Employees push back against wellness programs requiring they get medical checks or pay fees

Like many large employers, Yale University gave its clerical, food service and maintenance workers a choice: Get a routine health check or pay a $25 weekly fee.

But workers alleged in a federal lawsuit the university's participate-or-pay employee wellness program violated two federal laws. In a preliminary settlement approved Tuesday by U.S. District Court in Connecticut, the university agreed to pay nearly $1.3 million to workers and attorneys and won’t assess the $25 weekly fee for four years, or until federal law or regulations change to allow such a program.

Attorneys will have 45 days to notify about 6,300 eligible workers and their spouses about the settlement terms. A hearing to approve the final settlement is scheduled Nov. 22.

For more than a decade in corporate America, employers have been pushing wellness programs that help workers stop smoking, lose weight or change unhealthy behaviors. Often administered by third-party vendors, programs persuade employees through incentives or financial penalties to undergo biometric screenings that typically include a blood draw to check cholesterol levels and diabetes and blood pressure readings.

Employers like these plans because they encourage workers to maintain their health and act before chronic health conditions develop or worsen. Advocates say these plans can limit rising health costs, boost productivity and reduce absenteeism.

But some workers say wellness programs are anything but voluntary, charging workers higher premiums if they don’t participate.

The Americans with Disabilities Act prohibits employers from imposing medical requirements or questioning a worker’s health unless such inquiries are job related. But the law allows a loophole for wellness programs and health screenings that are voluntary.

Among large employers, 83% offered employees a wellness program that included at least one of the following: smoking cessation, weight management, and behavioral or lifestyle coaching, according to Kaiser Family Foundation’s 2021 annual benefits survey.

Half of large employers had biometric screening programs for workers in 2020, but that figure dropped to 38% last year, the Kaiser survey found. However, that might have been a temporary drop because companies didn’t want to make workers complete such screenings during the COVID-19 pandemic, said Matthew Rae, a Kaiser Family Foundation associate director.

Attorneys representing the Yale workers said the settlement is a powerful example of the limits employers have when establishing wellness programs.

"Our position isn't that wellness programs are bad or shouldn't be offered to employees," said Elizabeth Aniskevich, AARP Foundation attorney representing Yale employees. "We're hopeful employers will take note of this settlement and rethink imposing a fee in association with a wellness program."

EEOC delays updated rules

In 2016, the federal Equal Employment Opportunity Commission issued guidance allowing employers to assess opt-out fees of up to 30% of the total cost of an individual’s health insurance coverage. AARP sued the federal agency arguing such fees were not voluntary and violated the Americans with Disabilities Act and the Genetic Information Nondiscrimination Act. A federal court agreed and ordered EEOC to draft new regulations.

The EEOC submitted rules for public comment in January 2021 but withdrew the proposal about two weeks later. An EEOC spokesman said the agency has not updated rules for employers since then.

“Employee participation in employer wellness programs must be voluntary," EEOC spokesman Victor Chen said in an email. "To give meaning to that requirement, the incentives for participation cannot be so substantial as to be coercive.”

As part of its settlement, Yale also has agreed to no longer transfer workers' personal health information to a third-party vendor to facilitate health coaching without an employee’s consent, said Dara Smith, AARP Foundation senior attorney.

Smith said the settlement is an ideal model for employers to follow because it does not financially punish workers who don’t participate. It also yields control to workers who can choose whether to share their screening results with a vendor to access health coaching.

“Our position is that any penalty makes the program not voluntary,” Smith said. “That means you're volunteering to do this. You're not trying to avoid punishment.”

Voluntary wellness plans?

Six municipal employees sued the city of Chicago in 2020, claiming the city’s wellness program violated federal law by requiring employees and spouses to share personal health information and complete health screenings or pay $25 more for health coverage every two weeks. The city has halted the fee since the lawsuit was filed, said Allison Muth, a lawyer who represents the workers.

NASCAR has offered employees a choice of getting a health check or pay a $125 surcharge.

Employees could get screened in May at on-site clinics held at corporate offices in Daytona Beach, Florida, or Charlotte, North Carolina, or make an appointment at a Quest lab office, a doctor's office or complete a home test kit.

A memo sent to NASCAR employees, obtained by USA TODAY, described its biometric screening program as mandatory even though workers can opt out and pay extra.

"If you are enrolled in the NASCAR medical plan, the screenings are required," the NASCAR memo stated. "Employees who complete the screening will receive four hours of wellness (paid time off). A one-time $125 surcharge will be applied to those who do not participate."

NASCAR officials declined to answer USA TODAY's question about its wellness program. However, a NASCAR official told the Orlando Business Journal the auto racing organization uses data from screenings to craft its wellness programs.

A NASCAR official told the publication the program helps workers with chronic health conditions and manages the organization's health care costs.

Smith, the AARP Foundation attorney, reviewed NASCAR’s marketing material and noted key differences from the Yale case. Yale’s program charged up to $1,300 per year for nonparticipants and did not offer any incentives for people to complete the program. NASCAR offers four hours of paid time off for workers who complete the wellness screen. However, such an incentive can be construed as a penalty for people who don’t participate, Smith said.

“The best way to ensure that a program is voluntary is to treat employees who do and don’t participate exactly the same – except that those who participate can enjoy the program’s benefits themselves,” Smith said.

Employer health benefits consultants say wellness programs are typically designed to protect workers' private medical information. Vendors might have access to individual employee claims data, but such personal health information is not shared with the employer.

“An employer would not be allowed to have any personal health information (of employees),” said Steven Noeldner, a senior consultant at the benefits advisory firm  Mercer and expert in employer health plans. “That kind of information is always gathered by a third party.”

Companies, however, get access to broad categories of data that can help them tailor a program. For example, if the employer spends more on claims for employees who have lower back, knee or hip pain, it might choose to pay for programs that help workers take steps to lessen their risk of such conditions.

Workers who undergo biometric screening might get a report back from their employer's  wellness vendor about their health status that might include tips or referrals to lifestyle coaching to address health concerns.

The most common incentive is insurance discounts for those who complete biometric screenings, Noeldner said. For workers who are not covered by an employer's insurance plan, employers might offer other incentives such as cash or gift cards. Employers also might include other ways to reward workers. Plans also might incorporate tracking devices, such as Fitbits, used to reward workers who walk or swim a set amount.

"It's framed as an incentive and a positive thing for those who choose to participate," Noeldner said.

Ken Alltucker is on Twitter at @kalltucker, or can be emailed at alltuck@usatoday.com.

This article originally appeared on USA TODAY: Employees fight health insurance screenings that cost some workers