning their physical and/or mental condition. This information often was used to exclude and otherwise discriminate against individuals with disabilities particularly nonvisible disabilities, such as diabetes, epilepsy, heart disease, cancer and mental illness despite their ability to perform the job. The ADA s provisions concerning disability-related inquiries and medical examinations reflect Congress s intent to protect the rights of applicants and employees to be assessed on merit alone, while protecting the rights of employers to ensure that individuals in the workplace can efficiently perform the essential functions of their jobs. 107 The ADA regulations and EEOC guidance struck a delicate balance of these interests, and the GINA regulations followed suit. The scales should not now be tipped back towards powerful employers. Even though these rules and other laws protect privacy, in part by requiring that data be kept confidential and presented in aggregate form, privacy concerns remain. If [an] employer will see aggregated responses, how big is the sample size? Is there any way you could be identified say, if you re the only obese employee at a small firm? 108 105 Workplace Depression Screening, Outreach and Enhanced Treatment Improves Productivity, Lowers Employer Costs, Sept. 26, 2007, Journal of the American Medical Association, National Institutes of Health s National Institute of Mental Health (NIMH) at http://www.nimh.nih.gov/news/science-news/2007/workplacedepression-screening-outreach-and-enhanced-treatment-improves-productivity-lowers-employer-costs.shtml 106 Id. ( Previous studies have shown that employees who are depressed are less productive and are absent more often [and] that organized screening and enhanced depression treatment can significantly improve health... Enhanced and systematic efforts to identify and treat depression in the workplace significantly improves employee health and productivity [and reduce absenteeism], likely leading to lower costs overall for the employer. ) However, it is axiomatic that forcing or coercing treatment is destined to fail support for voluntary treatment, coupled with the assurance that no negative consequences will result, are most effective. 107 CCD Comments, citing EEOC Guidance. 108 Kara Brandeisky, The Surprisingly Personal Health Questions Your Employer Can Ask You, Time November 19, 2014, http://time.com/money/3579354/health-risk-assessment-questionnaire/; See also, Anne Fisher, Do wellness programs really save companies money?, Fortune, Jan. 29, 2014, at http://fortune.com/2014/01/29/dowellness-programs-really-save-companies-money/ 59

Sarah von Schrader, a senior researcher with the Employment and Disability Institute at Cornell University explained, In one recent study of 600 people with disabilities, roughly half involving mental health, about a quarter of the respondents said they had received negative responses to revealing their problems such as not being promoted, being treated differently, or in some cases, being bullied. 109 Based on this information, employers should spend energy on reducing the likelihood of negative consequences for disclosure, 110 as opposed to imposing negative consequences themselves. While, on the one hand, disclosure of a disability can assure that employees receive appropriate workplace accommodations, and can help employers respond more effectively to diversity and inclusion initiatives aimed at increasing the hiring and retention of individuals with disabilities, the outcome of this action is not always productive or favorable. 111 Disclosure of a disability to a current or potential employer may result in negative employment consequences for employees, such as lowered supervisor expectations, [lack of respect,] isolation from coworkers, [a decrease in job responsibility,] and increased likelihood of termination. 112 Increasingly, employers are pushing the envelope of mandating such disclosures requiring employees to answer questions on HRAs that pry deeply into the individual s medical history and even their ancestry e.g., family history of cancer, discussed possible future transplant, membership in a social group, or previous medical claims over a certain dollar amount, in order to access health insurance benefits. 113 These employer-mandated, gatekeeping questionnaires also delve into more than just the medical corners of employees lives, including 109 Schrader et al., Respons Rights J (2014) 26:237 110 Id. 111 Id. 112 Id. 113 Appendix 15 sample HRA; Brandeisky, The Surprisingly Personal Health Questions Your Employer Can Ask You. 60

but not limited to their: marital status, pregnancy plans, and social activities such as alcohol consumption, tobacco use, or extreme sports. 114 Mandating disclosure without first protecting against not only discrimination, but stigmatization, is putting the cart before the horse in employment practices. A substantial number of workers with mental illness do not feel safe disclosing their diagnoses in the workplace, and these fears are well founded. 115 Additionally, the rise in popularity of outcomes-based or health-contingent workplace wellness programs, 116 condoned and even encouraged by the Affordable Care Act, has emboldened employers to reward, punish, ostracize 117 and even discriminate. 118 Michigan Law Professor Samuel Bagenstos, former U.S. Department of Justice Disability Rights Section chief, is skeptical about the efficacy of workplace wellness programs. For years employers have offered worksite wellness programs, ranging from newsletters or gym memberships to high stakes incentive programs that change your insurance premiums by thousands of dollars if you lose weight, reduce your blood pressure or blood sugar levels, quit smoking or achieve some other health outcome. Although no scientific evidence has yet shown that such programs actually improve, health and a number of recent studies in fact suggest that high-stakes incentives merely shift, and do not reduce, health care costs the 114 Judith Feder and Samuel R. Bagenstos, Beware: 'Wellness' May Be Hazardous to Your Health, May 11, 2015, at http://www.huffingtonpost.com/judith-feder/corporate-wellness-programs_b_6846350.html 115 Alina Tugend, Deciding Whether to Disclose Mental Disorders to the Boss, New York Times, November 14, 2014, We re seeing changes in the broader culture, but we re not seeing it in the workplace, said Mary Killeen, a senior research associate at the Burton Blatt Institute at Syracuse University. http://www.nytimes.com/2014/11/15/your-money/disclosing-mental-disorders-atwork.html?emc=edit_tnt_20141114&nlid=69639673&tntemail0=y&_r=3 116 Brandeisky, Time, ( Outcomes-based wellness programs are growing but not yet widespread. And only 7% of employers say that employees with health risks must complete some kind of wellness program or face a penalty, according to Kaiser. ) This is not a trend that we should want to see increase. 117 Id. ( Your employer can set health-related goals for you. For example, if you re overweight, your employer can offer a financial incentive for you to lower your BMI. As part of the Affordable Care Act, those financial incentives can be worth 30% of the total cost of plan costs, up from 20% before health reform. ) 118 See, e.g., Health Plan Penalty Ends at Penn State, Natasha Singer, New York Times, Sept. 18, 2013: ( After weeks of vociferous objections by faculty members, Pennsylvania State University said on Wednesday it was suspending part of a new employee wellness program that some professors had criticized as coercive and financially punitive. In particular, the university said it was suspending a $100 monthly noncompliance fee that was to be levied on employees who declined to fill out an online questionnaire. The form, administered by WebMD Health Services, a health management company, asked employees for intimate details about their jobs, marital situation and finances. It also asked female employees whether they planned to become pregnant over the next year. ) http://www.nytimes.com/2013/09/25/business/rules-sought-for-workplace-wellnessquestionnaires.html?_r=1 61

