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S. HRG. 114–514 

EMPLOYER WELLNESS PROGRAMS: BETTER 

HEALTH OUTCOMES AND LOWER COSTS 

HEARING 

OF THE

COMMITTEE ON HEALTH, EDUCATION, 

LABOR, AND PENSIONS 

UNITED STATES SENATE 

ONE HUNDRED FOURTEENTH CONGRESS 

FIRST SESSION 

ON

EXAMINING EMPLOYER WELLNESS PROGRAMS, FOCUSING ON BETTER 

HEALTH OUTCOMES AND LOWER COSTS 

JANUARY 29, 2015 

Printed for the use of the Committee on Health, Education, Labor, and Pensions 

( 

Available via the World Wide Web: http://www.gpo.gov/fdsys/ 

LAMAR ALEXANDER, Tennessee, Chairman 

MICHAEL B. ENZI, Wyoming 

RICHARD BURR, North Carolina 

JOHNNY ISAKSON, Georgia 

RAND PAUL, Kentucky 

SUSAN COLLINS, Maine 

LISA MURKOWSKI, Alaska 

MARK KIRK, Illinois 

TIM SCOTT, South Carolina 

ORRIN G. HATCH, Utah 

PAT ROBERTS, Kansas 

BILL CASSIDY, M.D., Louisiana 

PATTY MURRAY, Washington 

BARBARA A. MIKULSKI, Maryland 

BERNARD SANDERS (I), Vermont 

ROBERT P. CASEY, JR., Pennsylvania 

AL FRANKEN, Minnesota 

MICHAEL F. BENNET, Colorado 

SHELDON WHITEHOUSE, Rhode Island 

TAMMY BALDWIN, Wisconsin 

CHRISTOPHER S. MURPHY, Connecticut 

ELIZABETH WARREN, Massachusetts 

DAVID P. CLEARY, Republican Staff Director 

EVAN SCHATZ, Minority Staff Director 

JOHN RIGHTER, Minority Deputy Staff Director 

(II) 

C O N T E N T S 

STATEMENTS 

THURSDAY, JANUARY 29, 2015 

Page 

COMMITTEE MEMBERS

Alexander, Hon. Lamar, Chairman, Committee on Health, Education, Labor, 

and Pensions, opening statement ....................................................................... 1 

Murray, Hon. Patty, a U.S. Senator from the State of Washington, opening 

statement .............................................................................................................. 3 

Isakson, Hon. Johnny, a U.S. Senator from the State of Georgia ....................... 53 

Baldwin, Hon. Tammy, a U.S. Senator from the State of Wisconsin .................. 55 

Scott, Hon. Tim, a U.S. Senator from the State of South Carolina ..................... 57 

Casey, Hon. Robert P., Jr., a U.S. Senator from the State of Pennsylvania ...... 58 

Mikulski, Hon. Barbara A., a U.S. Senator from the State of Maryland ............ 60 

Franken, Hon. Al, a U.S. Senator from the State of Minnesota .......................... 62 

WITNESSES

Loveman, Gary W., Ph.D., President and Chief Executive Officer, Caesars 

Entertainment Corporation, Las Vegas, NV ...................................................... 6 

Prepared statement .......................................................................................... 8 

Baase, Catherine M., M.D., Chief Medical Officer, The Dow Chemical Company, Midland, MI ................................................................................................ 11 

Prepared statement .......................................................................................... 12 

Grossman, David C., M.D., M.P.H., Medical Director for Population and Purchaser Strategy, Group Health Research Institute, Seattle, WA ..................... 30 

Prepared statement .......................................................................................... 31 

Abernathy, James Matthew, Nashville, TN .......................................................... 37 

Prepared statement .......................................................................................... 38 

Mathis, Jennifer, Bazelon Center for Mental Health Law, Washington, DC ..... 40 

Prepared statement .......................................................................................... 41 

Dreiband, Eric S., Partner, Jones Day, Washington, DC ..................................... 45 

Prepared statement .......................................................................................... 46 

ADDITIONAL MATERIAL 

Statements, articles, publications, letters, etc.: 

Judith L. Lichtman, Senior Advisor, National Partnership for Women 

& Families ..................................................................................................... 65 

Families USA, with attached EEOC letter .................................................... 74 

Consortium for Citizens With Disabilities (CCD) .......................................... 76 

U.S. Equal Employment Opportunity Commission, Office of Communications and Legislative Affairs ........................................................................ 77 

(III) 

(1) 

EMPLOYER WELLNESS PROGRAMS: BETTER 

HEALTH OUTCOMES AND LOWER COSTS 

THURSDAY, JANUARY 29, 2015 

U.S. SENATE, 

COMMITTEE ON HEALTH, EDUCATION, LABOR, AND PENSIONS, 

Washington, DC. 

The committee met, pursuant to notice, at 10 a.m., in room 430, 

Dirksen Senate Office Building, Hon. Lamar Alexander, chairman 

of the committee, presiding. 

Present: Senators Alexander, Burr, Isakson, Scott, Murray, Mikulski, Casey, Franken, Bennet, Baldwin, and Murphy. 

OPENING STATEMENT OF SENATOR ALEXANDER

The CHAIRMAN. The Senate Committee on Health, Education, 

Labor, and Pensions will please come to order. 

This morning our hearing is Employer Wellness Programs: Better Health Outcomes and Lower Costs. 

Senator Murray and I will each have an opening statement. 

Then we’ll introduce our panel of witnesses. We have your statements, and we’ll ask you if you could summarize your comments 

in no more than 5 minutes. That will leave us more time for questions and interaction. 

The Senate is voting today, and voting is to begin at 11, which 

means we’ll probably conclude the hearing about 11:15 or 11:20. 

We’ll stay as long as we can, have as many questions as we can, 

and if there are any additional questions by Senators or if things 

come up that you would like to say to us, please submit them after 

the hearing is over. 

If we’re going to have a conversation in our country about enabling high-quality, low-cost insurance, we probably should start 

with the roughly half of Americans who have health insurance 

through an employer. That’s 159 million Americans, more than the 

54 million Americans in Medicare, and more than the 69 million 

Americans in Medicaid and the Children’s Health Insurance Program. 

Today we’re going to hear from employers who are helping employees lower their insurance costs through employer wellness programs. There’s a lot of support for this idea. Senator Murray and 

I were with Secretary Burwell yesterday morning, and she was 

talking about her announcement Monday that signals a willingness 

to work with employers to reform the way that we provide health 

care to workers, which includes wellness programs. 

2 

In a similar vein, wellness programs are turning the table on the 

health care system, making it more oriented toward the individual, 

and helping people be healthy instead of curing them when they’re 

sick. 

I hope we can learn three things today: how well are the programs working; are the regulations that the government has regarding wellness programs working or do they need to be improved; 

and is the General Counsel of the Equal Employment Opportunity 

Commission discouraging something that promises to lower Americans’ health care costs? 

Now, it’s no secret Obamacare was not a bipartisan law, but it 

did include a bipartisan provision to strengthen workplace wellness 

programs. Senator Harkin, Senator Murray and I and many Republicans worked together during the HELP Committee markup of 

the Affordable Care Act. Before the Affordable Care Act, employers 

relied on a 2006 regulation that empowered them to discount employee premiums up to 20 percent for making healthy lifestyle 

choices. 

Today, employers have the certainty of law that they can offer 

their employees up to 30 percent off their premiums for doing 

things like maintaining a healthy way of keeping their cholesterol 

levels in check. The law also gives the Secretaries of Labor and 

Health the authority to extend this discount to 50 percent through 

regulations, and the Secretaries have done just that for tobacco cessation. 

But these discount programs aren’t a blank check. Under the Affordable Care Act, employers have to meet several conditions. They 

can’t discriminate. These programs have to be available to everyone. There have to be reasonable alternatives if the employee can’t 

complete the program’s standard requirement. They have to be designed to promote health. You can’t offer a reward for better job 

performance, but you can for stopping smoking. And third, you 

have to be able to qualify at least once a year. 

To get started, employees might fill out a questionnaire about 

themselves and their family’s medical history. Then they would 

work with a medical professional to improve on that. That information could only be provided to employers in the aggregate under 

Federal privacy laws. 

Employers seem to think these programs work. They’re rapidly 

adopting them. A September survey last year showed that 18 percent of employers already use outcomes-based wellness incentives; 

48 percent plan to add one by 2017. Some of the witnesses today 

will tell us that well-designed plans can be very effective. Are they 

working as well as they can? Do you have all the tools you need? 

And what about the EEOC’s attitude? Is that a problem or is it not 

a problem? 

Recently, the EEOC General Counsel sought an injunction 

against Honeywell which seemed to make the argument that any 

sort of premium discount the company offered to its employees for 

participation in the company wellness program made that participation involuntary. 

We had a lot of discussion here in the committee on the Affordable Care Act about the importance of allowing companies to provide premium discounts in exchange for wellness programs, and we 

3 

want to make sure we don’t have a countervailing move going on 

in the government to discourage that. Even the White House has 

expressed concern regarding the EEOC’s actions. When asked what 

the President thought about the EEOC wellness lawsuits, the 

White House Press Secretary said the Administration is concerned 

because these lawsuits could be ‘‘inconsistent about what we know 

about wellness programs and the fact that we know that wellness 

programs are good for both employers and employees.’’ 

Congress was clear in the health care law. The Administration 

was clear in its regulations. The White House has reiterated its 

support. Employers are adopting these programs. We don’t need 

confusion. And if confusion persists between different government 

agencies, I will work on legislation to provide clarity. 

But hopefully there’s a lot of good news in today’s testimony 

about what employers are doing to make health insurance less expensive for employees in exchange for employees leading a healthy 

lifestyle. 

Senator Murray. 

OPENING STATEMENT OF SENATOR MURRAY

Senator MURRAY. Thank you very much, Chairman Alexander. 

And thank you to our colleagues, and especially to our witnesses, 

for being here today. 

I’m especially glad to have a Washington State constituent here 

today to testify, Dr. David Grossman of Group Health in Seattle. 

Thank you for making the trip across the country. 

I’m really looking forward to this conversation today not only because this is such an important topic but because I’m hoping this 

kind of hearing on Affordable Care Act initiatives could help us 

refocus the debate on what really matters, and that is making our 

health care system work better for the families and communities 

that we serve. To me, this means fighting for more affordability, accessibility and quality, for a health system that works for women, 

families and seniors and puts their needs first. 

The Affordable Care Act was an historic step toward that goal. 

It has helped millions of people get more affordable, quality health 

care coverage, it has allowed young people across the country to 

stay covered, and it has put the power back in the hands of the 

patients, not the insurance companies. 

It is also encouraging new, innovative delivery systems that have 

helped drive down the cost for patients, and there’s certainly more 

we need to do. 

So I’m really glad that our Republican colleagues have joined 

Democrats in a conversation about how employer wellness programs can help improve our health care system and build on the 

progress that we have made so far. 

One important focus of the Affordable Care Act is to help people 

stay healthy and identify serious health risks sooner through preventive care. It has been exciting to see businesses nationwide respond to incentives included in the law by creating workplace 

wellness programs to help workers and families stay healthy, improve the quality of care, and reduce health care costs. 

I’m very impressed, for example, with the results that Dr. Grossman will discuss today. In 2010, Group Health partnered with King 

4 

County in my home State of Washington to offer an alternative 

lower-cost health care plan. The plan focused on preventing health 

problems rather than responding to them after the fact. They’ve 

seen some great progress so far, fewer claims for emergency rooms 

or hospital visits, lower out-of-pocket costs for employees, and very 

high ratings for quality of care. 

Our other witnesses will also be able to discuss the ways workplace wellness programs and new, innovative approaches to care 

can make a real difference for workers and their families. As we 

know, workers are putting more and more hours in on the job, and 

that makes it all too easy for some of the habits that help us stay 

healthy, like making an appointment for a checkup or getting some 

exercise, to fall through the cracks. So I really do appreciate businesses that are helping their employees prioritize their health. 

But I think all of my colleagues and the witnesses here today 

would agree it is critical these programs reflect the highest standards of workplace equality and fairness. Workplace wellness programs should be a tool to help all workers improve their health, to 

strengthen quality of care, and to drive down costs for patients and 

businesses alike. They should help workers, not discriminate 

against people with disabilities or harshly penalize employees who 

do not take part in wellness activities to boost their bottom line. 

I’m very concerned about some of the stories I’ve heard about 

workers being pressured to share personal health information, or 

losing coverage as a result of companies taking a wrong approach, 

and that, of course, is completely unacceptable. I want to make 

sure that wellness programs can continue to grow as a tool to help 

employees and not as a tool for discrimination. 

So I’m really glad that we have Jennifer Mathis of Bazelon Center here today to talk about why it’s important businesses uphold 

those protections. So, Jennifer, thank you for being here. I really 

actually appreciate you taking time on such short notice to come 

with us, especially as you have a brand new baby at home. 

I am looking forward to hearing from our other witnesses from 

Dow Chemical and Caesars Entertainment about the programs 

they have implemented, as well as the amazing success that Chairman Alexander’s constituent, Mr. Abernathy, has made. 

And as I have said before, I am really hopeful that our Republican colleagues will really join Democrats and move together to 

improve our health care system, move it forward, not backward, for 

families across the country, and I hope today’s hearing will really 

be an opportunity to move closer to that goal because I think we 

all know that finding ways to build on the successes many workers 

and businesses have seen so far with these wellness programs 

would be a really great start. 

So, Mr. Chairman, I do have three statements I’d like to enter 

into the record today. They are from the National Partnership for 

Women and Families, Families USA, and the Consortium for Citizens with Disabilities. 

The CHAIRMAN. Thank you. They will be. 

[The information referred to may be found in Additional Material.] 

The CHAIRMAN. Would you like to introduce two witnesses? 

5 

Senator MURRAY. I do have two witnesses I’d like to introduce, 

Mr. Chairman. 

I want to again welcome my witness from Washington State, Dr. 

David Grossman, who traveled here from Seattle, where he is both 

a practicing pediatrician and leader at Group Health, which is a 

national leader in delivery of better, more cost-efficient care that 

serves 600,000 patients in Washington State and Idaho. 

Dr. Grossman, thank you for traveling and being with us today. 

And again, I just want to thank Jennifer Mathis. She is the deputy legal director and director of programs at the Judge David L. 

Bazelon Center for Mental Health Law here in Washington, DC. 

Mrs. Mathis will share her expertise on why protections are vital 

to ensure that workers are not discriminated against and rights are 

protected in employer wellness programs. And again, I particularly 

want to thank her for being here with a brand new baby at home. 

She said she only got a few hours of sleep last night. Many of us 

can identify with that, so we appreciate you taking the time to be 

here today. 

The CHAIRMAN. Thank you, Senator Murray. 

I want to welcome Dr. Gary Loveman, president and CEO of 

Caesars, chairman of the Business Roundtable’s Health and Retirement Committee. He’ll be testifying on behalf of both. Dr. Loveman 

has a Ph.D. from MIT. He spent a decade at Harvard. More importantly, his family came from Tennessee, I’ve learned. So, we welcome him. 

Dr. Baase, Cathy Baase, chief medical officer at Dow Chemical, 

heads up an impressive workplace health effort. She has authored 

many articles in peer-reviewed journals on workplace health protection. She’ll be testifying on behalf of her company and the American Benefits Council. 

Matt Abernathy is a native Tennessean who resides in Nashville. 

He’s been working for Blue Cross Blue Shield since 2002 and has 

been steadily promoted. He’s an active participant in his company’s 

wellness program. He drove all the way here with his family from 

Nashville. 

We’re grateful to you for doing that. 

And finally, Mr. Eric Dreiband, Partner at Jones Day law firm, 

previously General Counsel to the Equal Employment Opportunity 

Commission in the Administration of President George W. Bush, 

and was Deputy Administrator of the Wage and Hour Division at 

the U.S. Department of Labor. He has spoken extensively about 

civil rights law. 

Again, I will say to the Senators who are here, we have votes 

starting at around 11, but hopefully we’ll have time, if the witnesses will stick to a 5-minute rule in their comments and Senators 

will be succinct in their questions, we may all have time to ask a 

question of the witnesses. 

So, we look forward to the hearing. 

Dr. Loveman, let’s start with you. 

6 

STATEMENT OF GARY W. LOVEMAN, Ph.D., PRESIDENT AND 

CHIEF EXECUTIVE OFFICER, CAESARS ENTERTAINMENT 

CORPORATION, LAS VEGAS, NV 

Mr. LOVEMAN. Thank you, Mr. Chairman and Ranking Member 

Murray. It’s an honor to be here, and it is indeed, I think, a happy 

subject that we’re covering today, wellness programs offered by private employers, where we have a very encouraging record and I 

think great promise to improve the health of millions of Americans. 

My name is Gary Loveman. I’m the chairman, CEO, and president of Caesars Entertainment in Las Vegas. I’m testifying today 

on behalf of the Business Roundtable, an association of CEOs of 

major U.S. companies operating in every sector of the economy, 

where I serve as Chair of the Health and Retirement Committee. 

I appreciate the invitation to appear before you today to discuss the 

opportunities that wellness programs create to improve health outcomes and lower costs. 

As the largest source of health care coverage for non-elderly 

Americans, employers are in a great position to help tens of millions of Americans better manage their own health. Indeed, the 

Business Roundtable companies provide insurance for more than 

40 million U.S. beneficiaries. 

This is my 13th year as CEO of Caesars Entertainment, and I 

have to tell you that the most unappealing day of my year for 

many years early on in my tenure was the day when my Human 

Resources director would come to discuss with me how we might 

allocate the cost of rising health care between our employees and 

the company. This process worked as follows. She would come in 

with a description of the trend rate of growth in health care costs 

that various experts had indicated we might experience. We would 

adjust those trends for the specifics of our populations and locations, and then we would have a debate about how much of that 

increase in cost would be borne by the folks who work for us and 

their family members versus how much the company would bear. 

And sadly, in most instances, the expected rate of increase in 

health care costs exceeded the rate of increase in growth of the 

company’s underlying business. 

Such an exercise, a truly zero-sum game, is not a very pleasant 

experience for anyone when you have to consider the consequences 

of these decisions for the folks that are our friends and colleagues, 

and it struck me that we had to find a new way to approach this 

problem. It was such an unappealing dynamic, there had to be a 

better way to do it, and what emerged from these discussions in 

my office and many others was this paradigm we now refer to as 

a wellness program, which suggests that instead of having a rather 

passive exercise where the company provides an insurance program 

and employees go off and use it as best they can, we needed a partnership. 

So beginning in 2010, I started appearing in employee dining 

rooms of our facilities three shifts a day, 7 days a week around the 

country saying to folks we’re now in this together. We’re going to 

have to make better decisions. I’m going to have to count on you 

to do better, more informed things to take care of your health and 

your family’s health, and you have to count on me to do a better 

job of supporting you in that effort. 

7 

And we launched in that context something called Wellness Rewards, which is indicative of the innovation taking place in private 

employer health care around the country. When you think about 

these programs, they have, in my view, three fundamental components. The first is information, a much higher degree of literacy 

available to employees as they begin to make these important 

health care decisions; a level of support to make it easier for them 

to make well-informed decisions and follow through on them in a 

timely way; and incentives, some concrete encouragement that says 

if you make this decision thoughtfully, something very favorable 

will happen for you and your family that might not otherwise happen if you were to make a less well-informed decision. 

And on the other hand, we have the obligation to support our 

employees in this effort and make sure that their care is of a higher quality and more affordable. In Caesars’ case, we’ve been able 

to sustain the same contribution rate, the same absolute dollar cost 

contribution rate for our employees now for 6 consecutive years, 

which for people, many of whom are hourly workers, is a tremendous benefit. 

Wellness programs are ideally suited to address the emergent 

epidemic of chronic disease in this country, which exacts a terrible 

toll on people’s lives that, as we all know, are among the most easily preventable and manageable of conditions. Given the opportunity to lessen or eliminate chronic disease, it certainly makes 

sense that these programs, including government-related programs 

like Medicaid and Medicare, begin to offer incentives for people to 

participate. It’s why there was bipartisan support at the time that 

the Affordable Care Act was put in place and why the Business 

Roundtable has supported those elements, importantly. 

Wellness programs provide the opportunity for employers to create value for employees by helping them access the information 

and support they need to get and to stay well. They’re designed to 

empower our employees with information about their health, both 

diagnostic and with respect to the provision of care, to help them 

get the care services they need at the right time and with the right 

level of quality. 

Companies involved in these programs offer a wide range of services, from health assessments and biometric screenings at the early 

stages of these exercises, to direct services to help reduce risk factors and monitor outcome attainments. Many of these programs, 

including our own, also offer tools that help workers better understand their health, and employers offer customized interventions, 

disease management programs, access to expert second opinions, 

and strategies for adopting lifestyle changes to reduce individual 

health risks. 

Over the last 10 years at Caesars, we’ve been driven by what we 

described as a partnership for health with our employees, their 

spouses, and their dependents. The combination of screenings, incentives, independent cost estimation information, quality information, onsite care in our facilities, often offered 24 hours a day, 7 

days a week, along with disease management programs, have 

helped our employees improve their health and wellness, get access 

to information about preventable care, and take better care of 

themselves when in need. I’ll give you just two examples. 

8 

In our facility in Joliet, IL, after discussing symptoms that she 

was experiencing with one of our onsite nurses at our clinic, our 

employee was referred to an ophthalmologist. She had an early diagnosis of glaucoma, I’m sure a diagnosis that she would not have 

been able to avail herself of in the absence of this program, is now 

undergoing treatment and is in very good condition as a result. 

Another example. In Atlantic City, we had an employee who had 

a systolic blood pressure reading of 250 when she came in for a biometric screening. Of course, she was immediately rushed to the 

emergency room. She underwent double bypass surgery and is alive 

and well and prospering today. I would argue that in the absence 

of the incentives to participate in this program and to undertake 

the biometric screening that led to this diagnosis, we would not 

have such a favorable result today. 

The CHAIRMAN. Dr. Loveman, if you could wind up? 

Mr. LOVEMAN. I will indeed. 

Members of the Business Roundtable believe that employer 

wellness programs provide significant potential for employees and 

their families. We are encouraged by the bipartisan support of 

these programs in the Affordable Care Act and the continued bipartisan support for these programs in the committee. 

Mr. Chairman, thank you again for the opportunity to discuss 

these programs and the opportunities they create for improved 

health in private employer cases and public employer cases as well. 

I’ll be happy to answer any questions when available. Thank you. 

[The prepared statement of Dr. Loveman follows:] 

PREPARED STATEMENT OF GARY W. LOVEMAN, PH.D. 

SUMMARY

Wellness programs are ideally suited to address the emergent epidemic in chronic 

diseases, which exact a terrible toll on people’s lives, but are among the most easily 

preventable and manageable of conditions. 

There was bipartisan support for expanding opportunities for the providers of insurance—from Medicaid to private sector employers—to offer incentive-based 

wellness programs in the Affordable Care Act (ACA). 

The ACA lays out specific requirements that employers must meet in order to 

offer incentive-based wellness programs. 

Under the law, employers must: 

• Offer a well-designed program; 

• Ensure that privacy protections are in place; 

• Limit the value of the incentives to be offered; and 

• Offer a reasonable alternative to meet the incentives for those employees who 

cannot participate for medical reasons. 

Employer-sponsored wellness programs represent a partnership between the employer and the employee. 

In the old days, the annual process of computing exogenous health care costs led 

to a total bill that had to be split between the company and the employee. It was 

a zero-sum game. Wellness programs allow for improvements to both sides of the 

partnership. 

Employer-sponsored wellness programs are an ensemble of information, support 

and incentives designed to help participants improve their health and receive greater value. In return for participation, employers provide better and more affordable 

care. 

The members of Business Roundtable believe that employer wellness programs 

provide significant potential for employees and their families. Further, we believe 

that over the long term, potential health care savings may come from behavioral 

changes, in which individuals become personally engaged by taking actions to avoid 

preventable conditions and detect other conditions as early as possible. 

9 

We are encouraged by the bipartisan support for these programs in the Affordable 

Care Act and the continued bipartisan support for these programs within this committee. 

Good morning, Chairman Alexander, Ranking Member Murray and members of 

the committee. 

My name is Gary Loveman, and I am chairman, CEO and president of Caesars 

Entertainment. I am testifying today on behalf of Business Roundtable, an association of CEOs of major U.S. companies operating in every sector of the economy, 

where I serve as chair of the Health and Retirement Committee. 

Business Roundtable CEO members lead companies with $7.2 trillion in annual 

revenues and nearly 16 million employees. Business Roundtable member companies 

comprise more than a quarter of the total market capitalization of U.S. stock markets and invest $190 billion annually in research and development (R&D)—equal to 

70 percent of U.S. private R&D spending. Our companies pay more than $230 billion in dividends to shareholders and generate more than $470 billion in sales for 

small- and medium-sized businesses annually. Business Roundtable companies also 

make more than $3 billion a year in charitable contributions. 

Thank you for inviting me to appear before you today to discuss the opportunities 

that employer wellness programs create to improve health outcomes and lower costs. 

As the largest source of health care coverage for non-elderly Americans, employers 

are in a great position to help tens of millions of Americans better manage their 

own health. Business Roundtable members alone provide health care coverage to 

close to 40 million. 

This year, 2015, is my 13th year as CEO of Caesars Entertainment. When I 

began, the single most unappealing event of the year was a discussion with my 

human resource leader about the allocation of rising health care costs between the 

company and our employees. We were provided an estimate of trend health care cost 

increases, we modified it for the specifics of our population and then agonized about 

who would pay for it. Such a zero-sum, lose-lose exercise is no way to make 

progress. We recognized that we had to find a new model—a partnership between 

employees and the company to engage everyone in the process necessary to improve 

wellness and make more informed decisions about value when purchasing 

healthcare. In 2010, Wellness Rewards was launched, and it is indicative of the innovation in private employer health care that is sweeping across Business Roundtable companies and employers more broadly. 

Employer-sponsored wellness programs are an ensemble of information, support 

and incentives designed to help participants improve their health and receive greater value. In return for participation, employers provide better and more affordable 

care. Wellness programs are ideally suited to address the emergent epidemic in 

chronic diseases, which exact a terrible toll on people’s lives, but are among the 

most easily preventable and manageable of conditions. 

Given the opportunity to lessen or eliminate chronic disease through wellness and 

prevention programs, it makes sense that the providers of health insurance—from 

Medicaid to private sector employers—should offer incentives for people to participate in these programs. That is why there was bipartisan support for expanding opportunities for employers to offer incentive-based wellness programs in the Affordable Care Act and why Business Roundtable also supports that provision in the law. 

To continue to be successful, employer wellness programs must evolve from engagement to the encouragement of goal achievement. Programs must include and 

integrate diagnostics, actions and outcomes. To comply with the law, incentive-based 

wellness programs must offer well-designed programs so that employees can achieve 

the goals they set. Programs must offer reasonable alternatives for employees who 

cannot participate for medical reasons, and they must ensure that strong privacy 

protections are in place. 

The focus on wellness underscores the evolution underway in the U.S. health care 

system. In the traditional health care system, patients engaged when they needed 

surgery, hospitalization or other forms of more invasive treatment. The more modern approach includes giving people the tools and information they need to understand their own health care needs. This approach, also, by its very nature of seeking 

to lessen the need for more invasive forms of care, is one of the most effective ways 

to control health care costs. 

Employers are engaging with employees and their families as part of the ongoing 

efforts of companies to drive innovations in health care and in the delivery of benefits. Wellness programs are integrated with the full suite of corporate health and 

safety initiatives. From innovative health plan design to creating a corporate culture 

dedicated to healthy living—companies are dedicating themselves to improving the 

10 

health and well-being of what my fellow Business Roundtable CEOs and I almost 

always cite as our companies’ greatest asset, our people. 

Employers understand the importance of having a qualified, productive and engaged workforce. For example, at Caesars Entertainment, we emphasize the health 

of our 65,000 employees as part of our broader approach to employee engagement 

and customer loyalty. Our goal is to change from being a passive benefits program 

to an active partner between our company and our employees. We see wellness programs as a key component of that relationship. 

Wellness programs provide the opportunity for employers to create value for employees by helping them access the information and support they need to get and 

stay well. The programs are designed to empower employees with information about 

their health and to help employees get the right health care services at the right 

time. Many companies offer a range of services from health assessments and biometric screenings to direct services to help reduce health risk factors. Many also 

offer tools that help workers better understand their health, and employers offer 

customized interventions, disease management programs and strategies for adopting 

lifestyle changes to reduce an individual’s health risks. 

Over the last 10 years, we at Caesars have been driven by our ‘‘handshake for 

health’’ with our employees, their spouses and dependents. With our wellness program at its core, we’ve provided a comprehensive suite of services to help employees 

manage their health. 

Since 2010, our wellness program has focused on incentivizing our employees to 

get biometric screening, complete their annual physicals and engage onsite resources to manage their own health. 

The potential in these programs is most evident in the stories from our employees: 

• An employee in Joliet came to one of our WellNurses with questions and describing symptoms. The nurse recommended that she see an ophthalmologist as 

soon as possible. She did, and, as a result, received an official early diagnosis of 

glaucoma and is undergoing treatment. 

• After a biometric screening, the wife of an employee in Ak-Chin discovered that 

her sugar level was over 500. The WellNurse reviewing the biometrics sent her immediately to a doctor. She is now effectively managing her diabetes and her husband credits the nurse with saving his wife’s life. 

• In Atlantic City, a WellNurse met an employee whose systolic blood pressure 

registered 250 at an onsite biometric screening event. The employee was sent to the 

emergency room where he immediately underwent double bypass surgery. Now back 

at work and feeling well, the employee credits the screening with saving his life. 

The anchor of these programs is the independently operated onsite clinics and 

health coaches that can help employees reach their goals. We currently offer five 

full-service clinics, six mini-clinics and 28 health coaches across the country. 

While these integrated solutions are critical in helping improve health outcomes 

and lower costs, we also couple them with tools to help employees have the information they need to make informed health care decisions. This consumer-centric approach includes a health care cost transparency tool, where our employees have already performed over 130,000 searches to help them shop for health care services. 

We continue to evolve our program, and this year we will offer expert second opinions to allow those members with a complex diagnosis an opportunity to have their 

case and treatment plan reviewed by an expert physician in that field. 

Together, these solutions have helped our employees decrease their health risk 

factors, reduce the number of chronic conditions, increase disease compliance and 

spend less time in the hospital. 

