Just because you can legally do something doesn't mean you should.
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The proposed new EEOC rules for wellness incentives and penalties are a perfect example of exactly that.
In conjunction with wellness uber-attorney Barbara Zabawa, author of Rule the Rules of Workplace Wellness. We will be hosting a webinar on this very topic July 9th at 1 PM EDT. For now, a summary would be:
Wellness incentives must be "de minimis"
Except when they don't.
Here is a Health Affairs blog post that parses the apparent contradiction.
In a nutshell, the de minimis rule applies only to participatory wellness programs. If a wellness program is linked directly to the insurance premium, as most outcomes-based programs are, the "safe harbor" remains at 30%. If 30% looks familiar, it is the same percentage incentive/penalty that was struck down by a federal court in 2018. This provision will almost certainly be struck down again as being an involuntary penalty.
Employers will be allowed to “establish, sponsor or administer...a bona fide benefit plan based on underwriting risks," using wellness data. In other words, you may soon be able to charge overweight/obese employees up to 30% more if you have a wellness program. At least until this proposed safe harbor is once again struck down.
The right to charge for, or otherwise stigmatize, obese employees has been on the wellness industry's wish list for years:
The editor of their trade publication proposed that employees pay by the pound for insurance, sort of like sending packages or ordering lobster.
A group of wellness vendors and "thought leaders" seriously proposed that disclosing the weights of employees to shareholders would be a good idea. Their goal was to shame companies into shaming their employees to enroll in their wellness programs by suggesting that the weight of employees would depress their stock price. (This Harvard Business Review article shows why it would likely have the opposite effect.)
Please do not implement an outcomes-based wellness program -- the type employees hate the most -- with the full "safe harbor" 30% differential, without considering six reasons not to.
First, the difference in healthcare spending due to weight, before age 65, is actually much, much lower than one would expect it to be. It also turns out people on the very low end of the BMI scale also have high costs while plenty of “obese” people turn out to be quite healthy too.
Second, the vast majority of spending on the <65 population is unrelated or only peripherally related to weight. Of 1000 commercially insured people, there will only be 2 admissions primary-coded to heart attacks or diabetes. You spend much more on unncessary, potentially hazardous and easily avoidable scans and procedures than on those two admission categories. Why not focus on the low-hanging fruit in those categories?
Third, conventional outcomes-based wellness programs have been definitively shown to fail. This conclusion is no longer challenged by the industry trade association. One wellness company, Vitality, admitted they couldn't even get their own employees to lose weight. Likewise, employees at their marquee customer McKesson also gained weight.
Fourth, people with eating disorders are usually advised not to weigh themselves. There are many instances of companies weighing employees who then experience relapses or complications. These stories should be enough to dissuade companies from doing this.
Fifth, the complexity of insurance price-discriminating is mind-boggling. Even smoking surcharges have proven far harder to execute in practice than in theory. And smoking is a 0-1 variable, where the choice to smoke was voluntary, and the costs of underwriting smokers is (unlike weight) without question higher than non-smokers. It's also much harder to cheat when you get tested. Yet only a minority of companies apply this differential – and that minority has not been growing.
Finally, and speaking of cheating, the amount of cheating that would take place at weigh-ins with four-figure financial forfeitures on the line boggles the mind. No need to take our word for it. Literally, the most popular blog post ever, intended to be tongue-in-cheek, on www.theysaidwhat.net -- with about 50,000 hits – is how to cheat in a corporate weight-loss contest. [SPOILER ALERT: the suggestions are gross.]
Register here for the upcoming webinar--or just cut to the chase and...
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