Affordable Care Act makes an exception to its basic ban on varying premiums based on health status for outcomes-based wellness programs. 119 Notwithstanding this Congressional concession to employers, [r]ecognizing the risk that unhealthy employees may be punished rather than helped by such programs, the [ACA] also forbids health-based discrimination. 120 While promoting health and healthier lifestyles should be commended, mandating participation or worse, requiring improved outcomes (by coupling them with incentives and penalties) in workplace wellness programs for working families is not good business and may diminish opportunities for many workers, particularly those with disabilities. One recent study concluded, evidence suggests that savings to employers may come from cost shifting, with the most vulnerable employees those from lower socioeconomic strata with the most health risks probably bearing greater costs that in effect subsidize their healthier colleagues. 121 The history of civil rights legislation in this country demonstrates the acknowledged need to break down institutional barriers for potential workers based on their sex, race, color, religion, ethnicity, national origin, marital status, age, sexual orientation, gender and disability. The exceptions under the ADA requiring employers to make reasonable modifications and accommodations for current and prospective employees with disabilities remain critically important and must be maintained in the context of wellness programs in the workplace. For some working individuals with disabilities, their use of a device to assist with mobility or 119 Feder and Bagenstos, Beware: 'Wellness' May Be Hazardous to Your Health (citing RAND study: Mattke, Soeren, Hangsheng Liu, John Caloyeras, Christina Y. Huang, Kristin R. Van Busum, Dmitry Khodyakov and Victoria Shier. Workplace Wellness Programs Study: Final Report. Santa Monica, CA: RAND Corporation, 2013; http://www.rand.org/pubs/research_reports/rr254, also available in print form; and citing Wellness Incentives In The Workplace: Cost Savings Through Cost Shifting To Unhealthy Workers Health Aff March 2013 32:3468-476;http://content.healthaffairs.org/content/32/3/468.full.html.) 120 Jill R. Horwitz, Brenna D. Kelly and John DiNardo, Wellness Incentives In The Workplace: Cost Savings Through Cost Shifting To Unhealthy Workers, Health Aff March 2013 32:3468-476; http://content.healthaffairs.org/content/32/3/468.abstract#aff-1 121 Id. 62

hearing, the presence of a service animal, or their physical appearance can belie the existence or perceived existence of some impairment or other characteristic upon which stereotypical beliefs and stigma can attach. For many others, the presence of a disabling condition or even a health factor or concern may be unknown to their employer. Several current federal and state laws protect employees confidentiality, and the right to privacy is as American as apple pie. Simply put, the importance of protecting this right should give employers sufficient cause to temper incentives and penalties requiring participation and disclosure. Education, rather than coercion, should be freely offered; participation made easy, and opting out always permitted. Employment discrimination on the basis of several protected categories, including disability, has not yet been relegated to a distant, but painful and destructive memory in American history. In fact, our society is not yet colorblind or ability blind. Employers, like everyone else, can fall victim to prejudice, stereotype and even patronizing, big brother tactics. Given this, employers should take care when endeavoring to incentivize to control their employees behavior outside the workplace, even when these actions may be well intentioned. What employer advocates label as lifestyle choices may, in fact, amount to circumstances over which employees have little or no control. Moreover, privacy and disability rights laws protect against not only outright discrimination and disparate treatment, but against stigmatization and isolation based on a characteristic, condition or disability. Certain chronic, serious, and congenital conditions occur with more frequency in different racial and ethnic groups. Lupus, sickle cell anemia, eczema, and hypertension, to name a few, have higher incidence among people who trace some African-American ancestry. 122 But racism, segregation and discrimination rather than the circumstance of birth, or biology, may play a bigger contributing 122 See, e.g., CDC NCHS Data Brief Number 107, October 2012, Hypertension Among Adults in the U.S. 2009-2010; http://www.cdc.gov/nchs/data/databriefs/db107.htm 63

