A Look Into the Final EEOC Wellness Regulations · Federal Wellness Rules on Incentives 7 HIPAA...

© Jim Pshock - All Rights Reserved© Jim Pshock - All Rights Reserved

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A Look Into the Final EEOC Wellness Regulations

Art & Science of Health Promotion Conference

March 29, 2017

© Jim Pshock - All Rights Reserved

Today’s Discussion

• Applicable federal regulations:

• HIPAA

• ACA

• ADA

• GINA

• Inconsistencies in the regulations and how to navigate

• Group participation: example plan designs to identify issues or concerns

• Practical actions and best practices

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20062010

-2013

Affordable Care

Act(only applies to health plan)

HIPAA

Final Wellness Rules(only applies to health plan)

• Discrimination permitted

based on a health status.

• Limited to premium

contribution differentials and

cost-sharing within the plan.

• Did not create financial limits

on participation-based

incentives or penalties

(did not supersede other

applicable laws).

Safe Harbors for Discrimination

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2011

ADA

Safe Harbor

Seff vs. Broward County

2015

Proposed Amendments

to ADA and GINA

4


2015 Preserving

Employee

Wellness Programs(Congressional Bill)

2016 Final ADA and GINA

Wellness

Regulations(EEOC)

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Sept

2016

Dec

2016

EEOC vs. Orion

Oct

2016

https://www.eeoc.gov/eeoc

/events/webcast-

wellness.cfm

Jan

2017

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https://www.eeoc.gov/eeoc/events/webcast-wellness.cfm


Federal Wellness Rules on Incentives

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HIPAA

(2006)

Affordable Care Act

(2010)

ADA/GINA (EEOC)

(2016)

Size of financial impact:

20% of total cost employee

enrolled in (assuming other

dependents may access as

well)

Same as HIPAA but 30% and

up to 50% if amount > 30% is

limited to tobacco use

30% of total cost for

employee-only coverage in

least expensive option.

Tobacco included if tested via

“exam” but not if attestation.

Applicable types of

incentives:Outcomes-based

Health contingent activity-

only and outcomes-based

(note impact to affordability

calculation)

Participation and Health

Contingent that require and

exam or answer to health

question(s) deemed

“disability related”

Incentive method(s):Premium contributions and/or

cost-sharing mechanisms

within health plan

Same as HIPAA

All forms (cash, PTO days,

merchandise, de-minimus

rewards, cost-sharing etc.)

Reasonable alternative

standard:

Required if medically

inadvisable or unreasonably

difficult due to medical issue

Same as HIPAA for

participatory and activity-only

but required for all outcomes-

based regardless of medical

issue

Required for all disability-

related and same as ACA for

outcomes-based


Federal Wellness Rules Continued….

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HIPAA

(2006)

Affordable Care Act

(2010)

ADA/GINA (EEOC)

(2016)

Applicable to: Health plan participants Health plan participantsAll employees (and

spouses via GINA)

Design requirements:“Reasonably designed to

promote health and prevent

disease”

Same as HIPAA plus

“minimum of report to

summarize health risks

and recommendations”

Same as ACA

Privacy notice:Follows health plan privacy

notice

Follows health plan

privacy notice

Model notice issued June

2016

Frequency: Not specified At least 1 time per year At least 1 time per year


• Incentives and/or penalties (a.k.a. “inducements”) are clearly permissible

and will not be deemed “involuntary” if compliant with requirements.

• Clear path to include those outside of health plan without fear of wage

discrimination.

• Rules largely mirror the ACA’s and HIPAA’s existing regulations.

• Not retroactive: Financial Inducement caps applied 1/1/17 plan year or

upon renewal after 1/1 must comply. Should be in compliance with all

other provisions now.

ADA & GINA: My Perspective, the Good News

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• Participation cannot be a gatekeeper for coverage.

• Not simply for coverage overall, but for any plan.

• Must offer access for non-participants to “buy up” to the better plan.

Example before: Non-participant earns Bronze plan; participant who passes fewer

than 4 of 6 goals earns Silver; participant who passes 4 to 6 earns Gold.

Example after: Same except Bronze participant can also pay $X to opt into Silver or

$Y to opt into Gold (provides basis for 30% test as well).

• Common question: “Are we now required to include non-health-plan participants in the

program? – No. Also may include in wellness program but not offer an incentive.

The Headlines: What’s in There?

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• Children (even adult children) may not be included in incentive program soliciting

health information or requiring exam, but spouses can.

• Outcomes and participation-based incentives count toward cap.

• “In-Kind” incentives (paid time off, movie tickets, t-shirts) count; even de-minimus.

