The bottom line: Brokers and advisers should now be aware both of the professional risks they are taking by pitching clinical wellness programs and of the career risk they are subjecting their clients to by encouraging use of the programs. Most clinical wellness programs now technically violate the Americans with Disabilities Act (ADA).
You might be wondering why this is the first you are hearing of it. That’s because this is new news, as of last Thursday. Here is a timeline:
- Jan. 16, 2018: Federal court case “vacates” the expansive, corporate-friendly EEOC rules allowing large incentives and penalties used in clinical wellness programs and directs the EEOC to write new rules accordingly.
- July 16, 2019: AARP and unionized Yale employees sue Yale for imposing such penalties.
- Jan. 7, 2021: The EEOC finally writes the new rules. As directed by the court, these rules no longer allow employers to subject employees to large forfeitures (penalties or foregone incentives) for refusing to submit to clinical wellness programs. The three Republican commissioners, at the request of the U.S. Chamber of Commerce and Business Roundtable, carve out a large loophole for increasingly unpopular and possibly harmful outcomes-based programs. (Those are the programs where you get heavily fined for not losing weight.)
- Jan. 8-20, 2021: The dog doesn’t bark in the nighttime: The Federal Register does not publish the proposed rules for public comment. The absence of this routine step suggests these rules are already generating blowback.
- Jan, 21, 2021: The Biden administration shakes up the EEOC, promoting the two Obama appointees, both of whom have strong pro-employee biases, and demoting the Republicans.
- Jan. 21, 2021: The Biden administration freezes all proposed rules from every agency from publication for comment in the Federal Register. This indicates a thorough realignment of priorities is in the works.
Here are three ways to know that this timeline means the end of programs that, like most, focus exclusively on risk assessments, screens and coaching.
First, the ADA requires that clinical inquiries and exams be “voluntary.” Absent rules defining “voluntary,” incentives can’t be imposed. Very few employees would voluntarily allow their employers to hire unlicensed wellness vendors to “play doctor,” especially with no law proscribing the vendors’ use of that data. (HIPAA does not apply to standalone wellness companies.)
Second, the new EEOC leadership alignment eliminates the chance that the EEOC will re-publish the existing rules. If indeed the EEOC publishes new rules once new rules are green-lighted for publication in general, the agency will specifically allow only minimal incentives. Penalties? No way.
Third, that 2019 Yale lawsuit has yet to be decided. The judge has been sitting on the summary judgment briefs for more than a year now, presumably waiting for the rules to be promulgated. With no rules, Yale is now in clear violation of the ADA, so the decision should come down within weeks -- in favor of the plaintiff employees. This decision will resonate with class action attorneys everywhere, as punitive programs will be “low-hanging fruit” for them. The decision will unleash a flood of claims by 2022.
Here’s how to keep your clinical program intact
The rules – and the EEOC’s jurisdiction in general – apply only to clinical programs. You can still offer activity-based programs and still tie up to 30% of insurance dollars to those programs. The reason? Activity-based programs are governed by the Affordable Care Act (ACA) only, not the ADA. They include physical and mental activities, as well as seminars, quizzes, volunteer work and more.
The difference between the two program types is best illustrated by an example: You can make employees wear FitBits to track their steps, but you can’t track their pulses. (It turns out tracking steps doesn’t accomplish anything anyway.)
There is a way to maintain your clinical programs. (Why anyone would want to is a different issue, covered at length here.) You can offer them side-by-side with your activity programs but allow employees to fully satisfy program requirements and earn the full incentive (or avoid the penalty) without submitting to any clinical test or inquiry.
Suppose an employee needs 500 “wellness points,” and a risk assessment and a screen are worth 250 apiece. “Lunch ‘n’ learn” nutrition seminars are worth 50 points each, but employees are currently capped at 5 such seminars. That program would be noncompliant. Raising the cap to 10 or upping each seminar to 100 points solves the entire problem by allowing employees to earn the full incentive by sitting through all those sessions.
Employers concerned about the time commitment for something like that could offer health literacy quizzes instead. [Note: My company offers those.] This simple one-page flyer checks the ADA/EEOC compliance box by offering both quizzes and conventional screenings. It also encourages the highest-risk employees to choose screens, while a large majority of employees would learn more about health, healthcare and health benefits through quizzes.
As a belt-and-suspenders protection against EEOC exposure, Quizzify also provides indemnification to employers. With or without health literacy, your own wellness vendor should reconfigure its program to both comply with the ADA and to indemnify you and your client if it doesn't.
Especially with indemnification, expanding the number of activity-based offerings to allow employees to hit their points target while avoiding clinical programs solves this new problem. The challenge will be to make those non-clinical activities useful.
If you want to explore this topic further, Insurance Thought Leadership is co-sponsoring a seminar on this very topic on Monday, Feb. 1 at 1pm EST. You can register here.