role in health than popular wisdom has allowed 123 even in conditions such as obesity 124 or asthma. 125 Incontrovertible research also shows that income inequality persists and financial stress is one of the largest contributors to poor health in America. 126 One undisputed source of anxiety and stress in the U.S. is personal financial circumstances. A study by the American Psychological Association in 2008 found that 8 in 10 people identified money and the economy as significant sources of stress, followed closely by, inter alia, work, family health problems, personal health concerns, and job stability. 127 According to the Federal Reserve Board, in 2008 Americans amassed over 2.5 trillion dollars in personal consumer debt an average of $8,565 per household. This debt is in part due to higher costs for education loans, unregulated home mortgage lending practices and a lack of increase in inflation-adjusted income among many employees. Thus, it is widely recognized that more and more workers in the U.S. are experiencing financial difficulties. 128 Disparities in race and gender only exacerbate the income inequality gap. 129 In addition, employees use of employee assistance programs (EAPs) is at record high utilization. 130 Financial problems have clear negative consequences on worker health and job performance. 123 David R. Williams, Michelle Sternthal, Harvard University, Understanding Racial-ethnic Disparities in Health: Sociological Contributions, Journal of Health and Social Behavior, Nov. 2010 vol. 51 no. 1 supp S15-S27 124 See, e.g., Igor Ryabov, The Role of Residential Segregation in Explaining Racial Gaps in Childhood and Adolescent Obesity Youth & Society 0044118X15607165, first published on September 23, 2015. 125 Williams and Sternthal, Understanding Racial-ethnic Disparities in Health: Sociological Contributions. 126 See, e.g., Employee Personal Financial Distress and How Employers Can Help, Research Works Partnership for Workplace Mental Health, Vol. 1, Issue 1 February 2009, http://www.workplacementalhealth.org/publications-surveys/research-works/employee-personal-financial- Distress-and-How-Employers-Can-Help.aspx?FT=.pdf 127 Id., citing American Psychological Association (2008) Economy and Money Top Causes of Stress for Americans, June 4, 2008, available at http://apahelpcenter.mediaroom.com/index.php?s=pr ess_releases&item=51 128 Id., citing Morgenson, G., Given a shovel, Americans dig deeper in debt, New York Times, July 20, 2008. 129 See, generally, Joan Acker, Inequality Regimes: Gender, Class, and Race in Organizations, GENDER & SOCIETY, Vol. 20 No. 4, August 2006 441-464 http://intergender.net/old_ig/ig_archive/www.sagepub.com/oswcondensed/study/articles/05/acker.pdf 130 Employee Personal Financial Distress and How Employers Can Help, at 4, citing Employee Assistance Society of North America EASNA Survey Shows Increase in EAP Utilization, Press Release December 8, 2008; available at http://www.easna.org/news.html. 64

Workers with financial distress typically report poorer overall health. 131 Conversely, when companies provide financial education initiatives in the workplace, employees report that these are highly valued, lead to better financial decision-making, increased success in investment decisions, and an improved financial situation overall. 132 A growing body of research has also begun to show the link between workers financial stability and their productivity and performance at work, 133 as well as improved overall health, which leads to a positive feedback loop. From this vantage point, investing in salary increases, sick leave banks, EAP loans or grants rather than coercive, outcome-based, workplace wellness programs would yield a net positive for both employer and employee. The whole mindset that employers can or should punish or impose penalties on employees for exercising rights should give advocates for equal employment opportunity pause. To those fighting against stigma and discrimination and trying to promote employment of qualified employees with disabilities, this perspective feels patronizing and unfair. One would hope we could all agree that placing the blame for health conditions that can be costly to manage and occur through no fault of the individual should not be permitted. And, notwithstanding that diet and exercise are, arguably, within an individual s personal control, to deny the existence of cultural and external factors based on race, gender and economic circumstances is to fail to see the entire picture of what is wrong with health and healthcare in the United States today. It is surely a truism that we do not choose our genetics or the families in which we are raised. Blame and therefore punishment should not be open for debate about individuals with such 131 Id., citing Garman, E. T. (2008). Increase the Bottom Line by Helping Distressed Employees During Challenging Financial Times. Presented August 6, 2008 to Society of Human Resources Management Webinar Series. and O'Neill, B., Sorhaindo, B., Xiao, J. J., & Garman, E. T. (2005). Financially distressed consumers: Their financial practices, financial well-being, and health. Financial Counseling and Planning, 16 (1), 73-87. 132 Id. at 5. 133 Id. 65

conditions. Consider obesity in an employee with inherited Type I diabetes and hypertension, or lung cancer in an employee who does not smoke, but was raised by parents who smoked, or PTSD, anxiety or alcohol addiction in an employee who is a survivor of sexual assault. What of the employee with an eating disorder for whom incentivized or coercive participation in an outcome-based wellness program would actually cause damage? Countless other conditions incident to birth defects, biological tendencies, and other non-communicable diseases account for high health care costs, many of which are caused by environmental factors. In reality, many conditions arise from a complicated combination of the choices individuals make, coupled with incidents of birth, DNA, and environmental factors. It is too simplistic to design a health care system, plan or program that forces those most in need of care to pay the most. Stated another way, failing to engage in a healthy lifestyle may be just an uninformed and unsympathetic manner of describing a person who grew up in segregated housing in an urban food desert with a lack of access to safe, affordable, and accessible health care. 134 This kind of argument about employees and their lifestyles falls dangerously prey to not only tautological thinking but also unnecessary and under-theorized syllogism. We can do a better job of discerning the difference between differential health outcomes and best practices in regard to healthcare at the workplace; our ethical practice depends upon it. The proposed new EEOC guidance clarifies that the ADA s protections for the privacy of employees medical and health information and against discrimination based on disability remain important and powerful rules for employers to follow. They dictate that the ADA s 134 See, e.g., Williams and Sternthal ( multiple pathways through which segregation can adversely affect health, including, inter alia, limited access to quality education, preparation for higher education and job training or opportunities, difficulties eating nutritiously, exercising regularly, and avoiding advertising for tobacco and alcohol, concerns about personal safety and the lack of recreation facilities can discourage leisure time physical exercise, chronic and acute financial stress, and increased exposure to environmental toxins, poor quality housing and criminal victimization.) 66

