- By Janice Podsada / World-Herald staff writer
- Nov 7, 2016 Updated Oct 16, 2019
Featured Photo Source: Unsplash, Markus Frieauff
Lana Hammel, a retired University of Nebraska Medical Center employee, said she enthusiastically participated in voluntary health screenings offered at work — readings of blood pressure, cholesterol and the like — before retiring in 2012.
“I think it was helpful,” Hammel said. “It can catch things that might otherwise be missed.”
A growing number of employers offer such wellness programs, in which employees complete health surveys or submit to a medical examination that records their weight, body mass index, cholesterol levels and other vitals in exchange for a discount on their annual health premiums.
Hammel was a fan back in her working days, but other people say such screenings are an invasion of privacy. They got a powerful advocate earlier this month in AARP, the consumer advocacy group that focuses on representing Americans 50 and older.
The group filed a lawsuit last month in the U.S. District Court for the District of Columbia against the Equal Employment Opportunity Commission, challenging new EEOC regulations that spell out what’s allowed under a voluntary wellness program, including the maximum incentives employers can offer for participation. The federal agency’s final rule, which goes into effect in 2017, allows employers to offer employees discounts of up to 30 percent on their annual health care premiums. A hearing for a preliminary injunction of the rules could take eight or more months, legal experts said.
AARP alleges the new rules violate anti-discrimination laws. It says financial incentives in the form of discounts on insurance are punitive and a means to pressure employees into divulging personal health information that could be used by employers to discriminate against them.
This year’s average annual cost of workplace-sponsored insurance is $18,142 per family, according to a national survey by the Kaiser Family Foundation and the Health Research & Educational Trust, an affiliate of the American Hospital Association. Families pay about 30 percent of the cost on average — about $5,277 a year. So a 30 percent discount off the employee’s share could save a family nearly $1,600 a year — all for undergoing a voluntary health survey.
For many workers, a 30 percent discount — or penalty, as AARP sees it — is a substantial amount, said Dara Smith, an attorney representing the organization. “If you’re pressured to provide this information, it is not voluntary,” Smith told The World-Herald.
The EEOC, an arm of the federal government, declined to comment to The World-Herald on AARP’s lawsuit.
But some local employers who offer wellness programs say they are good ways to encourage healthier behavior — eating right and stopping smoking, for instance — while also keeping a lid on health care costs.
The idea behind many of these programs is that a smoker, for instance, is going to cost a health insurance company much more than a marathon runner, generally speaking. If a company can encourage more marathon runners and fewer smokers using a voluntary wellness program, then it can potentially cut its employee health care costs.
Greater Omaha Packing is one company that uses a voluntary wellness program. Its general counsel, Mark Theisen, said employees can choose each year to enroll in a program that includes a health screening conducted by an outside company. Employees’ blood is taken for measuring cholesterol, triglycerides and glucose, and measurements are also taken for blood pressure and height and weight. If an employee has enrolled a spouse in a health care plan, the participating spouse also has to have a health screening once a year.
Greater Omaha ties a health-insurance premium discount of about 15 percent to employees’ participation in the plan.
If employees’ readings reveal concerns — high cholesterol, for instance — they’re required to attend coaching sessions at the company’s on-campus medical clinic. (They’re not penalized by losing the discount.)
Theisen said the wellness program has improved the health of those covered under the plan and also has slowed the pace of and percentage increases in health insurance costs.
He said the company is aware of the AARP lawsuit. The company’s position: Wellness programs should be available to employees and participation should be encouraged by using incentives such as the insurance discounts, but participation should be voluntary and not used to discriminate.
“All employees at Greater Omaha Packing are treated equally and have equal opportunity in all respects,” Theisen said. “We believe this is fair and does not adversely impact any employee in any protected category, including our older workers.”
Omaha-based West Corp., which offers health care coverage to employees, has been working on a wellness strategy and will roll out a new wellness program at the beginning of 2017, said company spokesman Dave Pleiss.
The company owns an administrator of wellness plans, Health Advocate. West doesn’t tie health insurance discounts to participation in a wellness plan now, but under its new wellness plan it will offer incentives. For an incentive, the company is looking closely at a cash contribution into a health savings account, Pleiss said.
He said that the company is aware of the lawsuit and is monitoring it, but that none of West’s programs will be affected.
At Werner Enterprises, the large trucking company based in Omaha, employees can get discounts on insurance premiums for participating in the company’s wellness plan, which includes fitness classes, gym discounts and an annual screening of biometrics: blood pressure, cholesterol, weight and such. The company declined to comment on AARP’s lawsuit.
Mutual of Omaha spokesman Jim Nolan said the company has a variety of wellness programs — weight management, exercise, stress reduction and others — that are voluntary and not connected to health insurance or other benefits.
Not all local employers tie employee wellness programs to discounts on insurance. The Omaha Airport Authority’s 150 employees take part in a voluntary wellness program administered by an outside vendor, said Stan Kathol, the authority’s finance director.
