Regulatory Guidance

EEOC Seeks to Clarify Wellness Programs, ADA

A proposed rule from the EEOC is intended to help clear up questions surrounding wellness programs and potential conflicts with the ADA.
By: | May 21, 2015 • 5 min read
Doctor measuring blood pressure

Employers seeking guidance on implementing workplace wellness programs without violating the law may get some help. The Equal Employment Opportunity Commission has issued a proposed rule on how Title I of the Americans with Disabilities Act applies to wellness programs that are part of group health plans. The agency is accepting public comments through June 19.

“The EEOC’s proposed rule makes clear that wellness programs are permitted under the ADA, but that they may not be used to discriminate based on disability,” according to a statement on the EEOC’s website. “The rule explains that under the ADA, companies may offer incentives of up to 30 percent of the total cost of employee-only coverage in connection with wellness programs. These programs can include medical examinations or questions about employees’ health (such as questions on a health risk assessment).”

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The rule says the programs must be voluntary and employers cannot deny health insurance, reduce health benefits, or discipline those who do not participate. Employers cannot interfere with the ADA rights of those who do not participate, and they must provide reasonable accommodation to disabled employees that allow them to participate in wellness programs and earn the incentives the employer is offering.

The programs “must have a reasonable chance of improving health or preventing disease in participating employees,” the EEOC said. “A program that collects information on a health risk assessment to provide feedback to employees about their health risks, or that uses aggregate information from health risk assessments to design programs aimed at particular medical conditions is reasonably designed. A program that collects information without providing feedback to employees or without using the information to design specific health programs is not.”

Finally, employers are only entitled to medical information collected for the wellness program in aggregate form. The employee’s identity must be kept confidential.

“I absolutely think this guidance is needed because employers were left in legal limbo with what to do,” said Ilyse Schuman, shareholder with Littler and cochair of the Workplace Policy Institute. “On one hand, the Affordable Care Act provisions are designed to promote [wellness programs]; at the same time, the EEOC had taken some recent enforcement action challenging the use of incentives in connection with wellness under the EEOC and the Genetic Information Nondiscrimination Act.”

In one case, the agency said an employer violated federal law by requiring an employee to “submit to medical exams and inquiries that were not job-related and consistent with business necessity as part of a so-called ‘wellness program,’ which was not voluntary, and then by firing the employee when she objected to the program,” according to court documents. It said the company’s wellness program “required medical examinations and made disability-related inquiries.”  When an employee declined to participate, the company “shifted responsibility for payment of the entire premium for her employee health benefits” to the worker and shortly thereafter fired her.

In a separate case, the agency said an employer threatened to penalize employees if they or their spouses did not submit to biometric tests. Employees said the testing was an unlawful medical exam and violated the ADA and GINA.

A bill recently introduced in Congress seeks to eliminate confusion for employers who offer rewards for participation in wellness programs.

“This is yet another example of the EEOC being out of step with employers and employees,” said Sen. Tim Walberg, R-Mich., chairman of the House Subcommittee on Workforce Protections before the proposed rule was issued. “Innovative approaches that empower employees to take more control of their personal health care decisions should be encouraged, not stymied by greater government overreach.”

Conflicting Messages

The proposed rule defines the incentives employers may use to encourage employee participation in wellness programs that include disability-related inquiries or medical exams. It says incentives are allowable as long as other parameters are met.

“As employers have increasingly turned to wellness programs to improve costs and health, they are faced with a quandary as to how to do that without running afoul of the ADA or GINA,” Schuman explained. “The conflicting messages coming from the administration on the one hand with respect to the ACA and its implementations and regulations, and the EEOC on the other, left employers in the crosshairs. I think [the rule] was a welcome development.”

Wellness programs. The EEOC defines wellness programs as those that “may include, for example: nutrition classes, onsite exercise facilities, weight loss and smoking cessation programs, and/or coaching to help employees meet health goals,” the agency said. “Wellness programs also may incorporate health risk assessments and biometric screenings that measure an employee’s health risk factors, such as body weight and cholesterol, blood glucose, and blood pressure levels.”

Incentives offered by employers typically are in the form of either rewards or penalties, such as prizes or cash, a reduction or increase in health care premiums, or cost sharing. Most employers that offer them use incentives totaling less than $500 per year, according to the EEOC.