In addition to our work on wellness at Caesars Entertainment, I would like to 

highlight a few of the programs at Business Roundtable member companies: 

• Exelis Inc. launched a wellness program in 2012, which provides employees and 

their families with a variety of opportunities to learn about their current health 

statuses and take action to maintain or improve their health. Some of the results 

to date include, 43 percent of incentive-eligible members completing all activities to 

earn their full incentives, an increase in the percentage of participants who engaged 

in the recommended level of physical activity and modest improvements in some 

clinical indicators, including a nearly 5 percent increase in the number of individuals whose cholesterol and glucose levels are in the healthy range. 

• In 2010, McKesson Corporation implemented a comprehensive wellness program through its partner vendor, Vitality. This program includes requirements for 

employees and spouses to complete a health assessment, biometric screening and 

certain other wellness activities to earn an incentive that reduces employees’ contributions toward health care coverage. Among the results so far, in 2011, 83 percent of McKesson’s eligible population had a ‘‘vitality age’’ (the measure of lifestyle 

11 

and biometric risks of a population) that was greater than their chronological age. 

In 2013, results improved to 77 percent. 

• Rockwell Automation, Inc. believes that rewarding outcomes is the best way to 

achieve better outcomes. In 2010, the company increased its focus on promoting 

healthy lifestyles by introducing ‘‘Live Healthy’’ programs designed to reward not 

just health improvement, but health achievement. Today 88 percent of employees 

meet three or more healthy targets, resulting in a cumulative risk reduction of 9.5 

percent over the past 4 years. The company says that its continued commitment to 

finding innovative solutions to balance costs and improve the health of its employees 

makes them a healthier company overall. 

A full compendium of the programs designed to drive innovations in employer 

health care at Business Roundtable companies can be found in our report, Driving 

Innovation in the Health Care Marketplace: A CEO Report. 

The sum of these efforts is a workforce empowered with the information they need 

to take control of their health and the tools to do so. 

We believe that employer wellness programs provide significant potential for employees and their families. Further, we believe that over the long term, potential 

health care savings may come from behavioral changes, in which individuals become 

personally engaged by taking actions to avoid preventable conditions and detect 

other conditions as early as possible. 

Mr. Chairman, thank you again for the opportunity to discuss the opportunities 

created by employer wellness programs today. We are encouraged by the bipartisan 

support for these programs in the Affordable Care Act and the continued bipartisan 

support for these programs within this committee. I am happy to answer any questions you may have. 

The CHAIRMAN. Thank you, Dr. Loveman. 

Dr. Baase. 

STATEMENT OF CATHERINE M. BAASE, M.D., CHIEF MEDICAL 

OFFICER, THE DOW CHEMICAL COMPANY, MIDLAND, MI 

Dr. BAASE. Good morning, Chairman Alexander, Ranking Senator Murray, and members of the committee. My name is Catherine Baase, and it is my great privilege to serve as the chief 

health officer for the Dow Chemical Company. I’m testifying today 

on behalf of my company and the American Benefits Council. My 

colleague, Janet Boyd, is the current chair of the board of this 

council. 

I’m most grateful for the invitation to speak at this hearing. I 

have great passion and interest in the employer-based health efforts. In fact, I’ve spent nearly my entire professional career dedicated to this field and the advancement of the health of populations. 

I expect that you are hearing much commentary, not only about 

the role of employer health efforts but also how health policy and 

actions of the EEOC might be impacting employers’ ability to serve 

this vital role. I hope that my comments this morning will provide 

important perspective in this arena. 

It’s no surprise to anyone here that in this country and around 

the world, we have incredible health challenges. What you might 

not fully appreciate is how very important employers are to the solution. The most important message I want to share with you today 

is that successfully engaging employers as part of the overall societal effort to advance the health of our people is vital. In fact, I do 

not believe that we will achieve the public health objectives of this 

Nation without an effective effort by employers. 

It is a national imperative, and we must find the best approach 

to involve our employers and support them in this critical action, 

and I am not alone in this view. National and international science 

12 

and policy organizations have concluded that employers and workplaces are absolutely essential to achieving health for society. 

I would refer the committee to the November 2014 discussion 

paper of the McKinsey Global Institute which concluded that no individual sector in society on its own can address obesity. It requires 

the engagement of as many sectors as possible. 

Although the McKinsey paper only addressed obesity, similar positions about health and chronic disease overall have been taken by 

the Institute of Medicine, the World Economic Forum, the Robert 

Wood Johnson Foundation, the World Health Organization, and 

many other science and policy organizations. 

Now, Dow has had over 100 years of experience with the focus 

on the health of our people. We’ve had a formal health promotion 

effort in place for over 25 years, and a comprehensive corporate 

health strategy for more than 10. Over time, our health efforts 

have become woven throughout the fabric of our organization. They 

have become linked with safety efforts that include off-the-job safety. They’ve become a component of leadership development and employee training programs. Our strategy has even evolved to include 

collaboration with community health strategies. 

While we do not use financial incentives to drive participation or 

outcomes in our global worksite health programs, the wellness component of our U.S. health care benefit plan does have a smoking 

surcharge. We rely on self-attestation for employees to report their 

smoking status and to report their participation in a tobacco cessation program to avoid that surcharge. 

Our efforts are working. Since 2004, we have substantially improved the health risk profile of our global population, and Dow 

spent $4.8 million less in 2013 on its U.S. health care costs than 

we would have spent had we experienced the industry average 

trend. 

As outlined in the Council’s strategic plan, ‘‘A 2020 Vision,’’ a 

critical component of encouraging employers to offer meaningful 

wellness programs is consistent Federal policy that promotes the 

health of Americans and is aligned across multiple agencies and 

Congress. I can understand why some employers are concerned 

with the legal uncertainty that exists with respect to the application of GINA and ADA to employer wellness programs. Employers 

should not have to face this confusion. We encourage Congress and 

the EEOC to work within existing HIPAA and ACA legislative and 

regulatory frameworks to provide certainty to employers. 

To maintain global competitiveness and to achieve health in our 

communities, American companies must encourage healthy behavior with every tool in our toolkit. A healthy workforce is a productive one, and a productive workforce makes for a healthier American economy. Thank you. 

[The prepared statement of Dr. Baase follows:] 

PREPARED STATEMENT OF CATHERINE BAASE, M.D. 

SUMMARY

National and international science and policy organizations have concluded that 

employers and workplaces are absolutely essential to achieving health for society. 

The business case for employer involvement in health has evolved and continues to 

advance. Population health is best achieved with business strategies that address 

employees as well as the community. Employers and vendors are making greater 

13 

1Kaiser Family Foundation, Employer Health Benefits 2014 Annual SurveylWellness Programs and Health Risk Assessments 196 (2014) [hereinafter KFF Survey]. 2Sloan Center on Aging & Work at Boston College, Fact Sheet 38: Health and Wellness Programs in the Workplace 1 (July 2014). 

use of population strategies and evidence-based approaches. The imperative for society is that we find the best way to support the business sector and keep employers 

engaged in effectively addressing the health of workers and their families. 

Dow has over 100 years of experience with a focus on the health of our people. 

Over time, our health efforts became woven throughout the fabric of our organization. They became linked with safety efforts including off the job safety and they 

became a component of leadership development and employee training programs. 

We recognize that the health situation of the communities where we operate can 

be a great asset and a multiplier to our efforts. 

While we do not use financial incentives to drive participation or outcomes in our 

global worksite health programs, we have a financial incentive—a smoking surcharge—for our medical plans ($50 per month) and dental plans ($10 per month). 

We rely on self-attestation for employees to report smoking status and participation 

in a tobacco cessation program to avoid the surcharge. 

Our efforts are working. Since 2004 we have improved the health risk profile of 

our global population substantially. Dow spent $4.8 million less in 2013 U.S. health 

care costs than we would have spent had we experienced the industry average 

trend. 

As outlined in the Council’s recently released strategic plan, A 2020 Vision, a critical component of encouraging employers to offer meaningful wellness programs is 

consistent Federal policy that promotes the health of Americans and is aligned 

across multiple agencies and Congress. Notwithstanding employers’ increasing interest in establishing wellness programs and support for the PPACA wellness provisions, a great deal of legal uncertainty exists with respect to the application of both 

GINA and the ADA to these programs. The Council and Dow encourage Congress 

and/or the EEOC to work within the existing HIPAA and PPACA legislative and 

regulatory framework to provide certainty and flexibility to employers. 

To maintain global competitiveness and help to achieve health in our communities, American companies must encourage healthy behavior with every tool in our 

toolkit. A healthy workforce is a productive workforce, and a productive workforce 

makes for a healthier American economy. 

My name is Catherine Baase. I am the chief medical officer for The Dow Chemical 

Company (‘‘Dow’’ or ‘‘the Company’’). I am testifying today on behalf of my company 

and for the American Benefits Council (the ‘‘Council’’). My colleague, Janet Boyd, 

currently serves as chair of the council’s board of directors. 

Dow, founded in Michigan in 1897, has become one of the world’s leading manufacturers of chemicals and plastics. We supply products to customers in 160 countries around the world, connecting chemistry and innovation with the principles of 

sustainability to help provide everything from fresh water, food, and pharmaceuticals to paints, packaging and personal care products. 

The Council is a public policy organization representing principally Fortune 500 

companies and other organizations that assist employers of all sizes in providing 

benefits to employees. Collectively, the Council’s members either sponsor directly or 

provide services to health and retirement plans that cover more than 100 million 

Americans. Many of the Council’s members are at the forefront of the workplace 

wellness revolution, developing programs to help employees live healthier lives and 

manage chronic conditions. 

Dow and the Council are strong supporters of employer-based wellness programs 

as an important tool for achieving better health outcomes for not only our employees 

but also our communities as a whole. According to the Kaiser Family Foundation’s 

Employer Health Benefits 2014 Annual Survey, 98 percent of large companies (with 

200 or more workers) and 73 percent of smaller companies in the United States offered at least one wellness program in 2014, and more than 75 percent of U.S. employees now have access to such programs.1 2 My testimony reviews both the recent 

studies supporting the need for employer engagement but also describes various 

types of employer-based programs and the need for strong public policy to support 

these programs. 

CLEAR RATIONALE FOR EMPLOYER ENGAGEMENT

Key Points: 

14 

3McKinsey Global Institute, Overcoming obesity: An initial economic analysis (November 

2014). 4World Economic Forum, Global Risks 2010 (2010). 

• Business/Employers are absolutely essential to society/countries achieving 

health for their people. 

• Success in engaging the business community, with appropriate actions as part 

of a broad societal strategy to improve health, is an imperative. 

• To have optimal impact, employers need to have a comprehensive health strategy. 

• The insight and business case for employer involvement in health has evolved. 

The health of employees and the communities in which the business operates have 

connection to multiple business/employer priorities. 

• It is possible to have a significant impact on the health of the employees 

through corporate health strategies and programs. The experience of Dow shares 

some of the impact of employer health strategies. 

In November 2014, McKinsey Global Institute released a compelling document illustrating the overwhelming nature of the challenge our country faces with obesity 

and the importance of all sectors—including the business community—being involved if we hope to find a better future.3 The McKinsey Global Institute (MGI) is 

the business and economics research arm of McKinsey & Company, which was established in 1990 to develop a deeper understanding of the evolving global economy. 

Its goal is to provide leaders in the commercial, public and social sectors with the 

facts and insights on which to base management and policy decisions. Its discussion 

paper provides a perspective on the nature and causes of the obesity problem and 

it provides recommendations. The report states, 

‘‘Obesity is now a critical global issue, requiring a comprehensive intervention 

strategy rolled out at scale. More than 2.1 billion people—nearly 30 percent of 

the global population—are overweight or obese. That’s nearly 21⁄2 times the 

number who are undernourished. Obesity, which should be preventable, is now 

responsible for about 5 percent of all deaths worldwide. If its prevalence continues on its current trajectory, almost half of the world’s adult population will 

be overweight or obese by 2030. This preliminary paper aims to start a global 

discussion on the components of a successful societal response.’’ 

In its executive summary, MGI makes several main points summarized as follows: 

• Any single intervention is likely to have only a small overall impact on its own. 

A systemic, sustained portfolio of initiative, delivered at scaled is needed. 

• Education and personal responsibility are critical but not sufficient. Changes to 

the environment and societal norms are also needed. 

• No individual sectors in society—governments, retailers, consumer-goods companies, restaurants, employers, media organizations, educators, health-care providers or individuals—on their own can address obesity. Success requires engagement from as many sectors as possible—together. 

• Implementing obesity abatement will not be easy; (1) deploy as many interventions as possible at scale, (2) understand how to align incentives and build cooperation and (3) do not focus unduly on prioritizing. 

• The evidence based on clinical and behavior interventions is far from complete, 

proving a barrier to action; this need not be so. Experiment, rather than waiting 

for perfect proof. 

As noted in the third bullet above, no individual sector in society, whether government, retailers, consumer-goods companies, restaurants, employers, media organizations, educators, health-care providers or individuals on their own can address obesity. It requires engagement from as many sectors as possible. 

This McKinsey paper is focused on obesity. However, very similar reviews and positions have been taken by policy organizations and learned bodies about the ability 

to create healthy populations in general. 

The World Economic Forum, in consideration of all non-communicable diseases, 

has stated that it is clear that chronic diseases are affecting social and economic 

capital globally. Non-communicable diseases are strongly connected to other global 

risks and fiscal crisis as well as underinvestment in infrastructure and food, water 

and energy security. The nature and extent of the challenges with non-communicable diseases will require the mobilization of social forces and people outside of 

health systems to make progress.4

The model of health created by the World Health Organization (WHO), and illustrated in their model, brings forward the concept that the approach to a healthy 

workplace includes an interface with the community, as noted in the Figure below. 

15 

5http://www.countyhealthrankings.org/resources/101-presentation. 

The Roadmaps to Health program from the Robert Wood Johnson Foundation also 

notes the business community as a core element of the method to achieve healthier 

communities through collective impact as noted here and taken from its Web site.5


93181-1.eps
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6 Institute of Medicine, Business Engagement in Building Healthy Communities: Workshop 

Summary (July 2014). 

The Institute of Medicine, as a part of the National Academy of Sciences, has convened a Population Health Roundtable (the ‘‘Roundtable’’), of which I am privileged 

to be a member. The Roundtable has considered for over a year the nature of the 

situation this country faces in addressing the health of populations, the multiple 

causes and factors which are at work in creating health or lack of health and the 

path forward to a better future. They, too, have determined that it will take the engagement of multiple sectors of society to make progress, and that includes the business community/employers. In July 2014, this Roundtable convened a workshop entitled ‘‘Business Engagement in Population Health Improvement,’’ which further explored the rationale, opportunity and case examples of the business/employer community and their beneficial impact not only on their own employees but also the 

families of those employees and the communities where they operate.6

During this July workshop, I presented a view of the rationale for business engagement in health broadly by illustrating the nature of the current situation and 

the multiple pathways through which the current policy environment is adverse to 

business success, using the macroeconomic model below, which highlights the alignment of business priorities and health. 


93181-2.eps
17 

One of the challenges in population health is that no single entity feels ownership 

of, or has responsibility or accountability for taking control and finding solutions. 

The task now is to create collective ownership of population health and engage people from all sectors, including the business community. 

The Macroeconomic Concept Model (the ‘‘Model’’) focuses on how business generates money in society. Some of that money is used to pay employee wages and 

some percentage, in the form of taxes, goes into a common resource pool. A portion 

of the employee wages also contributes to the shared resource pool of taxes serving 

the needs of society. The Model illustrates six key ways in which the current health 

scenario is negatively impacting the success of the business sector. A better understanding of how the Model’s elements are destructive to a business’s success should 

motivate the business community to become more engaged. The six elements are: 

• Wage compression: Increasing health care costs are resulting in wage compression; that is, a greater percentage of total compensation is going toward health 

care benefits versus take-home wages. This can be an issue in the ability to attract 

and retain global talent as well as achieve satisfaction and better morale in the 

workplace. 

• Reduced profits: A greater percentage of total funds generated by business 

have to be allocated toward health care, resulting in reduced profits. Further, the 

significant waste in the healthcare system means that dollars invested to achieve 

health are not delivering high value. 

• Eroded foundation for business: Money from the common resource pool 

funds health care as well as education, infrastructure, and other social priorities. 

Education and infrastructure are essential foundation elements for the success of 

business; however, they are being undermined by the diversion of greater and greater percentages of the societal resource base toward health care. 

• Less healthy workforce: Business also needs healthy people in order to be 

successful. The unfortunate reality is that the increasing expenditures on healthcare 

are not delivering greater health for our population. Relative to other developed 

countries our people are losing ground on health markers. As businesses invest significantly in their employee base, they hope to have the full potential of those workers to achieve their goals. Diminished health impacts performance potential. 

• Impact on elements essential to the creation of health: The same elements that are essential to business such as education are important social determinants of health. Diversion of spending away from education and infrastructure 

also undermines the creation of health. 

• Diminished purchasing power: The cumulative impact of the current scenario is a diminished market because there is less take-home pay, and less disposable income. 


93181-3.eps
18 

EXPERIENCES OF THE DOW CHEMICAL COMPANY

What employers really want is better health for their people and the communities 

in which they operate, better quality of care overall and better value for their dollars spent in pursuit of health. 

At Dow, we have over 100 years’ experience with a corporate focus on the health 

of our people. We have had a formal health promotion initiative for nearly 30 years. 

Our efforts have been recognized as innovative and successful by numerous organizations all over the world. Over 10 years ago, we established the Dow Health Strategy as a formal corporate level strategy. This strategy was built upon a comprehensive business case and is graphically illustrated below. Our actions within the strategy are focused in four key areas: prevention, quality and effectiveness of care, 

health system improvement and advocacy. 

Subsequent to developing the initial health strategy design, we have had continued insight and evolution of the business case and our action plan. Since our formal 

health promotion programs started, we have had comprehensive programs covering 

a broad array of prevention topics and utilizing a portfolio of methods from education to health assessments and counseling to group classes and targeted campaigns. We set policies like a tobacco policy. Over time, the health efforts became 

woven throughout the fabric of the organization. They became linked with safety efforts including off the job safety; they became a component of leadership development and employee training programs. We became intentional about setting a positive culture and environment for health including development of a corporate food 

philosophy and joint efforts with our facilities function to explore sit/stand desks 

and other aspects of our building design and management which can impact health. 

At this point, our business rationale links our health focus to many corporate priorities including safety, attracting and retaining talent, employee engagement and 

job satisfaction, corporate social responsibility, sustainability and profitability. This 

alignment of organizational priorities and the benefits of a healthy population reinforce the importance of healthy people to an organization. Thus, the value to the 

organization is broad and includes a serious focus on healthcare costs but much 

more. 


93181-4.eps
19 

We also recognize that in our pursuit of the goals of our health strategy, the communities within which we operate and the health situation of those communities 

can be a great asset and a multiplier to our efforts. We see the benefit of constructive collaboration with our communities. 

We see our strategy as one of shared responsibility, as illustrated in the following 

diagram: 


93181-5.eps 93181-6.eps
20 

As we pursued a ‘‘Culture of Health’’ several years ago, we launched an effort 

called the Healthy Workplace Index. This tool assigns scores for key elements and 

a cumulative score—Bronze, Silver, Gold or Platinum—for each Dow site in the 

United States and throughout the world. The use of this index is completely voluntary for each site, yet it has been widely used by the majority of sites across the 

country. The elements of the index are illustrated by the following diagram: 

The following chart shows the progress in achievement over time of scores and 

the increasing number of sites achieving higher milestones. 


93181-7.eps 93181-8.eps
21 

7http://www.mihia.org. 

We recognized the power of culture and environment in supporting healthy lives. 

As we worked to create and strengthen this culture in our workplaces, we began 

to bring into our view the opportunity to collaborate with others to create a community of health excellence where we operate. One example of this collaborative effort 

with the community is the Michigan Health Improvement Alliance serving 14 counties in central Michigan around our corporate headquarters. Since 2007, we have 

worked in a collective impact approach with all sector stakeholders in these counties. Through MiHIA, our communities are currently pressing to reduce waste and 

improve care through the ‘‘Choosing Wisely’’ campaign of the American Board of Internal Medicine Foundation. We are working to change the health system in our region to move upstream in the disease process by establishing a new norm and processes to identify and intervene to address pre-diabetes using the CDC’s evidence 

based intervention known as the Diabetes Prevention Program. More detailed information on the progress of this multi-stakeholder effort is available on the Web site.7

DOW’S SYSTEM FOR MEASURING IMPACT AND APPROACH TO USE OF INCENTIVES

Throughout our corporate health efforts, we have implemented extensive measures to track outcomes. We track progress across our sites around the world. Participation in our health promotion programs is voluntary. We do not use financial incentives to drive participation or outcomes in our global worksite health programs. 

Our employees value the services we offer and the programs available to them. Our 

global participation rates are very high—approaching 90 percent for completion of 

health assessments. 

However, in our U.S. healthcare benefit plan, we do have one financial incentive. 

On January 1, 2010, we introduced a smoking surcharge for our medical plans ($50 

per month) and dental plans ($10 per month). Of course one of the goals was to discourage smoking but the other purpose was just to recognize the increased cost of 

medical and dental coverage for a tobacco user. The surcharge can be avoided by 

agreeing to attend a tobacco cessation class. In the case of reporting smoking status 

and the report of attendance at a tobacco cessation class, both are self-attestation. 

The impact of our efforts is evidenced in the graphic below. Specifically, the graph 

shows our experience in U.S. health care spending and our experience worldwide 

in tracking our top three priority health risks since 2004. Due to our 1.3 percent 

trend in 2013, Dow spent $4.8 million less in 2013 U.S. health care costs than we 

would have spent had we experienced the industry average trend of 4.2 percent. Our 

5-year trend is less than 2 percent. Recognizing favorable trend compounding over 

the last 5 years, we spent $44.8 million less in 2013 than we would have spent in 

2013 had we experienced average trend over the last 5 years. 


93181-9.eps
22 

8 Buck Consultants, Working Well: A Global Survey of Health Promotion and Workplace 

Wellness and Productivity Strategies, Executive Summary 2 (2014). 9 RAND, Workplace Wellness Programs Study: Final Report 53 (2013). 10Society of Human Resource Management, State of employee benefits in the workplace— 

Wellness initiatives 4 (2013). 11Mercer, Taking health management to a new level (2014) via Sloan Center, supra note 2, 

at 3. 12 RAND, supra note 4 at 61. 

Regarding health risks, since 2004 we have seen a more than 15 percent increase 

in the percent of our employee population at low risk for BMI, physical activity and 

tobacco and a 28 percent decrease in the employee population at high risk for these 

same three risk factors. Further, a 2012 study conducted by Towers Watson comparing our population to peer companies with adjustments for demographics and 

other variables found that our entire covered lives in the U.S. healthcare plans population had a 9 percent better health risk profile than their book of business and 

our prevalence of chronic conditions was 17 percent less than others while we spent 

17 percent less on chronic conditions. 

OVERVIEW OF THE CURRENT STATE OF EMPLOYER SPONSORSHIP OF WELLNESS

PROGRAMS

Experiences of other employers with wellness programs also evidence positive results. A global survey by Buck Consultants, representing the views of 1,041 employer respondents based in 37 countries, states the leading results of wellness programs are ‘‘reducing sick leave’’ and ‘‘presenteeism’’ (the practice of attending work 

while sick), and ‘‘improving workforce morale and engagement.’’8

Data from the 2013 RAND Employer Survey, sponsored by the U.S. Department 

of Labor, suggest that employers view the impact of their wellness programs overwhelmingly as positive, with 78 percent stating that it decreased absenteeism and 

80 percent stating that it increased productivity.9

A 2013 Society of Human Resource Management (SHRM) Survey reported that 

three quarters (76 percent) of employers said their wellness initiatives are ‘‘somewhat’’ or ‘‘very effective,’’ 10 while 32 percent of respondents to a 2014 Mercer Survey 

said specifically that the health risks of the population served by their wellness programs were improving.11 These results support published research findings that 

workplace wellness programs can improve health status, as measured with physiological markers (such as body mass index, cholesterol levels and blood pressure).12


93181-10.eps
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13 Buck Consultants, supra note 3, at 4. 14 RAND, supra note 4 at 53. 15 RAND, supra note 4 at 57. 16KFF Survey, supra note 1, at 199. Similar results also available from Optum, Fifth Annual 

Wellness in the Workplace Study: An Optum Research Update 5 (2014) 17 Aon Hewitt, 2014 Health Care Survey 33 (2014). 18 Buck Consultants Survey Executive Summary, supra note 3, at 3. 19Optum, supra note 12 at 7. 

Like Dow’s experience, other employers’ programs hold the promise of more direct 

economic benefits under the principle that successful preventive actions, better-managed chronic conditions and fewer episodes of care will result in reduced health 

service utilization and fewer claims. The Buck Consultants study found that peremployee per-year health care costs were identified as a valuable outcome by 68 percent of employees.13

Indeed, the RAND study found that while it is not clear at this point whether 

improved health-related behavior will translate into lower health care cost, there is 

reason to be optimistic. Fully 60 percent of respondents indicated that their wellness 

program reduced health care cost,14 with reductions in inpatient costs accounting 

for 68 percent of the total cost reduction, compared to outpatient costs (28 percent) 

and prescription drug costs (10 percent).15

EMPLOYERS’ PROGRAM DESIGNS VARY

Employers have developed a variety of wellness program designs. The most common offerings generally include: 

• immunizations/flu shots (53 percent of all firms, 87 percent of large firms); • web-based resources for healthy living (39 percent/77 percent); • wellness newsletters (34 percent/60 percent); • employee assistance programs (‘‘EAPs’’) (29 percent/79 percent); • gym membership discounts or onsite exercise facilities (28 percent/64 percent); • smoking cessation programs (27 percent/64 percent); • biometric screening programs (for blood pressure, cholesterol, glucose, and body 

fat) (27 percent/51 percent); • lifestyle or behavioral coaching (23 percent/58 percent); • nutrition/healthy living classes (20 percent/47 percent); and • weight-loss programs (19 percent/48 percent).16

Many of these design elements are also common to value-based insurance designs 

(V–BID), which are related to wellness programs in that they also make use of financial incentives to increase health outcomes, similar to how Dow implemented our 

smoking incentive relating to our premium levels. For example, in one study, completion of a health risk assessment was a V–BID participation requirement for 26 

percent of companies; participation in a disease management, weight management 

or tobacco cessation program was a requirement for 29 percent of companies.17

Additionally, many employers expand these programs to the family members of 

their employees. The Buck Consultants survey found that 62 percent of programs 

include spouses, 52 percent include domestic partners and 43 percent include children.18 A separate study found that 17 percent of firms offer wellness programs to 

their retirees.19

The evidence base regarding workplace health promotion has evolved and continues to advance. Employers and vendors are making greater use of population 

strategies and evidence-based approaches. There is more advanced thinking to create cultures which advance health. Organizations are increasing their sophistication 

in establishing comprehensive efforts and an overarching health strategy. Consistent with the Center for Disease Control and Prevention’s ‘‘Health in All Policies’’ 

efforts, the worksite is a critical venue to address health needs and health improvement. Advanced approaches to population health in communities with an emphasis 

on Patient Centered Medical Homes, are working to make sure that the ‘‘medical 

neighborhood’’ is functioning in a strong manner knowing that everything cannot be 

accomplished in a physician’s office. All of this underscores the importance of supporting and keeping employers engaged in addressing health. It matters to society 

and to the quality of life of those in the workforce. 

CHALLENGES WITH CURRENT PUBLIC POLICY

Employers applaud Congress for working on a bipartisan basis to craft the 

wellness provisions in the Patient Protection and Affordable Care Act (PPACA) that 

built on the existing framework created in the Health Insurance Portability and Accountability Act of 1996 (HIPAA). PPACA’s bipartisan provision increased employer 

24 

20See Code § 9802, ERISA § 702, PHSA § 2705. 21See Code § 9802(a)(1) (‘‘ . . . a group health plan may not establish rules for eligibility (including continued eligibility) of any individual to enroll under the terms of the plan based on 

. . . [d]isability.’’ Other health factors are: (i) health status, (ii) medical condition (including 

both physical and mental illnesses), (iii) claims experience, (iv) receipt of health care, (v) medical 

history, (vi) genetic information, and (vii) evidence of insurability (including conditions arising 

out of acts of domestic violence). 22 Code § 9802(a)(1). 23 Nondiscrimination and Wellness Programs in Health Coverage in the Group Market, 71 

Fed. Reg. 75,014 (Dec. 13, 2006). 24See 26 C.F.R. § 54.9802–1(f)(1). Examples of participatory wellness programs include reimbursement of gym memberships, diagnostic testing that does not condition receipt of reward on 

attainment of certain outcomes, and a program that reimburses employees for the costs of smoking cessation programs regardless of whether an employee stops smoking. 25See 26 C.F.R. § 54.9802–1(f)(2). Examples include not smoking, attainment of certain biometric screening results, and achieving exercise targets. 

flexibility in designing programs to improve the health of employees and their families. Additionally, the PPACA has helped to cement wellness programs as one of the 

cornerstones of health reform. 

A critical component of encouraging employers to offer meaningful wellness programs is consistent Federal policy that promotes the health of Americans and is 

aligned across multiple agencies and Congress. We welcome the opportunity to work 

with this committee, the Equal Employment Opportunity Commission (EEOC) and 

other stakeholders to provide legal and regulatory certainty to employers offering 

wellness programs to their employees. 

Legal Landscape 

Wellness programs are subject to the jurisdiction of the Department of Labor 

(‘‘DOL’’), the Department of the Treasury (‘‘Treasury’’), the Department of Health 

and Human Services (‘‘HHS’’), and the EEOC via a range of Federal statutes and 

regulations. Many States have laws governing wellness programs, as well. The discussion below sets forth the basic Federal legal framework applicable to the oversight of wellness programs. This is not intended to be an exhaustive discussion of 

all Federal legal issues related to wellness programs but rather to provide a basis 

for understanding compliance and other issues employers face with regard to 

wellness programs. 

Health Insurance Portability and Accountability Act of 1996 

For years, wellness programs have been subject to extensive regulation by the 

DOL, HHS, and Treasury by virtue of the Health Insurance Portability and Accountability Act of 1996, Pub. L. No. 104–191 (‘‘HIPAA’’). HIPAA provides privacy 

and nondiscrimination protections to consumers in connection with group health 

plans. 

