Effective Jan. 1, 2019, EEOC Removes Incentive Limits from Wellness Plan Rules

Overview

On Dec. 20, 2018, the Equal Employment Opportunity Commission (EEOC) removed the incentive limits from its final wellness plan rules. The rules allowed employers to offer wellness incentives of up to 30 percent of the cost of health plan coverage.

The AARP successfully challenged the EEOC’s incentive limit by arguing that it was too high to be consistent with federal laws that require “voluntary” employee participation in wellness programs. The court vacated the EEOC’s incentive limit for employer-sponsored wellness plans, effective Jan. 1, 2019.

Consistent with the court’s decision, the EEOC has removed the incentive limit portion of its final wellness plan rules.

Next Steps

Beginning Jan. 1, 2019, the final rules’ guidance on permissible incentive limits for voluntary wellness programs no longer applies. Due to this new legal uncertainty, employers should carefully consider the level of incentives they use with their wellness programs. Employers should also continue to monitor any developments related to the EEOC’s rules.

Final Wellness Rules

Federal laws affect laws enforced by the EEOC—the Americans with Disabilities Act (ADA) and the Genetic Information Nondiscrimination Act (GINA).

  • Under the ADA, if they are job-related and consistent with business necessity, an employer may make disability-related inquiries and require medical examinations after employment begins. However, these inquiries and exams are permitted even if not job-related and consistent with business necessity if they are part of a voluntary wellness program.
  • Under GINA, employers cannot request, require or purchase genetic information, including information about an employee’s genetic tests, the genetic tests of family members and the manifestation of a disease or disorder of a family member. Like the ADA, GINA includes an exception that permits employers to collect this information as part of a wellness program, if the provision of information is voluntary.

Neither the ADA nor GINA define the term “voluntary” in the context of wellness programs. For years, the EEOC did not address whether incentives to participate in wellness programs are permissible under the ADA and, if so, in what amount. On May 17, 2016, the EEOC issued final rules that describe how the ADA and GINA apply to employer-sponsored wellness programs. These rules became effective on Jan. 1, 2017.

  • The final ADA rule provided that incentives offered to an employee who answers disability-related questions or undergoes medical examinations as part of a wellness program may not exceed 30 percent of the total cost for self-only health plan coverage.
  • The final GINA rule clarified that an employer may offer an incentive of up to 30 percent of the total cost of self-only coverage to an employee whose spouse provides information about his or her current or past health status as part of the employer’s wellness program.
Court Ruling
First Decision Incentive Limit is Arbitrary

On Aug. 22, 2017, the U.S. District Court for the District of Columbia ruled against the EEOC and remanded the final wellness rules back to the agency for reconsideration. In this case, the AARP argued that the 30 percent incentive limit is inconsistent with the voluntary requirements of the ADA and GINA and that employees who cannot afford to pay a 30 percent increase in premiums will be forced to disclose their protected information when they would otherwise choose not to do so.

The court concluded that the EEOC’s basis for establishing this incentive level was not well reasoned and not entitled to deference from the court. Rather than vacating the rules altogether and risking potential disruption for employers, however, the court remanded them to the EEOC for reconsideration.

Second Decision – EEOC’s Rules are Vacated on Jan. 1, 2019

 On Dec. 20, 2017, the court stated that the EEOC’s slow approach for reconsidering its final wellness rule is not what the court envisioned when it remanded the rules. The EEOC indicated that it would issue a new final wellness rule in October 2019 that would be applicable, at the earliest, in 2021. This lengthy timeline, per the court, was unacceptable.

Thus, the court vacated the EEOC’s limits on wellness incentives, but stayed its ruling until Jan. 1, 2019, to avoid disruption for employer-sponsored wellness plans. According to the court, this extended deadline provided employers with the time they needed to structure their wellness plans for 2019. The court also encouraged the EEOC to speed up its timeline for issuing new rules on wellness program incentives.

New EEOC Regulations

The EEOC has indicated that it will publish new proposed regulations on employer-sponsored wellness programs in the future. It is not clear, however, when these proposed regulations will be released. The EEOC, which is a bipartisan commission comprised of presidentially appointed members, is still waiting for the confirmation of two members (including a commission chair) and a general counsel. The EEOC has indicated that it may wait until mid-2019 to release new wellness regulations.