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Remaining questions. The rule is only a proposal, Schuman noted. She is unsure about such things as the allowable incentives.

“There are questions about how that is determined because the proposed regulations refer to 30 percent of employee-only coverage,” she said, “but often times employees sign up for family coverage. So it doesn’t seem to make sense.”

There is also the matter of GINA. “It doesn’t address GINA at all. That’s still out there,” Schuman said. “Employers are still left with the uncertainty with respect to how wellness programs offering incentives for a spouse to complete a health risk assessment are treated under GINA. This is not the end of the story for direction from the EEOC.”

Nancy Grover is the president of NMG Consulting and the Editor of Workers' Compensation Report, a publication of our parent company, LRP Publications. She can be reached at riskletters@lrp.com.
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Risk Insider: Patty Hostine

Bad Faith or Unfounded Requests?

By: | May 14, 2015 • 3 min read
Patricia Hostine, MA, MBA, LPC, CRC, MSCC, CWCP, has more than 20 years’ experience in workers’ compensation from both the vendor and corporate perspectives. She is the Director of US Disability Management for The Flex N Gate Group of Companies. She can be reached at phostine@FLEXNGATE-MI.com.

There’s a Mississippi case that’s been kicking around since 1992 related to physician prescribed Nike Air Max sneakers and a Whirlpool tub, and bad faith actions by the carrier. I’m not going to continue the debate on bad faith, as I think that’s in the eye of the beholder (or in this case, the courts) but rather point the discussion toward what are reasonable and necessary medical treatments and supplies.

We’ve all seen requests for jetted tubs, hot tubs, mattresses, shoes and perhaps other items that normally would not be considered medically necessary — some of which I blush to think about. When I see them, I wonder “Why?” What elevates the need for any of those items to the status of medical necessity?

A physician writes on a prescription pad that the injured worker requires a new mattress, but has never seen the worker’s home, let alone their mattress. (I think if they have seen the worker’s mattress we have much bigger problems in the claim.)

What research has been done to show that Nike Air Max is the only shoe beneficial to someone with back problems versus an orthopedic shoe with inserts? What about a jetted tub makes it medically necessary? What therapeutic value does it add that is superior to a warm bath with Epsom salts?

The difference between push-back and bad faith is in addressing the issue. When items seem out of the ordinary, put it back on the physician to explain the necessity.

I am reminded of a back claim case I had. The physician wrote on a prescription pad that the injured worker required a California King Tempur-Pedic mattress. When I saw it, I thought “why?” Why is her current mattress not meeting her needs? Why king size? Why Tempur-Pedic? Upon discussion I learned it wasn’t that there was a medical need, but due to the age of her mattress the physician thought she would benefit from a new one.

They say a mattress will last seven to 10 years. The employee was 58. The full size mattress she was sleeping on — the one she had been sharing with her husband for the entirety of their marriage — had been hers since she was a child. Small wonder she had a problem with her back.

This became a contentious point in mediation. She kept coming back to that new mattress. I offered to provide the residual value of her old mattress or rent/buy a twin mattress for her. In hindsight, that might have not helped the mediation. In the end, we agreed to a settlement number and the mediator came back to the mattress. It was a deal breaker for me on principle. I prepared to walk out. We settled — no mattress.

The difference between push-back and bad faith is in addressing the issue. When items seem out of the ordinary, put it back on the physician to explain the necessity. Why does that name brand meet their need better than others? Have they seen the old one? Where is the evidence that it is medically necessary? It is always better to question and then decide versus ignoring the request. You might just find a doctor that admits, “I don’t know — they just asked for it.”

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Sponsored: Liberty International Underwriters

Making the Marine Industry SAFE

A new initiative to help marine clients address safety risks leverages a customized, expertised approach.
By: | May 8, 2015 • 5 min read
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When it comes to marine based businesses there is no one-size-fits-all safety approach. The challenges faced by operators are much more complex than land based businesses.

The most successful marine operators understand that success is dependent on developing custom safety programs and then continually monitoring, training and adapting.

After all, it’s not just dollars at stake but the lives of dedicated crew and employees.