Specifically, Titles I and IV of HIPAA added certain provisions to the Internal 

Revenue Code (‘‘Code’’), the Employee Retirement Income Security Act (‘‘ERISA’’), 

and the Public Health Service Act (‘‘PHSA’’).20 These provisions are generally intended to prohibit group health plans and group health insurance issuers from discriminating against individuals in eligibility, benefits, or premiums based on a 

health factor, which includes, among other things, disability.21 An exception to the 

general rule allows premium discounts, rebates, and cost-sharing modifications (all 

forms of incentives or rewards) in return for adherence to certain programs of 

health promotion and disease prevention, such as a wellness program.22

Final regulations issued by the DOL, HHS and Treasury to implement these provisions of HIPAA took effect in 2007, and impose rules that certain wellness programs must satisfy in order to allow incentives to be provided to participants.23 Programs that either do not require an individual to meet a standard related to a 

health factor in order to obtain a reward or that do not offer a reward at all 

(‘‘participatory wellness programs’’) are not subject to the additional rules if participation in the program is made available to all similarly situated individuals.24 Programs that require individuals to satisfy certain health factor standards in order to 

obtain a reward (‘‘health-contingent wellness programs’’) must satisfy a host of requirements in order to satisfy the HIPAA nondiscrimination rules.25

The requirements are intended to prevent discrimination in the use of incentives 

in connection with wellness programs based on a health factor such as disability. 

In particular, the requirements that a wellness program (1) ‘‘not be a subterfuge for 

discriminating based on a health factor, and not be highly suspect in method,’’ and 

(2) the requirement that a ‘‘reasonable alternative standard (or waiver of the otherwise applicable standard)’’ be provided to individuals for whom it is unreasonably 

difficult due to a medical condition to satisfy the standard or for whom it is mediVerDate Nov 24 2008 11:07 Jan 09, 2017 Jkt 000000 PO 00000 Frm 00028 Fmt 6633 Sfmt 6621 S:\DOCS\93181.TXT CAROL
25 

26 78 Fed. Ref. 33158 27PPACA §§ 4303, 10404. 28PPACA § 1001. 29PPACA § 10408. 30 Interim Final Rules Prohibiting Discrimination Based on Genetic Information in Health Insurance Coverage and Group Health Plans, 74 Fed. Reg. 51,664 (Oct. 7, 2009). 

cally inadvisable to attempt to satisfy the standard each provide stringent protections to individuals with disabilities. 

Patient Protection and Affordable Care Act 

Congress signaled its strong support for the use of wellness program incentives 

and the protections provided in the current HIPAA nondiscrimination rules in a bipartisan provision of the PPACA. Specifically, PPACA Section 1201 codifies the 

HIPAA regulations and increases the permitted incentive from 20 percent to 30 percent (and permits regulators to increase incentives up to 50 percent in their discretion). This is a rare bipartisan provision in the controversial health care reform law 

and reflects Congress’s approval of the offering of incentives for health-contingent 

wellness programs. 

On June 3, 2013, the DOL, HHS and Treasury issued final rules on ‘‘Incentives 

for Nondiscriminatory Wellness Programs in Group Health Plans.’’ 26 These new 

final HIPAA wellness rules are based on the same general framework as the existing HIPAA wellness rules and incorporate changes that were mandated by the 

PPACA, including increased limits on the amount of health-based wellness program 

rewards that a plan can offer or penalties it can impose. 

Under the PPACA—as under the previous HIPAA rules—plans first must determine whether their wellness program is Participatory or Health-Contingent. A program will be considered Participatory if none of the conditions to obtain a reward 

are based on an individual satisfying a health standard, and thus participatory programs are not required to meet the HIPAA wellness rule requirements. Health-Contingent programs must meet the additional requirements of the HIPAA wellness 

rules in order to be in compliance with the HIPAA nondiscrimination rules. A 

wellness program is considered to be Health-Contingent if it requires an individual 

to satisfy a standard related to a health factor in order to obtain a reward. The June 

2, 2013, final rules break the Health-Contingent category down further into Activity-Based and Outcome-Based, with different requirements for each depending on 

the type of program. 

The PPACA has helped to cement wellness programs as one of the cornerstones 

of health reform. In addition to the express codification of the HIPAA wellness program regulations in PPACA Section 1201 discussed above, there are numerous other 

provisions relating to wellness initiatives in the PPACA, including: 

• Employer wellness program evaluation tools.27

• Health plan quality-of-care report and employee notice.28

• Small-employer wellness program grants.29

These provisions are inextricably linked to the fundamental fabric of the PPACA 

and indicate the clear intent of Congress and the Obama administration that 

wellness programs should be analyzed, studied and incorporated into the new reformed health care system, and that the employer role in sponsoring wellness plans 

should be supported. 

Genetic Information Nondiscrimination Act of 2008 

Wellness program design and implementation is also shaped by the Genetic Information Nondiscrimination Act of 2008, Pub. L. No. 110–233 (‘‘GINA’’). Title I of 

GINA, which is under the jurisdiction of DOL, HHS and Treasury, addresses whether and to what extent group health plans may collect or use genetic information, 

including family medical history. Title II of GINA, under the jurisdiction of EEOC, 

restricts how employers and certain other ‘‘covered entities’’ (collectively referenced 

herein as ‘‘employers’’ for purposes of clarity) may collect and disclose genetic information and prohibits employers from using genetic information in employment decisions. 

Title I: Title I of GINA amended the Code, ERISA, and the PHSA to prohibit discrimination in health coverage based on genetic information. Interim final rules 

were published in the Federal Register on October 7, 2009.30 Title I of GINA, in 

relevant part, prohibits group health plans and health insurance issuers in the 

group and individual markets from discriminating against covered individuals based 

on genetic information. Title I applies to a wide variety of group health plans, including wellness programs that constitute or are related to group health plans. Title 

26 

31 Interim Final Rules Prohibiting Discrimination Based on Genetic Information in Health Insurance Coverage and Group Health Plans, 74 Fed. Reg. at 51,665. 32 Code § 9832(d)(10)(B). 33 26 C.F.R. § 54.9802–3T(d)(1)(ii); 29 C.F.R. § 2590.702–1(d)(1)(ii); 45 C.F.R. § 146.122(d)(1)(ii). 34 26 C.F.R. § 54.9802–3T(a)(3); 29 C.F.R. § 2590.702–1(a)(3); 45 C.F.R. § 146.122(a)(3). 35 Interim Final Rules Prohibiting Discrimination Based on Genetic Information in Health Insurance Coverage and Group Health Plans, 74 Fed. Reg. at 51,669. 36 Regulations Under the Genetic Information Nondiscrimination Act of 2008, 75 Fed. Reg. 

68,912 (Nov. 9, 2010). 37See 29 C.F.R. § 1635.4. 38See 29 C.F.R. § 1635.8(b)(i). See also Commission Informal Discussion Letter (June 24, 

2011), http://www.eeoc.gov/eeoc/foia/letters/2011/adalginalincentives.html. 

I generally prohibits a group health plan and a health insurance issuer in the group 

market from: 

• increasing the group premium or contribution amounts based on genetic information; • requesting or requiring an individual or family member to undergo a genetic 

test; and • requesting, requiring or purchasing genetic information prior to or in connection 

with enrollment, or at any time for underwriting purposes.31

The prohibition on requesting, requiring or purchasing genetic information at any 

time for underwriting purposes affects wellness programs. The term ‘‘underwriting 

purposes’’ is defined broadly to include rules for eligibility for benefits and the computation of premium or contribution amounts, and it does not merely encompass activities relating to rating and pricing a group policy.32 The regulations clarify that 

the term ‘‘underwriting purposes’’ includes changing deductibles or other cost-sharing mechanisms, or providing discounts, rebates, payments in kind, or other premium differential mechanisms in return for activities such as completing an HRA 

or participating in a wellness program.33 ‘‘Genetic information’’ is defined for purposes of GINA Title I to include family medical history.34

Wellness programs cannot provide rewards for completing HRAs that request genetic information (including family medical history), because providing rewards 

would violate the prohibition against requesting, requiring or purchasing genetic information prior to or in connection with enrollment, or at any time for underwriting 

purposes. A plan or issuer can collect genetic information through HRAs under Title 

I of GINA as long as no rewards are provided for such genetic information (and if 

the request is not made prior to or in connection with enrollment).35 A plan or 

issuer can provide rewards for completing an HRA as long as the HRA does not collect genetic information. 

Title II: Title II of GINA, which is under EEOC’s jurisdiction, restricts how employers may collect and disclose genetic information and prohibits employers from 

using genetic information in employment decisions. Final regulations under Title II 

were published in the Federal Register on November 9, 2010.36

The final Title II regulations provide that it is unlawful for an employer to discriminate against an individual based on his or her genetic information with regard 

to, among other things, privileges of employment.37 Where a wellness program is 

considered to be a privilege of employment, the sponsoring employer may be subject 

to regulation under Title II with respect to the wellness program. 

Title II generally prohibits employers from requesting, requiring or purchasing genetic information of an individual or a family member of the individual. An exception is provided where health or genetic services are offered by the employer, including where they are offered as part of a wellness program, if the employer meets certain requirements: 

• The provision of genetic information by the individual is voluntary, meaning the 

covered entity neither requires the individual to provide genetic information nor penalizes those who choose not to provide it; 

• The individual provides prior knowing, voluntary, and written authorization, 

meaning that the covered entity uses an authorization form that (1) is written in 

language reasonably likely to be understood by the individual from whom the information is sought, (2) describes the information being requested and the general purposes for which it will be used, and (3) describes the restrictions on disclosure of 

genetic information; 

• Individually identifiable genetic information is provided only to the individual 

(or family member and the health care professional or genetic counselor providing 

services); and 

• The information cannot be accessed by the employer (except in aggregate 

terms).38

27 

39See 29 C.F.R. § 1635.8(b)(2)(ii). 40 29 C.F.R. § 1635.8(b)(2)(iii). 41 42 U.S.C. § 12112(a). 42 42 U.S.C. § 12112(d). 43See Commission Informal Discussion Letter (Jan. 18, 2013), http://www.eeoc.gov/eeoc/foia/ 

letters/2013/adalwellnesslprograms.html; Commission Informal Discussion Letter (June 24, 

2011), http://www.eeoc.gov/eeoc/foia/letters/2011/adalginalincentives.html; Commission Informal Discussion Letter (May 6, 2009), http://www.eeoc.gov/eeoc/foia/letters/2009/ 

adaldisabilitylmedexamlhealthrisk.html. See also American Bar Ass’n, Questions for the 

EEOC Staff for the 2009 Joint Committee of Employee Benefits Technical Session (2009), 

http://www.abanet.org/jceb/2009/EEOC2009.pdf. 44See Equal Employment Opportunity Comm’n, Enforcement Guidance: Disability-Related Inquiries and Medical Examinations of Employees Under the Americans with Disabilities Act 

(ADA), Q&A 22 (2000), http://www.eeoc.gov/policy/docs/guidance-inquiries.html. 45See Commission Informal Discussion Letter (Jan. 23, 1998) (on file with Council). 

Incentives may not be offered for individuals to provide genetic information.39

Thus, an employer may offer an incentive for completing an HRA (a common component of wellness programs) that includes questions about family medical history or 

other genetic information, provided that the employer specifically identifies those 

questions and makes clear, in language reasonably likely to be understood by those 

completing the HRA, that an individual need not answer the questions that request 

genetic information in order to receive the incentive. 

In addition, the final regulations provide that an employer may offer an incentive 

to encourage individuals who have voluntarily provided genetic information that indicates they are at increased risk of acquiring a health condition in the future to 

participate in disease management programs or other programs that promote 

healthy lifestyles, and/or to meet particular health goals as part of a health or genetic service. However, to comply with Title II of GINA, these programs must also 

be offered to individuals with current health conditions and/or to individuals whose 

lifestyle choices put them at increased risk of developing a condition but who have 

not volunteered genetic information.40

Americans with Disabilities Act 

The EEOC also regulates wellness programs pursuant to Title I of the Americans 

with Disabilities Act (‘‘ADA’’). Title I of the ADA prohibits discrimination against 

qualified individuals with disabilities.41 The ADA prohibits employers from conducting medical examinations or making inquiries regarding disabilities at any 

point during the hiring process or during employment, with certain limited exceptions.42

Title I of the ADA allows employers to conduct voluntary medical examinations, 

including voluntary medical histories, which are part of an employee health program available to employees at a work site. Any medical information acquired as 

part of the program is kept confidential and separate from personnel records. There 

is little guidance regarding what the term ‘‘voluntary’’ means in this context. 

The EEOC has issued numerous informal discussion letters that generally provide 

that a wellness program is considered voluntary as long as an employer neither requires participation nor penalizes employees who do not participate.43 The EEOC 

has stated in certain of these informal discussion letters that it has not taken a position on whether, and to what extent, Title I of the ADA permits an employer to 

offer financial incentives for employees to participate in wellness programs that include disability-related inquiries (such as questions about current health status 

asked as part of an HRA) or medical examinations (such as blood pressure and cholesterol screening to determine whether an employee has achieved certain health 

outcomes). The EEOC has also issued Enforcement Guidelines providing, among 

other things, that a wellness program is voluntary as long as an employer neither 

requires participation nor penalizes employees who do not participate.44

The EEOC has, on at least two occasions, come close to providing clarifying guidance. In 1998, the EEOC stated in an informal discussion letter that ‘‘[i]t could be 

argued that providing a monetary incentive to successfully fulfill the requirements 

of a wellness program renders the program involuntary’’ and that ‘‘where an employer decreases its share of the premium and increases the employee’s share, resulting in a significantly higher health insurance premium for employees who do not 

participate or are unable to meet the criteria of the wellness program, the program 

may arguably not be voluntary.’’ 45

In addition, on March 6, 2009, the EEOC rescinded part of a January 6, 2009, 

informal discussion letter which provided, in part, that: 

[A] wellness program would be considered voluntary and any disability-related inquiries or medical examinations conducted in connection with it would 

28 

46See Commission Informal Discussion Letter (Mar. 6, 2009), http://www.eeoc.gov/eeoc/foia/ 

letters/2009/adaldisabilitylmedexamlhealthrisk.html. 47Seff v. Broward County, 691 F.3d 1221 (11th Cir. 2012). 48http://www.americanbenefitscouncil.org/documents2013/wellnessleeoclcouncil-simontestimony050813.pdf. 49http://www.americanbenefitscouncil.org/newsroom/2020vision.cfm. 

not violate the ADA, as long as the inducement to participate in the program 

did not exceed 20 percent of the cost of employee only or employee and dependent coverage under the plan, consistent with regulations promulgated pursuant 

to the Health Insurance Portability and Accountability Act.46

Although rescinded, the above language indicates that the EEOC has at least contemplated allowing a certain level of incentives to be offered in connection with disability-related inquiries or medical examinations conducted in connection with a 

wellness program. It further indicates that the EEOC has, on at least this one occasion, looked to HIPAA guidance to shape the contours of the ADA. 

At least partly as a result of the EEOC’s silence, the Eleventh Circuit weighed 

in on the treatment of wellness programs for purposes of the ADA. The particular 

concern has to do with a common design that conditions receipt of an incentive upon 

mere participation rather than outcomes-based wellness programs. In Seff v. 

Broward County,47 the Eleventh Circuit upheld the district court’s decision as to 

whether a participatory wellness program satisfied the ADA where it imposed a $20 

charge on each biweekly paycheck issued to employees who enrolled in the group 

health insurance plan but refused to participate in the County’s wellness program, 

which required in part that employees complete online HRAs and take blood tests 

to measure their glucose and cholesterol levels. Employees diagnosed with asthma, 

hypertension, diabetes, congestive heart failure or kidney disease were given the opportunity to receive disease management coaching and certain free medications related to those conditions. Instead of looking at whether the wellness program is ‘‘voluntary’’ within the meaning of Title I of the ADA, the court relied on other provisions in the ADA (a provision creating a safe harbor for ‘‘bona fide benefit plans’’) 

to find that the wellness program complied with the ADA. We note that, despite the 

decision in Seff, the EEOC’s regional offices continue to undertake enforcement actions based on the ‘‘voluntary’’ standard and employers do not have the guidance 

from the EEOC necessary to comply with the ADA. 

KEY CONCERNS FOR EMPLOYERS AND POLICY RECOMMENDATIONS

Notwithstanding employers’ increasing interest in establishing wellness programs, 

a great deal of legal uncertainty exists with respect to the application of both GINA 

and the ADA to these programs. As noted above, existing guidance from the EEOC 

is not clear regarding what constitutes a voluntary wellness program for purposes 

of the ADA. Moreover, questions remain regarding how GINA applies to various aspects of some common wellness program designs, including the use of wellness incentives in connection with spousal and dependent HRAs. 

The Council testified before the EEOC48 in a May 2013 hearing, describing employers’ strong concern about the ongoing legal uncertainty that exists with respect 

to the application of the ADA and GINA to wellness programs. The Council also 

urged ‘‘Federal agencies promulgating regulations should proceed in a consistent, 

collaborative manner that supports participatory and outcomes-based wellness initiatives’’ in our new strategic plan, A 2020 Vision.49

This legal uncertainty has been exacerbated by certain enforcement actions initiated by regional offices of the EEOC with respect to employers’ HIPAA and PPACAcompliant wellness programs. Recent enforcement actions brought by the EEOC allege certain wellness programs violate the ADA and GINA by imposing penalties on 

employees who decline participation in the company’s biometric screening program. 

These legal actions have had a chilling effect on employer wellness programs. 

Additionally, the EEOC announced in its most recent semiannual regulatory agenda that it intends to issue regulations later this year addressing wellness programs under the ADA and GINA. However, the actual timetable for the issuance of such guidance is uncertain. 

Unfortunately for employers operating in good faith, the EEOC decided to pursue 

litigation before issuing guidance on this matter. This is very frustrating for employers who care about the well-being of their employees and take seriously their compliance obligations. It is impossible for employers to abide by rules that do not exist. 

The unfortunate result of continued legal uncertainty would be that many American workers who could benefit from access to meaningful wellness would be left 

without. 

29 

Recommendation: Building on HIPAA’s Framework 

It is my hope that this testimony has strongly reinforced the imperative to support and strengthen the efforts of employers to be effective in their role of advancing 

the health of people. The Council and Dow encourage Congress and/or the EEOC 

to work within the existing HIPAA and PPACA legislative and regulatory framework to provide certainty to employers. HIPAA imposes a robust set of nondiscrimination rules on issuers and employers with respect to a very broad class of 

persons—effectively any group health plan participant that has a health status or 

condition, even where such status or condition falls short of constituting a disability 

for purposes of the ADA. In other words, HIPAA already casts a broad protective 

net—one that not only protects individuals with disabilities, but also the American 

worker or health plan participant more generally. 

As mentioned, the EEOC announced in its most recent semiannual regulatory agenda that it intends to issue regulations later this year addressing wellness programs under the ADA and GINA. We fully respect the EEOC’s 

existing and longstanding authority to implement and enforce the ADA, as well as 

other Federal statutes. As the committee considers possible further wellness program standards or other legislative parameters applicable to the EEOC, we urge 

you to recognize the comprehensive regulatory framework that already exists, including protections for individuals with disabilities and beyond. The employer community appreciates this committee’s recognition of the importance of wellness programs and the existing regulatory framework that protects consumers, and notes 

PPACA was amended on a bipartisan basis to endorse and expand HIPAA-compliant wellness programs. 

We believe that the HIPAA regulatory framework is both comprehensive and 

practical, and if the committee or the EEOC concludes that improvements are needed, all interested parties should come together in a meaningful and measured fashion to carefully consider the effects of changes to this existing framework. 

If this committee considers advancing legislation pertaining to wellness programs, 

it would be helpful to provide relief from certain provisions of the ADA and GINA 

to employers that are complying with HIPAA and PPACA. 

For example, with respect to Health-Contingent wellness programs (including Activity-Based and Outcome-Based programs), legislation could deem such programs 

to comply with the ADA to the extent the program complies with existing HIPAA 

and PPACA regulations. With respect to participatory programs, such programs 

could be deemed to comply with the ADA, provided the program is reasonably designed to promote health or prevent disease and the program does not use a reward 

that exceeds 30 percent of the total premium cost (or up to 50 percent at the regulator’s discretion). With respect to all three categories of programs (i.e., 

participatory, Activity-Based and Outcome-Based programs), legislation could also 

specify that such programs would not be found to violate GINA solely because a program requests current medical information from a participant’s spouse (or viceversa) so long as the information is used solely with respect to the participant’s 

spouse. 

CONCLUSION

There is no single tactic for Dow’s success or the successes of other employer programs. Rather, a collective solution is needed, focused on each company’s health opportunity. For Dow, the solution includes an integrated Health Strategy, comprehensive health programs, two decades of sustained commitment and a major 

focus within our culture. As the Council’s A 2020 Vision states, employer-sponsored 

benefit plans are now being designed with the express purpose of giving each worker the opportunity to achieve personal health and financial well-being. This wellbeing drives employee performance and productivity, which drives successful organizations. To maintain global competitiveness and help to achieve health in our communities, American companies must encourage healthy behavior with every tool in 

our toolkit. In other words, a healthy workforce is a productive workforce, and a productive workforce makes for a healthier American economy. 

Thank you for your interest in employer-sponsored wellness programs. I appreciate the opportunity to testify, and the Council and I look forward to working with 

you to restore certainty to employers focusing on improving the health of their 

workforces. 

The CHAIRMAN. Thank you, Dr. Baase. 

Dr. Grossman. 

30 

STATEMENT OF DAVID C. GROSSMAN, M.D., M.P.H., MEDICAL 

DIRECTOR FOR POPULATION AND PURCHASER STRATEGY, 

GROUP HEALTH RESEARCH INSTITUTE, SEATTLE, WA 

Dr. GROSSMAN. Good morning, Chairman Alexander, Ranking 

Member Murray, and members of the committee. Thank you very 

much for inviting me to testify here at this important hearing 

today. My name is David Grossman, and today I’m representing 

Group Health Cooperative, which is a large integrated health system in the State of Washington that takes care of about 600,000 

people in our State. We’re a provider of care, a health plan, and 

also an employer, and as such, we have a unique perspective on 

this issue given that we take care of patients, that we take care 

of the populations of our purchasers, and also our own employees 

who deliver those services. 

At Group Health, I’m the medical director for population health 

and purchaser strategy, where I work together with the purchasers 

on helping to design these programs. I’m also a researcher at the 

Group Health Research Institute and a faculty member at the University of Washington. While I’m not here in that capacity, I also 

serve on the Community Preventive Services Task Force and am 

the incoming Vice Chair for the U.S. Preventive Services Task 

Force. 

Today I have three main points and two brief stories, and my 

three main points are these. 

First, as a Nation, we do have more work to do on worksite 

health. The worksite is a great opportunity, as we’ve heard, to improve the health of our Nation. There’s no question in my mind 

about that. And there are many successful examples out there, yet 

a lot still remains to be done to fully actually realize this promise, 

not only with large employers, who we hear a lot about, but also 

smaller employers, small businesses and medium-sized businesses, 

many of whom have yet to engage in this type of effort. We recognize this through our dealings with purchasers at Group Health, 

and I know my colleagues also see this. So we do support efforts 

to extend the reach of well-designed programs throughout the Nation. 

My second point is, we’ll get there faster if we use what we already know and then invest in filling the gaps for where we do 

have knowledge gaps. There’s been a lot of variation in the design 

and fidelity of execution of these programs, and those that have 

succeeded, as some we’re hearing about today, in delivering on improved health and productivity, and perhaps sometimes health care 

costs too, are those that generally implement based on best practices and good evidence. 

Group Health considers itself a learning health care system, in 

the parlance of the Institute of Medicine, and as such, we all know 

that we can stand to learn more about how to improve as new evidence emerges. 

My third point is engagement is key, but I don’t just mean engagement for the employee. I mean employers engaging their staff 

in the design and execution of wellness programs, that employees 

engage with managing their own health in partnership with their 

providers, and that employers, plans, health care systems and proVerDate Nov 24 2008 11:07 Jan 09, 2017 Jkt 000000 PO 00000 Frm 00034 Fmt 6633 Sfmt 6601 S:\DOCS\93181.TXT CAROL
31 

viders need to engage with each other to ensure that incentives are 

aligned so that we get to the right place and do the right thing. 

Financial incentives are just one part of that equation as a success factor, and that’s what we try to do at Group Health as an integrated system, is to try to make sure that those incentives are 

aligned. 

OK. Now, the stories. One is about my county Senator Murray 

talked about, and the second is about Heidi. 

King County Government is a national leader in worksite health 

programs, especially for the public sector. They call their program 

Healthy Incentives, and we took a lot of inspiration from King 

County in the design of our own program at Group Health. We did 

it by changing the culture, the environment, and by providing economic incentives to motivate behavior change. And Group Health 

was proud to be a partner in this effort because we take care of 

one-third of their employees and their families, and we brought 

programs to them that enabled the facilitation of receipt of those 

services. 

The results are really impressive. King County employees and 

their families lost 19 tons of weight, and smoking prevalence 

dropped by over 6 percentage points. Their own economist estimated that they saved $46 million in health care costs through this 

program over the years, to date. And they were the recipient of 

Harvard’s Innovation in Government Award for the work that 

they’ve done. So I’m proud to say that I live in a county that has 

such a forward-thinking government, and also an employer. 

My second story is about Heidi. Heidi works with me at Group 

Health and was concerned about the impact of her weight on her 

health but could never really quite get to the point of acting on it. 

With our Total Health program at Group Health and incentives to 

participate in our onsite program, she was able to transform her 

life by losing 30 pounds, or over 15 percent of her body weight, in 

a healthy way. She felt so much younger, energetic, athletic; and 

most importantly, she has learned how to manage her weight toward the future so she doesn’t necessarily need to rely on others 

to get her there. 

There are many people like Heidi around America who have benefited from having an employer who takes an interest in their 

health thanks to an evolving science that’s getting a lot of traction. 

Thank you, Chairman Alexander, Ranking Member Murray, and 

members of the committee for your time, and I look forward to your 

questions. 

[The prepared statement of Dr. Grossman follows:] 

PREPARED STATEMENT OF DAVID C. GROSSMAN, M.D., M.P.H. 

SUMMARY

The worksite offers us a tremendous opportunity in our work to improve health 

in the United States. However, there is significant variance in workplace wellness 

programs and their effectiveness. To be effective, workplace wellness programs 

should be: (1) focused on improved employee health and productivity in their goals 

and (2) evidence-based in their design and practices. There is still much to learn 

about how best to incent and engage employees in efforts to improve their health. 

Fortunately, we do have resources to help guide these efforts. The Community 

Preventive Services Task Force and the U.S. Preventive Services Task Force both 

provide a wealth of evidence-based information online, at no cost, regarding effective 

health promotion programs and appropriate screenings. 

32 

1McGinnis JM, Williams-Russo P, Knickman JR. The case for more active policy attention to 

health promotion. Health Affairs (Millwood) 2002; 21(2):78–93. 

King County, WA, as an employer, offers a great example of an effective workplace wellness program. Working in partnership with Group Health, organized 

labor, and other expert stakeholders, King County designed their ‘‘Healthy IncentivesSM’’ program on two goals: (1) creating a culture of health in the workplace to 

make healthier employee behavioral and lifestyle choices easier and normative, and 

(2) encouraging employee consumption of evidence-based clinical preventive services 

and chronic condition management. Financial incentives help to nudge employees 

toward making the right choices. 

The county’s healthcare economist reports that through improved health of employees and use of higher quality health care, the county has reduced its health care 

cost trend from 11 percent to 6.2 percent, avoiding $46 million in costs. Employee 

engagement has been at or above 90 percent since the program began. Participants 

have lost 19 tons more weight than a national comparison group, and the smoking 

rate has dropped below the national average from 11.3 percent to less than 5 percent. The Healthy Incentives program has won a variety of national awards, including Harvard University’s Innovations in Government award. 

The most effective workplace wellness programs will likely share King County’s 

two-pronged focus: (1) impacting employee behavioral and lifestyle choices, and (2) 

impacting employee uptake of evidence-based clinical preventive services such as 

cancer and blood pressure screening. Indeed, King County found that the highestquality health care (using evidence-based preventive services)—as rated by the 

Washington Health Alliance and provided by Group Health—saved the county more 

than $4,200 per employee per year. Linking worksite health programs with high 

quality clinical care delivery, such as medical homes, synergizes the impact of these 

programs. 

The most important success factor for workplace wellness programs is also the 

most difficult to achieve—meaningful engagement by employers with health systems 

and by employees with their own health. Financial incentives such as premium discounts seem to be an effective way to ‘‘nudge’’ employees toward better health, 

though more evidence is needed to determine how successful these efforts are, with 

whom they are successful, and what amounts encourage engagement. There are a 

variety of other potential approaches toward using incentives that researchers are 

currently exploring. Employers and health systems must work together to design 

programs that work to make employees healthier and more productive, thereby reducing costs to both employees and employers. Long-term healthcare cost trends 

should be moderated by reducing risk factors and delaying the onset of chronic illnesses in the population. 

Chairman Alexander, Ranking Member Murray and members of the Senate 

Health, Education, Labor, and Pensions Committee, thank you for inviting me to 

testify at this important hearing on workplace wellness programs. 

My name is David Grossman, and I am medical director of Population Health and 

Purchaser Strategy at Group Health Cooperative in the State of Washington. Group 

Health is an integrated health system—by which I mean we provide both direct care 

and plan coverage. We cover about 600,000 lives in Washington and Idaho and rank 

among the highest-quality plans and health systems in the country, as measured 

by the Centers for Medicare and Medicaid Services’ star rating system, the National 

Committee for Quality Assurance, the Washington Health Alliance’s Community 

Checkup, and others. In my role at Group Health, I lead the design, promotion, delivery, and evaluation of population care services, and I work with large purchasers 

in their efforts to design benefits and programs that maximize health and effectively 

steward resources. Additionally, I serve as a senior investigator at Group Health Research Institute and practice pediatrics part-time at a Group Health medical center 

in Seattle. I am also a member of the Center for Disease Control’s Community Preventive Services Task Force, and I am the incoming vice-chair of the U.S. Preventive Services Task Force. 

The health care we receive determines only a small percentage of our health. By 

some estimates, only about 10 percent of an individual’s health is determined by the 

care he or she receives; the rest is dictated by behavior, genetic predisposition, social 

circumstances, and environmental exposure.1 This means that there are many 

places other than a doctor’s office that an individual’s health can be affected. As a 

pediatrician, I’ve seen firsthand how school-based health programs and embedded 

clinics have made an incredible positive difference in childhood health throughout 

the country. From requiring and providing immunizations to offering care in schoolVerDate Nov 24 2008 11:07 Jan 09, 2017 Jkt 000000 PO 00000 Frm 00036 Fmt 6633 Sfmt 6621 S:\DOCS\93181.TXT CAROL
33 

2Goetzel, Gibson, Short, Chu, et al. A Multi-Worksite Analysis of the Relationships Among 

Body Mass Index, Medical Utilization, and Worker Productivity. Journal of Occupational and 

Environmental Medicine 2010; 52 Suppl 1: S52-S58. 3 Centers for Disease Control and Prevention. Benefits of Health Promotion Programs. 