• October 2016 opinion indicates that only the elements that require an exam or require

individuals to answer disability-related questions count. HRA’s may not count if

questions can be skipped.

• Incentives >30% are okay if you can earn maximum rewards without exam or DI

questions

• Privacy notice requirements adopted: model notice issued, June 2016.


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New 30% rule varies based on four scenarios:

• If there is only one health plan offered to employees, use 30% of the cost of

employee-only coverage in that plan for all employees (whether in the plan or not).

• If multiple health plan options are offered and wellness inducements are offered

regardless of which plan an employee enrolls in, use 30% of the cost of employee-

only coverage in the least expensive health plan.

• If multiple health plan options are offered but the wellness program and

inducements are only included in certain plan options, use 30% of the cost of

employee-only coverage in the plan in which an individual is actually enrolled.

• If no health plan is offered at all, use 30% of rate for Silver Plan on public

exchange that would apply to a 40 year old non-smoker in the zip code of company

headquarters.


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Tobacco Inducements

• The EEOC amended the ADA regulations regarding tobacco/nicotine incentives limiting

incentives that require an “exam” to allow 30% of employee-only premium.

• Blood draws and cheeks swabs, for example, are considered an exam. A provider form

that has the provider attest is also incident to an exam.

• Utilizing an attestation to incent tobacco use (instead of an exam), allows a plan design

to increase its inducements to up to 50%.

• Nuance: the 20% can be used for each tier (employee, employee plus spouse,

family).

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Reasonably designed?

• Largely mirrors HIPAA and ACA now.

• Must have a reasonable chance of improving health/preventing disease.

• Must not be overly burdensome or time consuming.

• Must not be a subterfuge for violating ADA or other law.

• Wellness programs that collect medical information through measurement,

screening or test without follow-up information and advice designed to improve

health would not be considered “reasonably designed.”

• Most health risk assessment reports achieve this standard.


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• Physician attestation in lieu of participation: NOT ADOPTED.

• Applicability of “insurance safe-harbor” provisions: NOT ADOPTED. Final rules

specifically state that the safe harbor does not apply to wellness programs

even if they are part of employer’s health plan. Note: EEOC vs. Orion Energy.

• May require different rules for low income employees: NOT ADOPTED. Note: Option

for wage banded design.

• Requirement to collect prior written acknowledgement of voluntary nature of program

and incentive: NOT ADOPTED.

The Headlines: What’s Not in There?

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Exception to GINA for spouse involvement in wellness programs appears to no longer

be limited to spouses who are participating in the employer sponsored health plan.

• Cannot ask employee for spouse health information. Must directly ask the spouse.

• Spouse must provide their own consent and privacy acknowledgement. Employee

cannot approve on behalf of spouse.

• May ask about spouse’s current and past health status but NOT about the spouse’s

family history or genetic information.

• Cannot “link” results and deny employee incentives because their spouse did or did

not engage in wellness program. Exception for tobacco use!

Other Key Points in GINA Rule

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Changes in the

Last 60 Days

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• AARP lawsuit against EEOC:

• Argues 40% allowance renders programs “involuntary” in violation of

ADA and GINA.

• Lost request for injunction to prevent rules from going into effect

1/1/17.

• Court has not concluded in favor of EEOC at this time, only that the

injunction was not warranted.

• S. 620 and H.R. 1189 -- Preserving Employee Wellness Programs Act --

currently dormant.

An Update

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An Update

• Evidence-based research results concerning the use of incentives.

• EEOC webinar – October 19, 2016

• Victoria Lipnic - New Acting Chair of EEOC

• Repeal of the ACA:• Strong bipartisan support for wellness and incentives.• May temporarily revert back to HIPAA wellness rules (which, when

coupled with EEOC rules, would limit health-contingent portion to 20% of total premium).

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Sample Program Designs

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Embedding Wellness and Incentives into Medical Plan

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Employer Employee

20%

80%

1,000enrolled

employees

$8,000annual

premium/EE

Employer Employee

$1,600,000

$6,400,000

All EmployeesPer Employee


A Purpose-Driven Portion of the Benefit Plan

3%

20%Original

Employee base

Employees

(as a whole)

are paying

only 3%

more than

the previous

contribution

level

15%

8%

22%55%

All Employees CostPer Employee Costs

1,000enrolled employees

$8,000annual premium/EE

New Employee

Base

Wellness

New Employer

Base

Unearned

Employee

Incentives

Earned

Employee

Incentives

Employee

Base

15%

55%30%

New

Employer

Base

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$244,500Unearned incentives (above what the previous plan

funded) can then be redirected BACK to employees

through targeted interventions such as:

• High risk coaching

• Disease management

• Stress management

• Financial wellness

• On-site clinics, etc.