The LIU SAFE Program: Flexible, Pragmatic and Results Driven

Given these high stakes, LIU Marine is launching a new initiative to help clients proactively identify and address potential safety risks. The LIU SAFE Program is offered to clients as a value added service.

Richard Falcinelli, vice president, LIU Marine Risk Engineering

Richard Falcinelli, vice president, LIU Marine Risk Engineering

“The LIU SAFE program goes beyond traditional loss control. Using specialized risk assessment tools, our risk engineers function as consultants who gather and analyze information to identify potential opportunities for improvement. We then make recommendations customized for the client’s business but that also leverage our knowledge of industry best practices,” said Richard Falcinelli, vice president, LIU Marine Risk Engineering.

It’s the combination of deep expertise, extensive industry knowledge and a global perspective that enables LIU Marine to uniquely address their client’s safety challenges. Long experience has shown the LIU Risk Engineering team that a rigid process will not be successful. The wide variety of operations and safety challenges faced by marine companies simply cannot be addressed with a one-size-fits-all approach.

Therefore, the LIU SAFE program is defined by five core principles that form the basis of each project.

“Our underwriters, risk engineers and claims professionals leverage their years spent as master mariners, surveyors and attorneys to utilize the best project approach to address each client’s unique challenges,” said Falcinelli.

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The LIU SAFE Program in Action

When your primary business is transporting dry and liquid bulk cargo throughout the nation’s complex inland river system, safety is always a top concern.

The risks to crew, vessels and cargo are myriad and constantly changing due to weather, water conditions and many other factors.

SCF Marine, a St. Louis-based inland river tug and barge transportation company and part of the Inland River Services business unit of SEACOR Holdings Inc., understands what it takes to operate successfully in these conditions. The company strives for a zero incident operating environment and invests significant time and money in pursuit of that goal.

SponsoredContent_LIUBut when it comes to marine safety, all experienced mariners know that no one person or company has all the answers. So in an effort to continually find ways to improve, SCF management approached McGriff, Seibels & Williams, its marine broker, to see if LIU Marine would be willing to provide their input through an operational review and risk assessment.

The goal of the engagement was clear: SCF wanted to confirm that it was getting the best return possible on its significant investment in safety management.

Using the LIU SAFE framework, LIU’s Risk Engineers began by sending SCF a detailed document request. The requested information covered many aspects of the SCF operation, including recruiting and hiring practices, navigation standards, watch standing procedures, vessel maintenance standards and more.

Following several weeks of document review the LIU team drafted its preliminary report. Next, LIU organized a collaborative meeting at SCF’s headquarters with all of the latter’s senior staff, along with McGriff brokers and LIU underwriters. Each SCF manager gave an overview of their area of responsibility and LIU’s preliminary findings were reviewed in depth. The day ended with a site visit and vessel tour.

“We sent our follow-up report after the meeting and McGriff let us know that it was well received by SCF,” Falcinelli said. “SCF is so focused on safety; we are confident that they will use the information gained from this exercise to further benefit their employees and stakeholders.”

“It was probably one of the most comprehensive efforts that I’ve ever seen undertaken by a carrier’s loss control team,” said Baxter Southern, executive vice president at McGriff, which also is based in St. Louis. “Through the collaborative efforts of all three parties, it was determined that SCF had the right approach and implementation. The process generated some excellent new concepts for implementation as the company grows.”

In addition to the benefits of these new concepts, LIU gained a much deeper understanding of SCF’s operations and is better positioned to provide ongoing loss control support.

“Effective safety management is about being focused and continuously improving, which requires complete commitment from top management,” Falcinelli added. “SCF obviously is on a quest for safety excellence with zero incidents as the goal, and has passed that philosophy down to its entire workforce.”

“SCF’s commitment to the process along with LIU’s expertise was certainly impressive and a key reason for the successful outcome,” Southern concluded.

There are many other ways that the SAFE program can help clients address safety risks. To learn more about how your company could benefit, contact your broker or LIU Marine.

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This article was produced by the R&I Brand Studio, a unit of the advertising department of Risk & Insurance, in collaboration with Liberty International Underwriters. The editorial staff of Risk & Insurance had no role in its preparation.




LIU is part of the Global Specialty Division of Liberty Mutual Insurance.
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