safeguards survive the ACA s expansion of permissible incentives and penalties, while stretching the concept of voluntariness. the proposed rule allows the disclosure of medical information obtained by wellness programs to employers only in aggregate form, except as needed to administer the health plan. The proposed rule does not implicate disability-related inquiries or medical examinations outside the context of a voluntary wellness program. The proposed rule re-asserts the Commission s position, based on the language of the ADA, that employee health programs that include disabilityrelated inquiries or medical examinations (including inquiries or medical examinations that are part of a HRA or medical history) must be voluntary and clarifies the application of that rule in light of the amendments made to HIPAA by the Affordable Care Act. 135 The current GINA regulations also clarify that employers may not offer a financial inducement for individuals to provide genetic information for a wellness program or for completing a health risk assessment that mandates answering questions about genetic information. 136 These account for the fact that one of the primary stressors facing most Americans is financial, and it amounts to undue coercion and eviscerates the laws protections to permit such inducements. The rationale employers use to justify penalties is that few employees participate of their own volition, which belies that these incentives are coercive, and intentionally so. 137 According to the 2014 Kaiser survey, the average annual premium for single coverage was just over $6,000. Thirty percent of that is more than $1,800 per year, and for many employees the figure is higher. Moreover, the vast majority of employees (85%) already pay 20 to 30 percent of the cost of their health insurance coverage, so that an additional 30 percent would more than double the cost of health insurance for most employees. 138 It s one thing to diagnose someone who is sick, but the 135 21663 Federal Register Vol. 80, No. 75 / Monday, April 20, 2015 / Proposed Rules 27 See 26 CFR 54.9802 1(f)(3)(iii); 29 CFR 2590.702(f)(3)(iii); 45 CFR 146.121(f)(iii). 136 29 C.F.R. 1635.8(b)(2). 137 Michelle M. Mello, J.D., Ph.D., and Meredith B. Rosenthal, Ph.D., Wellness Programs and Lifestyle Discrimination The Legal Limits, Health Law, Ethics, and Human Rights, N Engl J Med 359; 2 www.nejm.org, July 10, 2008; CCD comments 138 CCD comments; Kaiser 2014. 67

science of risk is not as well-developed. 139 It remains to be seen whether programs designed to stay within the boundaries of the law can be effective in reducing health care risks and health care costs. 140 For example, it is unclear how large an incentive is needed to gain widespread participation in wellness programs, and programs offering only modest rewards may appeal primarily to people who already practice healthy habits and do not have to change behavior or lifestyle. 141 Furthermore, employers and courts undoubtedly will be arguing for some time to come over when or at what point a medical condition or impairment makes it medically inadvisable or unreasonably difficult for an employee to satisfy a specifically designated health standard. 142 By employing all of the data around risk and disparate health impacts, employers are armed with the tools to provide robust compensation and benefits in a supportive and inclusive workplace to ensure quality employee health care that might also reduce health care costs and increase productivity. That package should include voluntary wellness and financial assistance programs, comprehensive health care coverage focused on prevention and sustainability, as well as vigilance against impermissible stigma, stereotyping, and discrimination to tear down the barriers to full employment and a healthier American workforce. 139 Brandeisky, The Surprisingly Personal Health Questions Your Employer Can Ask You. 140 Michelle M. Mello, J.D., Ph.D., and Meredith B. Rosenthal, Ph.D., Wellness Programs and Lifestyle Discrimination The Legal Limits, Health Law, Ethics, and Human Rights, N Engl J Med 359; 2 www.nejm.org July 10, 2008. 141 Id. at 197. 142 Id. at 193-195. 68

Four Sample Wellness Programs and Their Possible Compliance Issues We recognize that it is not possible or at least very unlikely that one can extrapolate generalities that are valuable based on just four plans. While Rand 2013 used four plans, with many thousands of employees, even the averages derived there for all aspects of plan design, utilization and results are probably not safe predictors for other plans. Corporate culture and the workforce s age, education, location, and economic status also appear to be large influences. But, looking at discrete plans, the type of employer, and the makeup of the workforce may give some reasonable indications of what can be expected in a similar situation. Plan One The company is a non-profit organization that maintains six nursing homes providing services ranging from minor healthcare needs through serious dementia and any care short of hospitalization. It has 1,125 employees. Set forth below are the documents which describe its wellness plan offerings. The program is administered by the Company, although its insurer does provide $10,000 per year to defray costs, and the Company uses many of its health insurer s services, such as exercise classes, educational seminars, etc. The carrier reviews the last three years of claims experience to establish the new experience rating. The company s goal is to trend between 85-90% of the average experience rating for other businesses insured by the carrier in the state at issue. The company does not have comparisons just for similar businesses. There will be only a 3.5% increase in rates for the 2016 plan year, and the goal is zero increase for 2017. A tobacco cessation program will be added in 2016 and provide for a $250/year reimbursement for nicotine replacement therapy. As shown in Appendices 9 and 10, the Company relies on monetary incentives to encourage program participation and will significantly increase the incentive amounts in 2016. Plan 69