Accessed online January 25, 2015 at http://www.cdc.gov/workplacehealthpromotion/business 

case/benefits/index.html. 4Mattke, Liu, Caloyeras, Huang, Van Busum, Khodyakov, and Shier. Workplace Wellness 

Programs Study: Final Report. RAND Health for the U.S. Department of Labor and the U.S. 

Department of Health and Human Services. Accessed online January 22, 2015 at http:// 

www.rand.org/content/dam/rand/pubs/researchlreports/RR200/RR254/RANDlRR254.sum 

.pdf. 

based health clinics, over the years we’ve changed young lives by making prevention, wellness and chronic condition management accessible in a place where we 

know children spend a significant part of their day. At Group Health, we believe, 

as our large purchasers also tell us, that the worksite offers a similar opportunity 

for health promotion. 

As an example, at Group Health Research Institute, I work with an analyst 

named Heidi Merrifield. In 2012, Heidi was feeling tired a lot. It was getting tougher to move around, but she told herself it was just the inevitable impact of turning 

50. At more than 220 pounds, Heidi was close to her highest weight ever, but she 

had never seriously considered joining Weight Watchers or another formalized 

weight loss program. With her long commute on top of a long work day, Heidi 

couldn’t imagine how she would find time, and the programs seemed expensive as 

well. She figured she knew how to lose weight if she really wanted to. But she didn’t 

act on it. 

Then Heidi discovered that Group Health’s ‘‘Total Health’’ employee wellness program would significantly reduce her health insurance premiums if she undertook 

certain wellness activities, including participation in Weight Watchers. Group 

Health would, in addition, reimburse her for half the cost of participating in the program. She also discovered she had the option of meeting with a Weight Watchers 

group at work. While she wasn’t particularly hopeful, she says Group Health made 

it so easy, she had to try. 

Heidi learned a lot about herself and her eating habits, and eventually she lost 

33 pounds. Heidi reports she felt like age 25 again. She has more energy, she’s more 

agile, and at 53, she requires no medications. She and her husband have always 

loved sailing, and Heidi says it’s even more fun with her increased dexterity and 

strength. Heidi says now even when her weight starts to inch back up, she understands what to do to stay healthy and knows she has the skills and motivation to 

do it. 

Group Health, as an employer, benefits too, given the strong association between 

obesity and health care costs, absenteeism, and presenteeism.2 Employees who are 

engaged in their health care are also more productive and positive at work, contributing to a stronger workplace overall. 

It’s a simple story. It’s not particularly dramatic. But I believe its simplicity, and 

the science behind it, make it replicable. Heidi lost a significant amount of weight 

and got healthier just because her workplace wellness program made it easy and 

incented her to do so; you can see why at Group Health, we believe the worksite 

offers a tremendous opportunity for improving health and well-being. 

There is good science behind programs that engage employees to improve their 

health by reducing risk factors for heart disease, diabetes, and cancer through increasing time in health promoting activities and receipt of clinical preventive services.3

With that said, it’s important to note that today there is tremendous variation in 

workplace wellness programs across the country—and that means that it’s likely 

there is an equally large amount of variation in their effectiveness. Just like clinical 

care, these programs are best positioned to deliver when they are based on good 

science and are well executed and coordinated. 

Financial incentives are a common approach toward the initial engagement of employees. We all know that economic incentives can be a powerful way to get attention and even change behavior. Incentives vary considerably. One company may 

offer a free t-shirt to employees who report eating more vegetables. Another may 

provide an Amazon gift card for filling out a Health Screening Assessment (HSA). 

And others may tie it to health benefits and offer a more financially significant premium discount for participating in wellness programs in other ways, or for meeting 

certain outcome-based goals (e.g., weight loss or reducing blood pressure). Though 

one study4 showed about half of employers in 2013 offered workplace wellness iniVerDate Nov 24 2008 11:07 Jan 09, 2017 Jkt 000000 PO 00000 Frm 00037 Fmt 6633 Sfmt 6621 S:\DOCS\93181.TXT CAROL
34 

5Mattke, et al., p. xix. 

tiatives of some kind, there is a lot of variation. This makes measuring effectiveness 

and standardizing best practices difficult. 

Premium discounts are an increasingly popular tool for employers to incent employees to participate in wellness programs. Since 2006, rules issued under the 

Health Insurance Portability and Accountability Act (HIPAA) have generally prohibited group health plans and insurers from discriminating against participants as to 

eligibility, benefits, or premiums based on a health factor. However, an exception 

was created to allow premium discounts, rebates, or modification of cost sharing for 

employees participating in workplace wellness programs. The Affordable Care Act 

amended and expanded the HIPAA rules, most notably by increasing the maximum 

permitted financial incentives from 20 percent of the total annual cost of employeeonly coverage to 30 percent. 

One common requirement to receive premium discounts is completion of a health 

risk assessment (HRA). The HRA is a common screening tool that allows assessment of an individual’s specific health risks and chronic conditions, which supports 

individualized action plans to address risks and manage conditions. At Group 

Health, we encourage all of our patients to complete HRAs; we also use HRAs as 

a tool in our organizational wellness program. 

At Group Health, we believe there are two basic principles to guide wellness programs to success. First, we believe successful workplace wellness programs should 

have a clear primary goal: improved worker health and productivity. Employers, 

therefore, may or may not experience reduced health care costs. The best evidence 

indicates that employers are most likely to benefit from improved productivity— 

whether they benefit from reduced future health care claims is less clear and subject 

to substantial variation. 

In Group Health’s own employer-sponsored wellness program, ‘‘Total Health,’’ we 

work very hard to ensure that the means to achieving the goal of improved health 

and productivity are never a threat to the privacy of an employee’s health information; nor are they discriminatory in nature. Privacy, nondiscrimination, and engagement incentives are issues that every workplace wellness program must address. 

Second, workplace wellness programs should be evidence-based whenever possible. The number of wellness vendors seems to be increasing by the day—each with 

its own approach for pursuing good health. But greater scrutiny is required to ensure success and avoid unnecessary services; for example, a company that requires 

lipid screenings for grocery store clerks of all ages really isn’t adding value to employee health. And in the 2013 RAND Employer Survey, while ‘‘employers overwhelmingly expressed confidence that workplace wellness programs reduce medical 

cost, absenteeism, and health-related productivity losses,’’ only half reported formally evaluating program impacts, and ‘‘only 2 percent reported actual savings estimates.’’ 5 There is clearly room for more rigorous study and evaluations, as these 

will be important to building programs that work to improve health for large numbers of workers. 

Happily, there is already a good deal of unbiased evidence available for clinicians, 

communities, and employers to use in building and judging wellness initiatives. 

The Centers for Disease Control and Prevention supports the Community Preventive Services Task Force (CPSTF) to provide a ‘‘Community Guide’’—evidence-based 

guidance to policymakers, practitioners, program planners, and other decisionmakers in communities, including companies, schools, public health agencies, health 

care institutions, and health plans, at the local, State, and Federal levels. The scientific literature tells us that worksite programs can indeed lead to engagement and 

improved health. The Community Preventive Services Task Force recommends the 

use of assessments of health risks with feedback when combined with health education programs, with or without additional interventions, on the basis of strong evidence of effectiveness in improving one or more health behaviors or conditions in 

populations of workers. Additionally, the Task Force recommends the use of assessments of health risks with feedback when combined with health education programs 

to improve the following outcomes among participants: 

• Tobacco use (strong evidence of effectiveness); 

• Excessive alcohol use (sufficient evidence of effectiveness); 

• Seat belt use (sufficient evidence of effectiveness); 

• Dietary fat intake (strong evidence of effectiveness); 

• Blood pressure (strong evidence of effectiveness); 

• Cholesterol (strong evidence of effectiveness); 

• Number of days lost from work due to illness or disability (strong evidence of 

effectiveness); 

35 

6King County application, Harvard Innovations in Government Award. 

7 Ibid. 

8 Ibid. 

• Health care services use (sufficient evidence of effectiveness); and 

• Summary health risk estimates (sufficient evidence of effectiveness). 

Again, health assessments are often considered the portal to worksite wellness 

programs, given that interventions should be tailored to a person’s need and risks. 

The U.S. Preventive Services Task Force (USPSTF), supported by the Agency for 

Health care Quality and Research, provides complementary evidence-based recommendations on clinical preventive services for patients. Their recommendations 

are typically used in primary health and health care-referable settings by clinical 

care professionals and decisionmakers. But since these recommendations address 

screening, such as blood pressure or blood lipids, they form the basis of worksite 

programs that offer onsite screening and referral programs. 

In addition to offering our own employee wellness program, Group Health actively 

works with employers who want to offer worksite wellness programs. Our goal, as 

an integrated system, is to make sure that incentives are aligned at all levels—the 

worksite, the health plan and the medical provider—to maximize success. 

One of the most successful and recognized employer wellness programs in the 

country is found in King County, WA, where Seattle is the county seat. The King 

County government, under the leadership of former King County executive Ron 

Sims, created its ‘‘Healthy IncentivesSM’’ workplace wellness program in 2005. According to the county, Healthy Incentives was created based on two principles. 

‘‘First, an environment that supports health empowers lifestyle changes that 

reduce the impact of chronic conditions. 

‘‘Second, integrated care that focuses on preventive, evidence-based medicine 

produces better outcomes and is less expensive.’’ 6

Creating an environment that supports health and lifestyle changes wasn’t easy— 

but the county worked collaboratively with organized labor and worker representatives with a focus on improving health rather than shifting costs. According to King 

County, 

In 2005, the county negotiated an agreement with labor unions to overhaul 

its medical plan design. The obvious strategy for stemming rising costs was [instituting] a health care premium [cost-share for the first time]. Instead, the 

county offered lower out-of-pocket expenses for employees participating in 

wellness activities; the higher the level of participation, the lower the member’s 

out-of-pocket expenses. The new plan was introduced to employees in 2006. Participants get a substantial reduction in out-of-pocket expenses for taking a 

health risk assessment and even lower for participating in an action plan targeting behavior-related health risks.7

The county worked aggressively to build a new culture of health in the workplace 

for employees. ‘‘Wellness programs like Weight Watchers at Work® were brought 

onsite, healthy food options were put in vending machines, and ongoing education 

on nutrition and exercise were launched through a newsletter and Web site.’’ 8

King County also worked closely with Group Health to drive costs down by extending high-quality health care to more workers. Group Health has consistently 

been rated the highest-quality provider in the region by the non-profit Washington 

Health Alliance, and claims data demonstrated that employees using Group Health 

as their provider cost the county about $4,200 per employee less annually, even 

though the quality of care was much higher. In 2009, Group Health served only 

about 20 percent of county employees, so the county created more incentives for its 

workers to obtain higher-quality care. The county eliminated the deductible for employees who chose Group Health and lowered copayments for those who participated 

in the Healthy Incentives program. Group Health has long offered free preventive 

care benefits and had a medical home model, so employees engaged in their program received great reinforcement for their health care needs at our medical centers. Continued support for screening services, immunizations or smoking cessation 

could all be fulfilled through, and reinforced by, their medical home provider. 

Group Health also brought lifestyle management programs that had proven successful in a clinical setting into the King County workplace. Despite initial concerns 

that the ‘‘Better choices, better health’’ program for living well with chronic conditions might not translate outside the clinical setting, the program has been a great 

success. 

In the end, according to the County the results—in measurably improved health— 

have been nothing short of stunning: 

36 

9King County application, Harvard Innovations in Government Award and Vestal, Christine. 

Through improved health of employees and use of higher quality health care, 

the county has reduced its health care cost trend from 11 percent to 6.2 percent, 

avoiding $46 million in costs. Employee engagement has been at or above 90 

percent since the program began. Participants have lost 19 tons more weight 

than a national comparison group, and the smoking rate has dropped below the 

national average from 11.3 percent to [less than 5 percent].9

The Healthy Incentives program has been recognized with the National Committee for Quality Assurance’s Health Quality Award, the National Association of 

Counties’ 2006 Achievement Award, and more recently with Harvard University’s 

Innovations in Government award. We believe that King County, working closely 

with Group Health, has delivered abundantly on the promise of workplace wellness 

programs and preventive care. 

There are two keys to success in creating a high-value worksite health promotion 

program and they are found in the goals King County embraced at the Healthy Incentives program’s outset: (1) creating a culture of health in the workplace to make 

healthier employee behavioral and lifestyle choices easier and normative, and (2) encouraging employee consumption of evidence-based clinical preventive services and 

chronic condition management. Financial incentives help to nudge employees toward 

making the right choices. 

Group Health’s own workplace wellness program, ‘‘Total Health,’’ is one example 

of the kind of program that is making progress toward building a culture of health 

at the worksite. The program includes making healthier choices at work easier (e.g., 

offering no-cost Quit for Life® phone counseling for smoking cessation, subsidizing 

Weight Watchers at Work for employees, and offering healthier choices in vending 

machines). It also uses significant premium discounts—up to $750 annually—based 

on screenings and self-guided participation in selected wellness activities focused 

mostly on cardiovascular risk reduction. More than 80 percent of Group Health employees participate in Total Health, with stories like Heidi’s becoming more and 

more common. Like King County, we designed Total Health with labor organizations at the table to ensure our goal of improved employee health remained paramount. It wasn’t always easy, but in the end, we designed an evidence-based program whose outcomes are currently under study by the Group Health Research Institute. 

Of course, in addition to being an engaged employer sponsor of Total Health, 

Group Health is also an integrated health system eager to engage with other employer sponsors to ensure employees have access to high-quality, high-value preventive services and a patient-centered medical home model. 

We believe the integrated nature of the Group Health system—with our reach 

into not just the plans sold, but the provider system—gives us the ability to collaborate with purchasers in designing truly individualized solutions to their workplace 

wellness and prevention needs. 

In fact, Group Health recently worked closely with one purchaser—the SEIU 

Healthcare NW Benefits Trust—to address high emergency department and hospital 

utilization. Working together, we devised a unique approach to addressing the problem. The Trust offered $100 to any worker who completed three tasks: (1) registering with Group Health’s online member portal; (2) completing a health risk assessment; and (3) making one preventive office visit. Surfacing health issues 

through an HRA and establishing a relationship with a primary care provider made 

a remarkable difference; these simple steps (over a 4-year period) led to a 27 percent 

reduction in emergency department and a 14 percent reduction in hospital admissions. 

This example illustrates an important point—meaningful engagement by employers with health systems and by employees with their own health are critical success 

factors for workplace wellness programs. King County and the SEIU Healthcare NW 

Benefits Trust offer powerful examples of very engaged employers who have created 

their own very significant positive outcomes. 

Of course, health systems also must be willing to engage with employers in innovative, individualized approaches; today many health systems are simply not prepared to have a conversation with their purchasers about new ways to serve employee health promotion needs. Until incentives are fully aligned through the marketplace, we expect the engagement with health systems will progress slowly. 

My message today is not that all or even most workplace wellness programs are 

effective, but that carefully designed, evidence-based programs with the primary 

goal of improved employee health can demonstrate dramatic results to reduce risk 

and improve health, often improving worker productivity at the same time. The inVerDate Nov 24 2008 11:07 Jan 09, 2017 Jkt 000000 PO 00000 Frm 00040 Fmt 6633 Sfmt 6621 S:\DOCS\93181.TXT CAROL
37 

credible variance in programs, vendors, employers and research on workplace 

wellness prevent any blanket conclusions about program effectiveness. 

I commend this committee for hosting this discussion and encourage further study 

of the issue in pursuit of the most effective paths to success. I urge more high-quality research on program outcomes so that evidence may guide our decisions, answering important questions about the necessity and size of incentives to improve health, 

the qualities that will encourage meaningful engagement by employees, and the 

most effective protections against discrimination and on behalf of consumer privacy. 

The CHAIRMAN. Thank you, Dr. Grossman. 

Mr. Abernathy. 

STATEMENT OF JAMES MATTHEW ABERNATHY, 

NASHVILLE, TN 

Mr. ABERNATHY. Good morning, Chairman Alexander and Ranking Member Senator Murray, and members of the committee. My 

name is Matt Abernathy. I work in Nashville, TN for Blue Cross 

Blue Shield of Tennessee, and I’ve been there 12 years. I’m here 

today with my wife Holly and my children Shannon and Ian. 

In 2003 at age 21, I weighed 250 pounds. My doctor told me I 

was at high risk for premature heart attack. I had high cholesterol, 

high blood pressure, and was pre-diabetic. This bothered me, but 

not enough to do anything about it. Four years later, when our 

daughter Shannon was born, I realized it was time to change 

things if I wanted to be around to see her grow up. I also wanted 

to be a role model for her to see how to live so that she wouldn’t 

face the same challenges that I faced throughout my life. I decided 

to take responsibility for my own health and make choices accordingly. 

From there, I chose to start a run/walk program. I started learning about healthy diet. Two years later Ian was born, and for the 

same reasons as when Shannon was born, I knew that these 

changes had to become a way of life. 

The support for these choices came first and foremost from my 

wife, Holly. She’s been there through everything from meal planning to keeping me motivated when things seemed too difficult, to 

instilling the values in our children. 

Also, support came from the resources provided by Onlife Health. 

My employer, Blue Cross Blue Shield of Tennessee, has a voluntary 

wellness program that is provided by Onlife. Early in my career at 

Blue Cross I had participated in the program, but it wasn’t until 

after the birth of Shannon that I began to take it seriously and 

start to utilize the resources available to me. With the goal of making my life better for me and my family, I took full advantage of 

Onlife’s wellness program. I was provided the tools I needed to set 

goals, track my progress, make changes, and stay on track. These 

included free annual health assessments and biometric screenings, 

a secure online wellness portal for 24/7 access, health coaching, 

electronic pedometer, as well as walking programs. 

The health coaches encouraged me to get moving and become active. They provided accountability as well as educational material 

and expert input. 

Still today, I continue to use Onlife’s wellness portal to track my 

progress and stay in touch with my health coaches. The financial 

incentives that Blue Cross offers further motivates me and rewards 

me for doing healthy activities. These incentives are tied to particiVerDate Nov 24 2008 11:07 Jan 09, 2017 Jkt 000000 PO 00000 Frm 00041 Fmt 6633 Sfmt 6601 S:\DOCS\93181.TXT CAROL
38 

* Disclaimer: Mr. Abernathy’s testimony is his own account of a personal wellness journey 

which included participation in a formal workplace wellness program. Mr. Abernathy’s outcomes 

are not meant to be representative of, nor can they be reasonably expected for participants in 

this or similar workplace wellness programs. 

pation in various programs offered by Onlife Health. Additionally, 

I receive discounts and rebates on my health insurance for my participation in these events. 

Overall, this wasn’t an overnight fitness program. This has been 

an ongoing commitment and a deliberate lifestyle transformation 

for me. Today, my kids have a dad who is fit and healthy. I weigh 

now 188 pounds. I’ve completed six half-marathons and two full 

marathons. My workplace wellness program gave me a support system to help me succeed. 

As a result of my healthy lifestyle, my children will not face 

many of the struggles that I had to deal with in my past. They understand good food choices and moderation. 

I’m thankful for my wife, my workplace wellness program, my 

health coaches who have helped me change from an overweight, atrisk employee into a picture of health. Thank you, and I’ll be happy 

to answer any questions. 

[The prepared statement of Mr. Abernathy follows:] 

PREPARED STATEMENT OF JAMES MATTHEW ABERNATHY* 

SUMMARY

My name is James Matthew Abernathy. I work in Nashville, TN as a Regional 

Service Coordinator for BlueCross BlueShield of Tennessee. I am 32 years old and 

have worked at BlueCross since 2002. 

Today, I am ‘‘a picture of health,’’ according to my doctors. However, that description did not fit me just a few years ago. In 2003, I weighed 250 pounds, drank 4 

to 5 sodas a day, and did not exercise at all. After completing a health assessment, 

doctors told me I was a high-risk for a heart attack. 

After the birth of my daughter, Shannon, in 2007, I made the decision to change 

my life. I realized that if I wanted my children’s lives to be different than mine that 

I would have to change my unhealthy habits and break the cycle. 

My wife, Holly, is my rock at home. But I have been lucky because I also receive 

the help I need from my employer. BlueCross BlueShield of Tennessee has a 

wellness program that is provided by Onlife Health. Early in my career at 

BlueCross I had participated in the program, but after the birth of Shannon, I went 

all in. The Onlife program and their professional health coaches not only changed 

my life, they saved my life. 

With a goal of making life better for me and my family, I took full advantage of 

Onlife’s comprehensive wellness program. It starts with a health assessment that 

includes a biometric screening to measure my weight, blood pressure, cholesterol, 

glucose levels, and other fitness indicators. Over the years, I have worked with 

great health coaches who encourage me, take the time to learn my personal goals, 

and help me set realistic action plans to achieve those goals. My coaches encouraged 

me to get moving and to become active. The company set up a walking program. 

They provided employees with pedometers and rewarded us for reaching step goals. 

The financial incentives the company offers further motivate and reward me for 

doing healthy activities. Incentives are tied to participation in the various programs 

offered by Onlife. For example, we are rewarded up to $200 per quarter for reaching 

our step goals, and I receive discounts on my health insurance. 

Today, my kids have a dad who is fit and healthy. I have completed 6 half-marathons and 2 full marathons. My weight is down to 188 pounds. My workplace 

wellness program gave me the support system I needed to succeed. It made me realize that I wasn’t in this alone, that I could get help whether I was at work or at 

home. And it is contagious. I have many friends and co-workers who have become 

more active and fit. 

As a result of my new lifestyle, my children will not face many of the struggles 

I had to deal with in the past. They understand good food choices and moderation. 

I’m thankful for my wife, my workplace wellness program, and my health coaches 

39 

who helped me change from an overweight, at-risk employee into a picture of 

health. 

Chairman Alexander, Ranking Member Senator Murray, and, members of the 

committee. 

Good morning. Thank you for the opportunity to share my story about the benefits 

I received by participating in my company’s voluntary wellness program as part of 

a culture of wellness at my workplace. My name is James Matthew Abernathy. I 

work in Nashville, TN as a Regional Service Coordinator for BlueCross BlueShield 

of Tennessee. With me today are my wife, Holly, my daughter, Shannon, and my 

son, Ian. 

I am 32 years old and have worked at BlueCross since 2002. Today, I am very 

pleased to be described as ‘‘a picture of health,’’ by my doctors. That’s a statement 

I am very proud of. However, it is also a statement that did not apply to me just 

a few years ago. 

In 2003, doctors described my condition much differently. I weighed 250 pounds, 

indulged in unhealthy eating and snacking, drank 4 to 5 sodas a day, and did not 

exercise at all. After completing a health risk assessment, doctors told me I had 

high blood pressure, was pre-diabetic, and was a high-risk for a heart attack. At 

the time I was 21 years old and didn’t want to listen. So I did what many people 

do when hearing these kinds of warnings. I didn’t go back to my doctor for a number 

of years. 

Things changed after the birth of our daughter, Shannon, in 2007. That’s when 

I made the realization that I had to change. I wanted to improve for my own benefit 

and for my family. I realized that if I wanted my children’s health and their lives 

to be different than mine that I would have to change my unhealthy habits and 

break the cycle. My wife, Holly, was and continues to be my No. 1 fan. She supports 

me, motivates me, and inspires me. 

Holly is my rock at home. But I have been lucky because I also receive the help 

I need from my employer. BlueCross BlueShield of Tennessee has a wellness program that is powered by Onlife Health. Early in my career at BlueCross I had participated in the program, but after the birth of Shannon, I went all in. The Onlife 

program and their professional health coaches not only changed my life, they saved 

my life. 

The wellness program consisted of a number of elements that helped me recognize 

the unhealthy habits that I had developed, and the options and resources available 

to me to break those habits and learn new ones. I learned that becoming healthy 

overnight was not realistic, that it would take time, a commitment on my part, personal accountability, and replacing the unhealthy habits with healthy ones. That 

meant eating better, being more active, getting more rest, and reducing stress. 

With a goal of making life better for me and my family, I took full advantage of 

Onlife’s comprehensive wellness program. It started by taking a health risk assessment that included a biometric screening to measure my weight, blood pressure, 

cholesterol, glucose levels, and other fitness indicators. The screenings were conveniently done right at my office, and they were free. From the health assessment, my 

health profile was established. Over the years, I have worked with great health 

coaches who encourage me, take the time to learn my personal goals, and help me 

set realistic action plans to achieve those goals. That includes information about 

proper nutrition . . . what to eat and drink . . . and learning that moderation is 

key. It wasn’t that I couldn’t eat snacks or even drink a soda now and then. My 

coaches taught me to eat sensible snacks and foods that were good for me, and to 

avoid those that were not good for me. 

My coaches encouraged me to get moving and to become active. The company set 

up a walking program and invited employees to track the number of steps we took 

each day. They provided us with pedometers and rewarded us for reaching step 

goals. Onlife Health helped me keep track of everything on their secure wellness 

portal. I can go online anytime and find educational materials about fitness, message my health coach, or track the number of Life Points and other incentives that 

I have earned. 

The financial incentives the company offers further motivate and reward me for 

doing healthy activities. Incentives are tied to participation in the various programs 

offered by Onlife. For example, we are rewarded up to $200 per quarter for reaching 

our step goals, and I receive discounts on my health insurance. 

Today, the financial incentives are secondary to me; my main motivation is maintaining a healthy lifestyle for me and my family. Shannon and Ian now have a dad 

who is fit and healthy. I have completed 6 half-marathons and 2 full marathons. 

My weight is down to 188 pounds and I am training to run the toughest trail maraVerDate Nov 24 2008 11:07 Jan 09, 2017 Jkt 000000 PO 00000 Frm 00043 Fmt 6633 Sfmt 6621 S:\DOCS\93181.TXT CAROL
40 

thon in the country, the Savage Gulf Marathon in Beersheba Springs, TN, in March. 

My wife, Holly, is a runner too, and even our 7-year-old enjoys getting out and competing in fun runs, 5Ks and such. What has become a big transformation in my life 

is now a part of my children’s lives. 

It’s incredible to see this. What was MY wellness journey has become a wellness 

journey for our entire family. 

A few years ago, I was overweight and unhealthy——now I’m not. I never thought 

I could be healthy. I thought that was something for ‘‘other guys.’’ I thought it was 

something only maintained by elite thin people with active families. Now, I know 

that’s not true. 

My workplace wellness program gave me the support system I needed to succeed. 

It made me realize that I wasn’t in this alone, that I could get help whether I was 

at work or at home. And it is contagious. I have many friends and co-workers who 

have become more active and are now running buddies of mine. 

As a result of my new lifestyle, my children will not face many of the struggles 

I had to deal with in the past. They understand good food choices and moderation 

(which was foreign to me). I’m thankful for my wife, my workplace wellness program, and my health coaches who helped me change from an overweight, at-risk 

employee into a picture of health. 

The CHAIRMAN. Thanks, Mr. Abernathy, for your own story. 

Mrs. Mathis. 

STATEMENT OF JENNIFER MATHIS, BAZELON CENTER FOR 

MENTAL HEALTH LAW, WASHINGTON, DC 

Mrs. MATHIS. Thank you. Chairman Alexander, Ranking Member 

Murray, members of the committee, thank you for inviting me to 

testify concerning this very important issue. As Senator Murray 

said, I serve as director of programs at the Bazelon Center for 

Mental Health Law. The Center is a national non-profit organization that works to promote equal opportunities for individuals with 

mental disabilities in all aspects of life, from litigation, policy advocacy, training, and education. 

I am also here on behalf of the Consortium for Citizens with Disabilities, or CCD, which is a coalition of national disability organizations working for national public policy that ensures the selfdetermination, independence, empowerment, integration and inclusion of children and adults with disabilities in all aspects of society. 

CCD believes that wellness programs can be useful tools to promote health and well-being. In fact, the idea of early intervention 

is very consistent with good practices in disability service systems. 

We do, however, have significant concerns about the potential of 

some wellness programs to discriminate against individuals with 

disabilities if applicable laws like the Americans with Disabilities 

Act are not followed. 

As you know, the employment rate of people with disabilities is 

far lower than that of any other group tracked by the Bureau of 

Labor Statistics, and people with disabilities have been disproportionately impacted by the economic downturn. People with disabilities tend to have employment rates of somewhere between onethird and one-half of the employment rates of people without disabilities. It’s a significant problem. 

Against this backdrop, we think it is important to ensure that 

employer-based wellness programs are implemented to promote 

healthy behaviors without eroding longstanding and critical workplace protections for people with disabilities. In light of the differences in understanding among different people about how the 

ADA interacts with the Affordable Care Act in this area, we hope, 

like some of our colleagues in the business community, that the 

41 

Equal Employment Opportunity Commission, or the EEOC, will 

soon issue guidance or regulations to clarify the ADA’s application 

to wellness programs. Such clarification would benefit both employers and employees and afford stakeholders an opportunity to offer 

input about how the requirements of the ACA and the ADA should 

interact in the area of wellness. 

CCD believes that the ADA and ACA do coexist easily in their 

application to wellness programs, and that the requirements of 

both laws can be followed at the same time. We look forward to a 

regulatory process that will allow the EEOC to clarify how these 

laws do intersect. Absent EEOC action through policymaking or 

litigation, we are concerned that many employees with disabilities 

will continue to be faced with the following predicament, which is 

that due to the threat of losing thousands of dollars for failing to 

respond to intrusive medical inquiries, many employees with disabilities are left with little choice but to disclose highly sensitive 

information about their disabilities, information that the ADA intended to protect from disclosure as it has nothing to do with these 

employees’ ability to do their jobs. In some cases, information solicited is not even connected to the wellness services actually offered. 

For this reason, we think it is extremely important that the 

EEOC has brought litigation to address what we think are some 

clear violations of the ADA in this context where people were punished for not answering medical questions by losing their employer’s entire or nearly entire contribution to their health insurance 

coverage. 

The cases that have been brought by the EEOC have largely 

been cases where it’s hard to imagine how the choice that the person was presented could be considered a true voluntary choice 

about whether to disclose disability-related information. 

The ADA’s confidentiality protections are among its most important. Congress put these protections in place in the ADA based on 

consideration of an extensive record and a long history of intractable discrimination against people with disabilities in the workplace. It is critical for people with disabilities to maintain the privacy rights afforded to them under the ADA as they participate in 

wellness programs. Thank you. 

