White House Wants Employers To Penalize Employees Who Don’t Participate in Wellness Programs. EEOC Doesn’t.

January 25th, 2016

On of the planks of the Affordable Care Act’s efforts to control health costs is to allow employers to penalize employees who do not participate in certain wellness programs. What is the penalty? Higher premiums:

Workers increasingly are being told by their companies to undergo health screenings and enroll in wellness programs, as a way to curb insurance costs. Many employees now face stiff financial penalties — often in the form of higher premiums — if they do not have their cholesterol checked or join programs to lose weight or better manage diabetes.

The penalty can be as high as 30% of the cost of the premium.

Under the Affordable Care Act, businesses can use financial incentives of up to 30 percent of the yearly cost of coverage, which could easily amount to several thousand dollars. While few employers have incentives of that size, about one in 20 large employers offering screenings has incentives of at least $1,000, according to the Kaiser survey. A smaller fraction require screening before an employee can enroll in coverage. Over all, the amounts for not participating have been increasing, said Karen Pollitz, a senior fellow at Kaiser.

The E.E.O.C.’s challenges have given employers pause as they try to square the Americans With Disabilities Act with the Affordable Care Act and other laws. “It’s becoming more and more difficult even for the lawyers to keep up with the patchwork regulatory approach to these rules,” said Edward Fensholt, a lawyer who heads compliance services for Lockton Companies, an insurance broker based in Kansas City, Mo.

The EEOC has challenged this in court, as a violation of the ADA. A federal judge in Wisconsin rejected this claim. The Times reports this has created a fissure between EEOC and the White House:

While most large employers offer wellness programs, companies and workers alike may find the rules difficult to navigate. The Affordable Care Act allows employers to impose hefty penalties on individuals who do not participate. Nearly half of the large employers offering screenings and wellness programs use some sort of financial incentive to persuade employees to comply, according to a recent analysis by the Kaiser Family Foundation.

But the E.E.O.C. seems to have adopted a different standard, and its proposed regulations do not mesh neatly with the health law. The agency appears to be facing pressure from the White House and Republicans to make sure it does not derail corporate efforts to rein in health care costs.

Nick Bagley has more here.