participation is currently at 45% of the workforce. In 2016-2017, the Company will further increase the incentives to participate in the plan by lowering the Company s contribution for the plan s premium by 5% if an employee does not participate. The Company recognizes that obtaining the health status data, i.e., an annual physical and annual health screening, provides the basis for moving into health coaching and wellness participation activities that can focus on addressing specific health issues. Because the program is entirely voluntary (unless the amount of initiatives are deemed coercive), the Company intends that the plan should not be classified as one that is health contingent. However, Incentive No. 4, in Figure 2 may involve activities that some employees should not or cannot participate in, the plan clearly provides at the bottom of both Figure 1 and 2 that the company program will, as needed, design alternative methods for qualifying for the rewards, and importantly the employee s own doctor can be involved in such activity designing. Although no formal audit by an outside party has been conducted, the company reports emergency room visits are down over a two-year period by 21%, workplace injuries by 37%, high cost claims by 54%, hospital in-patient costs by 53%, and total medical costs by 30%. However, as is often the case in the first few years of a plan, pharmaceutical costs are up (21%) and well care visits are also up (18%). But, with the expected increase in employee participation levels, the company is confident that its long-term savings will continue to be significant. 143 The rewards for Plan One are all direct cash pay outs to help defray the 5% of the premium that employees pay, which premiums are pro rated based on hours worked by the employees. A full-time employee pays 0 for the individual HMO and $39.o6 for the PPO, and 143 The Company does not attribute all of its healthcare savings to the wellness program. It has also made educational efforts regarding work place safety. 70

then $198 for employee and children and $627 for the family plan. For 2016 all plans will go up $34.72 per month, but that cost is being absorbed by the employer. Plan Two The company is a large international manufacturing, processing, and distribution company with operations in most states and many countries and has over 30,000 employees, including unionized employees. 144 The Company uses a third-party vendor to administer its wellness program, but does so as part of its insured health benefit plans offered to its employees. The plan programs are available to all participants in the Company s health plan and are not otherwise available to employees. The program uses a point system, where certain activities and conduct earn various numbers of points to determine the reward the participant will receive. An employee, spouse or domestic partner must earn a minimum number of points each plan year (here, it is 1,000) and complete the Annual Enrollment Health Questionnaire in order to qualify for the incentive benefits. The plan provides free to the employee or other participant a personal tracking device for walking activity and gives points based on downloads from the tracking device (the data for which is not shared except in aggregate form with the company). Once the two requirements, there are opportunities to enroll in other plans, including a high deductible plan which can generate a $1,000 payment into each participant s Health Savings Account (HSA). Part of qualifying for the HSA contribution requires that the employee go through a Metabolic Syndrome Screening, which is designed to assess increased risk of developing cardiovascular disease or diabetes. The employee can do the screening with his own physician. The plan pays the cost of the screening if done by an in-network physician. Another requirement for receiving the $1,000 HSA contribution is that the employee must meet certain 144 At Company Two, the union-represented employees participate in exactly the same healthcare plans as the non-union-represented employees, and the specific benefits are not bargained over. 71

target ranges for three out of five of the screened medical risk factors. 145 The plan also provides that if three of five risk factors are not met, there are other ways to qualify, such as having a health improvement plan designed by the employee s physician put in place to address the risks, or that the employee for medical reasons is exempt, or that the employee complete six calls with one of the vendor s health coaches. The plan also provides that just for getting an annual physical, the employee gets 50% of the required points to qualify for the other plan options. Still other activities, single biometric screening with an approved physician, a call with a Health Advisor to discuss the Annual Enrollment Health Questionnaire results, participation in a Financial Fitness Assessment and Financial counseling to discuss results and develop an action plan, working with a telephone lifestyle Health Coach or doing the same by mail, generate reward points. There are also award points for wellness classes, participation in local sponsored wellness activities, and for filling out a more comprehensive health questionnaire. And, for those participants dealing with chronic health conditions, there is participation in the plan s Telephonic Condition Managed Program. What should be obvious from the breadth of the program is that the Company has both designed the program to support healthier lifestyles and also included the critical aspect of addressing existing medical conditions. Engagement in one s own health is the critical and overriding feature of the plan concept. The plan is designed to provide extensive incentives for participants to discuss health care problem areas, provide multiple methods for addressing them so that any participant regardless of their health or disability status has many options to obtain the incentives, and encourage with economic incentive actions to do so. By adding a specific chronic medical condition component, the plan seeks to address the areas where the studies agree 145 The risk factors are: blood pressure; HDL cholesterol; triglycerides; glucose; and size of waist. 72

the greatest healthcare cost savings can be achieved. 146 No doubt this is because such conditions cause both present and also expected future significant costs if they are not addressed as effectively as possible. Plan Two s comprehensive approach would seem to assure that it can be shown to have a reasonable chance of improving the health of, and preventing disease in, participating individuals, which would mean it at least passes that requirement in the ACA Regulations. 147 Even meeting ACA s requirement, one must determine whether Plan Two runs afoul of the existing regulations under the ADA, HIPAA, and GINA. However, as discussed elsewhere in this paper, the 11 th Circuit Court has upheld a Florida District Court decision that the safe harbor provision found in the ADA, that wellness plans that are a term of a bona fide benefit plan that are based on underwriting risks, classifying risks, or administering such risks that are based on or not inconsistent with state law, are not subject to the ADA s prohibition against involuntary medical examinations. 148 Plan Two s reward program covers activities which are both participatory and also activities which are contingent on the results. Thus, some aspects of Plan Two should be free of any compliance oversight, while other aspects, such as the metabolic syndrome screening, may have to meet the five standard Affordable Care Act test. For Plan Two, there are no premium differentials for the PPO plans. The difference comes in deductibles and out of pocket maximums. The difference between the preferred and non-preferred PPO plans are a $300/900 single/family deductible difference. For the high deductible plan, there is a premium difference of approximately $50/mo, but the deductibles are actually greater in that plan given the high deductible nature. The additional benefit for the high deductible plan participants, though, is the 146 147 148 See Rand 2013. 78 Fed. Reg., at 33162. Seff v. Broward County, 778 F.Supp.2d 1370, S.D. Fla. 2011, 691 F. 3d 1221. 73

