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EEOC’s Wellness Regulations

By April 24, 2015Commentary

Employers have generally been enthusiastic in their adoption of various forms of wellness programs.  While some government laws, like the reform act, facilitate wellness programs, companies have been concerned about possible discrimination issues under the disability laws.  The Equal Employment Opportunity Commission recently issued proposed regulations on how wellness efforts can avoid these potential discrimination problems.   (Wellness Regs)   The regulations are as usual complex and obfuscating, leaving lots of room for ambiguity and uncertainty.  The business of business is increasingly trying to figure out how to at least try to comply with a web of often contradictory regulatory and legal requirements and liabilities.  So here, for example, early on in the proposed rule, the EEOC says that complying with the rule doesn’t mean you can’t be found to be discriminating under other laws or rules by offering a wellness program.  Gee, thanks for the comfort.  The EEOC had made life so difficult for wellness sponsors that Congress in the reform law had to make it clear that they were to be encouraged and could actually have a reward or penalty up to 30% of the value of employee-only coverage or 50% for programs relating to smoking cessation.  So the EEOC reluctantly has to accept that encouragement, otherwise it would like to make it impossible for companies to help employees be healthier.

The EEOC distinguishes between health programs that are part of a group health plan and those that are offered separately.  Why is beyond me to explain and likely would only make sense to a lifelong bureaucrat.  And so the incentive-related part of this set of proposed rules only applies to wellness programs that are part of a group health plan.  In a footnote the EEOC makes it sound like for standalone wellness programs they would look askance at incentives and are considering rules regarding this in the future.  So in the meantime employers are left hanging.  The agency further distinguishes between programs that are merely participatory and those that require meeting an activity or health standard to get the reward or avoid the penalty.  That distinction makes a little more sense, but I’ll be darned if I can figure out what difference it makes in the actual rules.  And the wellness programs must be still be constructed so that they don’t discriminate against employees with disabilities.  Since under various federal agency interpretations, this is now 100% of Americans, it is easy not to discriminate.  Since everyone is disabled, nothing could possibly be discriminatory as long as it applies to everyone.  Not sure that is what the bureaucrats intended, but seems logical to me.   And speaking of good logic, in its discussion of the costs of the rule, the Commission estimates that it will cost a company $42,583 just to develop a notice they are requiring under the rule.  And they ignore the cost to employers of being discouraged from implementing effective wellness programs.

Since the research suggests that those who need wellness programs the most, i.e., employees in fair or poor health, are the least likely to participate and that incentives or penalties seem to be needed to get them to participate, if we are really concerned about people’s health, companies should be pretty much allowed to do what it takes to get their employees to take their health seriously.  If people really don’t want to do that, then they can sign a document explicitly saying they don’t want to participate in wellness and they should then have to bear the full cost of their health care.  It makes no sense not to have people take full responsibility for their choices.  If they don’t, other people are paying for the “I don’t care about my health” group’s bad decisions, and I don’t know any way to justify that.

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