[The prepared statement of Mrs. Mathis follows:] 

PREPARED STATEMENT OF JENNIFER MATHIS

Chairman Alexander, Ranking Member Murray, and members of the committee: 

Thank you for inviting me to testify concerning this important issue. My name is 

Jennifer Mathis. I serve as director of Programs at the Bazelon Center for Mental 

Health Law, a national non-profit organization that works to promote equal opportunities for individuals with mental disabilities in all aspects of life through litigation, policy advocacy and training. I am here also on behalf of the Consortium for 

Citizens with Disabilities, a coalition of national disability organizations working for 

national public policy that ensures the self-determination, independence, empowerment, integration and inclusion of children and adults with disabilities in all aspects 

of society. 

While CCD believes that wellness programs can be useful tools to promote health 

and well-being, we have significant concerns about their potential to discriminate 

against individuals with disabilities if applicable laws such as the Americans with 

Disabilities Act (ADA) are not followed. As you know, the employment rate of people 

with disabilities is far lower than that of any other group tracked by the Bureau 

of Labor Statistics, and people with disabilities have been disproportionately impacted by the economic downturn. Against this backdrop, we think it is important 

to ensure that employer-based wellness programs are implemented to promote 

42 

1The ADA also has other applications to wellness programs, including requiring reasonable 

modifications to requirements that individuals meet certain health targets where such requirements would deny equal opportunity based on disability. I focus, however, on penalties for failure to respond to wellness program medical inquiries since that issue has been the primary 

focus of attention in recent discussions. 2There is little dispute that the medical inquiries asked as part of wellness programs typically 

relate to an employee’s health and not to the ability to perform job duties. 

healthy behaviors without eroding longstanding and critical workplace protections 

for people with disabilities. 

In light of the different understandings about the ADA’s interaction with the Affordable Care Act in this area, we hope that the Equal Employment Opportunity 

Commission (EEOC) will soon issue guidance or regulations to clarify the ADA’s application to wellness programs. Such clarification would benefit both employers and 

employees, and afford stakeholders an opportunity to offer input about how the requirements of the ACA and the ADA should interact in the area of wellness. Moreover, the Departments of Labor, Health and Human Services, and Treasury have 

left this door open, making clear in their final regulations implementing the ACA’s 

wellness provisions that other laws such as the ADA may also apply and impose 

additional requirements. Employers and employees alike are eager for clarification. 

CCD believes that the ADA and the ACA co-exist easily in their application to 

wellness programs, and that the requirements of both laws can be followed at the 

same time. We look forward to a regulatory process that will allow the EEOC to 

clarify how these laws intersect. 

Absent EEOC action through policymaking or litigation, we are concerned that 

many employees with disabilities will continue to be faced with this predicament: 

due to the threat of losing thousands of dollars for refusing to respond to intrusive 

wellness program medical inquiries, many employees with disabilities are left with 

little choice but to disclose highly sensitive information about their disabilities—information that the ADA intended to protect from disclosure, as it has nothing to do 

with these employees’ ability to do their jobs. In some cases, the information solicited is not even connected to wellness services actually offered. The ADA’s confidentiality protections are among its most important; Congress put these protections in 

place in the ADA based on consideration of an extensive record and a long history 

of intractable discrimination against people with disabilities in the workplace. It is 

critical for people with disabilities to maintain the privacy rights afforded to them 

under the ADA as they participate in wellness programs. 

The ADA prohibits employers from penalizing employees for failing to answer non-job related medical inquiries as part of a wellness program.1

The ADA prohibits discrimination on the basis of disability with regard to the 

‘‘terms, conditions, and privileges of employment,’’ 42 U.S.C. § 12112(a), including in 

contractual relationships with fringe benefits providers that have the effect of discriminating against employees with disabilities, id. at § 12112(b)(2). ‘‘Discrimination’’ under the ADA is defined as, inter alia, conducting medical examinations or 

inquiries of employees that are not job-related and consistent with business necessity. 42 U.S.C. § 12112(d)(4)(A).2 There is an exception permitting ‘‘voluntary medical examinations, including voluntary medical histories, which are part of an 

employee health program available to employees at that work site.’’ Id. at 

§ 12112(d)(4)(B) (emphasis added); see also EEOC Enforcement Guidance on Disability-Related Inquiries and Medical Examinations of Employees Under the Americans with Disabilities Act (July 27, 2000) at Question 22, http://www.eeoc.gov/policy/docs/guidance-inquiries.html (‘‘EEOC Guidance’’). 

The purpose of the ADA’s bar on medical inquiries that are not job-related and 

consistent with business necessity is to guard against discrimination and ensure 

that disability-related inquiries are limited to those necessary to determine whether 

an individual can do the job. See S. Rep. 101–116, at 39–40 (1989) (‘‘As was abundantly clear before the committee, being identified as disabled often carries both blatant and subtle stigma. An employer’s legitimate needs will be met by allowing the 

medical inquiries and examinations which are job-related.’’). As the EEOC noted in 

its guidance concerning disability-related inquiries of employees: 

Historically, many employers asked applicants and employees to provide information concerning their physical and/or mental condition. This information 

often was used to exclude and otherwise discriminate against individuals with 

disabilities—particularly nonvisible disabilities, such as diabetes, epilepsy, 

heart disease, cancer, and mental illness—despite their ability to perform the 

job. The ADA’s provisions concerning disability-related inquiries and medical 

examinations reflect Congress’s intent to protect the rights of applicants and 

employees to be assessed on merit alone, while protecting the rights of employVerDate Nov 24 2008 11:07 Jan 09, 2017 Jkt 000000 PO 00000 Frm 00046 Fmt 6633 Sfmt 6621 S:\DOCS\93181.TXT CAROL
43 

3 EEOC Guidance, General Principles. 4 EEOC Guidance, Question 22. 5 As recognized by the Department of Health and Human Services, Department of the Treasury, and Internal Revenue Service, a penalty for failure to participate in a wellness program 

should be treated the same as an inducement to participate. See, e.g., Final Rule, Incentives for 

Nondiscriminatory Wellness Programs in Group Health Plans, 78 Fed. Reg. 33158, 33160 (June 

3, 2013) (‘‘References in the final regulations to a plan providing a reward include both providing a reward (such as a discount or rebate of a premium or contribution, a waiver of all or 

part of a cost-sharing mechanism, an additional benefit, or any financial or other incentive) and 

imposing a penalty (such as a surcharge or other financial or nonfinancial disincentive).’’). Thus 

employees who choose to forego a financial inducement to participate are effectively penalized 

financially for not participating. 6 42 U.S.C. § 2000ff–1(b)(2). The statute allows employers to acquire genetic information 

‘‘where—(A) health or genetic services are offered by the employer, including such services offered as part of a wellness program; (B) the employee provides prior, knowing, voluntary, and 

written authorization; (C) only the employee (or family member if the family member is receiving genetic services) and the licensed health care professional or board certified genetic counselor involved in providing such services receive individually identifiable information concerning 

the results of such services; and (D) any individually identifiable genetic information provided 

under subparagraph (C) in connection with the services provided under subparagraph (A) is only 

available for purposes of such services and shall not be disclosed to the employer except in aggregate terms that do not disclose the identity of specific employees.’’ Id. 

ers to ensure that individuals in the workplace can efficiently perform the essential functions of their jobs.3

In the absence of a statutory definition of voluntary, ‘‘we construe a statutory 

term in accordance with its ordinary or natural meaning.’’ FDIC v. Meyer, 510 U.S. 

471, 476 (1994) The ordinary meaning of ‘‘voluntary’’ is ‘‘not impelled by outside influence’’ and ‘‘[w]ithout valuable consideration.’’ Black’s Law Dictionary (9th ed. 

2009). See also Merriam Webster Dictionary (‘‘unconstrained by interference’’ and 

‘‘without valuable consideration’’). 

Since 2000, the EEOC, charged with enforcing and interpreting Title I of the 

ADA, has defined ‘‘voluntary’’ for purposes of this provision consistently with this 

common-sense definition. According to the agency, ‘‘voluntary’’ means that an employer may neither require participation nor penalize employees who do not participate.4 Thus, medical questions that an employee is penalized for not answering are 

not voluntary.5

Indeed, the EEOC similarly interpreted a parallel provision in the Genetic Information Non-Discrimination Act (GINA). The Act prohibits covered employers from 

requesting, requiring or purchasing genetic information from employees, except in 

limited circumstances including when the employee voluntarily discloses the information as part of a wellness program.6 In its implementing regulations, the EEOC 

states that the ‘‘wellness program’’ exception applies only where ‘‘the provision of 

genetic information is voluntary, meaning the covered entity neither requires the individual to provide genetic information nor penalizes those who choose not to provide it.’’ 29 C.F.R. § 1635.8(b)(2)(i)(A). Accordingly, an employer ‘‘may not offer a financial inducement for individuals to provide genetic information.’’ Id. 

§ 1638.5(b)(2)(ii). While an employer may offer financial inducements for completion 

of health risk assessments that include questions about family medical history or 

other genetic information, the employer must make clear, in language reasonably 

likely to be understood by those completing the health risk assessment, that the inducement will be made available whether or not the participant answers questions 

regarding genetic information. Id. 

The ACA did not silently repeal the ADA’s provisions concerning medical 

inquiries in wellness programs. 

First, it is important to note that the ACA did not supersede the ADA’s requirement that non-job-related medical inquiries in wellness programs be voluntary and 

failure to answer not be penalized. It is well-established law that courts presume 

that Congress did not repeal prior laws without saying so. See Morton v. Mancari, 

417 U.S. 535, 550–51 (1974) (‘‘cardinal rule’’ of statutory construction that ‘‘repeals 

by implication are not favored’’). It would be remarkable if Congress jettisoned the 

ADA’s detailed requirements concerning medical inquiries—a cornerstone of the 

ADA’s protections—without saying a word about this repeal in either the statute or 

in the legislative history. 

The ADA’s separate application to wellness programs was also recognized by the 

Departments of Labor, Health and Human Services, and Treasury in their final 

wellness regulations: 

As noted in section II.H later in this preamble, these final regulations are implementing only the provisions regarding wellness programs in the Affordable 

44 

7 78 Fed. Reg. 33158, 33165. 

8 Id. at 33168. 

9 Among other things, such programs must not be a subterfuge for discriminating based on 

a health status factor, and must allow reasonable alternative standards for an individual to receive the reward when a medical condition makes it unreasonably difficult or medically inadvisable for him or her to meet the standard. Id. § 2705(j)(3)(B), (D). 

Care Act. Other State and Federal laws may apply with respect to the privacy, 

disclosure, and confidentiality of information provided to these programs. For 

example . . . employers subject to the Americans with Disabilities Act of 1990 

(ADA) must comply with any applicable ADA requirements for disclosure and 

confidentiality of medical information and non-discrimination on the basis of 

disability.7 (emphasis added) 

* * * 

Compliance with the HIPAA nondiscrimination rules (which were later 

amended by the Affordable Care Act), including the wellness program requirements in paragraph (f), is not determinative of compliance with any other provision of ERISA, or any other State or Federal law, including the ADA. This paragraph is unchanged by these final regulations and remains in effect. As stated 

in the preamble to the 2006 regulations, the Departments recognize that many 

other laws may regulate plans and issuers in their provision of benefits to participants and beneficiaries. These laws include, but are not limited to, the ADA, 

Title VII of the Civil Rights Act of 1964, Code section 105(h) and PHS Act section 2716 (prohibiting discrimination in favor of highly compensated individuals), the Genetic Information Nondiscrimination Act of 2008, the Family and 

Medical Leave Act, ERISA’s fiduciary provisions, and State law.8 (emphasis 

added) 

The ACA does not address whether penalties may be imposed for failure 

to answer wellness program medical inquiries, and to the extent that the 

ACA addresses penalties generally, it speaks to whether such penalties constitute insurance discrimination, not workplace discrimination. 

The ACA is not an employment discrimination statute. It does not purport to address whether wellness program penalties or other aspects of wellness programs 

constitute disability-based employment discrimination. Instead, the ACA prohibits 

disability-based discrimination in insurance coverage, providing that ‘‘[a] group 

health plan and a health insurance issuer offering group or individual health insurance coverage may not establish rules for eligibility (including continued eligibility) 

of any individual to enroll under the terms of the plan or coverage based on’’ one 

of eight ‘‘health status-related factors,’’ including ‘‘health status’’ and ‘‘disability.’’ 

Public Law 111–148 (Mar. 23, 2010), § 2705(a). To comply with this non-discrimination provision, wellness programs that offer rewards for satisfying a standard based 

on a health status factor must meet certain conditions, including a limit on such 

rewards to no more than 30 percent of the cost of employee-only coverage. Id. 

§§ 2705(j)(1)(C), (j)(3).9 Wellness programs offering rewards that are not based on 

satisfying a standard related to a health status factor—which presumably would include rewards for answering medical inquiries—comply with the non-discrimination 

requirement as long as participation in the program is made available to all similarly situated individuals. Id. §§ 2705(j)(1)(B), (j)(2). 

The ACA does not conflict with the ADA’s requirements concerning medical inquiries in wellness programs and both laws should be given effect. 

‘‘[W]hen two statutes are capable of co-existence, it is the duty of the courts, absent a clearly expressed congressional intention to the contrary, to regard each as 

effective.’’ Morton v. Mancari, 417 U.S. 535, 551 (1974). The ADA’s provisions concerning medical inquiries and the ACA’s provisions concerning wellness program 

penalties are clearly capable of coexistence and both must be given effect. If the 

ACA required penalties or rewards that were prohibited by the ADA, the two statutes would conflict. But the mere fact that the ACA provides that certain penalties 

do not violate its requirement concerning non-discrimination in insurance coverage 

does not mean that such penalties comply with the ADA or other laws. 

Indeed, it is routine for two statutes that apply to the same conduct to impose 

independent obligations. See, e.g., K.M. v. Tustin Unified School Dist., 725 F.3d 

1088 (9th Cir. 2013) (Individuals with Disabilities Education Act (IDEA) coexists 

with ADA and public schools must comply with both; while public school’s failure 

to provide word-for-word transcription service to deaf student did not violate IDEA’s 

requirement to provide a free and appropriate public education, that did not foreclose claim that this failure violated ADA’s requirement to provide student with 

45 

equally effective communication). See also Statement of Interest of the United 

States of America in S.S. v. Springfield Public Schools, Civ. Action No. 3:14-cv– 

30116, at 2, http://www.ada.gov/briefs/springfieldlmalsoi.pdf (‘‘. . . while the 

ADA and IDEA provide complementary protections for many students with disabilities, they are not identical in purpose or scope and impose distinct obligations on 

school districts in furtherance of their respective statutory mandates. . . . [the ADA] 

may require different or additional measures to avoid discrimination against children with disabilities than the measures that are required to comply with IDEA.’’). 

Where, as here, the two statutes do not even address the same issue—the ACA 

addresses what constitutes insurance discrimination and the ADA addresses what 

constitutes employment discrimination—it would be particularly inappropriate to 

look to the terms of the ACA to determine what constitutes a violation of the ADA. 

Both statutes apply to wellness programs and both impose independent obligations 

that do not conflict. 

Thank you for the opportunity to provide testimony on this important issue. The 

Consortium of Citizens with Disabilities appreciates the committee’s interest in this 

issue and stands ready to assist in any effort to secure further clarification concerning the ADA’s application to wellness programs. 

The CHAIRMAN. Thank you, Mrs. Mathis. 

Mr. Dreiband. 

STATEMENT OF ERIC S. DREIBAND, PARTNER, JONES DAY, 

WASHINGTON, DC 

Mr. DREIBAND. Good morning, Chairman Alexander, Ranking 

Member Murray, and members of the committee. Thank you for affording me the privilege of testifying before you today. My name is 

Eric Dreiband, and I’m a partner at the law firm of Jones Day here 

in Washington, DC. 

In 1990, Congress passed and President George H. W. Bush 

signed the Americans with Disabilities Act. This important civil 

rights law is known as the ADA, and it prohibits discrimination in 

employment on the basis of disability. It also authorizes employers 

to conduct voluntary medical examinations, including voluntary 

medical histories, which are part of an employee health program. 

The law also contains a safe harbor that permits employers to implement benefit plans that are based on underwriting risk. 

Congress directed the Equal Employment Opportunity Commission to enforce these protections. The Commission is also known as 

the EEOC, as we’ve heard from some of our witnesses today. And 

in July 2000, the EEOC stated that a wellness program is voluntary and therefore lawful as long as the employer neither requires participation nor penalizes employees who do not participate. 

In 2006, the Departments of Labor and Health and Human Services and the Treasury enacted regulations under the Health Insurance Portability and Accountability Act. This law is known as 

HIPAA, and the 2006 HIPAA regulations authorized employers to 

reward employees who participate in wellness plans with financial 

inducements of up to 20 percent of the cost of health insurance coverage. 

On January 6, 2009, the EEOC announced that it agreed with 

this 20 percent standard. The EEOC reasoned that ‘‘borrowing 

from the HIPAA rule is appropriate because the ADA lacks specific 

standards on financial inducements and because it will help increase consistency in the implementation of wellness programs.’’ 

On March 6, 2009, however, the EEOC rescinded its endorsement of the HIPAA standards and said that it was continuing to 

46 

examine what level, if any, of financial inducement to participate 

in a wellness program would be permissible under the ADA. 

In 2010, Congress passed the Patient Protection and Affordable 

Care Act. That law provides that a financial inducement for employee participation in wellness programs will be lawful if it does 

not exceed 30 percent of the cost of coverage. The law also authorizes the Secretaries of Labor, Health and Human Services, and the 

Treasury to increase lawful financial inducements for participation 

up to 50 percent of the cost of coverage. 

On August 20, 2012, the U.S. Court of Appeals for the 11th Circuit rejected an Americans with Disabilities Act challenge to a 

wellness program that imposed a $20 charge on each bi-weekly 

paycheck issued to employees who refused to participate in the program. The court reasoned that the Americans with Disabilities 

Act’s safe harbor exempted the wellness program from the ADA’s 

prohibitions. 

Next, on June 3, 2013, the Secretaries of Labor, Health and 

Human Services, and the Treasury issued regulations that permit 

employers to reward employees who participate in wellness plans 

by now offering financial inducements of up to 30 percent of the 

cost of health coverage, and as high as 50 percent for programs designed to prevent or reduce tobacco use. 

In August and September 2014, the EEOC filed lawsuits that alleged that various wellness programs violated the Americans with 

Disabilities Act. Then in October 2014, the EEOC filed suit against 

Honeywell International, Inc. and alleged that Honeywell’s 

wellness program violates the Americans with Disabilities Act even 

if it complies fully with the Affordable Care Act. 

The Commission asserted that the 11th Circuit’s decision is 

wrong about the ADA’s safe harbor, that the safe harbor does not 

apply to wellness programs, and that compliance with the Affordable Care Act is not a defense to their ADA action. 

In November 2014, a Federal District Court judge in Minnesota 

rejected the EEOC’s position. 

All of this leaves the public in a lurch. Protections for working 

people and their benefits are unclear. Employers face the threat of 

EEOC investigations and lawsuits even if they structure their 

wellness plans to comply fully with the Affordable Care Act. And 

after a nearly 6-year examination, the Commission has failed or refused to explain how it believes a wellness plan may be lawful. 

The EEOC is flip-flopping. Its investigations and its litigation 

perpetuate confusion and uncertainty. None of this serves the public good. And if the executive branch of the government will not end 

this sorry State of affairs, the Congress should do so by enacting 

appropriate legislation. 

Thank you, and I look forward to your questions. 

[The prepared statement of Mr. Dreiband follows:] 

PREPARED STATEMENT OF ERIC S. DREIBAND

I. INTRODUCTION

Good morning Chairman Alexander, Ranking Member Murray, and members of 

the committee. Thank you all for the privilege of testifying today. My name is Eric 

Dreiband, and I am a partner at the law firm Jones Day here in Washington, DC. 

I previously served as the General Counsel of the U.S. Equal Employment Opportunity Commission (‘‘EEOC’’ or ‘‘Commission’’). The EEOC is a Federal law enforceVerDate Nov 24 2008 11:07 Jan 09, 2017 Jkt 000000 PO 00000 Frm 00050 Fmt 6633 Sfmt 6621 S:\DOCS\93181.TXT CAROL
47 

1See 42 U.S.C. § 12101 et seq. 

2 42 U.S.C. § 12112(d)(4)(A). 

3 42 U.S.C. § 12112(d)(4)(B). 

4 42 U.S.C. § 12201(c)(2). This is sometimes referred to as a ‘‘safe harbor’’ provision. 

ment agency that is charged with enforcing very important Federal laws against 

discrimination on the basis of race, color, sex, religion, national origin, age, disability, and genetic information, among others. As EEOC General Counsel, I directed the Federal Government’s litigation under the Federal employment antidiscrimination laws. I also managed approximately 300 attorneys and a national 

litigation docket of approximately 500 cases. I was privileged to work with many 

public officials who dedicated their careers to serving the public, enforcing the civil 

rights laws, rooting out unlawful discrimination, and working to ensure that our 

Nation reaches the idea of equal opportunity for everyone. These individuals continue their important work. They investigate charges of discrimination. They mediate and conciliate disputes and work with individuals, unions, and employers to resolve very difficult and often painful problems. They pursue enforcement through 

litigation in the Federal courts, at every level up to and including the Supreme 

Court of the United States. And, these very able EEOC officials have the awesome 

power of the U.S. Government to back them up. 

It is with this background that I appear here today, at your invitation, to speak 

about employer wellness programs. 

The Americans with Disabilities Act of 1990 (‘‘ADA’’) authorizes employers to conduct medical examinations and to obtain employee medical history of employees as 

part of wellness programs as long as participation by employees is voluntary. The 

Patient Protection and Affordable Care Act (‘‘ACA’’) specifies that the reward for a 

wellness program may be up to 30 percent of the cost of coverage, with the potential 

for that to increase to 50 percent. Moreover, the U.S. Department of the Treasury, 

the U.S. Department of Labor, and the U.S. Department of Health and Human 

Services (‘‘the Departments’) have issued standards for wellness programs that likewise endorse the ACA’s 30 and 50 percent standards, and the U.S. Court of Appeals 

for the Eleventh Circuit has determined that the ADA may exempt wellness plans 

from that law. However, compliance with the ACA may not eliminate the risk of 

ADA liability for employers, at least according to the U.S. Equal Employment Opportunity Commission (‘‘EEOC’’ or ‘‘Commission’’). Since March 2009, the Commission has declined to endorse any definition of what the ADA’s ‘‘voluntary’’ standard 

means, and in a recent court case, the EEOC asserted that the decision by the Eleventh Circuit is wrong. So employers and employees throughout the United States 

are left with the rather bizarre situation in which the Congress and one part of the 

executive branch of the Government have endorsed a set of standards that it says 

govern wellness plans and comply with the law while the EEOC has failed or refused to explain what it will treat as a lawful ‘‘voluntary’’ wellness plan. The Commission’s silence about this issue is perplexing, and the Congress, the EEOC, or 

both should clarify exactly how a wellness plan will comply with the ADA. 

II. STATUTORY BACKGROUND

Congress enacted the Americans with Disabilities Act1 in 1990. That law permits 

disability-related inquiries and medical examinations that are part of a ‘‘voluntary’’ 

wellness program. Specifically, the ADA states: 

‘‘A covered entity shall not require a medical examination and shall not make 

inquiries of an employee as to whether such employee is an individual with a 

disability or as to the nature or severity of the disability, unless such examination or inquiry is shown to be job-related and consistent with business necessity.’’ 2

On the other hand, Section 102(d)(4)(B) of the ADA states that employers 

‘‘may conduct voluntary medical examinations, including voluntary medical histories, which are part of an employee health program available to employees at 

that work site.’’ 3

Section 501(c)(2) authorizes employers to establish, sponsor, observe, and administer 

‘‘the terms of a bona fide benefit plan that are based on underwriting risks, 

classifying risks, or administering such risks that are based on or not inconsistent with State law.’’4

The Health Insurance Portability and Accountability Act (‘‘HIPAA’’), enacted in 

1997, did not specifically address wellness programs but rather included a general 

prohibition against provisions in employer group health plans that discriminated 

48 

5See ERISA Section 702(a), 29 U.S.C. § 1182(a). 

6See Department of Labor Regulations, 29 C.F.R. § 2590.702(f). 

7See 78 Fed. Reg. 33158. 

8 42 U.S.C. § 300gg–4(j)(3)(A). 

9 Id. 

10See http://www.eeoc.gov/policy/docs/guidance-inquiries.html. 11See EEOC Opinion Letter, Jan. 6, 2009 at 2, rescinded on March 6, 2009, http:// 

pdfserver.amlaw.com/cc/WellnessEEOC2009.pdf. 12 Id. 13See http: //www.eeoc.gov/eeoc/foia/ letters/2009/adaldisabilitylmedexamlhealthrisk 

.html. 14See http://www.eeoc.gov/eeoc/foia/letters/2013/adalwellnesslprograms.html. 15See http://www.eeoc.gov/eeoc/newsroom/release/5–8–13.cfm; http://www.eeoc.gov/eeoc/ 

meetings/5–8–13/index.cfm. 

against employees with respect to their plan participation based on factors such as 

health status, medical conditions, or claims experience.5 In 2006, in response to employer concerns that wellness programs could be deemed to violate these HIPAA 

nondiscrimination standards, the Departments issued regulations that exempted 

wellness programs from the HIPAA nondiscrimination rules if they met certain requirements.6 Those regulations authorized employers to offer financial inducements 

to participate in wellness plans of up to 20 percent of the cost of coverage.7

In 2010, Congress passed and the President signed the Patient Protection and Affordable Care Act, commonly called the Affordable Care Act or the ‘‘ACA.’’ With respect to wellness programs, the ACA provides that 

‘‘ [a] reward may be in the form of a discount or rebate of a premium or contribution, a waiver of all or part of a cost-sharing mechanism (such as 

deductibles, copayments, or coinsurance), the absence of a surcharge, or the 

value of a benefit that would otherwise not be provided under the plan.’’ 8

Specifically, the ACA states that the reward for a wellness program 

‘‘shall not exceed 30 percent of the cost of the coverage in which an employee 

or individual and any dependents are enrolled . . . The Secretaries of Labor, 

Health and Human Services, and the Treasury may increase the reward available under this subparagraph to up to 50 percent of the cost of coverage if the 

Secretaries determine that such an increase is appropriate.’’ 9

III. EEOC AND JUDICIAL POSITIONS ON WELLNESS PROGRAMS

According to the EEOC, a wellness program is ‘‘voluntary’’ if the employer ‘‘neither requires participation nor penalizes employees who do not participate.’’ 10 In a 

letter dated January 6, 2009—2 weeks before President George W. Bush left office— 

the EEOC’s Office of Legal Counsel announced that a wellness plan would be ‘‘voluntary’’ (and therefore lawful) if ‘‘the inducement to participate’’ does not 

‘‘exceed 20 percent of the cost of employee only or employee and dependent coverage under the plan, consistent with regulations promulgated pursuant to the 

Health Insurance Portability and Accountability Act.’’ 11

The EEOC explained that 

‘‘[b]orrowing from the HIPAA rule is appropriate because the ADA lacks specific standards on financial inducements, and because it will help increase consistency in the implementation of wellness programs.’’ 12

On March 6, 2009, however, the EEOC rescinded this statement and announced 

that it was ‘‘continuing to examine what level, if any, of financial inducement to participate in a wellness program would be permissible under the ADA.’’ 13 EEOC’s ‘‘examination’’ has continued for nearly 6 years, and when this examination will conclude, if it ever does, is unclear. On January 18, 2013, EEOC reiterated that 

‘‘[t]he EEOC has not taken a position on whether and to what extent a reward 

amounts to a requirement to participate, or whether withholding of the reward 

from non-participants constitutes a penalty, thus rendering the program involuntary.’’ 14

EEOC held a hearing about wellness plans on May 8, 2013,15 and more than 18 

months after that hearing, the EEOC apparently is still ‘‘continuing to examine’’ its 

position about wellness plans. 

The courts and the Departments are not waiting for the EEOC. On August 20, 

2012, the U.S. Court of Appeals for the Eleventh Circuit rejected a challenge to a 

wellness program that imposed a $20 charge on each biweekly paycheck issued to 

employees who enrolled in the employer’s group health insurance plan and refused 

49 

16 See Seff v. Broward County, 691 F.3d 1221 (11th Cir. 2012). 17 Id. at 1223–24. 18See http://webapps.dol.gov/FederalRegister/HtmlDisplay.aspx?DocId=26880&AgencyId=8& 

DocumentType=2. 19See http://www.eeoc.gov//eeoc/newsroom/release/8–20–14.cfm?renderforprint=1. See also 

EEOC v. Orion Energy Systems, Inc., Case No. 14–1019 (E.D. Wis. Complaint filed Aug. 20, 

2014). 20Plaintiff EEOC’s Complaint at 5–6, EEOC v. Orion Energy Systems, Inc., Case No. 14–1019 

(E.D. Wis. filed Aug. 20, 2014). The EEOC also alleges that Orion retaliated against an employee for her objections against the wellness program, and that Orion ‘‘interfered, coerced, and 

intimidated’’ the employee in violation of the ADA. Id. at 6–7. 21Defendant Orion Energy Systems’ Answer at 4–5, EEOC v. Orion Energy Systems, Inc., Case No. 14–1019 (E.D. Wis. filed Oct. 16, 2014). 22See http://www.eeoc.gov//eeoc/newsroom/release/10–1–14b.cfm?renderforprint=1. See also 

Plaintiff EEOC’s Complaint, EEOC v. Flambeau, Inc., Case No. 14–638 (W.D. Wis. filed Sept. 

30, 2014). 23Defendant Flambeau’s Answer, EEOC v. Flambeau, Inc., Case No. 14–638 (W.D. Wis. filed 

Nov. 24, 2014). 24 EEOC v. Honeywell Int’l, Inc., Civil No. 14–4517 (D. Minn. Oct. 27, 2014). 25 EEOC v. Honeywell Int’l, Inc., Civil No. 14–4517, 2014 U.S. Dist. LEXIS 157945, at *11 (D. 