potential to receive a $1,000 employer contribution to the participant s Health Savings Account should the participant complete the biometric screening. Depending on the size of the payment discounts between the standard plan and the reward-based plan options, there could be challenges under either Affordable Care Act triagency regulations, or under the proposed EEOC ADA regulations. But, Plan Two was designed so the allowed percentage discounts would not be exceeded, leaving the only challenge of whether the amounts can be considered objectively coercive. And for that, Plan Two would no doubt argue that it is within the ADA s safe harbor exemption. Plan Two engages in routine audits to determine whether and what savings are being achieved in healthcare costs or other benefits obtained by the Company s health plan. The plan s overall health trend, while increasing, has had a declining rate of increase over the last three years, and is lower than the national average by 3 to 4 percentage points over that time. Specific areas where savings have been identified are for the so-called shock or large cost claims, which have dramatically decreased. Indeed, even with over 30,000 employees, one extraordinarily expensive claim can be and has been a significant driver of the Company s health plan costs. The Company continually evaluates the program and modifies it as necessary to assure that it offers action steps to address chronic conditions with the goal to keep them at a lower level of incidence. Given the nature of many employees work and the number of sedentary desk-based jobs, the Company believes that the popular walking program, with its free monitors, has had a large influence on lowering levels of Metabolic Syndrome issues. Plan Three Plan Three is at a bank with approximately 55 branches and 500 employees. The Bank s wellness plan, described by its materials set out on Appendices 11, 12 and 13 has a participation 74

rate of 95%. The plan is designed by the American Bankers Association and administered by the Bank, using a third party to assess the most at risk employees. The Bank does not know who participates in the plan and the case management portion of the plan is handled by RNs employed by the third party. The Bank s overall healthcare experience rating has not changed, which it attributes to a few catastrophic illnesses. Controllable Illness experience, such as with diabetes, has improved, as well as biometric measures, such as blood pressure and body mass. Participation in the Health Matters program for employees with high risk factors has doubled in the past year. As is easily seen, the plan relies on significant economic incentives both to drive participation and to reward outcomes, and are meant to be well below the limits permitted by the HIPAA and ACA regulations. The goals of the Results-Based Wellness Program in Appendix 12 provide a clear statement of the alternative means to satisfy the goals, which are designed to meet the existing ADA and EEOC proposed regulation requirements. Assuming that the alternatives include the possibility that an employee s physician could bar any effort to achieve the goal as medically unadvisable, the alternatives should meet the new requirements. Plan Three seems to support the conclusions of Rand 2013, that although cost savings can be achieved, they are not statistically significant even with high participation level plans. A better analysis is needed of what might have been the Bank s likely healthcare costs if it had not had the plan and/or not had a high participation rate. Plan Four The Company s plan has been actively in place since 2003. Since 2004, educational meetings have been held company-wide dealing with diet, water consumption, and exercise. In 2005, the Company introduced two different deductibles for their health insurance plan with 75

participation in wellness required for the lower deductible. At that time, participation meant an annual health risk assessment with follow-up appointments as determined by a health coach. It also involved more consumption of water and fruit and recognized people who lost weight or stopped smoking. The Company also circulated a wellness letter monthly to all of its employees. Since 2005, the Company has frequently amended its wellness program to add rewards, which could affect a person s annual bonus, the power given to the wellness provider to determine under which deductible an employee would fall, the waiver of the deductible for people in smoking cessation programs, versus paying the higher deductible and higher out-of-pocket payments for non-participation. In the last six years, the Company has had an annual increase in healthcare costs of about 4% less each year than the national trend would suggest the Company should have. This is the case despite the fact that the Company has an aging population, with overwhelming numbers of which are truck drivers or hold sedentary jobs. The Company is currently focused on plans of introducing stress reduction coaching and health monitoring. Just for participating as indicated the employee reduces his deductible from $1000 to $500 for individuals, and to $1000 from $2000 for a family plan. If they participate in the wellness program then some services have a 20% co-insurance, which normally would be 30%. This plan is self-insured and the employees have no premium contribution in order to participate, thus there is no premium differential. The Company uses a fairly generic biometrics screening form, a copy of which is set out in Appendix 14. The testing is to be done by the employee s personal physician and the cost is paid by the Company. However, failure to obtain the biometric testing will result in the employee paying the higher deductibles and co-pays. The Company also provides for men and women differentiated recommended prevention screening lists, copies of which are attached as 76

Appendices 15 and 16. Again, the Company makes clear that the decision to perform any of the screenings is a decision between the employee and his or her healthcare provider. The decision to participate in coaching with a third party wellness provider is optional. Because the various regulations appear to still treat a biometric screening test that is required as only a participatory activity, Plan 4 should not run afoul of the regulations requiring reasonable alternatives. If it were to require actual smoking cessation or the completion of a smoking cessation program, them it would fall within the regulations calling for reasonable alternatives and possibly even waiver if a reasonable alternative were not medically advisable or possibly even if the employee simply refused. But without more incentives or the elimination of taking some amount of cash in lieu of participating in the health plan and its wellness program, Plan 4 s company is likely to have much less success in curtailing its healthcare costs than it might with greater participation and a more comprehensive less voluntary plan. 77

