Full Podcast Transcript
NASIR: Welcome to our podcast where we cover business in the news and add our legal twist. My name’s Nasir Pasha.
MATT: And I’m Matt Staub.
NASIR: Right on cue. Yeah, so we’re finally back after a week-long – well, two-week vacation for you, a week-long for me. That’s why we were absent and I’m sure you guys missed us this last week and a half, I guess.
MATT: Yeah. You can always go back and listen to previous episodes as well but I think it’s actually a pretty common thing because a lot of the podcasts – or not a lot but some of the podcasts that I listen to, I notice there is also some gaps or they were doing rebroadcasts of previous episodes so it just must be I guess the time of the year that people go on vacation.
NASIR: Yeah, it was right after Memorial Day and people did mention they thought that the reason we didn’t have episodes is because Houston was under water which was not the case. There was definitely a lot of flooding here but we had planned already that there was going to be no episodes last week.
MATT: Yeah. I’m glad to hear that you’re all right.
NASIR: Yeah, so long as I’m okay, that’s all that matters. Actually, you know, Houston was bad but, obviously, the rest of Texas got hit pretty hard.
NASIR: But that Tuesday after we came back from Memorial Day holiday, I mean, offices were just kind of half-filled because people couldn’t get out of their homes and the water was still draining into the bayous and so forth.
NASIR: It was definitely off week last week.
MATT: Well, that happens. Hopefully that clears up and everything’s all right. But we’re getting into our topic for today. We’re talking about wellness programs. This isn’t the same thing necessarily as, you know, there’s way more talk about health care and that’s obviously been a big focus last year, the last two years, the last three years. Wellness programs are a little bit different because it’s not something that’s necessarily going to be a mandatory part of anything as an employee working for someone but it’s something that many companies are implementing. I think I saw something… roughly over 90 percent of big companies in the US have some sort of wellness program in place and a good chunk of those are trying to stick to those programs so it’s definitely something that’s happening or that’s at least an option for a lot of the major companies in the US but one of the things that’s really coming to the forefront here is, you know, is there questions of discrimination with these wellness programs? You know, there’s all these different laws in place, the ADA being obviously a big one and, you know, you can’t discriminate someone on the basis of a disability and these wellness programs are just kind of infringing upon that. It’s one of the questions that’s being asked right now.
NASIR: Yeah. And so, it’s an interesting world we’re living in now because the Affordable Care Act having a requirement of employers of 50 and more to have health insurance – which most do already – then a lot of these companies are actually self-insured where they’re actually taking on risk. Even smaller employers or relatively smaller employers that wouldn’t usually be self-insured are starting to do this as well. When you’re doing that, even if you’re fully insured – meaning you’re actually buying a policy from a regular health insurance company as opposed to funding it yourself – even if that’s the case, your incentive is still to have a healthy employee population. And so, in theory, if you have this wellness program, then you’re able to keep your health care cost low and, if you’re fully insured, then your premium is low and even 73 percent I read that of smaller employers offer at least one wellness program. Even larger employers, of course, 90 percent or more, that makes sense. But even smaller employers now are starting to partake in this.
MATT: Yeah. Like you said, it makes sense because, the healthier the employers are, I mean, the better it’s going to be keeping your cost down for the employer. I mean, another thing too I guess would be it’s going to better in the culture if everyone’s healthier and feeling good about things. Obviously, your company softball team’s going to be helping as well because everyone’s going to be in better shape and going to be competing at a higher level than maybe some other companies.
NASIR: I don’t know what your thought is. These wellness programs are a little goofy to me and reading this article about whether wellness plans actually do any good or not, I mean, I think there’s always mixed results because, let’s get to the bottom line here of the legal issues here, if you participate in these programs, you usually get some kind of reward or vice versa – if you don’t participate, some kind of penalty. And so, the idea is, you know, Matt mentioned the ADA, the American Disabilities Act, you can also include GINA which has to do with discrimination for genetic information and then HIPAA prohibits discrimination based upon health factors, et cetera. You have these different statutes that prohibit discrimination. But then, you have the Affordable Care Act which says that basically regulates wellness plans and provides that you can reward for participation of these wellness plans.