This Compliance Bulletin is not intended to be exhaustive nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel for legal advice.

What is the Current State of the ACA?

On Dec. 14, 2018, a federal judge ruled in Texas v. United States that the entire Affordable Care Act (ACA) is invalid due to the elimination of the individual mandate penalty in 2019. The decision was not stayed, but the White House announced that the ACA will remain in place pending appeal. The Department of Health and Human Services (HHS) also confirmed that it will continue administering and enforcing all aspects of the ACA.

Twenty states filed this lawsuit because of the 2017 tax reform law that eliminates the individual mandate penalty. In 2012, the U.S. Supreme Court upheld the ACA on the basis that the individual mandate is a valid tax. With the penalty’s elimination, the court, in this case, ruled that the ACA is no longer valid under the U.S. Constitution.

Next Steps

The ruling will likely be appealed, and be taken up by the Supreme Court. Thus, a final decision is not expected to be made until then. The federal judge’s ruling left many questions as to the current state of the ACA; however, the White House announced that the ACA will remain in place pending appeal.

Background

Since early 2014, the ACA has imposed an “individual mandate” requiring most individuals to obtain adequate coverage for themselves and their family or pay a penalty. In 2011, many lawsuits were filed challenging the constitutionality of this individual mandate provision.

In 2012, the U.S. Supreme Court upheld the constitutionality of the ACA in its entirety, ruling that Congress acted within its constitutional right when enacting the individual mandate. The Court agreed that, while Congress could not use its power to regulate commerce between states to require individuals to buy health insurance, it could impose a tax penalty using its tax power for individuals who refuse to purchase health insurance.

However, a 2017 tax reform bill, called the Tax Cuts and Jobs Act, reduced the ACA’s individual mandate penalty to zero, effective beginning in 2019. Therefore, beginning in 2019, individuals will no longer be penalized for failing to obtain adequate health insurance coverage.

Texas v. United States

Following the tax reform law’s enactment, twenty Republican-controlled states filed a lawsuit again challenging the ACA’s constitutionality. The plaintiffs, first, argued that the individual mandate could no longer be considered a valid tax since there will no longer be any revenue generated by the provision.

Also, in its 2012 ruling, the Supreme Court indicated (and both parties agreed) that the individual mandate is an essential element of the ACA, and that the remainder of the law could not stand without it. Therefore, the plaintiffs argued that the elimination of the individual mandate penalty rendered the rest of the ACA unconstitutional.

The U.S. Justice Department chose not to defend the ACA in court fully and, instead, 16 Democratic-controlled states intervened to uphold the law.

 Federal Court Ruling

In his ruling, Judge Reed O’Connor ultimately agreed with the plaintiffs, determining that the individual mandate can no longer be considered a valid exercise of Congressional tax power.

Per the court, “[u]nder the law as it now stands, the individual mandate no longer ‘triggers a tax’ beginning in 2019.” Thus, the court ruled that “the individual mandate, unmoored from a tax, is unconstitutional.”

Because the court determined that the individual mandate is no longer valid, it now had to decide whether the provision is “severable” from the remainder of the law (meaning whether other portions of the ACA can remain in place or whether the entire law is invalid without the individual mandate).

In determining whether the rest of the law could stand without the individual mandate, the court pointed out that:

“Congress stated three separate times that the individual mandate is essential to the ACA, [and that] the absence of the individual mandate would ‘undercut’ its ‘regulation of the health insurance market.’ Thirteen different times, Congress explained how the individual mandate stood as the keystone of the ACA … [and,] ‘together with the other provisions’ [the individual mandate] allowed the ACA to function as Congress intended.”

Thus, the court determined that the individual mandate could not be severed, making the ACA invalid in its entirety.

Impact of the Federal Court Ruling

Judge O’Conner’s ruling left many questions as to the current state of the ACA because it did not order for anything to be done or stay the ruling pending appeal. However, this ruling is expected to be appealed, and the White House announced that the ACA will remain in place until a final decision is made. On Dec. 17, 2018, HHS also confirmed that it will continue administering and enforcing all aspects of the ACA.