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Reward

CategoriesNIH (Healthy)

Outcome

Required

Monthly

Incentives

Alternative

Goals

Biometric

Screening & HRA(participation)

n/a n/a $50 n/a

BMI 18.5 – 24.9 kg/m2

≤ 27.5 kg/m2

OR

Waist: < 34.5 F

< 37 M

$50 5% weight loss(or work with doctor)

Blood Pressure 120/80 mmHg ≤ 130/85 mmHg $25 Improve by one

risk category(or work with doctor)LDL Cholesterol ≤ 100 mg/dL ≤ 130 mg/dL $25

Tobacco /

NicotineNegative

Negative

blood test$50

Complete

cessation

program

$8,000 x 30% = $2400 ($200/month)

Incentive Structure A

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Reward

CategoriesNIH (Healthy)

Outcome

Required

Monthly

Incentives

Alternative

Goals

Biometric

Screening & HRA(participation)

n/a n/a $50 n/a

BMI 18.5 – 24.9 kg/m2

≤ 27.5 kg/m2

OR

Waist: < 34.5 F

< 37 M

$50 5% weight loss(or work with doctor)

Blood Pressure 120/80 mmHg ≤ 130/85 mmHg $25 Improve by one

risk category(or work with doctor)LDL Cholesterol ≤ 100 mg/dL ≤ 130 mg/dL $25

Tobacco /

NicotineNegative

Negative

blood test$50

Complete

cessation

program

$5,000 x 30% = $1500 ($125/month)

Incentive Structure B

$50 $25 + $25

Negative Attestation

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Other Open Questions

• Impact of incentives from carriers/fully insured policies? Count it.

• Practical application for non-covered spouses? Not recommended.

• Rules for raffles? Applies to raffle winner (verbal from EEOC).

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Other Open Questions

Where is the line for health inquiries versus disability inquiries?

Avoid:• Asking about a disability and/or employees’ genetic information.• Asking “health questions that are likely to elicit information

about a disability.”• Asking about current prescription drugs or medications.• Asking broad questions about impairments.• General well-being questions (e.g. how are you?) are not

considered disability inquiries.• Questions about tobacco use are not considered “disability

related.”

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Sample Program

Designs:

Compliant or Not?


• Employer offers health plan participants $25 per week if both the employee and the

spouse meet two out of three biometric goals.

• NO.

• Spouse participation/results should not be a “gatekeeper” to employee rewards.

• Employer offers all employees a free health screening at work as part of their health

fair day. Everyone gets a t-shirt and an entry to win a paid day off.

• YES and NO.

• If everyone gets a t-shirt regardless of participation, this does not need to be

counted towards the maximum allowable.

• The paid day off is tricky in that you will need to calculate the value of a PTO for

each employee that wins. We do not recommend using PTO as an incentive.

Is This Compliant?

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• Employer offers all employees a web portal with an HRA, health challenges, financial wellness

support and coaching videos. Employees can earn up to 10,000 points by completing activities

and use the points to buy merchandise.

• Maybe.

• Depends on how it is structured. This is okay assuming the total of all rewards that require

participation in an exam and/or answering disability-related questions is under the 30%

threshold or there is a way to earn the maximum reward without an exam or answering

questions.

• This is not a best practice as written. There is a question on how to attribute the dollar

amount towards the allowable differential ($3 per point that employer pays rewards vendor

or the value of the toaster?).

• Employees may participate in a free biometric screening at work. If they lose 5% of their weight in

a year, they get $50/month off of their premium. If they aren’t on the plan, they get $600 cash

(taxable compensation).

• YES.

Is This Compliant?

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• Determine date this impacts your incentives.

• Review program design for reasonability.

• Determine population included (Health plan only? All employees? Spouses?).

• List all incentives included (outcomes, improvement, participation, “in-kind”, de-

minimus, trinkets, raffles etc.; note if linked to applicable inquiry or exam).

• Perform 30% test (50% with tobacco attestation), adjust as needed.

• Confirm compliance with ACA (note that 2x employee-only may be more than 2x

employee + spouse…).

• Review and update privacy notice.

• Review appeal, alternatives and exceptions for disabilities.

• Update programming and communications as needed.

What Now?

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Thank You

Jim Pshock

[email protected]

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A Look Into the Final EEOC Wellness Regulations · Federal Wellness Rules on Incentives 7 HIPAA...

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