The program doesn’t give employees a discount on health insurance premiums or other incentives — “It’s just voluntary,” Kathol said. “Everybody’s bought into it.” Each person is required to fill out a wellness questionnaire and take part in a health screening annually.
“It encourages people to read up on health matters, eat healthy, have healthy activities,” Kathol said. “It’s all self-administered by each person. They put as much into it as they want,” beyond the required questionnaire and screening.
The Airport Authority, like many larger companies, has what’s called a self-insured health plan, with an insurance company administering the plan but the authority paying claims, Kathol said. That means any savings from employees’ improved health could translate into lower health claims. And that’s a good reason for encouraging healthy employees, he said.
“If you promote wellness in the workplace and get the employees involved with it, the positive effect will come back over time, because people will be managing their health more pro-actively and do preventive maintenance instead of waiting until it’s too late and incurring major expenses.”
He said he couldn’t put a dollar figure on the amount possibly saved in health expenses because of the voluntary wellness program.
Union Pacific’s wellness program offers cash incentives but not health insurance premium discounts, said Calli Hite, an Omaha-based company spokeswoman.
Non-union employees receive a $200 incentive for completing a wellness assessment and $150 for completing an annual physical. If employees have family coverage, spouses are eligible for the same incentives. The employees report completion of the wellness assessment and annual physical to the third party vendor to receive the cash incentive, Hite said.
Greg Howe, who oversees wellness programs for the 500-employee Lincoln Industries, said the company has had a wellness program for more than a decade, including a free clinic and fitness center. It now includes discounts on premiums of up to 30 percent and, for those who want, an all-expenses-paid trip to Colorado each summer to hike up a 14,000-foot mountain. Howe said the programs can adapt to anyone who wants to improve his or her health, regardless of age or physical condition.
“Where employers try to push people to do health and wellness for the wrong reasons — cost-cutting or whatever — if that’s the only reason you’re doing it, it’s the wrong outlook,” Howe said.
“These people work eight hours, but they’re 24-hour people. We are doing stuff to help them live healthier lives, have more energy, engage with the families more.”
Companies have definitely seen cost savings with wellness programs — particularly those that get smokers to stop puffing, said Steve Wojcik, vice president of public policy for the National Business Group on Health, a nonprofit that represents more than 400 large U.S. employers.
He said spending on wellness may boost productivity. For example, you might have fewer people absent from work, he said.
Even though the new federal rules allow a discount on insurance premiums of up to 30 percent, Wojcik said annual incentives offered by employers for participation in wellness programs is nowhere near 30 percent. The median discount among large employers is $500 to $600 per person per year, he said.
Other wellness plans offer prizes, recognition or reduction in health-related out-of-pocket costs, Wojcik said.
Before the EEOC regulations were issued this month, employers were operating the wellness programs in a bit of a murky space.
In 2014 the EEOC brought enforcement action against several employers that penalized workers who would not participate in wellness programs that included medical inquiries. Now, with the new guidelines in place, employers say they’re glad the feds issued specific regulations, Wojcik said.
Still, AARP says the 30 percent discount amounts to a 30 percent penalty for choosing not to participate.
That’s a threat to all workers, including older workers, who are more likely to have health conditions “that are likely to be revealed by medical questionnaires,” the group’s lawsuit said.
“We have no problem with employees wanting to participate in these programs,” said Smith, the AARP attorney, “but it shouldn’t be tied to a reduction. The ideal outcome is there are no penalties.”
In written statements, the EEOC has said more specific guidelines were needed to ensure employers weren’t violating federal employment laws and anti-discrimination laws with their wellness programs. And setting the maximum discount at 30 percent jibes with the amount allowed under federal privacy regulations for voluntary wellness programs, amended under the Affordable Care Act.
A Kaiser report said more than 80 percent of large employers (companies with 200 or more workers) offer employee wellness programs, of which 42 percent offer financial incentives to workers to participate in or complete the program. Nearly half of small employers (those with three to 199 workers) have wellness programs, with 15 percent offering financial incentives, the report said.
Meanwhile, the AARP suit will wend its way through the courts. Until then, the current EEOC rules are in effect and should be followed. Attorney Jonathan Mook, a founding partner in the firm of DiMuro Ginsberg and an authority on the Americans With Disabilities Act, said the case could take two or three years to get to trial.
Part of employer and employee health care costs could hinge on its outcome.
The era of the wellness checkup
Employers want to know what their workers are up to — a practice some say is bordering on Big Brother. They use the information to offer discounts on health insurance, or to design programs to improve health, such as a stop-smoking program, among other things. AARP is suing the federal government for allowing such wellness programs to essentially strong-arm employees, AARP says, to release medical information by applying “incentives” — or penalties for not participating. Employers and others say the programs encourage healthier living and help drive down the cost of insurance. Here are some things your employer might ask about or monitor, either as part of a wellness program or other background-checking.
Body mass index
World-Herald staff writers Barbara Soderlin and Steve Jordon contributed to this report.
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