Wellness Penalty/Incentives Lose Again in Court

They’re dead for now. Those godawful coercive wellness programs will be illegal on January 1, 2019, thanks to a new court ruling this week. A judge finally threw out EEOC rules that allowed companies to impose big penalties on employees who don’t step on the scale and lose weight.

Some employers called them incentives. But it’s just two sides of the same coin.

A Tortured History That Started with the ACA

The idea for these “incentives” came to be called the “Safeway” amendment to the Affordable Care Act. And it was controversial from the beginning.

The concept was to give people incentives to improve their health through employer wellness programs. By taking health screenings and meeting health goals, employees could qualify for a big discount on their health insurance.

After a slick sales job by the CEO of Safeway, Congress wrote it into the ACA. But the idea had a few problems. For one, it was a bit of a scam. Little evidence supports the claims that financial bribes or penalties bring any lasting health benefits.

And secondly, federal law requires that wellness programs be strictly voluntary. When people forfeit a big chunk of compensation unless they participate, it’s not voluntary. Because of that issue, AARP sued the EEOC to block rules that would have let employers off the hook for involuntary programs.

They scored a partial victory in August. A federal judge ruled that the EEOC regulations were unjustified. But the judge didn’t set a deadline for the EEOC to change the rules. And EEOC dragged its feet.

The Final Blow (for Now)

So AARP went back to court and won the ruling this week. It sets that final date of January 1, 2019, for repealing the rules. Then, those whopping penalties will be illegal.

Is this the final word? Only time will tell. Big employers and the wellness industry have a proposal for a new law that would, in essence, repeal the prohibition against involuntary programs in the ADA and another related law, known as GINA.

Money is at stake here. The wellness industry is a multi-billion dollar juggernaut. These big penalty/incentives put money in play and the industry gets a cut of it. The impact on health is beside the point for some employers and for a big chunk of that industry.

Even though these programs are unethical, we probably haven’t heard the last of them.

Click here for more from the The Incidental Economist and here for more from Health Affairs.

Law, photograph © Woody Hibbard / flickr

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December 23, 2017