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AIS's Health Business Daily
Featured Story September 26, 2008 Programs That Target Obesity and Other Employee Behaviors Face Scrutiny, Legal Hurdles Reprinted from HEALTH PLAN WEEK, the industry's leading source of business, financial and regulatory news of health plans, PPOs and POS plans. By Steve Davis, Managing Editor, (sdavis@aispub.com) As health care costs and insurance premiums swell, some employers are launching programs to inspire healthier lifestyles among employees. However, while obese and overweight employees are more at risk for costly medical conditions than are other employees, industry observers warn that employer and health plan policies to slim down employees must overcome several legal hurdles. "There is no question that you will see more efforts by employers and health plans to deal with the obesity issue. It has become overwhelming to them," says Christine Ferguson, associate research professor of health policy at George Washington University (GW) and director of the STOP Obesity Alliance. "From a health and productivity perspective, there is a desire and realization among employers" of the need to help employees reach a healthy weight, she tells HPW. "At the same time, there is frustration that physicians and health plans don't play a significant enough role" in such efforts. Late last month, the Alabama State Employee Insurance Board (ASEIB) announced a "worksite wellness premium discount program" for its 37,500 state employees. Beginning in 2010, state employees will be able to trim $25 from their monthly health insurance premiums if they participate in the program. To receive the discount, employees must complete a wellness screening, which will test blood pressure, cholesterol levels, glucose levels and body mass index (BMI). Employees who have a BMI of 35 or lower are eligible for the premium discount (a BMI of 30 or above is considered obese.) Employees with a higher BMI, or one or more of the other three risk factors, can receive the discount by meeting with a physician during the year. "It's encouraging to see Alabama trying to address this issue," Ferguson tells HPW. "But most employers and employees, by a very, very large margin, believe that negative incentives or penalties are not as effective as positive rewards." Jeffrey Levi, executive director of the Washington, D.C.-based Trust for America's Health, agrees and says Alabama's program appears to be more of a punishment than a reward because employees receive the discount only if they take action. Levi also is an associate professor of health policy in GW's School of Public Health and Health Services. A policy that requires employees to achieve a specific BMI, he adds, could punish employees who improve their health but are not able to lower their BMI. But ASEIB CEO William Ashmore argues that the program doesn't punish employees. "We don't say that just because you have a BMI over a certain level, you have to pay a surcharge or a penalty. We give employees up to a year to go to the doctor, free of charge. As long as they do that, they get the discount," he tells HPW. Program Focuses on Health Risk The purpose of the program, he explains, is to make sure that people who have one or more of these four risk factors understand their health risk. "As a health plan, we need to do our part to knock down barriers so people can get the help they need to manage their condition." The state has been conducting voluntary health screenings for the past 15 years. About 10% of employees who participate are identified as having one or more health risks. Ashmore says he hopes the new incentive will encourage more people to participate in the screening. An employee who has a BMI of 40 or more will cost the state an average of $2,000 more annually in health expenses than an employee with a BMI of 25 or less, he says. Growing numbers of employers are requiring employees to complete a health risk assessment before being allowed to enroll in the employer's health plan, says Chip Kerby, an employee benefits attorney at Liberté Group LLC. in Washington, D.C. "What's different about the Alabama program is the linkage between health outcomes and the required employee premiums," he explains. "Alabama is essentially saying, 'If you don't achieve a specific BMI, you will be required to pay more to participate'" unless you visit a doctor. Geoff Taylor, a spokesperson for Excellus BlueCross BlueShield, agrees and says most behavioral health studies show that reinforcement and rewards work better than penalties. Health plans and employers, he adds, are struggling to find ways to promote healthy behaviors. The percentage of obese or overweight residents in the upstate New York market has grown from 53% in 1997 to 62% in 2006, according to Taylor. Through a product line, HealthyRewards, employer clients of Excellus can reward employees and their covered spouses with up to $500 each for completing a health risk assessment and tracking other "healthy behaviors," such as regular exercise. Employees who have a chronic condition can receive rewards by managing their condition. Todd McGuire, chief technology officer at incentaHEALTH, LLC in Denver, says it's important to contrast a disease such as obesity with one such as cancer. Obesity, he explains, is largely preventable with healthy nutrition and physical activity. "Everyday choices an individual makes about what to eat and what to do dramatically impact their chances of becoming overweight or obese," he says. "In stark contrast, cancer can affect anyone regardless of the personal choices they make. That is why the cost [of treating such a disease] should be shared across the group." Programs Face HIPAA, ADA Hurdles Alabama could be "on the front end of a trend" in employee benefits, says Glenn Patton, a partner in the labor and employment practice at law firm Alston & Bird. "When a state does something like this, it encourages other employers to look at obesity as something they can [target] to save some money and improve employee behavior," he tells HPW. More than 15 states have rules that prevent employers from taking "adverse employment action" against an employee for engaging in lawful, off-duty activities, such as smoking and overeating. Alabama does not have that kind of a statute, Patton says. Employers must consider federal rules when implementing programs aimed at improving employee health. HIPAA, for example, prohibits health plans from discriminating in eligibility or contributions/benefits based on health factors, although there is "a significant exception" for wellness programs that satisfy specific requirements, Kerby notes. But government employers can avoid the HIPAA nondiscrimination requirements entirely by choosing to "opt out" of those requirements. Employers also must abide by HIPAA. HIPAA regulations finalized in late 2006 set ground rules for employers that offer coverage discounts based on a health standard (e.g., weight, blood pressure, nicotine use), says John Hickman, an employee benefits attorney with Alston & Bird. Under HIPAA, employer programs: (1) Cannot offer a discount to employees that exceeds 20% of the unsubsidized cost of health coverage; (2) Must provide "adequate" notice before the policy goes into effect; and (3) Must offer employees an alternative way to receive the discount or avoid a surcharge if the goal can't be achieved due to a medical condition such as a thyroid condition or injury. Employers also must ensure that their policies do not discriminate against employees who are obese due to a disabling condition. The Americans with Disabilities Act (ADA) prohibits employment-based discrimination based on disability. While obesity doesn't meet the definition of a disability under ADA, there could be an underlying medical condition that does, Patton says. At least one appeals court has concluded that morbid obesity — if not related to physiological causes — is not an impairment protected by the ADA. In a ruling filed Sept. 12, 2006, the U.S. Court of Appeals for the Sixth Circuit Court upheld an earlier decision that Watkins Motor Lines did not violate the ADA when it fired a morbidly obese driver/dock worker in 1996. The court determined that the plaintiff's condition was not related to any physiological cause and therefore was not an impairment under ADA. Because of the "legal
uncertainty," Kerby says it's unlikely that many non-governmental
employers will rush to tie a specific BMI target to discounts on health
premiums. "But I think more employers will explore BMI outcome
approaches, even having to address the 'reasonable alternative standard'
requirement in the HIPAA exception for wellness programs as long as
there is empirical evidence that excess weight is a risk factor adversely
affecting health status." |
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