Appendix 1 Figure 1 Use of Specific Health Management Programs, by Firm Size, 2013 90% 80% 80% 79% o Small Employers Large Employers 70% 60% 50% 40% 30% 20% 10% 0% Disease management Health assessment Telephone or web-based health/lifestyle coaching Health advocate services On-site fitness Fitness facility Face-to-face Sleep disorder facility discounts health/lifestyle diagnosis and coaching treatment program Resiliency program Source: Mercer National Survey of Employer-Sponsored Health Plans, 2014 78

Appendix 2 Figure 2 Percentage of Firms Offering Health Risk Assessments or Biometric Screenings, by Firm Size, 2014 osmall employers Large employers I 51% 51% 26% Health Risk Assessment Biometric Screening Source: Kaiser Family Foundation, 2014. 79

Appendix 3 Figure 3 Percentage of Firms Offering Employees the Opportunity to Complete Health Risk Assessments, by Firm Size, 2008-2014 I - Small Employers -Large Employers I 38% 20% 10% - 14.... % 8%... -- -- -.. 21% 10%""' "' " --18 23% -.-% ---- " "" "32% 0% 2008 2009 2010 2011 2012 2013 2014 Sot.Kee:http:t/krt.org/repott ecl!oo/ef)bs 2911-sectior,..IW!lv&-we!fl)OH PrOQ mt: nd:heal!h:f1sk assessmenw 80

81 Appendix 4

82 Appendix 5

Appendix 6 Figure 3.9: Percentage Distribution of Types of Clinical Screening Tests Offered by Employers That 100% 95 % Have Clinical Screenings in Their Wellness Programs 80% 60% 40% 20% 0% Blood pressure Blood glucose Cholesterol BMI/ Cancer Tobacco use I body fat screening lipids Stress Other * Clinical screening test * includes bone density, general exam, vision/hearing SOURCE: RAND Employer Survey, 2012. NOTES: The graph represents information from employers with at least 50 employees that offer any clinical screening as a component of a wellness program. 51percent of employers offer a wellness program, a nd 49 percent of those include clinical screenings. includes bone density, general exa m,and vision/hearing tests. 83

Appendix 7 Figure 3.10: Percentage Distribution of Types of Lifestyle Management Programs Offered by Employers Providing Any Lifestyle Management Component in Their Wellness Program 100% 80% 79% 60% 40% 20% 0% Lifestyle management program SOURCE: RAND Employer Survey, 2012. NOTES: The graph represents information from employers with at least 50 employees that offer any lifestyle management intervention as a component of a wel lness program. 51 percent of employers offer a wellness program, and 77 percent of those have a lifesty le management intervention. 84

85 Appendix 8

Appendix 9 86

Appendix 10 87

Appendix 11 88

Appendix 12 89

Appendix 13 90

Appendix 14 91

Appendix 15 92

Appendix 16 93

Appendix 17 INSTRUCTIONS Health Risk Assessment The Healthy Michigan Plan is very interested in helping you get healthy and stay healthy. We want to ask you a few questions about your current health and encourage you to see your doctor for a check-up as soon as possible after you enroll with a health plan, and at least once a year after that. Take this form with you when you go. An annual check-up appointment is a covered benefit of the Healthy Michigan Plan and your health plan can help you with a ride to and from this appointment. Your doctor and your health plan will use this information to better meet your health needs. The information you provide in this form is personal health information protected by federal and state law and will be kept confidential. It CANNOT be used to deny health care coverage. If you need assistance with completing this form, contact your health plan. You can also call the Beneficiary Help Line at 1-800-642-3195 or TTY 1-866-501-5656 if you have questions. INSTRUCTIONS FOR COMPLETING THIS HEALTH RISK ASSESSMENT FOR HEALTHY MICHIGAN PLAN: Answer the questions in sections 1-3 as best you can. You are not required to answer all of the questions. Call your doctor s office to schedule an annual check-up appointment. Take this form with you to your appointment. Your doctor or other primary care provider will complete section 4. He or she will send your results to your health plan. After your appointment, keep a copy or printout of this form that has your doctor s signature on it. This is your record that you completed your annual Health Risk Assessment. 94

Health Risk Assessment First Name, Middle Name, Last Name, and Suffix Date of Birth (mm/dd/yyyy) Mailing Address Apartment or Lot Number mihealth Card Number City State Zip Code Phone Number Other Phone Number SECTION 1 - Initial assessment questions (check one for each question) 1. In general, how would you rate your health? Excellent Very Good Good Fair 2. In the last 7 days, how often did you exercise for at least 20 minutes in a day? 3. Every day 3-6 days 1-2 days 0 days Exercise includes walking, housekeeping, jogging, weights, a sport or playing with your kids. It can be done on the job, around the house, just for fun or as a work-out. 4. In the last 7 days, how often did you eat 3 or more servings of fruits or vegetables in a day? Every day 3-6 days 1-2 days 0 days Each time you ate a fruit or vegetable counts as one serving. It can be fresh, frozen, canned, cooked or mixed with other foods. 5. In the last 7 days, how often did you have (5 or more for men, 4 or more for women) alcoholic drinks at one time? Never Once a week 2-3 times a week More than 3 times during the week 1 drink is 1 beer, 1 glass of wine, or 1 shot. 6. IN THE LAST 30 DAYS HAVE YOU SMOKED OR USED TOBACCO? YES NO If YES, Do you want to quit smoking or using tobacco? Yes I am working on quitting or cutting back right now No 7. IN THE LAST 30 DAYS, HOW OFTEN HAVE YOU FELT TENSE, ANXIOUS OR DEPRESSED? Almost every day Sometimes Rarely Never 8. Do you use drugs or medications (other than exactly as prescribed for you) which affect your mood or help you to relax? Almost every day Sometimes Rarely Never This includes illegal or street drugs and medications from a doctor or drug store if you are taking them differently than exactly how your doctor told you to take them. 9. The flu vaccine can be a shot in the arm or a spray in the nose. Have you had a flu shot or flu spray in the last year? YES NO 10. A checkup is a visit to a doctor s office that is NOT for a specific problem. How long has it been since your last checkup? Within the last year Between 1-3 years More than 3 years 95