Now, the question is, okay, if you can reward, that effectively may be a penalty for not participating, is that now a discrimination because some of these wellness plans includes requirements to participate in certain exercise or health activities. If you smoke, then participating in some kind of tobacco education process and so forth. Now, the question is, is there discrimination? And that’s exactly what the EEOC has alleged and now a famous case, Honeywell.
MATT: Yeah, and that’s what I was just about to get to. In this Honeywell case, employees who participated in the plan – their high deductible health plan – had the option to participate in their wellness program which required employees to undergo tests for blood pressure, BMI – which I think is fake, cholesterol.
NASIR: Yeah, BMI is just, like, your height and weight, right? Just a calculation.
MATT: It’s a calculation that tells people whether they’re healthy or not but based on nothing else.
NASIR: At least it’ll tell you if you’re obese or not but I feel like, if you’re within that kind of mid-range or not, it doesn’t say much else, right?
MATT: Yeah, and I don’t think there’s going to be a calculation with that that’s going to surprise anyone.
NASIR: Yeah, that’s true. “Your BMI is what?!”
MATT: Not to get too far off-track but I remember I saw a commercial for this a long time ago, there was a scale you would step on it, it would actually tell you your body fat percentage somehow, but I don’t get how it would calculate it.
NASIR: Yeah, electronically, there is some level of accuracy to it but I don’t know through your feet. If you’re barefoot, maybe there’s some way to do that. But, see, I mean, that’s what’s ridiculous. I’m sorry to interrupt your train here but that’s what’s kind of ridiculous with these wellness programs because, at the end of the day, how health insurance companies and these plans measure so-called health is based upon just some numbers, you know? And so, it’s kind of relating to studying for the test in school, right? Because then it’s all about meeting these metrics and so forth. Frankly, there may be no other better way.
For example, I think my wife’s work has a wellness program and because she keeps track of exercise per week or whatever with a certain group of other employees in part of this wellness program, because they keep track of it or meet certain goals, then all of a sudden we’re bumped up to the top premium health insurance plan at the low rate. And so, we’re rewarded for that, but they don’t measure that you’re actually succeeding in your health. They’re just measuring that you’re actually participating in the plan which is kind of weird.
MATT: Yeah, it’s like a list of items and just checking off the boxes. I agree with you on that and I thought the wellness plan that you put in place for the firm is pretty ridiculous, I thought.
NASIR: Ah, if I had a wellness plan, I’d be like, “You have to…” I think it’s just exercise and diet. You have to keep track of it and actually be accountable. I don’t think there’s really any accountability in the wellness and I don’t even know if you can do that legally because how involved in your employees’ lives do you really want to be, you know?
MATT: You’re crossing privacy lines at that point.
NASIR: Yeah, exactly, and there’s that company we were reading about. What was it? It was some Swedish trucking company, Scania. They have, like, 5,000 employees and this article describes it as believing in a 24-hour employee meaning, you know, 24/7 they’re on the clock in the sense that you’re expected to exercise. They have an on-site gym, a team of health care professionals, seminars which they can learn and I think that’s fine and I think this is all good if it’s effective but, like I was saying, I think some of these things, I’m not sure how effective they actually are.
MATT: Yeah, we took a nice side track off of that.
MATT: But, getting back to Honeywell, let’s see. They can participate in the plan. The employees who choose not to participate are not eligible for this health savings account and must pay an additional surcharge to the annual health insurance contribution. Those who refuse some biometric testing are presumed to be tobacco users unless they participate in a tobacco cessation program. There’s a lot of just kind of all these little hoops that they have to jump through and all these different things and so that’s why people are saying, “Well, I don’t want to participate in this,” and, you know, “You’re discriminating me based on a disability I may have,” then you’re getting into a bigger issue.
NASIR: What’s crazy about that is that’s how most of these wellness programs work. Some of those complaints or what-have-you, and I don’t know if this what brought by any of the employees, I think this was just brought my EEOC and maybe someone made some complaints and so forth, and so this is what’s strange about this. You have EEOC which is one agency and then you have the administration which is a proponent of the ACA who are seemingly of conflicting opinions and so it’s not surprising that April 23rd of this year, the EEOC published a proposed rule on how the ACA, the American Disabilities Act, applies to these wellness programs. And so, I guess now – and this is the take-home of all this – where we’re headed when it comes to the regulations here is that you’re going to be able to have some kind of penalty or I should say reward so long as it’s up to only 30 percent of the total cost that is the employer and the employee‘s share of employee premiums. I say employee premiums meaning not including the spouse or the family. And so, if you’re within that little gap there, then the disability issues don’t apply and you should be good – at least, by the way, this is a proposed rule. This hasn’t been adopted yet.
