ACA Not Enough to Save Penn State’s Employee Wellness Program

by Wilson Elser
Contact

Recent negative media reports caused Pennsylvania State University to modify its employee wellness program, making clear that considering compliance with the Patient Protection and Affordable Care Act of 2010 (ACA) alone is not enough when employers launch such programs. Penn State followed the ACA requirements and, so it believed, implemented an effective tool to fight health care inflation. But it lost the public relations battle as opponents of the wellness program claimed that certain aspects of the program violated a number of privacy and civil rights laws.

The program imposed a $100-a-month penalty on any employee who declined to answer questions, including sensitive issues such as their marital situation, and for female employees, whether they planned to become pregnant. Penn State eventually backed down and modified its program. And this is the important lesson for any employer or consultant that looks only to the ACA as it develops an employee wellness program: Be sure to consider, in addition to the ACA and its implementing regulations, the broader range of laws that bear on employer-sponsored wellness programs, and understand how a potential negative public reaction to your program might affect your business’s reputation and workforce morale.

ACA Final Regulations
The ACA amended and codified the rules previously applicable to employer-sponsored wellness programs. To implement these rules, the Internal Revenue Service and the Departments of Labor and Health & Human Services released on May 29, 2013, final regulations regarding wellness programs integrated with employer-sponsored health plans.

The final regulations, among other things, set forth criteria that wellness programs must satisfy to qualify for an exception to the prohibition on discrimination under the Health Insurance Protection and Affordability Act of 1996 (HIPAA). HIPAA generally prohibits health plans from discriminating against any participant on account of eight health factors, including health status, medical condition (both physical and mental illnesses), claims experience, receipt of health care, medical history, genetic information, evidence of insurability (including conditions arising out of acts of domestic violence) and disability. The regulations essentially set forth criteria for an affirmative defense that can be used in response to a claim that the wellness program discriminated under the HIPAA nondiscrimination provisions.

The preamble to the regulations makes clear that (1) many other laws regulate plans and issuers in their provision of benefits to participants and beneficiaries and (2) compliance with the wellness program regulations is not determinative of compliance with other applicable requirements, such as the Americans with Disabilities Act, Title VII of the Civil Rights Act of 1964, the Genetic Information Nondiscrimination Act, the Internal Revenue Code, and privacy and state law.

Remedies Sought and Provided
On September 23, 2013, Congresswoman Louise Slaughter (D-NY), in a letter to the Equal Employment Opportunity Commission, raised her concern about the Penn State wellness plan requesting that the EEOC issue sub-regulatory guidance that would provide “strong nondiscrimination protections for employees in wellness plans.” Congresswoman Slaughter, along with others, is calling into question whether wellness programs such as the one implemented by Penn State violate civil rights and other laws.

In response, Penn State has launched a new wellness health program in which employees will be rewarded for their participation. The university will give $100 to each employee who completes an online health profile through WebMD, has a biometric screening done and agrees to see a doctor for a preventative-care medical exam. If spouses or same-sex partners participate, the bonus will increase to $150.

Employers, health plans, issuers and others involved in the development of employer-sponsored wellness programs should work with an attorney as they consider, in addition to the ACA, the newly issued wellness program regulations and potential negative public fallout as well as whether any other laws or public relations concerns are applicable to their circumstance.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Wilson Elser | Attorney Advertising

Written by:

Wilson Elser
Contact
more
less

Wilson Elser on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):
hide

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.

Security

JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at info@jdsupra.com. In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at: info@jdsupra.com.

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.