The Regulatory State Reaches the Wellness Industry

The Equal Employment Opportunity Commission (EEOC) has finalized rules on how employers can use wellness programs. By current federal standards, the rules are concise: 19 pages pertaining to the Americans with Disabilities Act and 17 pages pertaining to the Genetic Information Nondiscrimination Act. Both laws are extremely popular. The ADA (1990) passed by 91-6 in the U.S. Senate and 377-28 in the U.S. House of Representatives. The GINA (2008) passed by 95-0 in the Senate and 414-1 in the House.

These laws are meant to prevent discrimination. However, this purpose bumps against the real world, where health insurers cannot charge different premiums to individuals who are sick. The Affordable Care Act (2010) allows employers to offer incentives to workers who participate in wellness programs, and can offer financial incentives up to 30 percent of premium (or up to 50 percent for anti-smoking programs). However, participation in a wellness program also necessitates surrendering personal health information to an employer who would otherwise be barred from having it (under the Health Insurance Portability and Accountability Act, 1996).

Because employers cannot use underwriting for medical risk to charge different premiums to different employees, it is hard to avoid the conclusion that wellness programs are designed less to make or keep employees well than to ensure healthy people are attracted to the employer and sick people are not. Evidence suggests this is the real consequence of workplace wellness programs.

ACA-related rules attempting to triangulate these contradictions were published in 2013 (the “tri-department rule”). However, the Obama administration recognized that these two previous laws also had to be reconciled with the ACA. So, more regulations had to be emitted. Professor Timothy Jost summarizes the rules at Health Affairs blog:

Unlike the tri-department rule, which applies only to wellness programs connected with employer-sponsored health insurance or health plan coverage, the EEOC ADA and GINA rules apply to employer wellness programs whether a wellness program is part of employer-sponsored health plan, is offered to employees whether or not they participate in a health plan, or is offered by employers that do not sponsor a health plan or health insurance.

There is no hiding place. We have come a long way from ensuring people in wheelchairs can enter buildings. Laws intended to prevent discrimination are now being used to regulate corporate yoga classes.