While the appeals are pending, the current ACA provisions will continue to be enforced. Although the individual mandate penalty will be reduced to zero beginning in 2019, employers and individuals must continue to comply with all other applicable requirements.

This ruling does not impact the 2019 Exchange enrollment, the ACA’s employer shared responsibility (pay or play) penalties and related reporting requirements, or any other applicable ACA requirement.

This ACA Compliance Bulletin is not intended to be exhaustive nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel for legal advice.

 

 

Seasonal Affective Disorder: What It Is and How It Can Be Alleviated

Seasonal affective disorder (SAD) is like any other condition. It doesn’t make you a weak person because you suffer from it. And like any disorder, it can be treated, and prevented, if proper measures are taken. Here’s what you need to know.

What Is SAD?

Seasonal affective disorder can be far more debilitating than milder conditions. Evidence suggests that it is caused when our circadian rhythm is disrupted. Our well-being can rely on consistent light exposure, and those dark, winter months create a light shortage. SAD is common in areas where colder temperatures and short days are more prevalent. If you have the condition, you likely are aware of the symptoms and its effects. Otherwise, it’s important to know certain warning signs, so you can take action. For example, do you find yourself sleeping more, perhaps in conjunction with diminished energy and an increasingly erratic sleep schedule? Are you less inclined to socialize or be active, to the point of isolation? Has your diet changed, with a greater focus on comfort foods? These can be compelling signs that you may be developing SAD, and this is especially true if you or your family has a history of depression. If you notice any signs, it’s imperative that you reach out to a doctor for further advice.

Keep Routines

Cold can be a major inhibitor for maintaining healthy routines and can contribute to the onset of SAD. Eating healthily is one habit that can fall by the wayside. Having a nutritious diet can influence gut health and help our bodies to stay in good condition and produce chemicals that can enhance mood. Also, think about your daily schedule and what you can do to stay active and stimulated. Getting outside is beneficial. Find ways to go outdoors, not only to raise your energy levels through physical activity but improve mood. Socialize with loved ones, no matter how brief. Make visits to your local park, or take a walk around the neighborhood. At home, find ways to process your emotions. Those dark nights can leave us restless, with only one’s thoughts for company. Meditation or journaling, even a fun movie night with loved ones, can potentially make a world of difference in the home.

Harness Light

Thankfully, there are ways to replicate the brightness of summer. At the very least, keep curtains and blinds open throughout the day. Trim hedges or trees — anything that deprives your home of some natural light. Adding artificial light through the home can be beneficial, as well. Dedicated devices might also be something to invest in. Dawn simulators, which use full-spectrum lighting, can reproduce a bright morning. This helps us wake up more naturally, and aids efforts to maintain a consistent sleep schedule. Light boxes, meanwhile, can provide a form of light therapy. Many of these use fluorescent lights and, when used daily, can offer light comparable to a summer’s day. While it is not a complete substitute for natural light, it is still a welcome brightness during the winter months.

Adapt Your Environment

Consider making adjustments to your environment. Look at the rooms you spend most of your time in. What could be done to brighten them? A fresh coat of paint in a radiant, happy color can positively influence mood and spirit. Even a few embellishments on furniture, such as some colorful throw pillows or bedding, can transform the ambiance of a room. Decor, too, can be impactful. Add paintings you find emotionally inspiring or photographs that remind you of joyous and happy moments in your life. You might even place a few motivational posters around your home to give you gentle reassurances. As an extra touch, use plants to further your home’s coziness and color. They may have the additional benefit of providing you with a low-intensity responsibility that you can add to your daily routine.

Winter can be a difficult time, so we need to monitor ourselves closely during the darker months. If you notice any signs, speak to your doctor immediately, and do your best to maintain healthy routines. This winter, take positive steps to make your mental well-being a priority in your life.

This is not intended to be exhaustive nor should any discussion or opinions be construed as legal or medical advice. 

 

Kimberly Hayes enjoys writing about health and wellness and created PublicHealthAlert.info to help keep the public informed about the latest developments in popular health issues and concerns. In addition to studying to become a crisis intervention counselor, Kimberly is hard at work on her new book, which discusses the ins and outs of alternative addiction treatments.