MATT: Yeah. Well, problem solved, right? We definitely needed to make health care more difficult for employers to figure out.
NASIR: No kidding. I know. It’s definitely getting more and more complicated, especially those employees that are above 50. Even below there, it’s difficult but, once you hit that 50 number, it becomes something that you really require a lot of attention to.
MATT: Yeah. I mean, most of the discrimination that we’re seeing – or at least I’ve seen – is based on a disability. I haven’t seen really any… there’s got to be age discrimination claims out there as well I would think.
NASIR: Yeah. I mean, I think there’s a lot of ways that you can get creative when it comes to these wellness programs because they’re relatively new. By the way, the reason they’re new is because there hasn’t been such an incentive – and I think this is part of the nature of the Affordable Care Act, at least its objectives – there hasn’t been such an incentive to try to reduce health care costs and it wasn’t as obtainable as it was before. Now that everyone’s in group plans and so forth and we’re forcing employers to do so, then all of a sudden that cost becomes something that needs to be managed.
MATT: Gone are the good old days of just a competition to which office can lose the most weight.
NASIR: Yeah, or like a volleyball competition like in The Office.
MATT: Yeah, I guess those are separate episodes but I think the weight-loss was actually a continuation episode. I think it was technically two.
NASIR: We have to go through an Office episode per podcast episode. That’s the rule, right? There was that weight-loss competition amongst the different branches and it became to such an extent where Kelly was basically starving themselves and she fainted and, because of that, did they cancel the competition or did they send down some disclaimers or guidelines to fix it up?
MATT: They didn’t cancel it because they still tried to…
NASIR: Tried to win, yeah.
MATT: The Dunder Mifflin office tried to still win at the end and they were unsuccessful but, yeah, they’re a pretty good one. I liked that one.
NASIR: By the way, there are a lot of wellness companies out there that’ll handle your entire system and I think some of the things to look out for is whether or not it’s actually going to benefit the bottom line and actually help in health care costs. Sometimes, you’re just doing it for the sake of showing the metrics and the numbers, but I would try to find a wellness program that actually has some impact. And then, you also have to balance with how involved do you want to get in the private lives of your employees and everything from company culture and things like that, you’ll all have to keep in mind. Of course, this voluntariness aspect from the EEOC, that is a little uncertain but, from my perspective, I expect this to be adopted because there are too many companies in this exact position. If EEOC sticks to its position that Honeywell is doing something wrong, then Honeywell is not going to be the only company that is hit by this. It’s going to be industry-wide.
MATT: Yeah. I guess wait and see what happens, as always, but too much confusion, again, with health care. I don’t like it.
NASIR: What would you propose? What would be the simple solution?
MATT: Let’s see. What would I propose?
NASIR: You’d probably say like, just everyone has to be healthy and no one can die or get sick.
MATT: Yeah, I’d be fine with that. I don’t really get sick and I haven’t died yet.
NASIR: Yeah, I’d support that. We’d have to figure out some way to enforce, like, if you die or get sick, then there has to be some kind of penalty – like, a death penalty.
MATT: I can’t think of that giving rise to any sort of lawsuit.
NASIR: No, not at all.
MATT: Our tip for the day.
NASIR: Tip for the day. Okay, guys. Well, thanks for joining us and, beginning this week – or beginning next week – we’ll be going to two episodes per week. I think Monday and Wednesday so look out for that little change and I apologize for all you folks that tend to listen to our Friday episode. You’re going to have to just sit there and not listen to anything on Fridays. I apologize.
MATT: As you should. They can figure it out. There are some other good…
NASIR: No, there is nothing else. They’re just going to have to listen to old episodes on Fridays.
MATT: Okay, I take that back.
NASIR: No other podcasts.
MATT: All right.
MATT: All right. Keep it sound and keep it smart.