Minn. Nov. 6, 2014). Under the program, Honeywell employees that choose to participate agree 

to undergo biometric testing and become eligible for an HSA in which Honeywell contributes 

$250 to $1,500 to qualified employees in a certain salary range. Id. at *2–4. Those employees 

who choose not to participate in the program do not qualify for a company-sponsored HSA and 

must also pay a $500 surcharge. Id. at *4. 26 Id. at *13. 27 Id. at *14. 

to participate in the employee wellness program.16 The court reasoned that a ‘‘safe 

harbor’’ contained in the ADA permits employers to make disability-related inquiries and give medical examinations to observe the terms of a ‘‘bona fide benefit plan,’’ 

and because the $20 charge was a ‘‘term’’ of the employer’s health plan, the plan 

was ‘‘bona fide’’ and therefore lawful.17

On June 3, 2013, the Departments issued rules that permit employers to 

‘‘reward employees who participate in wellness plans, including plans that involve health-related questionnaires or biometric tests, by offering financial inducements up to 30 percent of the cost of health coverage and as high as 50 

percent for ‘‘programs designed to prevent or reduce tobacco use.’’ 18

IV. EEOC LAWSUITS AGAINST EMPLOYERS

Even though EEOC has yet to provide employers guidance on what is ‘‘voluntary,’’ 

the agency has filed multiple lawsuits against employers for their wellness programs. In August 2014, the EEOC filed a lawsuit that alleged that a wellness program violated the ADA.19 In its complaint, the EEOC alleged that Orion Energy 

Systems’ wellness program was not ‘‘voluntary’’ and therefore violated ADA Section 

102(d)(4)(A).20 In its Answer, Orion denied that its wellness program violated the 

ADA and, listed as some of its affirmative defenses, stated that the program is a 

‘‘bona fide benefit plan’’ and that the medical examinations were ‘‘voluntary.’’ 21

One month later, in September 2014, the EEOC brought suit against Flambeau, 

Inc., a plastics manufacturer, alleging that the employer violated the ADA because 

its wellness program 

‘‘required that employees submit to biometric testing and a ‘ health risk assessment,’ or face cancellation of medical insurance, unspecified ‘disciplinary action’ 

for failing to attend the scheduled testing, and a requirement to pay the full 

premium in order to stay covered.’’ 22

In its Answer, Flambeau stated that its program was a ‘‘bona fide benefit plan’’ 

and that the biometric testing and health risk assessments were voluntary and thus 

denied that its program violated the ADA.23

In its third lawsuit, filed in October 2014, the EEOC pursued a different strategy 

by seeking a temporary restraining order and preliminary injunction against Honeywell International, Inc. for its wellness program.24 The EEOC alleged that Honeywell’s wellness program is an involuntary medical examination that was not job-related and therefore in violation of the ADA.25 Honeywell argued that its wellness 

program: (1) is covered under the ADA’s safe harbor provision (Section 501(c)(2)); 

and (2) comports with the ADA’s voluntary wellness program provision (Section 

102(d)(4)(B)).26 Moreover, Honeywell maintained that the ACA illustrated ‘‘Congress’ express approval of surcharges used in conjunction with wellness programs. 27

In response, EEOC argued that Honeywell’s wellness program was not ‘‘voluntary,’’ 

50 

28Plaintiff EEOC’s Memorandum in Support of EEOC’s Application for Temporary Restraining Order and an Expedited Preliminary Injunction at 13–19, EEOC v. Honeywell Int’l, Inc., 

Civil No. 14–4517, 2014 U.S. Dist. LEXIS 157945 (D. Minn. filed Oct. 27, 2014). 29 Honeywell Int’l, Inc., Civil No. 14–4517, 2014 U.S. Dist. LEXIS 157945, at *5–10. 30 Id. at *13–15. This paper does not address the issues involving Genetic Information Nondiscrimination Act (‘‘GINA’’). 

the Eleventh Circuit’s decision is wrong, and that ‘‘compliance with HIPAA and the 

ACA are not defenses to the ADA. 28

The court in Honeywell ultimately rejected the EEOC’s position and declined to 

issue a preliminary injunction. The court determined that the EEOC failed to establish the threat of irreparable harm and that additional factors weighed against an 

injunction.29 The court also noted that 

‘‘great uncertainty persists in regard to how the ACA, ADA and other Federal 

statutes such as [the Genetic Information Nondiscrimination Act] are intended 

to interact,’’ 

but that 

‘‘[s]hould this matter proceed on the merits, the Court will have the opportunity 

to consider both parties’ arguments after the benefit of discovery in order to determine whether Honeywell’s wellness program violates the ADA and/or 

GINA.’’ 30

V. CONCLUSION

All of this raises many questions. It is too soon to tell whether other courts will 

agree with the Eleventh Circuit. The EEOC does not agree and said so explicitly 

in the Honeywell case. Whether the EEOC will agree with the Affordable Care Act’s 

standards remains to be seen. Employers that design and implement wellness plans 

that comply with the ACA may be unpleasantly surprised to find that the EEOC 

asserts that such plans may violate the ADA. And, the EEOC’s continued and 

lengthy ‘‘examination’’ of wellness programs calls into question the EEOC’s ability 

to enforce the law, to put the matter mildly. 

And so the public is left with a sorry state of affairs when it comes to wellness 

plans. The EEOC’s flip-flopping, ongoing and seemingly never ending ‘‘examination,’’ 

and litigation perpetuate confusion and uncertainty. The public is also left with a 

government that has spent more than half a decade trying to figure out the meaning 

of the word ‘‘voluntary.’’ None of this serves the public good, and if the executive 

branch of the Government will not end this regulatory mess, the Congress should 

do so by enacting appropriate legislation. 

The CHAIRMAN. Thank you, Mr. Dreiband. 

There should be time for all the Senators to ask questions before 

we go to vote. 

Mr. Dreiband, what is the solution to the confusion you described? 

Mr. DREIBAND. The solution I think would come in one of two 

forms. One, either the EEOC should articulate a public position 

about how employer wellness plans can comply with the Americans 

with Disabilities Act, and they would do that either by endorsing 

the 11th Circuit’s decision and saying that the safe harbor does 

apply to these wellness programs, or as part of that the EEOC 

could define finally what the statute means to be voluntary under 

the Americans with Disabilities Act. 

Alternatively, the Congress could enact legislation. 

The Commission has been looking at this now for nearly 6 years 

and has not articulated any standard at all, and that’s what has 

created, I think, the problems that at least the public is facing now. 

The CHAIRMAN. In your opinion, does the law, the Affordable 

Care Act and the regulations that have been adopted pursuant to 

it, provide employers with sufficient certainty to be able to establish wellness programs? What I’m trying to get at is are the regulations under the Affordable Care Act appropriate or do they need to 

be changed? 

51 

Mr. DREIBAND. I think both the Affordable Care Act, the statute 

that Congress passed in 2010 and the regulations that the executive branch passed, the Secretaries of Labor, Treasury, and Health 

and Human Services passed, they clearly authorize employer 

wellness programs that include financial inducements of up to 30 

percent of the cost of coverage. 

The problem I think is that the EEOC in 2009 endorsed the 

then-existing HIPAA standard of 20 percent, rescinded that standard and hasn’t replaced it with anything, and now takes the position that compliance with the Affordable Care Act says nothing 

about compliance with the Americans with Disabilities Act. 

The CHAIRMAN. There is a specific provision in the Affordable 

Care Act itself that employers must provide a reasonable alternative to employees who can’t complete the employer’s standard requirement. Is that correct? 

Mr. DREIBAND. Yes. 

The CHAIRMAN. And that would be designed to help deal with the 

question of a disabled employee. Is that right? 

Mr. DREIBAND. Yes, and I think the Americans with Disabilities 

Act would require employers to provide reasonable accommodations 

to individuals with disabilities if they are participating in a program, sure. 

The CHAIRMAN. Dr. Loveman, you represent, I think you said, 

the Business Roundtable employs 40 million people. 

Mr. LOVEMAN. Yes, Mr. Chairman. 

The CHAIRMAN. And their large number of wellness programs. Do 

you see the confusion described by Mr. Dreiband as discouraging 

implementation of wellness programs or not making much difference, and do you have any comment about what we need to do, 

if anything, to reduce the confusion? 

Mr. LOVEMAN. Yes and yes, Mr. Chairman. First, up until the action of the EEOC recently, I don’t believe that any of my colleagues 

and their companies’ wellness programs were discouraged much at 

all. But this recent action did give pause to all of us that what we 

consider to be a very well-intentioned intervention to improve the 

health of our employees and provide higher quality outcomes for 

them was threatened by the ambiguity that the counselor has just 

described in his remarks. 

With respect to the regulations more broadly, these programs are 

evolving rather dynamically, and by that I mean the early stages 

of these programs were largely diagnostic in nature. They said a 

man my age ought to have certain types of tests and ought to try 

to appeal to certain parameters of health in his own care. 

Once many people and a company have achieved those levels, the 

next step is how do we encourage people to actually improve their 

health rather than simply know what they ought to do to improve 

their health, and there are burdens and regulations among the different departments that impede the ability to reward the actual 

improvement of health rather than the diagnostic efforts taken to 

understand how one might improve one’s health. So I think that 

is an area where we need additional clarification and help. 

The CHAIRMAN. Thank you. 

The same committee that recommended the Americans with Disabilities Act is the committee that also recommended the AffordVerDate Nov 24 2008 11:07 Jan 09, 2017 Jkt 000000 PO 00000 Frm 00055 Fmt 6633 Sfmt 6601 S:\DOCS\93181.TXT CAROL
52 

able Care Act, and the guardians of rights for disabled Americans 

had no greater champion than Senator Harkin and other members 

of this committee. Yet, it was very clear in the Affordable Care Act 

that the committee wanted employers to be able to provide incentives up to 30 percent for leading a healthy lifestyle, with a specific 

exemption for dealing with those employees who couldn’t reach 

that standard. 

So let me invite the five witnesses. My time is about up. If you 

have specific suggestions—I know, for example, Dr. Baase, you’ve 

written a lot about this—for how to resolve the confusion that Mr. 

Dreiband described, or Ms. Mathis, if you have specific suggestions, 

we’d like to have them. And if you could send them to us when the 

hearing is over, they would be helpful to us in evaluating whether 

the regulation which appears to be coming from the EEOC is sufficient or whether we need to take some action in the Congress. 

Senator Murray. 

Senator MURRAY. Thank you very much, Mr. Chairman. I know 

Senator Harkin well. I’ve worked with him forever. I know for a 

fact that he would never push legislation that went against ADA. 

It was his heart and soul. 

But, Ms. Mathis, I want to thank you. You’ve had a chance to 

hear some of the answers so far, and I really appreciate your coming here today to make sure we do have a good perspective on the 

role of the Americans with Disabilities Act and the work of the 

Equal Employment Opportunity Commission as they relate to 

these employer wellness programs. 

Can you respond a little bit to what you’ve heard and share why 

worker protections and civil rights are so important as we enact 

this? 

Mrs. MATHIS. Sure. One of the interesting things about Senator 

Harkin is he recently at a hearing described, I think, what his vision of what happened in the Affordable Care Act was with respect 

to wellness programs and how it interacted with the ADA and how 

he understood that you can have wellness programs and you can 

have penalties in wellness programs without being inconsistent 

with the ADA, and that like GINA, like the Genetic Information 

Non-discrimination Act, there is a separate rule under GINA and 

under the ADA about when you’re asking questions—disabilityrelated questions under the ADA, genetic information questions 

under GINA—that you just can’t penalize people for not answering 

those particular questions. That’s all. 

Senator Harkin said I think it’s totally consistent. You can have 

wellness programs. This is the one thing that you have to be careful about, and I think that piece about answering disabilityrelated questions, that has been really at the heart of the ADA. 

That has been one of the most important pieces of the ADA for people with disabilities. 

I work in the area of mental health. It is true—I wish it weren’t, 

but it is true that for many people having certain diagnoses, having 

a diagnosis of schizophrenia, of schizo-affective disorder, in many 

cases bipolar disorder, that is a death sentence if an employer discovers that. 

That is why Congress deliberately and very carefully created 

these rules around what kinds of inquiries can be asked of people 

53 

with disabilities on the job and very specifically said you can ask 

only things that are job-related and consistent with business necessity. Nobody, I think, is claiming that these types of questions on 

a health risk assessment are job related. It’s not about your ability 

to do the job. It’s about your health. 

The one exception to that rule is that you can ask, but only if 

it’s part of an employee health program that is voluntary. That’s 

really the issue. And as Mr. Dreiband said, one of the issues for 

the EEOC is to define what is voluntary, and the EEOC has always said that if there’s a penalty attached, that’s not voluntary. 

But I think there’s room to further clarify what the EEOC means 

by that. 

The other issue is, aside from confidentiality, what Senator Alexander referred to, the penalties for not meeting a health target. 

There, the ACA has a reasonable alternative standard built in. If 

it’s medically inadvisable or unreasonably difficult for somebody to 

meet that kind of health target because of a disability, they have 

to be given a reasonable alternative standard, and the Health and 

Treasury rules, the DOL rules address that, and I think that is 

very consistent with the ADA’s reasonable accommodation requirement. I think the agencies will interpret those two sets of rules 

consistently under the two separate statutes. 

The issue has really been, I think, more challenging to understand the interaction with the medical inquiries and the penalties 

on the medical inquiries. 

Senator MURRAY. Thank you. I really appreciate your response. 

I just have a few seconds left. I wanted to ask Dr. Grossman, if 

a company is going to implement a wellness program, how best can 

they go about deciding how to pick intervention strategies and prevention approaches? 

Dr. GROSSMAN. Thank you, Senator Murray. That’s a great question. There are a number of resources out there that are very valuable for companies to use. The National Business Group on Health, 

for example, has an excellent resource available for companies. The 

CDC, the Centers for Disease Control, and also the Community 

Preventive Services Task Force issues something called the Community Guide which has a series of recommendations out there 

that I think is also useful. 

There are ample resources currently available for employers. 

They tend to be perhaps more geared toward large employers, the 

large-size rather than small- or medium-size employers. 

Senator MURRAY. OK. Thank you very much. 

Dr. GROSSMAN. Thank you. 

The CHAIRMAN. Thank you, Senator Murray. 

Senator Isakson. 

STATEMENT OF SENATOR ISAKSON

Senator ISAKSON. Dr. Loveman, what kind of doctor are you? 

Mr. LOVEMAN. A Ph.D. in economics, unlike my colleagues, not 

a science according to many. 

[Laughter.] 

Senator ISAKSON. The other type of health care. 

And you’re with the Business Roundtable? 

54 

Mr. LOVEMAN. That’s correct. I chair the Committee on Health 

Reform. 

Senator ISAKSON. We have a number of companies in Georgia— 

IBM, Santa Fe, Georgia Regents, a number of people like that— 

who have received recognition for the programs they have put in 

for wellness that have reduced the impact of their cost. Does the 

Business Roundtable promote that sort of thing? 

Mr. LOVEMAN. Yes, sir, we do. We have tremendous support 

among the companies that are members for these types of programs. 

Senator ISAKSON. I have a question for you and Dr. Baase. Is it 

Baase? 

Dr. BAASE. Yes, that’s right. 

Senator ISAKSON. And Dr. Grossman. 

I believe the only way a business or an employer can effectively 

and positively impact the cost to their employees and to the company of health care is through disease management and wellness. 

Is that correct? Under the current environmental and regulatory 

and statutory requirements under which you operate, the only real 

way a company can impact positively the cost of health care it provides to its employees and its share of that cost is through robust 

wellness and disease management programs. 

Dr. BAASE. I think both of those, wellness programs and disease 

management, are important strategies. But I do think companies 

have other things that they can do. I mean, they work on the methodology of their benefit plan design, they work on collaboration 

with the providers of care to seek innovation and mechanisms of 

even payment reform and other things that can be done to improve 

quality of care, cost of care, or the health of people. 

I do think that, in our strategy, for example, we have pillars of 

prevention, quality and effectiveness of care, health system management and advocacy. I think that employers can engage the communities within which they operate and their plan partners, as 

well as what they can do within their own company. 

We also work with the communities as part of multi-stakeholder 

efforts in a collective impact model. So the communities within 

which we operate have health improvement strategies, and an employer can become part of those as well. 

So I’m agreeing with you that wellness programs and disease 

management programs are critical actions, but I do think there’s 

a bigger horizon than that that complements them. 

Senator ISAKSON. Dr. Grossman. 

Dr. GROSSMAN. Yes, I agree that I think wellness programs have 

a lot to do with reducing risk factors for chronic disease in the future for employees. In the short term, health care costs by employers largely stem from two main factors, utilization and the price of 

those services. And whether or not they’re fully insured or selfinsured as employers, they should be working with either their 

plans or their administrative service organizations to really focus 

on utilization and price as also a very key mechanism for addressing cost. 

Senator ISAKSON. On the utilization issue, though, Senator Warren and I have a care coordination provision we’ve proposed for 

Medicare where we reimburse for care coordination, because there 

55 

are so many people getting health care from different sources. 

There is redundant and fee-for-service costs, which drives the cost 

up. 

Do you all in any way in any of your companies promote care coordination within the coverage? 

Dr. GROSSMAN. At Group Health, care coordination is taken extremely seriously because we see ourselves as managing the total 

cost of care, and clearly care coordination is a major factor in stemming utilization of care, and we take that very seriously. 

Dr. BAASE. Activities around the patient-centered medical home 

and care coordination are certainly the types of partnerships that 

we are also involved in our communities and with our plans. 

Senator ISAKSON. I think for us as policymakers, Mr. Chairman, 

I’m told—and I can’t remember the exact percentage, but the two 

largest contributors to the cost of Medicare are hypertension and 

diabetes, both of which are substantially preventable with good 

care management, good wellness programs, and good involvement 

of the patients. So we really ought to promote those as much as we 

can to help reduce the cost of that, not just to the individual but 

to the taxpayer. 

Thank you, Mr. Chairman. 

The CHAIRMAN. Thank you, Senator Isakson. 

Senator Baldwin. 

STATEMENT OF SENATOR BALDWIN

Senator BALDWIN. Thank you, Mr. Chairman and Ranking Member Murray. 

I’m really encouraged to learn of the innovative programs that 

the witnesses have talked about today, and I too want to share 

some cutting-edge activity that’s happening in the State of Wisconsin, my home State. 

In particular, I wanted to highlight a program created by one of 

the largest American printing companies, Quad/Graphics, which is 

located in Sussex, WI. Back in 1991, Quad/Graphics established a 

fully integrated patient-centered medical home called QuadMed for 

its now 22,000 employees nationwide. QuadMed includes a team of 

salaried health professionals who bring primary care and wellness 

services right onsite for its employees. The employees have access 

to these onsite clinics, fitness centers, rehab facilities, pharmacists, 

nutritionists, as well as an electronic medical record and a digital 

patient portal. 

Now it’s a national model for employer-based care, and QuadMed 

has not only improved employee satisfaction and productivity 

through this model, but the program also has an economic benefit, 

an economic incentive. The program provides a $3.70 return for 

every $1.00 invested up front. 

So I believe it’s critical that we continue to support and advance 

similar initiatives to help improve our Nation’s health. 

Dr. Grossman, I’m encouraged to hear that your health system, 

Group Health Cooperative, works with other organizations in your 

community. In fact, you’ve highlighted in your testimony some of 

the leadership roles that they’ve taken. 

Another example in my home State of Wisconsin is in La Crosse, 

where we too have an innovative integrated health system called 

56 

Gundersen Health System that not only has its own wellness program for employees but also partners with local businesses to offer 

onsite clinics, and with school districts and convenience stores, actually, in the La Crosse area to offer healthy food products and 

healthy meals. 

So I’d like to hear you talk a little bit more about Group Health 

Cooperative’s initiatives to advance wellness in your whole community and beyond, beyond your own employees, and how this helps 

improve population health in the patients that you serve. 

Dr. GROSSMAN. Thanks very much, Senator Baldwin. It’s exciting 

to hear about those great activities in Wisconsin, which is clearly 

a great State, another leader in health care. 

Group Health as a non-profit actually has a substantial commitment to the benefit and to the health of the community and engages in a variety of activities to help promote health in the broader community statewide. And recently, through some recent reforms occurring in our own State, we’re developing what’s called 

Accountable Communities of Health where communities are actually coming together to work together—hospitals, employers, health 

departments, and health care providers—to actually set targets 

and goals for geographically defined communities in order to advance the health of the communities and the citizens living in those 

areas. 

That is something that Group Health is very much planning to 

participate in and be actively engaged in those efforts. We have 

sponsored for many years a number of health promotion activities 

among non-profit providers that actually extend the reach, and certainly have endorsed other efforts by groups that are providing 

those services, such as YMCA, for example, through their diabetes 

prevention program, or through the Cascade Bicycle Club that actually has gotten thousands and thousands of Washingtonians, including myself, to get engaged in riding. 

So Group Health sees the engagement with the broader community as being a very key part of the work that you’re describing. 

Senator BALDWIN. Great. 

Dr. Loveman, I’m wondering if you can discuss how your work 

with employees that may not be able to fully participate in some 

aspects of Caesars’ wellness program, maybe due to an injury or an 

illness, how do you maintain the engagement and morale of those 

who may not see measureable results as quickly as some of their 

peers do? 

Mr. LOVEMAN. Senator Baldwin, that’s a great question. Let me 

take, for example, our facility in New Orleans, LA, a city known 

for many things great but not always the greatest of health outcomes. 

We have onsite care providers in our facility in New Orleans, and 

so employees literally every day are meeting with well nurses and 

other members of the professional medical staff to talk about specific things that could happen in their lives that would make them 

and their family members healthier. 

So while there may be special circumstances in certain instances 

such as those described by Ms. Mathis that would preclude the employee from taking a more traditional route in these wellness programs, it’s the obligation of those who work for us in these inVerDate Nov 24 2008 11:07 Jan 09, 2017 Jkt 000000 PO 00000 Frm 00060 Fmt 6633 Sfmt 6601 S:\DOCS\93181.TXT CAROL
57 

stances to customize what’s available to them in a way that suits 

them, and the stories that I hear coming back to us that follow 

from these interventions are really quite remarkable. 

The CHAIRMAN. Thank you, Senator Baldwin. 

Votes have not started yet, so there should be sufficient time for 

the remaining three Senators to take their questions, and we’ll 

stick to 5 minutes. 

Senator Scott. 

STATEMENT OF SENATOR SCOTT

Senator SCOTT. Thank you, Mr. Chairman. 

Mr. Dreiband, just a couple of questions for you. In October, the 

EEOC filed suit against Honeywell to stop the company from offering financial rewards to employees who participate in biometric 

screening as part of the company’s wellness program. 

As this committee is well aware, in light of provisions in the ACA 

specifically allowing employers to reward employees for participation in wellness programs, many employers across the country have 

adopted these programs, programs they believe to be compliant 

with current law, including HIPAA and the ACA. While the EEOC 

said it would issue guidance on this topic and employers have 

sought official guidance, the Commission has yet to do so. Lawsuits 

that target compliant programs, especially in the absence of guidance from the EEOC, serve to confuse employers and employees 

and may reduce participation in these beneficial wellness programs. 

Given these facts, do you believe the EEOC was justified in filing 

suit against an employer over its wellness plan when Congress has 

encouraged the programs and the EEOC has yet to make clear how 

it views the law, particularly when the agency went into court a 

mere 7 business days after a complaint was filed against Honeywell with the agency? 

Mr. DREIBAND. I don’t know all of the evidence that the EEOC 

had when it sued Honeywell. I’m not involved in that case. What 

I will say is I think it’s patently unfair for the U.S. Government 

to endorse a standard, as the EEOC did in January 2009, and then 

to rescind it and spend 6 years doing nothing about replacing that 

standard, and then threatening companies and individuals with potential liability of the sort that the EEOC has the power to bring 

in Federal District Court. I think the Commission should articulate 

a standard and then put the public on notice of what it is if it’s 

going to litigate and enforce the law. 

Senator SCOTT. A followup question, perhaps a more difficult 

question. From your perspective and in your opinion, why has the 

EEOC targeted these effective health care programs through the 

legal system rather than simply issuing the guidance that so many 

of these companies are desperately seeking? And as a former general counsel, would you say that the EEOC is using effectively 

their resources when they have, I think, 70,000, 75,000 complaints 

outstanding? 

Mr. DREIBAND. Yes. I don’t know why the EEOC has not been 

able to figure out in 6 years what the statute means by the word 

‘‘voluntary.’’ I mean, what we’re talking about here is a single word 

in a statute, one word, ‘‘voluntary.’’ It’s one thing not to articulate 

58 

a standard. That’s one thing. But it’s another thing, as has happened here, to say that the Commission is going to endorse a 

standard, as it did, for Congress to pass a law that essentially expands and encourages employers to use these wellness plans, and 

EEOC to sit on its hands for 6 years and then sue people. To me, 

it’s a question of fundamental due process of law, and I don’t think 

it’s fair at all, and I don’t know why they’re doing it. I suppose you 

could ask them. 

I do think there are legitimate concerns about coercing people 

into participating in wellness plans, and that may be motivating 

the Commission. But they can certainly articulate a position publicly about what they think is permissible under the Americans 

with Disabilities Act. 

Senator SCOTT. Thank you. Six years is plenty of time. 

Let me ask Dr. Loveman, who brought up a very important 

point. I’m a Charlestonian, South Carolina. You were talking about 

the good food in New Orleans. I would recommend that you come 

to the Nation’s best tourist destination to really experience good 

food. Unfortunately, the result of good food sometimes is an expanding waistline. Please do not use mine as an example. 

However, I would ask you that according to the recent National 

Business Group Health Survey, 95 percent of employers offered a 

health risk assessment biometric screening or other wellness program in 2014, and nearly three-quarters of employers use incentives to encourage employees to participate in these programs. 

Do you believe that the benefits of these programs would be as 

profound if employers were not able to somehow encourage participation in the programs? 

Mr. LOVEMAN. Senator, I think you’re on a very, very important 

point. It’s been my experience with our 70,000 folks that you cannot encourage recalcitrant participants in this sort of activity without the use of some sort of an incentive. So when these incentives 

are first applied—for example, for biometric screening—you observe 

a high uptake among those you would naturally expect to do so, 

those who are very active in the management of their own health, 

and then you find others who are a little bit slower to come along. 

As the incentive becomes more and more appealing, finally someone who has not otherwise been called to action decides, you know 

what, I’m going to go get that biometric screening; what’s the harm 

with checking my blood pressure and my glucose level? And if the 

company is going to discount my premiums by $75 every 2 weeks, 

that seems like a very appealing opportunity, and they do, and the 

remarkable benefit that accrues to their family to some degree, as 

you’ve heard from Mr. Abernathy’s testimony, it is a very, very encouraging thing. 

Senator SCOTT. Absolutely. Thank you. 

Thank you, Mr. Chairman. 

The CHAIRMAN. Thank you, Senator Scott. 

Senator Casey. 

STATEMENT OF SENATOR CASEY

Senator CASEY. Mr. Chairman, thank you very much, and we appreciate the panel’s testimony and willingness to be here today. I 

59 

know I missed a good bit of the testimony, but I’ll try to focus just 

on maybe one or two issues. It may only be one. 

First of all, I wanted to start with the predicate, which is I think 

all of us can agree that we’ve made substantial strides in making 

sure that wellness is part of our health care strategy. It used to 

be that we would laud wellness programs and say that’s a good example over there by that company or that particular program, and 

we would not then engage in strategies that would make sure that 

everyone was doing something on wellness. We just thought it was 

the exception rather than the rule. I think we’re getting closer to 

making it much more of a standard. 

I know that there are some instances where there can be a concern that wellness programs may go too far and may infringe on 

other basic rights that people have. I know that, Ms. Mathis, you 

said—I’m just looking at your written testimony on page 6. You say 

the Affordable Care Act does not conflict with the ADA’s requirements concerning medical inquiries in wellness programs, and both 

laws should be given effect. 

I would ask you to explain what you mean by that, and I know 

you’ve walked through some of this in your own testimony here 

today, but I know this is the written testimony. 

Mrs. MATHIS. Sure. 

Senator CASEY. That’s question No. 1. Question No. 2 is can you 

give me an example of a wellness program which has reached or 

has achieved an accommodation that is contemplated by the ADA? 

That was one of the greatest achievements in recent American history, that the ADA said that an employer should have reasonable 

accommodations for that employee, not any accommodation, not 

any accommodation that people would develop, but reasonable accommodations. I think we can have both a very strong ADA as well 

as a strong and well-implemented Affordable Care Act. 

Mrs. MATHIS. That’s right. So let me say something about the 

second question first, actually. I don’t know—I haven’t seen on-theground examples of what kinds of accommodations have been offered as reasonable alternative standards for people who can’t meet 

a health target because of a disability, or it’s unreasonably difficult 

or medically inadvisable. Those are the ACA standards. The ADA 

standard is reasonable accommodation to provide equal opportunity. 

But I do know that that part seems to be working out well. I 

think that the regulations that were issued implementing that 

piece of the ACA really are closely in line with how people would 

see reasonable accommodation as working. So I think the idea and 

the examples in those regulations are things like if you can’t meet 

maybe a body mass index standard, that you have an alternative 

of going to a gym or getting a subsidy for a gym or doing an education class or different things that will in other ways help you 

achieve better health outcomes while taking into account your disability and the real limitations that it may impose that may make 

it hard to meet the health standard. 

So I think those things seem to be operating fairly well, in sync 

the ACA and the ADA. 

I think with the medical inquiries, all of the language in the 

ACA about the 30 percent penalties and all that, that’s all about 

60 

meeting health targets. That’s all about satisfying a health standard. It does not talk about medical inquiries particularly. The ACA 

has no language about medical inquiries. That’s not what Congress 

seemed to be thinking about. 

There is sort of a catch-all provision. Basically, the ACA has this 

non-discrimination in insurance provision that says, ‘‘well, you 

can’t discriminate based on health status in insurance’’, except that 

here is sort of how we think it should work in wellness programs, 

and you can have these penalties, and we think it doesn’t discriminate based on health factors. It doesn’t violate the ACA’s health 

non-discrimination requirement if you do these things. That’s all it 

says. It doesn’t say that we’re saying that this then complies 

with—if you follow these rules for the ACA, that it complies with 

every other law, and there are often situations where multiple laws 

will apply, and all this does is say that to the extent that you’re 

not, that you’re imposing penalties that are not related to a health 

target, that it’s just about penalties for medical inquiries, for example, that they’re not going to violate this health insurance nondiscrimination provision. 

Does that mean that they don’t violate the ADA, which has entirely different sets of concerns, which is about workplace discrimination? Confidentiality of information is not a concern that Congress was addressing in the ACA and the health insurance discrimination provisions. 

So, yes, I think the ADA applies at the same time, and there are 

many instances in the world where you will have two laws that 

apply to the same situation, and they may require some different 

things. 

