Lawyers to the rescue

Employers considering offering employee wellness programs and penalizing workers who have “high” health indices will now want to think twice. Attorneys are catching onto the science and raising questions about the discriminatory aspects of these programs and how they violate the rights of employees, especially fat employees.

Companies penalizing employees who are fat or have high health risk numbers have been in the news lately. Purportedly, these wellness initiatives are to encourage employees to change their behaviors to be healthy and save healthcare costs.

As disturbing as this may sound, how many people know that, beginning on July 1st, a new Federal law made this legal? Employees can compensate fat, older and minority people as much as 20% less and discriminate against employees based on health factors — as long as it’s connected with an employee wellness program. This new law was passed so quietly, the public has been left largely in the dark.

As the Associated Press recently reported, many companies were holding off enacting these penalties, pending the finalization of this new law. Now, they report, “employers wary of risking legal problems feel more confident after federal regulations were finalized July 1 covering how wellness programs can comply with nondiscrimination requirements under the Health Insurance Portability and Accountability Act.”

Health risks tied to charges for insurance

First they tried nudging. Now companies are penalizing workers who have high health risks such as obesity and high blood pressure or cholesterol as insurance costs climb... A small number of companies have linked health factors to what employees pay for benefits, but the practice is expected to grow now that some federal rules have been finalized, spelling out what's allowed by law.... The businesses are deducting from employees' paychecks, adding insurance surcharges or offering insurance discounts or rebates only to low-risk workers....

[Lawyer, Garry Mathiason] said more than 300 companies have sought advice on creating more aggressive wellness programs since the firm released a study in April on legal issues and trends associated with requiring healthy practices....

In 2009 [Clarian Health] will start reducing pay for employees in its health plan by $10 per paycheck if their BMI is in the obese range [and] $5 per check if they don't meet required cholesterol, blood pressure or blood glucose measurements. Workers will be required to complete an annual health risk assessment and can appeal to have their fees dropped if they show improvement....

Some workers and employee advocates say companies are intruding in workers' private lives. The National Workrights Institute says employers adopting the charges are trying to control private behavior and amassing huge amounts of personal health information. “It's a backdoor approach to weeding out expensive employees," legal director Jeremy Gruber said.... “Employers are paying the lion's share of health-care costs and feel that they have the right to call the shots," [Linda] Cushman said.

The fine print

The complete Final Rules of the Nondiscriminiation and Wellness Programs in Health Coverage in the Group Market, Health Insurance Portability and Accountability Act, regulations can be downloaded here. The lawyers at DeDechert, LLP summarized the ruling in the January issue Dechert On Point. Basically, wellness programs need only satisfy five rules in order to base compensation and rewards on the achievement of a health factor:

· The amount of the reward/penalty can be up to 20% of the employee’s coverage. Rewards are generally a discount, rebate of premium or contribution, waiver of cost sharing mechanism, absence of surcharge or the value of a benefit that would otherwise not be provided under the plan.

· The program must give eligible individuals the opportunity to qualify for the reward at least once a year.

· The reward must be available to all similarly situated individuals, with a reasonable alternative offered for those for whom attempting to achieve the regular standard is unreasonably difficult due to a medical condition or is medically inadvisable.

· All wellness program materials that describe the terms of the program must disclose the availability of a reasonable alternative standard.

· The program must be reasonably designed to promote health or prevent disease. To satisfy this standard, a program has to have “a reasonable chance of improving the health of participants, is not overly burdensome, is not a subterfuge for discriminating based on a health factor, and is not highly suspect in the method chosen to promote health or prevent disease.”

As Junkfood Science readers no doubt instantly caught, wellness programs have no sound evidence to support effectiveness in preventing disease, let alone lower costs. They are also based on the unsound beliefs that: health problems are caused and can be prevented by certain diets and behaviors; body weight is a measure of health; that intense “exercise” is necessary to enjoy benefits and is risk free; and that long-term weight loss is even possible and doesn’t worsen health problems. They also disregard the facts that health risk indices are not good measures of future health problems; that these measures are largely genetically determined and “normal” levels have been redefined so that the cutoffs now fall in the fattest part of the bell curve and in ranges normal for most people as they age; and that no amount of healthy behaviors will enable most older, fatter or genetically predisposed people to achieve ideal numbers. That makes them exactly “subterfuge for discrimination.”

The final regulations (page 75018) also include a wide variety of wellness programs that would not have to satisfy any additional standards to comply with the nondiscrimination requirements. Those include programs that:

• reimburses all or part of the cost for fitness center memberships

• rewards participation in diagnostic testing, not related to outcomes

• penalizes those who don’t comply with preventive care and rewards those who do

• reimburses employees for smoking cessation programs, unrelated to outcome

• rewards employees for attending monthly health education

But not so fast. According to Newsday today, growing numbers of lawyers are advising employers against getting on the bandwagon:

Making obese pay higher health premiums slammed

This is a bandwagon employers might want to think twice about before jumping on. Some companies nationwide are tackling health-care costs by charging obese employees higher premiums. But local experts, including attorneys who represent employers, have poohpoohed the approach because they believe the solution could be worse than the problem.

Commack attorney Allen Breslow said that the weight differential costs could violate obese employees' rights... “It might be an ADA [Americans With Disabilities Act] violation ... I just wouldn't let my clients touch it."

In fact, an attorney for the U.S. Equal Employment Opportunity Commission, which enforces the ADA, echoed that concern, especially regarding the morbidly obese, generally considered to be individuals at least 100 pounds overweight. “If they targeted the morbidly obese, then I think there would be an ADA claim," said Elizabeth Grossman, regional attorney in the EEOC's Manhattan Office.

Another local lawyer questioned whether singling out individual employees could violate state insurance law. “An employer has to be very careful when it comes to offering insurance coverage to staff under a group policy if it attempts to make selections that are based on someone's individual characteristics," said Carmelo Grimaldi, a partner at Meltzer, Lippe, Goldstein & Breitstone in Mineola. “Insurance statues could potentially prohibit that."

There is much money to be made by lawyers going after companies who coerce their employees to participate in wellness programs — mandating diets, weight loss interventions, or prescription medications, that may put their health in greater risk — and discriminate on the basis of controversial health risk factors. The lawyers will have the soundest scientific evidence behind them. There are a lot more employees than there are employers and lawyers can have a field day. Lawyers may do more to bring attention to this issue and advocate for people’s health and welfare than anything politicians, public health officials, or the medical community have done.

© 2007 Sandy Szwarc