Take this form to your check-up and complete the rest of the form with your doctor at this appointment. SECTION 2 - Annual appointment A routine checkup is an important part of taking care of your health. An annual check-up appointment is a covered benefit of the Healthy Michigan Plan and your health plan can help you with a ride to and from this appointment. What month did you first schedule this Date of appointment? appointment: (Month) (mm/dd/yyyy) At my appointment, I would most like to talk with my doctor about: An annual appointment gives you a chance to talk to your doctor and ask any questions you may have about your health including questions about medications or tests you might need. Your Healthy Behavior Small everyday changes can have a big impact on your health. Think about the changes you would be most interested in making over the next year. Look at the list below and CHOOSE ONE or MORE: Exercise regularly, eat better, and/or lose weight Cut back or quit drinking alcohol Cut back or quit smoking or using tobacco Get a flu shot Section 3 - Readiness to change Return to the doctor to get tested for high blood pressure, high cholesterol and diabetes OR if I already have any of them, return to the doctor for check-ups for these conditions Seek treatment for drug or substance abuse I will commit to keep up all of the healthy things I do now Other: Changes like drinking water rather than soda or walking every day can help you stay healthy or help you better control illnesses you may already have. You can learn new ways to handle stress or quit smoking. Remember, even small changes can be difficult and take a long time. It may be helpful to get support from your family, friends, community or your doctor. Your health plan may have programs that can help you. Now that you have selected your healthy behavior(s) above, answer questions 1-3. For each question, use the scale provided and pick a number from 0 through 5. Thinking about your healthy behavior(s), do you want to make some small lifestyle changes in this area to improve your health? 0 1 2 3 4 5 n t want to make I want to learn more about Yes, I know the changes I changes now changes I can make want to start making How much support do you think you would get from family or friends if they knew you were trying to make 0 1 2 3 4 5 some changes? I don t think family or I think I have some support Yes, I think family or friends would help me friends would help me How much support would you like from your don t want to be I want to learn more about Yes, I am interested in doctor or your health plan to make these changes? contacted programs that can help me signing up for programs 96

Section 4 To be completed by your primary care provider Primary care providers should fill out this form for Healthy Michigan Plan beneficiaries enrolled in Managed Care Plans only. Fill in the Member Results, select a Healthy Behavior statement in discussion with the member, and sign the Primary Care Provider Attestation. Blood pressure, BMI and tobacco use status will be known from the appointment. For all other Member Results, marking the result as unknown and indicating whether the screening or immunization is recommended satisfies the requirements for a complete Health Risk Assessment. All three parts of Section 4 must be filled in for the attestation to be considered complete. MEMBER RESULTS Blood Pressure (xxx/xxx mmhg) Patient diagnosed with hypertension? Yes No BMI Ht Wt. BMI (xx.x) In the context of all relevant clinical factors, does this BMI indicate need for weight management? Yes No Tobacco Use Status Never used tobacco Previous tobacco user Current tobacco cessation Starting tobacco cessation Tobacco user Cholesterol Cholesterol known? Yes No Patient diagnosed with high cholesterol? Yes No If cholesterol known is Yes: Total cholesterol: LDL: Date of most recent test results: HDL: Triglycerides: If cholesterol known is No: Screening not recommended Screening Ordered Blood Sugar Blood sugar known? Yes No Patient diagnosed with diabetes? Yes No If blood sugar known is Yes: Date of most recent test results: FBS (xxx mg/dl): A1C (xx.x%): If blood sugar known is No: Screening not recommended Screening Ordered Influenza Vaccine Annual Influenza Vaccination? Yes No If Influenza vaccination is Yes: Date of most recent vaccination: If Influenza vaccination is No: Vaccination not recommended Vaccination recommended Healthy Behaviors - Choose one of the following statements (1-4) 1. Patient does not have health risk behaviors that need to be addressed at this time. 2. Patient has identified at least one behavior to address over the next year to improve their health (choose one or more below): 97

INCREASE PHYSICAL ACTIVITY, LEARN MORE ABOUT NUTRITION AND IMPROVE DIET, AND/OR WEIGHT LOSS REDUCE/QUIT TOBACCO USE Annual influenza vaccine Agrees to follow-up appointment for screening or management (if necessary) of hypertension, cholesterol and/or diabetes Reduce/quit alcohol consumption Treatment for Substance Use Disorder Other: explain 3. Patient has a serious medical, behavioral or social condition(s) which precludes addressing unhealthy behaviors at this time. 4. Unhealthy behaviors have been identified, patient s readiness to change has been assessed, and patient is not ready to make changes at this time. PRIMARY CARE PROVIDER ATTESTATION I certify that I have examined the patient named above and the information is complete and accurate to the best of my knowledge. I have provided a copy of this Health Risk Assessment to the member listed above. Print Name (First Name, Last Name) National Provider Identifier (NPI) Signature Date SUBMISSION INSTRUCTIONS: Submit completed forms in the secure manner specified by the member's Managed Care Plan. Authority: MCL 400.105(d)(1)(e) Completion: Of this form provides information to better meet the health needs of Healthy Michigan Plan beneficiaries in Managed Care Plans. Michigan Department of Community Health is an equal opportunity employer. 98