I think here it’s not really all that onerous. We have a rule in 

GINA—— 

The CHAIRMAN. Mrs. Mathis, I think we need to go to the next 

Senator. 

Mrs. MATHIS. Sure. 

The CHAIRMAN. If you would wrap up your comments. Please go 

ahead. 

Senator CASEY. I’ll make sure you get something in writing as 

well. 

Mrs. MATHIS. Thank you. 

Senator CASEY. Thank you. 

The CHAIRMAN. Thank you, Senator Casey. 

Senator Mikulski. 

STATEMENT OF SENATOR MIKULSKI

Senator MIKULSKI. Thank you, Mr. Chairman. 

You know, when we passed the Affordable Care Act, I was most 

excited. There were many things I was excited about. But the two 

things that I was most excited about, in addition to dealing with 

preexisting conditions and improving access, was wellness workplace opportunities, as well as a medical home so that you could 

have coordinated services and, again, perhaps nutrition, mental 

health counseling, and a variety of things. 

So we looked at the whole person, and we dealt with the issues. 

What I was looking forward to in terms of a hearing like this was 

to really be able to talk about what has been the impact of passing 

61 

the law, has it done any good in large workplaces and employers, 

what are the best practices that we’re learning now to motivate 

people. Motivation is not an easy issue. And then how a regular 

guy like Mr. Abernathy found homes and happiness in broccoli and 

better eating. I don’t know if it is broccoli. 

So I’m very frustrated to hear that we’re now arguing over EEOC 

giving regs and rules and so on. I would hope we could encourage 

the EEOC to really publish its guidance and to do it in a full public 

comment so all could testify, acknowledging challenges like in the 

mental health area. But we’ve got to get on with this because what 

I’m concerned about, given the uncertainty of the law, the wellness 

programs are going to pull back or go minimalist. 

Are my concerns, Dr. Baase, well-founded? 

Dr. BAASE. I appreciate your comments very much. I think, as 

my statement was about the imperative for our country, that we 

have employers involved, and we’ve got to find a way to make it 

most effective. I think people are utilizing the evidence that’s out 

there, just as Dr. Grossman indicated, and that evidence base has 

been improving, appreciating the work of the CDC and the Guide 

to Community Preventive Services that’s out there. 

We’ve still got opportunities for improvement in wellness programs and health promotion programs. But certainly what we want 

to do is strengthen those efforts and not have people pull back. So 

I endorse what you’re saying. 

Senator MIKULSKI. But in the absence of EEOC clarity, do you 

think employers will pull back? 

Dr. BAASE. I think it clearly has a dampening effect where people 

feel like they don’t need to be dealing with this kind of risk situation. 

Senator MIKULSKI. That they don’t want to get into it. 

Dr. BAASE. Right. 

Senator MIKULSKI. So tell me, though, Dow has really been one 

of the leaders in workplace wellness programs. What have you 

found has been the impact? And also, what do you think have been 

some of the best practices to really motivate people? 

Dr. BAASE. We have been very successful. Since our baseline in 

2004, we have improved the health of our people worldwide, a 28 

percent reduction in high risk and a 15 percent increase in low risk 

of our population, and our employees highly value the services and 

the programs of the wellness and health promotion effort. They see 

it as a huge benefit to them, and they participate at high levels, 

approaching 90 percent on a global basis. 

Senator MIKULSKI. Wow. 

Dr. BAASE. And we find that it has an impact to us across the 

board in our corporate priorities. It has an impact in terms of our 

improvement in safety, because healthier people have better safety 

outcomes. We know that our ability to attract and retain talent is 

impacted by the nature of the culture that we have in the company 

that highly supports health and healthy living, and our ability to 

get the best performance out of the investment we have in our 

human beings in the company. 

So it’s something where we’ve had remarkable success, and the 

culture of the company is a huge multiplier. But I also made an 

additional comment that we work with the communities within 

62 

which we’re operating and partnering with them, and one of the 

Senators made a comment about diabetes. We’re currently involved 

in a community effort, the Diabetes Prevention Program and creating system change in our community. 

There’s a great number of things that can be done by an employer to advance health, and we need to strengthen and support 

that. 

Senator MIKULSKI. Thank you, and I know my time is up. 

The CHAIRMAN. Thank you, Senator Mikulski. 

Senator Franken. 

STATEMENT OF SENATOR FRANKEN

Senator FRANKEN. I’m glad, Dr. Baase, that you mentioned the 

Diabetes Prevention Program. This is something that, with Senator 

Lugar, I put into the ACA, that we should be promoting this. This 

is a CDC program. CDC and NIH together piloted it to YMCAs, 

one in Indianapolis and one in St. Paul. Hence, Franken-Lugar. 

I know, Senator Isakson—I’m sorry I wasn’t here for a lot of this; 

I was in the Energy Committee—this works. What it is, it’s 16 

weeks of physical training and nutritional training to people who 

have pre-diabetes. I think, Dr. Grossman, you mentioned the Diabetes Prevention Program in answering a question. 

What it did was, pre-diabetes is people who have this blood— 

they’re about to become diabetic if they don’t do something about 

it. Longitudinally, it reduced the chances of becoming diabetic in 

the next 5 years by 59 percent. So much of the cost of care in this 

country goes to people’s chronic conditions, and diabetes is one of 

the No. 1 chronic conditions. 

So, just to all of you, how can we, through workplace programs, 

encourage, without violating people’s privacy and rights and all 

that kind of stuff, just encourage people, encourage employers and 

encourage employees to take advantage of this, get this covered 

maybe by the employer or by the employer’s insurance company? 

I’ve been doing some pilots in the VA. I have a bill to get Medicare 

to pay for this, because the return on investment is tremendous. 

Any ideas on this at all in terms of workplace? 

Mr. LOVEMAN. If I may, Senator, employer wellness programs, 

because these large private employers are self-insured, we have 

tremendous discretion as to what we cover and the circumstances 

under which we seek to support our employees. 

For example, in our case, the fact that the care centers are in the 

same facility where our employees work, particularly since some of 

them work unusual hours, they’re surrounded by access to information, support, encouragement, collegiality around this question. 

They’re able to really manage the preventive steps around pre-diabetic care very thoughtfully. 

I think these programs provide—in addition to the incentive 

structures that we’ve described and tools for access to better care 

and more high value-added interventions—all the right tools to do 

what your legislation has proposed, and I think you’re seeing that 

across the programs that my colleagues on this panel have been 

promulgating. 

Senator FRANKEN. Dr. Grossman. 

63 

Dr. GROSSMAN. Yes, I agree with you that the Diabetes Prevention Program was a solid piece of evidence. It’s been used both by 

the U.S. Preventive Services Task Force and the Community Guide 

in their reviews in understanding what works, particularly around 

weight management, but specifically around this area that you’re 

speaking of. 

I think we know at Group Health that we have a number of employers who have expressed interest in this specific program, and 

we supported that through coverage and through providing that 

service. It does require an engaged employer to get participation 

going. 

It’s not the sole solution. It’s part of a spectrum of solutions, and 

actually part of potentially a menu of choices that employees could 

have to actually engage in better managing their weight, and also 

their physical activity, because what we know about effective 

weight management is that it’s not just about dieting, it’s also 

about maintaining an effective activity program. 

Senator FRANKEN. Again, this is 16 weeks of physical and nutritional training. 

Dr. GROSSMAN. Absolutely. Correct. 

Senator FRANKEN. I had a meeting with the Deputy HHS Secretary, with the YMCAs, and United Healthcare, a big Minnesota 

company, and the executive from United Healthcare said we will 

just cover this for any of our people who are pre-diabetic. We’ll pay 

for it because we will save $4 for every dollar we spend. 

Dr. GROSSMAN. Yes. 

Senator FRANKEN. I’m just a champion for that, you see. 

I’m done. 

[Laughter.] 

The CHAIRMAN. Thank you, Senator Franken. 

Senator Murray, do you have any concluding remarks? 

Senator MURRAY. Thank you very much for this hearing. 

I agree with Senator Mikulski. One of our goals that has sort of 

been forgotten in health care is to make sure that people are 

healthier because it does wonders for them, obviously, but it also 

makes sure that we are helping to control the cost of health care 

for this country, which is extremely important. As a government 

that supplies health care through Medicare and Medicaid and 

through a lot of services, as well as to businesses who see the rising costs of health care, it’s important to them. 

I think it’s really important that EEOC get the rules out, working with the other agencies to make sure that they have the accommodations as described by Ms. Mathis that will assure that all people are protected, but that we don’t put a stop to doing this. So I 

hope those come out very soon, and I share with her her concern 

that they get those out. 

But once those rules come out—and I’m assured, actually, that 

they will be out very shortly—we need all the businesses that are 

doing the great job that many of you are and the organizations that 

are doing this, to take a look at them and get comments back so 

that we can get the final issues ruled and keep moving in this really important direction for our country. 

The CHAIRMAN. Thank you, Senator Murray. 

64 

Thank you to the witnesses. Some of you have come a long way, 

and we appreciate that very much. You provided very helpful testimony. I think you can hear that the law demonstrates there’s a 

strong bipartisan interest in encouraging employer wellness plans, 

and I think you’ve heard also that if things are discouraging that, 

such as uncertainty in the law and the regulations, we’d like to 

clear that up as quickly as possible. 

So I would invite you, again, if you have additional thoughts 

about how to improve regulations that exist, how to reduce uncertainty, we’d like to have it. 

The hearing record will remain open for 10 days. Members may 

submit additional information for the record within that time if 

they would like. 

Our next hearing on health care will be February 10th. It will 

be on the rise of diseases that are preventable by vaccines. For example, in Disneyland and the West Coast, there’s beginning to be 

a measles outbreak, and it has spread into other parts of the Western United States. Unlike Ebola, for which there is no vaccine— 

and that captured the attention of the whole world, particularly 

this country—we do have a vaccine for measles, yet we have an 

outbreak of measles. So we’re going to take a look at what’s happening with diseases that are preventable by vaccines and why do 

we have a rise of those diseases. 

Thank you for being here. 

The committee will stand adjourned. 

[Additional Material follows.] 

65 

1Mercedes Carnethon, et al., Work site wellness programs for cardiovascular disease prevention: a policy statement from the American Heart Association. American Heart Association Advocacy Coordinating Committee; Council on Epidemiology and Prevention; Council on the Kidney in Cardiovascular Disease; and Council on Nutrition, Physical Activity and Metabolism 

(2009). 2See V. Paul-Ebhohimhen & A. Avenell, Systematic review of the use of financial incentives 

in treatments for obesity and overweight, 9 Obesity Reviews 355–67 (Oct. 23, 2007); Kevin G. 

Volpp, David A. Asch, Robert Galvin & George Loewenstein, Redesigning Employee Health Incentives—Lessons from Behavioral Economics, 365 N. Engl. J. Med. 388–90 (Aug. 4, 2011). 3 Nat’l Women’s Law Center, Nowhere to Turn: How the Individual Health Insurance Market 

Fails Women 7 (2008), http://action.nwlc.org/site/DocServer/NowhereToTurn.pdf. 

ADDITIONAL MATERIAL 

PREPARED STATEMENT OF JUDITH L. LICHTMAN, SENIOR ADVISOR, 

NATIONAL PARTNERSHIP FOR WOMEN & FAMILIES

Chairman Alexander, Ranking Member Murray, members of the committee, my 

name is Judith Lichtman, and I am senior advisor at the National Partnership for 

Women & Families. Thank you for the opportunity to offer recommendations on ensuring nondiscrimination in employer wellness programs, to be considered today in 

conjunction with the committee’s hearing. 

The National Partnership is a non-profit, nonpartisan advocacy organization with 

more than 40 years of experience promoting fairness in the workplace, access to 

quality health care and policies that help women and men meet the competing demands of work and family. Since our creation as the Women’s Legal Defense Fund 

in 1971, we have fought for every significant advance for equal opportunity in the 

workplace, and we continue to advocate for meaningful safeguards that prevent discrimination against women and families. 

I. ENSURING NONDISCRIMINATION IN WELLNESS PROGRAMS REQUIRES

CAREFUL ANALYSIS

The National Partnership represents women and families across the country. As 

health care purchasers, consumers and decisionmakers for themselves and their 

families, women are keenly interested in wellness and prevention of illness. Employer wellness programs—if designed and implemented properly—can potentially 

offer women and their families an avenue for improving and maintaining their 

health, and lower costs for the employer.1

A well-designed, voluntary wellness program should be individually tailored and 

focused on the health and well-being of each employee. Employers should take into 

account personal circumstances, including family caregiving responsibilities or multiple jobs, that may make it difficult for employees, particularly women, to participate in wellness programs that take place outside of normal work hours. Employers 

should look to accredited wellness programs as guides. These programs offer true 

benefits that can help women achieve their wellness goals by providing activities at 

a time and location that fits the time constraints associated with their obligations 

at home and in the workplace. While there may be benefits of ‘‘participatory’’ 

wellness programs that seek to improve employee health across the board, we continue to be concerned by outcomes-based or punitive wellness programs that operate 

to shift costs to employees and have not been scientifically proven to promote improved health. 

There is scant evidence showing that punitive programs tying health insurance 

premiums to health outcomes actually improve employee health.2 These wellness 

programs often require a one-size-fits-all approach that does not address individual 

employees’ life circumstances and wellness needs; these programs often utilize biometrics that are not always adequate measures of health. Such programs enable 

employers to reduce their health care costs under the guise of wellness promotion 

by merely shifting those costs to employees that they deem to be most unhealthy. 

This practice is akin to medical underwriting, the practice of determining an employee’s health insurance premium on the basis of certain health information.3 Employers must not be permitted to utilize employer wellness programs as a subterfuge 

for discriminatory cost-shifting that decreases affordability and access to health insurance for those who need it most. 

As described in further detail below, punitive wellness programs implicate employment nondiscrimination statutes if they disproportionately penalize women, racial minorities, older workers and other protected classes. Wellness programs that 

impose punitive measures or that grant so-called ‘‘rewards’’ in the form of lower insurance premiums to some employees but not to others could run afoul of anti-disVerDate Nov 24 2008 11:07 Jan 09, 2017 Jkt 000000 PO 00000 Frm 00069 Fmt 6633 Sfmt 6621 S:\DOCS\93181.TXT CAROL
66 

4 Alina Salganicoff, et al., Women and Health Care: A National Profile, Kaiser Family Foundation (July 2005), https://kaiserfamilyfoundation.files.wordpress.com/2013/01/women-andhealth-care-a-national-profile-key-findings-from-the-kaiser-women-s-health-survey.pdf; Leandris 

C. Liburd, Looking Through a Glass, Darkly: EliminatingHealth Disparities, 3 Preventing 

Chronic Disease (July 2006), available at: http://www.cdc.gov/pcd/issues/2006/jul/pdf/ 

05l0209.pdf. 5 42 U.S.C. § 18116. 6 42 U.S.C. §§ 2000d et seq. 7 20 U.S.C. §§ 1681 et seq. 8 42 U.S.C. §§ 6101 et seq. 9 29 U.S.C. §§ 794 et seq. 10 Rene Bowser, The Affordable Care Act and Beyond: Opportunities for Advancing Health Equity and Social Justice, 10 Hastings Race & Poverty L. J. 69, 91 (2013). 11 42 U.S.C. § 300gg. 12 Id. 13 42 U.S.C. §§ 300gg-4(a) to (b). 14 42 U.S.C. §§ 2000e et seq. 15 42 U.S.C. §§ 12101–12213. 16 29 U.S.C. §§ 621–634. 17 29 U.S.C. § 206(D) (2006). 18 42 U.S.C. § 2000ff–6(a)(1). 19 42 U.S.C. §§ 300g, 1181 et seq., 1320d et seq. 

crimination laws if they have a disparate impact on members of a protected group. 

Women, racial minorities and older workers are more likely to pay increased costs 

associated with punitive wellness programs. These groups are more likely to experience significant health disparities and are particularly vulnerable to chronic illnesses, and as a result they may face greater difficulty satisfying employer-defined 

benchmarks.4

Although the Patient Protection and Affordable Care Act (ACA) permits employers 

to implement wellness programs, it also sets important nondiscrimination standards 

for such programs that are intended to safeguard civil rights. Section 1557 of the 

ACA prohibits discrimination on the basis of sex, race, color, national origin and disability by health programs receiving Federal funds or by any entity established 

under Title I of the Act.5 Section 1557 incorporates and applies numerous civil 

rights laws, such as Title VI of the Civil Rights Act of 1964,6 Title IX of the Education Amendments of 1972,7 the Age Discrimination Act of 1975,8 and Section 504 

of the Rehabilitation Act of 1973,9 to Federal health programs and entities. Section 

1557’s incorporation of these key protections mandates that health plans receiving 

Federal premium tax credits are bound by existing civil rights law applicable to 

other federally assisted programs.10

Additional provisions of the ACA require insurance companies to cover all applicants and to offer enrollees the same rates regardless of pre-existing conditions or 

sex.11 For example, the law prohibits gender rating.12 The law also limits medical 

underwriting.13 Allowing employer wellness programs to raise costs for protected 

groups contravenes the purpose of these provisions, which endeavor to ensure equal 

and affordable access to everyone, regardless of sex, pre-existing conditions, or other 

status. 

Similarly, punitive programs that impose fees or withhold financial rewards for 

failing to meet certain health benchmarks carry the risk of disproportionately impacting groups protected under Title VII of the Civil Rights Act of 1964,14 the Americans with Disability Act (ADA),15 Age Discrimination in Employment Act 

(ADEA),16 the Equal Pay Act,17 Genetic Information Nondiscrimination Act,18 and 

the Health Insurance Portability and Accountability Act (HIPAA),19 among other 

laws. These laws prohibit discrimination on the basis of sex, race, national origin, 

age and other protected categories. 

The Equal Employment Opportunity Commission (EEOC) is charged with ensuring that employer wellness programs do not operate as a subterfuge for unlawful 

discrimination. The EEOC, which is tasked with enforcing employment nondiscrimination laws, serves a critically important role in ensuring equal opportunity 

for workers in the United States. The EEOC is the first place workers who have 

experienced discrimination must go to pursue their claims and it provides invaluable assistance to workers in filing charges, investigating claims and mediating and 

attempting to conciliate the charges that the agency deems meritorious. The agency 

also litigates specific charges, authorizes workers to file complaints in court and participates as amicus curiae in key courts of appeals cases. Through enforcement, 

guidance, outreach, education, technical assistance and advice to other Federal 

agencies, the EEOC has an opportunity to ensure that employers comply with nondiscrimination laws, such as those set forth in the ACA and in other civil rights 

67 

20 42 U.S.C. §§ 2000e et seq. 21 42 U.S.C. § 2000e–2(a)(1). 22See, e.g., Dep’t of Water & Power v. Manhart, 435 U.S. 702, 711 (1978) (holding that the 

plaintiffs established a prima facie case of discrimination by demonstrating that an employer 

charged all female employees higher retirement fund premiums than it charged to males). 23 Id. 24 Int’l Bhd. of Teamsters v. United States, 431 U.S. 324, 335 n. 15 (1977). 25See Griggs v. Duke Power Co., 401 U.S. 424, 429–33 (1971). 26 Id. at 432 (explaining that the complainant must show that an employer has a ‘‘particular 

employment practice’’ that causes a disparate impact). 27 Newport News Shipbuilding and Dry Dock Co. v. E.E.O.C., 462 U.S. 669, 682 (1983). 28 Cynthia L. Ogden et al., Nat’l Center for Health Statistics, Obesity Among Adults in the 

United States—No Statistically Significant Change Since 2003–2004 1 (2007), available at: 

http://www.cdc.gov/nchs/data/databriefs/db01.pdf. 29 Ctrs. for Disease Control and Prevention, Morbidity and Mortality Weekly Report: Prevalence of Doctor-Diagnosed Arthritis and Arthritis-Attributable Activity Limitation—United 

States, 2010–2012 (Nov. 8, 2013), http://www.cdc.gov/mmwr/preview/mmwrhtml/ 

mm6244a1.htm. 

statutes, and follow best practices in the design and implementation of wellness programs. 

II. STATUTES IMPLICATED IN NONDISCRIMINATION ANALYSIS

A. Title VII of the Civil Rights Act of 1964: Employer wellness programs 

that impose disproportionate penalties or disproportionately deny rewards on the basis of sex, race or national origin may violate Title VII 

of the Civil Rights Act of 1964.20

Title VII prohibits discrimination with respect to ‘‘compensation, terms, conditions, or privileges of employment.’’ 21 An employer may violate title VII by treating 

members of a protected class differently than others (i.e., disparate treatment discrimination).22 In order to state a disparate treatment claim, the plaintiff must 

show that the employer treats some people less favorably than others on the basis 

of plaintiff ’s membership in a protected group.23 Critical to a disparate treatment 

claim is the employer’s discriminatory motive, although this motive can be inferred 

in some circumstances.24

An employer may also violate Title VII by utilizing a facially neutral employment 

practice if it has an adverse impact upon persons of a protected group (i.e., disparate 

impact discrimination).25 In order to State a prima facie disparate impact claim, the 

plaintiff must point to a specific policy or practice that has an adverse impact on 

the basis of race, sex, or other protected characteristics.26 The Supreme Court, in 

a case addressing an employer’s unequal provision of health insurance coverage, 

held that ‘‘health insurance and other fringe benefits are compensation, terms, conditions, or privileges of employment’’ under title VII.27 Charging increased fees or 

denying rewards for failure to meet certain biometrics could be subject to a disparate impact challenge under the title VII framework. 

For the purposes of an adverse action under a title VII framework, financial rewards and penalties can operate as flip sides of the same coin. A wellness program 

that offers a ‘‘reward’’ to those who meet certain benchmarks may constitute an adverse action for those who do not qualify for the reward, just in the same way that 

a penalty may constitute an adverse action for those who are required to pay a higher cost. Although the language of the wellness program might refer to a ‘‘penalty’’ 

or ‘‘reward,’’ the effect is the same: to shift the employer’s health insurance costs 

disproportionately to protected groups. 

Some wellness programs offer voluntary activities and benefits for all employees, 

such as flex-time for exercise or reduced gym memberships, geared toward encouraging employees to improve and maintain their health. But wellness programs that 

tie rewards or fees to health benchmarks could be expected to have an adverse impact on women and racial minorities, because women and racial minorities are more 

likely to experience the most serious health disparities. For example, women are 

more likely than men to have medical conditions such as obesity28 and arthritis.29

68 

30 Ctrs. for Disease Control and Prevention, Morbidity and Mortality Weekly Report: Prevalence of Heart Disease—United States, 2005, Table 1 (Feb. 16, 2007), http://www.cdc.gov/ 

mmwr/preview/mmwrhtml/mm5606a2.htm. 31 Ctrs. for Disease Control and Prevention, Morbidity and Mortality Weekly Report: Differences in Prevalence of Obesity Among Black, White, and Hispanic Adults—United States, 

2006–2008 (July 17, 2009), http://www.cdc.gov/mmwr/preview/mmwrhtml/mm5827a2.htm. 32 Ctrs. for Disease Control and Prevention, Age-Adjusted Incidence of Diagnosed Diabetes per 

1,000 Population Aged 18–79 Years, by Race/Ethnicity, United States, 1997–2011, http:// 

www.cdc.gov/diabetes/statistics/incidence/fig6.htm (last visited Jan. 28, 2015). 33See Salganicoff, et al., supra note 4. 34 Id. 35 U.S. Dep’t of Health & Human Services, Office of Minority Health, Cancer and African 

Americans, http://minorityhealth.hhs.gov/omh/browse.aspx?lvl=4&lvlid=16 (last accessed Jan. 

28, 2015). 36 U.S. Dep’t of Health & Human Services, Office of Minority Health, Diabetes and African 

Americans, http://minorityhealth.hhs.gov/omh/browse.aspx?lvl=4&lvlID=18 (last accessed Jan. 

28, 2015). 37 U.S. Dep’t of Health & Human Services, Office of Minority Health, Heart Disease and African Americans, http://minorityhealth.hhs.gov/omh/browse.aspx?lvl=4&lvlid=19 (last accessed 

Jan. 28, 2015). 38 U.S. Dep’t of Health & Human Services, Office of Minority Health, Diabetes and Hispanic 

Americans, http://minorityhealth.hhs.gov/omh/browse.aspx?lvl=4&lvlid=63 (last accessed Jan. 

28, 2015). 39 U.S. Dep’t of Health & Human Services, Office of Minority Health, Cancer and Hispanic 

Americans, http://minorityhealth.hhs.gov/templates/content.aspx?lvl=2&lvlID=54&ID=3323 

(last accessed Jan. 28, 2015). 40 Ctrs. for Disease Control & Prevention, Health Disparities and Inequalities Report—United 

States, 2013, Summary, available at: http://www.cdc.gov/mmwr/pdf/other/su6203.pdf. 41 Civil Rights Act of 1991 § 105(a), 42 U.S.C. § 2000e–2(k)(1)(A)(i). 42 Ricci v. DeStefano, 557 U.S. 557, 623 n. 3 (2009) (citing Robinson v. Lorillard Corp., 444 

F.2d 791, 798 (4th Cir. 1971)). 43Williams v. Colorado Springs, Colo., Sch. Dist. No. 11, 641 F.2d 835, 841 (10th Cir. 1981). 44Jones v. Lee Way Motor Freight, Inc., 431 F.2d 245, 249 (10th Cir.), cert. denied, 401 U.S. 

954 (1970). 45 Ricci, 557 U.S. at 635 (quoting Robinson, 444 F.2d at 798, n. 7). 46 Robinson, 444 F.2d 791, 799, n.8; U.S. v. N. L. Industries, Inc., 479 F.2d 354 (8th Cir. 1973); 

Johnson v. Pike Corp. of America, 332 F. Supp. 490 (C.D. Cal. 1971). 47 Ricci, 557 U.S. at 623 n. 3 (2009) (citing Robinson, 444 F.2d at 798 (4th Cir. 1971)). 48See supra note 2. 

Racial minorities are more likely to face heart disease,30 obesity31 or diabetes.32

Over one-third of African-American women over age 45 report fair or poor health, 

and almost 30 percent have diabetes.33 African-American women also suffer from 

the greatest obesity rates.34 African-Americans have the highest mortality rate of 

any racial and ethnic group for all cancers combined.35 They are twice as likely to 

be diagnosed with diabetes compared to non-Hispanic whites,36 and also 40 percent 

more likely to have high blood pressure.37 Hispanic adults are 1.7 times more likely 

than non-Hispanic white adults to have been diagnosed with diabetes,38 and twice 

as likely to have certain types of cancer compared to non-Hispanic white Americans.39 Even when income, health insurance and access to care are accounted for, 

disparities remain.40 While well-designed, nondiscriminatory wellness programs 

that seek to combat these conditions and improve employees’ health may be a worthy endeavor, wellness programs that merely seek to shift costs depending on health 

benchmarks may run afoul of the law. 

Employers have encountered difficulty in attempting to justify a wellness program 

that disparately impacts a protected group. If a plaintiff is able to show that the 

employer’s wellness program adversely impacts a protected group, the employer 

must demonstrate that the policy is ‘‘consistent with business necessity.’’ 41 The employer must show that the program is ‘‘necessary to the safe and efficient operation 

of the business’’ 42 and ‘‘of great importance to job performance.’’ 43 Proof of ‘‘mere 

rationality’’ is not enough.44 The policy is not a business necessity ‘‘if an alternative 

practice better effectuates its intended purpose or is equally effective but less discriminatory.’’ 45

Although issues of economy can be considered, courts have concluded that cost 

savings alone cannot justify a policy or practice that results in a disparate impact.46

The employer would likely encounter difficulty demonstrating that any cost savings 

associated with wellness programs are ‘‘necessary to the safe and efficient operation 

of the business,’’ 47 particularly when there is scant evidence establishing that 

wellness programs have resulted in measurably improved health outcomes for employees.48 Although reducing health care costs is arguably a factor a court might 

consider, the employer would most likely need to show that there was no other solution to lowering costs that did not result in a disparate impact. Linking financial 

69 

49 42 U.S.C. §§ 12101 et seq. 50 42 U.S.C. § 12112(d); see also Watson v. City of Miami Beach, 177 F.3d 932, 935 (11th Cir. 

1999); Tice v. Centre Area Transp. Authority, 247 F.3d 506, 514 n. 7 (3d Cir. 2001). 51See Equal Employment Opportunity Comm’n, ADA Enforcement Guidance: Preemployment 

Disability-Related Questions and Medical Examinations, http://www.eeoc.gov/policy/docs/ 

medfin5.pdf. 52 Id. 53 42 U.S.C. §§ 2000ff–1 to 2000ff–11. 54 42 U.S.C. § 1320d–9. 55 29 C.F.R. § 1635.8. 56 29 C.F.R. § 1635.8(b)(2)(ii). 57 29 U.S.C. §§ 621 et seq. 58 29 U.S.C. § 623. 59 Age Discrimination in Employment Act, 29 U.S.C.A. § 623(i)(1)(A). 

rewards to biometrics or other standards that may not correlate to underlying 

health and adopting wellness programs that disproportionately harm members of a 

protected group runs contrary to the spirit and the letter of title VII. 

B. The Americans with Disabilities Act: Wellness programs that disproportionately impose penalties or deny rewards to people with disabilities 

may violate the Americans with Disabilities Act (ADA). 

The ADA prohibits employment discrimination on the basis of disability and limits an employer’s ability to make disability-related inquiries and to require medical 

examinations.49 Generally, the examination or inquiry must be made on a post-offer 

basis for employment and either be ‘‘job-related and consistent with business necessity,’’ or a voluntary medical examination, as ‘‘part of an employee health program 

available to employees at that work site.’’ 50

Wellness plans and health risk assessments may be prohibited under the ADA’s 

‘‘no medical exams or inquiries’’ provision if they are not voluntary.51 The level of 

inducement, or more specifically, the value of the incentive for taking the health 

risk assessment, may impact whether the medical examination or inquiry is truly 

voluntary.52 Financial penalties for failure to meet health criteria also can have a 

disparate impact on individuals with disabilities. For example, wellness programs 

run afoul of the ADA if they penalize employees who fail to have normal blood glucose or cholesterol levels, who fall within a certain range of weight or blood pressure, or who cannot participate in a walking or other exercise program due to a disability. In short, a wellness program that requires inappropriate disability-related 

inquiries, offers reduced benefits, or carries financial penalties for individuals with 

disabilities can subject an employer to liability under the ADA. 

C. The Genetic Information Nondiscrimination Act: Wellness plans that involve genetic information or testing can run afoul of the Genetic Information Nondiscrimination Act (GINA). 

GINA restricts an employer’s ability to inquire about family health history or 

other ‘‘genetic information’’ as part of a program of wellness incentives under a 

group health plan.53 In connection with any group health plan or health insurer, 

GINA prohibits the covered entity from increasing premiums or contribution 

amounts based on genetic information; requesting or requiring an individual or family member to undergo a genetic test; and requesting, requiring or purchasing genetic information prior to or in connection with enrollment, or at any time for ‘‘underwriting purposes.’’ 54 Employers must ensure that wellness programs and any associated financial incentives or penalties comply with GINA and its implementing 

regulations.55 The regulations and the EEOC’s June 24, 2011 opinion letter clarify 

that GINA prohibits employers from offering financial inducements to encourage 

employees to provide genetic information as part of a wellness program.56

D. The Age Discrimination in Employment Act: Wellness programs that disproportionately impose penalties or deny rewards to older workers may 

violate the Age Discrimination in Employment Act (ADEA). 

The ADEA prohibits discrimination against persons over the age of 40.57 In pertinent part, the ADEA makes it illegal for an employer to . . . discriminate against 

any individual with respect to his compensation, terms, conditions, or privileges of 

employment, because of such individual’s age.’’ 58 The statute specifically prohibits 

‘‘the reduction of the rate of an employee’s benefit accrual, because of age.’’ 59 An 

increase to a health insurance premium could constitute an adverse action under 

70 

60Smith v. City of Jackson, 544 U.S. 228, 240 (2005). 61Meacham v. Knolls Atomic Power Lab., 554 U.S. 84, 100 (2008). 62 Id. at 93–98; 29 C.F.R. § 1625.7. 63 29 C.F.R. § 1625.7(e)(1). 64 29 C.F.R. § 1625.7(e)(2). 65 42 U.S.C. §§ 12101 et seq. 66 29 U.S.C. §§ 701 et seq. 67 Ctrs. for Disease Control and Prevention, Morbidity and Mortality Report: Vital Signs: 

State-Specific Obesity Prevalence Among Adults—United States, 2009 (Aug. 3, 2010), http:// 

www.cdc.gov/mmwr/preview/mmwrhtml/mm59e0803a1.htm. 68 Ctrs. for Disease Control and Prevention, High Blood Pressure Facts, http://www.cdc.gov/ 

bloodpressure/facts.htm (last visited Jan. 28, 2015). 69 Ctrs. for Disease Control and Prevention, High Blood Cholesterol: Conditions, http:// 

www.cdc.gov/cholesterol/conditions.htm (last visited Jan. 28, 2015). 70 U.S. Dep’t of Health & Human Services, Office of the Surgeon General, Bone Health and 

Osteoporosis: A Report of the Surgeon General, Ch. 4, Oct. 14, 2004, available at http:// 

www.ncbi.nlm.nih.gov/books/NBK45513/. 71 U.S. Dep’t of Health & Human Services, Office of Women’s Health, Diabetes Factsheet, 

http://womenshealth.gov/publications/our-publications/fact-sheet/diabetes.html. 72 U.S. Dep’t of Health & Human Services, Nat’l Heart, Lung & Blood Inst., Who Is at Risk 

for Heart Disease?, http://www.nhlbi.nih.gov/health/health-topics/topics/hdw/atrisk.html. 73 Ctrs. for Disease Control and Prevention, Arthritis: The Nation’s Most Common Cause of 

Disability, http://www.cdc.gov/chronicdisease/resources/publications/aag/arthritis.htm. 74 Ctrs. for Disease Control and Prevention, Older Persons’ Health, http://www.cdc.gov/nchs/ 

fastats/older-american-health.htm (last visited Jan. 28, 2015). 75 E. Calkins, et al. New Ways to Care for Older People: Building Systems Based on Evidence 

(1999). 76L.P. Fried, LP & J.M. Guralnik, Disability in older adults: evidence regarding significance, 

etiology, and risk, J. 45 Am. Geriatric Soc. 92–100 (1997). 77See supra note 2. 78 29 C.F.R. § 1625.7(e)(2). 79 § 1625.7(e)(2)(i). 

the ADEA, and an employer cannot discriminate against older workers in the provision of that benefit. 

As under Title VII, an ADEA plaintiff may proceed under a theory of disparate 

treatment or disparate impact.60 If the plaintiff has evidence that the employer intended to discriminate against older workers through a wellness program, the plaintiff may proceed with a claim of disparate treatment. An employer may also violate 

the ADEA by utilizing a facially neutral employment policy or practice that has an 

adverse impact on older workers. When an employee identifies an employment practice that causes a disparate impact,61 the employer must show that a ‘‘reasonable 

factor other than age’’ motivated the policy.62 Under the ADEA’s implementing regulations, a ‘‘reasonable factor other than age’’ is a non-age factor that is, 

‘‘objectively reasonable when viewed from the position of a prudent employer 

mindful of its responsibilities under the ADEA . . .63 Factors a court could consider when determining whether the policy is reasonable include: the extent to 

which the factor is ‘‘related to the employer’s business purpose,’’ whether the 

factor was administered ‘‘fairly and accurately’’ 

and the employer considered the impact on older workers and the extent of the 

harm suffered.64

A wellness program may violate the ADEA if it has a disparate impact on older 

employees, who are more likely to suffer from a range of chronic conditions (some, 

if not all of which also would qualify as disabilities under the Americans with Disabilities Act of 199065 and the Rehabilitation Act of 1973,66 both as amended). Studies have shown that obesity,67 hypertension,68 high cholesterol69 and low bone density,70 as well as more serious conditions such as diabetes,71 heart disease72 and arthritis73 are strongly correlated with age. Obesity is far more prevalent among the 

elderly than the general population.74 Almost 75 percent of individuals aged 65 and 

over have at least one chronic illness,75 and at least 50 percent have two chronic 

illnesses.76 Thus wellness programs that penalize employees for failing to satisfy 

certain biometric benchmarks might be expected to disproportionately impact older 

workers. 

As detailed below,77 there is little reliable evidence that punitive wellness programs do more than shift costs to employees. Thus, a court could find that there 

is insufficient evidence to establish a defense to a disparate impact claim. Indeed, 

the factors laid out in the EEOC’s regulations weigh against these programs.78

There is little evidence that a wellness program is ‘‘related to the employer’s business purpose.’’ 79 Punitive wellness programs that penalize older workers whether 

directly, or indirectly through unattainable employee incentives, should not be 

71 

80 § 1625.7(e)(2)(ii). 81 § 1625.7(e)(2)(v). 82 29 U.S.C. § 623(f)(2)(b). 83 29 C.F.R. § 1625.10(a)(1). 84 Id. 85 29 U.S.C. § 206(D)(1). 86 29 C.F.R. § 1620.10. 87 Equal Employment Opportunity Comm’n, Equal Pay/Compensation Discrimination, http:// 

www.eeoc.gov/laws/types/equalcompensation.cfm (last visited Jan. 28, 2015). 88See, e.g., Meadows v. Ford Motor Co., 510 F.2d 939 (6th Cir.1975), cert. denied, 425 U.S. 

998 (1976); Grove v. Frostburg Nat. Bank, 549 F. Supp. 922, 946 (D. Md. 1982). 89 26 U.S.C. § 9802; 29 U.S.C. § 1182; 42 U.S.C. § 300gg-1. 90 26 C.F.R. § 54.9802-1(g); 29 CFR 2590.702(g); 45 C.F.R. § 146.121(g). 91 United States Dep’t of Labor, Frequently Asked Questions: The HIPAA Nondiscrimination 

Requirements, http://www.dol.gov/ebsa/faqs/faqlhipaalND.html (last accessed Jan. 28, 

2015). 

deemed to be administered ‘‘fairly and accurately.’’ 80 Under the last factor—harm 

to the employee—it is clear that if a wellness program imposes a financial penalty, 

this can significantly reduce an employee’s earnings.81 As such, the ADEA protects 

against wellness programs that disproportionately penalize older workers. 

The ADEA prohibits employers that offer health care benefits to their employees 

from discriminating against older workers by refusing to cover them or by reducing 

their benefits because of their age. However, an employer may be permitted under 

the ADEA to reduce benefits of older workers as long as the same amount of money 

is spent on older workers as is spent on younger workers.82 Yet there are several 

ways that a wellness program might not be sheltered by this defense provided by 

the ADEA. First, the exception is only available to employers when ‘‘justified by significant cost consideration.’’ 83 Second, in the context of a contributory health plan, 

wherein the employer and employee both contribute to the cost of the premium, the 

employer may increase the employee’s premium contribution as the employee ages, 

but the proportion that the employee pays cannot be higher than the proportion 

paid by younger employees.84 Thus, an employer would run afoul of the ADEA if 

the proportion of older workers’ contributions increases as a result of financial penalties or increased premiums associated with wellness programs. 

E. Equal Pay Act: Wellness plans that impose financial penalties can run 

afoul of the Equal Pay Act, which requires that women and men are compensated equally for equal work.85

The Department of Labor’s regulations implementing the Equal Pay Act make 

clear that equal wages include fringe benefits.86 The EEOC also has recognized that 

the Equal Pay Act requires equal compensation for not only salaries and bonuses, 

but also employment benefits.87 Indeed, courts have awarded lost benefits in Equal 

Pay Act cases.88 Thus, an employer wellness program could run afoul of the Equal 

Pay Act if it penalizes employees by granting different benefit levels to women and 

men with the same or similar work duties. 

F. The Health Insurance Portability and Accountability Act (HIPAA): 

Wellness plans that discriminate in health coverage based on health factors can run afoul of the Health Insurance Portability and Accountability 

Act.89

HIPAA prohibits discrimination in participation, eligibility, premiums and contributions for health coverage90 based on factors like health status, medical condition, medical history and genetic information.91 The Departments of Treasury, 

Labor, and Health and Human Services are expected to issue a final regulation implementing HIPAA’s nondiscrimination provisions in the near future. The proposed 

rule sets certain parameters for employer wellness programs. For example, wellness 

programs must be made available to all similarly situated employees. The proposed 

rule states that wellness programs must be reasonably designed to promote health 

or prevent disease. The proposed rule also states that wellness programs must provide a reasonable alternative to a health-based standard for individuals for whom 

it is unreasonably difficult or medically inadvisable to meet the initial standard. 

III. THE EEOC’S IMPORTANT ROLE IN EVALUATING WELLNESS PROGRAMS’ PUNISHMENTS

AND REWARDS

The EEOC has a responsibility to investigate and, where appropriate, develop systemic and impact litigation to protect the most vulnerable workers, including lowwage workers who would be impacted by wellness program cost-shifting measures 

72 

92 V. Paul-Ebhohimhen & A. Avenell, Systematic review of the use of financial incentives in 

treatments for obesity and overweight, 9 Obesity Reviews 355–67 (Oct. 23, 2007). 93Kevin G. Volpp, David A. Asch, Robert Galvin & George Loewenstein, Redesigning Employee Health Incentives—Lessons from Behavioral Economics, 365 N. Engl. J. Med. 388–90 

(Aug. 4, 2011). 94 Health Enhancement Research Org., et al., Fact Sheet: Statistics About Workplace Wellness 

(July 2012), http://hero-health.org/wp-content/uploads/2014/03/FactSheetlwellness-statsl 

FINALl071512.pdf. 95L. Perusse & C. Bouchard, Gene-diet interactions in obesity. Am. J. Clinical Nutrition; vol. 

72 (5 Suppl.), pp. 1285S–90S (2000). 96 Jon R. Gabel, et al., Obesity and the Workplace: Current Programs and Attitudes Among 

Employers and Employees, 28 Health Affairs 46–56 (2009). 97 Antony D. Karelis, et al. Metabolic and body composition factors in subgroups of obesity: 

What do we know? J. 89 Clinical Endocrinology & Metabolism 2569–75 (June 2004); Neil 

Ruderman, et al., The metabolically obese, normal weight individual revisited, 47 Diabetes 699– 

713 (1998); Adam Gilden Tsai & Thomas A. Wadden, Systematic review: An evaluation of major 

commercial weight loss programs in the United States, 142 Annals of Internal Medicine 56–66 

(Jan. 4, 2005). 98M.J. Franz, et al., Weight-loss outcomes: A systematic review and meta-analysis of weightloss clinical trials with a minimum 1-year followup. 107 J. Am. Dietetic Ass’n 1755–67 (2007); 

L.P. Svetkey, et al., Comparison of strategies for sustaining weight loss, 299 JAMA 1139–48 

(March 12, 2008). 99 Rena R. Wing & Suzanne Phelan, Long-term weight loss maintenance, 82 Am. J. Clinical 

Nutrition 222S–5S (2005); Thomas A. Wadden, et al., Efficacy of lifestyle modification for longterm weight control. 12 Obesity Research 151S–162S. 11 (December 2004). 

that penalize protected groups. Investigators and litigators should be trained to 

identify red-flags. In addition to identifying programs that unlawfully raise insurance premiums for vulnerable employees, investigators must also pay particular attention to programs that purportedly offer ‘‘rewards’’ to participating employees but 

result in fewer employees participating in the employer-provided health insurance. 

Employees who receive ‘‘rewards’’ are better able to utilize the employer’s health 

benefits, while those who do not participate in wellness programs and do not receive 

these ‘‘rewards’’ may no longer be able to afford health insurance. 

The EEOC’s efforts are particularly important in light of the fact that there is 

little data supporting employer wellness programs that try to change employee behavior by raising insurance premiums or tying rewards to health outcomes. There 

is scant—if any—empirical evidence that monetary rewards can result in sustained 

weight loss.92 Crucially, there is no independently evaluated research demonstrating 

that linking the cost of employer-sponsored insurance to certain biometrics has an 

impact on health outcomes.93

For example, biometric markers are overwhelmingly common in wellness programs generally. According to a recent survey, 90 percent of companies that have 

outcomes-based wellness programs use a weight-related standard and 75 percent 

use blood pressure, cholesterol and tobacco use.94 However, requiring all employees 

to meet biometric markers such as BMI, blood pressure and cholesterol is not reasonably related to improving employees’ health, particularly when the same standards are applied indiscriminately to all employees. These biometrics are influenced 

by a range of genetic and environmental determinants that do not affect all employees equally and are largely out of an individual’s control.95 BMI, in particular, is 

not an accurate assessment of health, as it is designed as a measure of public health 

risk, not as a marker for individual goals.96 Penalizing all individuals with a BMI 

or body weight over a certain number ignores the science that shows that many individuals who are not overweight nevertheless have a high BMI, and, conversely, 

that many overweight people are in good health and whose blood pressure and cholesterol are in the healthy range.97

In addition, whether because of genetic or environmental factors, some chronic 

conditions do not significantly improve over time. For example, there is extensive 

scientific evidence indicating that employers cannot expect their employees to lose 

large amounts of weight and maintain significant weight loss over time, even with 

intensive treatment options.98 There is also strong scientific research showing that 

individuals can improve their health by taking small steps toward weight loss.99 Yet 

an employee who took such a step—for instance, lowering her BMI from 35 to 32, 

where the employer’s benchmark is set at 30—would not escape a penalty under a 

punitive wellness program when there is one BMI benchmark required for all employees. 

Some punitive wellness programs charge employees higher health insurance premiums simply for failing to reach certain benchmarks. Safeway’s ‘‘Healthy Measures’’ program, for example, tests participating employees’ tobacco use, weight, blood 

73 

100Steven A. Burd, How Safeway Is Cutting Health-Care Costs, Wall St. J., June 12, 2009, 

http:// wsj.com/article/SB124476804026308603.html. 101 Id. 102Larry Hand, Employer health incentives: Employee wellness programs prod workers to 

adopt healthy lifestyles, Harvard Sch. Pub. Health Mag., (Winter 2009), available at http:// 

www.hsph.harvard.edu/news/magazine/winter09healthincentives. 103 Id. 104 Id. 105 Id. 106 Id. 107Mike Stobbe, Dieting for dollars? More U.S. employees trying it, Fort Worth Star Telegram, 

June 2, 2010, http://www.star-telegram.com/living/family/moms/article3825613.html. As 

many as one-third of employers plan to implement financial incentive programs to encourage 

employees to reduce their BMI or other biometric markers of health. Id. 108Obesity Action Coalition, Measuring Weight and Obesity, http://www.obesityaction.org/ 

understanding-obesity/measuring-weight (last visited Jan. 28, 2015). 109Shari Roan, Alabama to place ‘‘fat tax’’ on obese State employees, L.A. Times Blog, Aug. 

25, 2008, http://latimesblogs.latimes.com/boosterlshots/2008/08/alabama-places.html. 110 2009 N.C. Sess. Laws 16, available at http://www.ncga.State.nc.us/Sessions/2009/Bills/ 

Senate/PDF/S287v8.pdf. 111See Michelle M. Mello, et al., Wellness Programs and Lifestyle Discrimination—The Legal 

Limits, 359 N. Engl. J. Med. 192–99 (2008). 112 Bloomberg.com, Hewitt Survey Shows Growing Interest Among U.S. Employers to Penalize 

Workers for Unhealthy Behaviors (March 17, 2010), http://www.bloomberg.com/apps/ 

news?pid=newsarchive&sid=aqKgAGxn8bBA. 113 Aon Hewitt Survey Highlights Important Role of Incentives in U.S. Employers’ Efforts to 

Improve Workforce Health and Performance, (2013), http://aon.mediaroom.com/2013–03–25- 

Aon-Hewitt-Survey-Highlights-Important-Role-of-Incentives-in-U-S-Employers-Efforts-to-ImproveWorkforce-Health-and-Performance. 

pressure and cholesterol levels.100 Employees who fail these tests pay $780 more for annual individual coverage and $1,560 more for annual family coverage than employees who pass the tests.101

Many punitive wellness programs penalize employees whether or not they choose 

to participate in the programs. Scotts Miracle-Gro has implemented a program that 

imposes penalties for failure to participate in some aspects of the program.102 Scotts’ 

wellness program offers a health-risk appraisal called ‘‘Health Quotient.’’ 103 Employees who choose not to participate pay a $40 per month insurance premium surcharge.104 If an employee takes the appraisal and is in the mid- to high-tier range 

of risk levels, she can opt to consult a health coach and take steps to lower risks.105

However, if the employee does not take further action, she will pay a $67 insurance 

premium surcharge—or penalty—per month.106 Scotts’ policy is a double-edged 

sword—if employees choose not to be evaluated, they incur a penalty, but agreeing 

to undergo the evaluation can come with even greater costs. 

Several States penalize employees if their BMI—one of the most popular biometrics used by employers to measure health107 and obesity108—exceeds a certain 

threshold. The State of Alabama has imposed financial penalties on its employees 

who have a BMI over 30,109 and the State of North Carolina has denied its employees access to better health insurance options if an individual’s BMI is above a certain measure.110

Notwithstanding the lack of evidence to demonstrate their efficacy, many employers have already implemented, or plan to implement, wellness programs that penalize employees who do not meet health criteria set by the employer, and that is cause 

for concern to those with an eye on nondiscrimination protections and makes even 

more important the EEOC’s role in ensuring nondiscrimination. 

Employers are increasingly relying on punitive wellness programs to control the 

cost of health benefits.111 A 2010 survey by Hewitt of nearly 600 large U.S. employers (representing more than 10 million employees) found that nearly one-half (47 

percent) already used or planned to use financial penalties over the next 3 to 5 

years for employees. Of those companies using or planning to use penalties, the majority (81 percent) say they would do so through higher benefit premiums. Increasing deductibles and out-of-pocket expenses were also cited as possible penalties.112

Interest in punitive wellness programs is on the rise. In Hewitt’s most recent survey, published in March 2013, 58 percent of employers surveyed planned to impose 

consequences on participants who do not take appropriate actions for improving 

their health.113

Because women, racial minorities and older workers tend to be less likely to meet 

rigid health benchmarks, they are more likely to have to pay increased costs when 

financial penalties or rewards are associated with those benchmarks. As such, punitive wellness programs can run afoul of equal employment opportunity laws and the 

EEOC’s role in identifying these programs is critical. 

74 

IV. CONCLUSION

When punitive wellness programs impose costs or withhold rewards from protected groups they violate well-established nondiscrimination laws. We urge this 

committee to support the EEOC’s enforcement efforts to enforce nondiscrimination 

protections to ensure that employer wellness programs do not operate as a subterfuge for unlawful discrimination. Proper investigation and oversight by the EEOC 

is critical to ensuring that employer wellness programs help employees achieve 

meaningful improvements in health outcomes without running afoul of equal employment opportunity laws. Women, racial minorities and older workers are more 

likely to experience significant health disparities and are particularly vulnerable to 

chronic illnesses and therefore most likely to be impacted by wellness programs that 

discriminate. Employers should not use punitive wellness programs to shift costs 

disproportionately to these groups, particularly in light of the lack of evidence that 

punitive wellness programs actually improve employee wellness or decrease overall 

health care costs. Without congressional support, the EEOC’s ability to promote 

equal opportunity and enforce civil rights laws for U.S. workers will be compromised. 

Thank you for the opportunity to share our comments. We look forward to continuing to work with Congress and the Administration to ensure nondiscrimination 

in employer wellness programs. 

PREPARED STATEMENT OF FAMILIES USA 

Mr. Chairman Alexander, Senator Murray, and members of the committee: The 

undersigned organizations would like to submit the attached letter for the record 

for the hearing entitled, ‘‘Employer Wellness Programs: Better Health Outcomes and 

Lower Costs.’’ This letter was sent by the undersigned organizations, representing 

diverse consumers and patients, to the Equal Employment Opportunity Commission 

(EEOC) on January 27, 2015. It commends the EEOC for its recent legal actions 

against select employers’ wellness programs for violating the Americans with Disabilities Act (ADA) and other critical nondiscrimination laws (EEOC v. Flambeau 

Inc., Civil Action No. 3:13-cv–00638; EEOC v. Orion Energy Systems, Civil Action 

1:14-cv–01019; EEOC v. Honeywell Inc., Civil Action 1:14-cv–04517). These actions 

are critical to ensuring that employers’ wellness incentive programs preserve employees’ rights under the ADA, the Genetic Information Nondiscrimination Act of 

2008, and all other nondiscrimination laws, in addition to complying with requirements under the Affordable Care Act and HIPAA. 

Thank you for the opportunity to submit this letter into the hearing record. 

Sincerely, 

AMERICAN DIABETES ASSOCIATION, 

AMERICAN FEDERATION OF STATE, COUNTY, AND MUNICIPAL EMPLOYEES, 

AMERICAN SOCIETY OF BARIATRIC PHYSICIANS, 

BINGEBEHAVIOR.COM, 

EPILEPSY FOUNDATION, 

FAMILIES USA, 

OBESITY ACTION COALITION. 

U.S. EQUAL EMPLOYMENT OPPORTUNITY COMMISSION, 

WASHINGTON, DC 20507, 

January 27, 2015. 

Cc: Secretary Sylvia Burwell, Department of Health and Human Services; Secretary 

Thomas E. Perez, Department of Labor 

Re: EEOC Lawsuits Challenging Wellness Programs 

DEAR COMMISSIONERS BARKER, BURROWS, FELDBLUM, LIPNIC, AND YANG: We, the 

undersigned organizations, are writing on behalf of the millions of patients, consumers, and workers that our organizations represent. We commend the Equal Employment Opportunity Commission (EEOC) for its recent legal actions against select 

employers’ wellness programs for violating the Americans with Disabilities Act and 

other critical nondiscrimination laws (EEOC v. Flambeau Inc., Civil Action No. 3:13- 

cv–00638; EEOC v. Orion Energy Systems, Civil Action 1:14-cv–01019; EEOC v. 

Honeywell Inc., Civil Action 1:14-cv–04517). 

The Americans with Disabilities Act (ADA), as amended by the ADA Amendments 

Act, places important limits on employers’ abilities to make disability-related inquiries and to require medical examinations of their employees. Unless the examination 

or inquiry is ‘‘job-related and consistent with business necessity,’’ any disability-reVerDate Nov 24 2008 11:07 Jan 09, 2017 Jkt 000000 PO 00000 Frm 00078 Fmt 6633 Sfmt 6621 S:\DOCS\93181.TXT CAROL
75 

1 §146.121(h) of the Code, states, 

‘‘compliance with this section is not determinative of compliance with any other provisions 

of the PHS Act (including the COBRA continuation provisions) or any other State or Federal law, such as the Americans with Disabilities Act.’’ 

The preamble to the 2013 final tri-agency rule enforcing ACA amendments to the HIPAA and 

wellness provisions of the PHS Act, ‘‘Incentives for Nondiscriminatory Wellness Programs in 

Group Health Plans,’’ also states that, 

‘‘the Departments recognize that many other laws may regulate plans and issuers in their 

provision of benefits to participants and beneficiaries. These laws include, but are not limited to, the ADA, Title VII of the Civil Rights Act of 1964, Code section 105(h) and PHS 

Act section 2716 (prohibiting discrimination in favor of highly compensated individuals), 

the Genetic Information Nondiscrimination Act of 2008, the Family and Medical Leave 

Act, ERISA’s fiduciary provisions, and State law. The Departments did not attempt to 

summarize the requirements of those laws in the 2006 regulations and do not attempt to 

do so in these final regulations.’’ 

lated inquiries or medical examinations must be voluntary for employees, as part of 

an employee health program. 

We agree with the EEOC, as asserted in their suits, that the aforementioned employers’ wellness programs include penalties for not completing medical exams that 

are so large that they effectively make the medical exams involuntary and in violation of the ADA. These employers’ penalties for non-participation include thousands 

of dollars in penalties tied to employees’ medical plan costs, disciplinary action, and 

loss of any employer contributions to health care benefits. Such penalties could 

leave employees feeling that they have no choice but to provide private health information that, under the ADA, they have a legal right not to disclose. 

In the case of Honeywell Inc., we have significant concerns with the company’s 

penalty for nonparticipation in its wellness program’s biometric testing, which is up 

to $4,000 in penalties tied to employees’ medical plan costs and employer HSA contributions. This includes a tobacco surcharge of $1,000 on any individual who refuses to complete the medical exam, including employees and employees’ spouses 

who do not use tobacco but do not wish to complete the exam for other reasons. For 

many working families who simply can’t afford to pay this additional cost, programs 

with monetary penalties of this magnitude can be as coercive as programs that revoke all employer contributions toward an employee’s health coverage if they do not 

participate. 

Section 1201 of the Patient Protection and Affordable Care Act (ACA) allows employers to provide incentives for meeting certain wellness program requirements. 

However, this section only amended requirements of the HIPAA nondiscrimination 

and wellness provisions, under the Public Health Service Act and Employee Retirement Income Security Act. These provisions do not speak to the issue of how employers can gain access to an employee’s health information. If Congress had intended for the ACA amendments to the HIPAA nondiscrimination and wellness provisions to override the ADA limitations on an employer’s ability to request medical 

information about an employee or to require an employee to submit to a medical 

exam, it would have explicitly done so as part of the ACA wellness provisions. Just 

2 years earlier, in the Genetic Information Nondiscrimination Act of 2008, Congress 

clearly addressed how job-based health plans could use genetic information (in title 

I amendments to ERISA) and how job-based health plans could inquire about genetic information (in title II amendments to the ADA). Absent language explicitly 

modifying the ADA provisions that limit employers’ ability to request medical information or to require employees to submit to a medical exam, it seems clear that 

Congress intended to leave them intact. 

Both Section 1201 of the ACA and enforcing regulations in §146.121 of the Code 

of Federal Regulations clearly state that compliance with wellness incentive requirements under HIPAA, as amended by the ACA, does not assure compliance with 

other Federal and State laws.1

The law is clear that employers must design and implement wellness incentive 

programs in a manner that ensures that they do not violate employees’ rights under 

the ADA, the Genetic Information Nondiscrimination Act of 2008, and all other nondiscrimination laws, in addition to ensuring that they comply with requirements 

under the ACA and HIPAA. Therefore, it is the EEOC’s duty to pursue these cases 

to ensure compliance with the ADA prohibition on compelling employees to disclose 

health information to their employers. 

We thank the EEOC for taking action to ensure that employers’ wellness programs are carried out in a nondiscriminatory manner that preserves all employees’ 

rights. 

76 

If you have any questions or need additional information, please do not hesitate 

to contact Lydia Mitts, Senior Policy Analyst, Families USA, at 202-628-3030 or 

lmitts@familiesusa.org. 

AMERICAN DIABETES ASSOCIATION, 

AMERICAN FEDERATION OF STATE, COUNTY, AND MUNICIPAL EMPLOYEES, 

AMERICAN SOCIETY OF BARIATRIC PHYSICIANS, 

BINGEBEHAVIOR.COM, 

EPILEPSY FOUNDATION, 

FAMILIES USA, 

OBESITY ACTION COALITION. 

CONSORTIUM FOR CITIZENS WITH DISABILITIES (CCD), 

January 28, 2015. 

Hon. LAMAR ALEXANDER, Chairman, 

Committee on Health, Education, Labor, and Pensions, 

455 Dirksen Senate Office Bldg., 

Washington, DC 20510. 

Hon. PATTY MURRAY, Ranking Member, 

Committee on Health, Education, Labor, and Pensions, 

154 Russell Senate Office Building, 

Washington, DC 20510. 

DEAR SENATORS ALEXANDER AND MURRAY: We submit this letter on behalf of the 

Consortium for Citizens with Disabilities (CCD) Rights Task Force for purposes of 

the HELP Committee hearing tomorrow concerning employer-based wellness programs. CCD is a coalition of national disability organizations working for national 

public policy that ensures the self-determination, independence, empowerment, integration and inclusion of children and adults with disabilities in all aspects of society. 

We applaud the committee for focusing on wellness programs, which we believe 

can play an important role in improving health outcomes for employees with disabilities and others. It is important to acknowledge, however, that wellness programs 

can and should be conducted consistently with civil rights laws. While the Affordable Care Act (ACA) and the Health Insurance Portability and Accountability Act 

(HIPAA) set forth rules for the operation of wellness programs, other laws, such as 

the Americans with Disabilities Act (ADA), also apply to these programs. Indeed, 

the ACA did not supersede or eliminate the requirements of the ADA. Employerbased wellness programs should operate in ways that both promote better health 

outcomes and comply with the ADA’s workplace protections. These protections do 

not conflict with the rules set forth in the ACA. 

As you know, employment rates for people with disabilities have remained far 

below those for any other group tracked by the Bureau of Labor Statistics, and there 

is a particularly strong need for the EEOC to enforce the ADA’s requirements and 

ensure that people with disabilities have full and fair opportunities to work. The 

disability community has always considered the EEOC’s mission and work critically 

important. Overwhelmingly, people with disabilities want to work, and the EEOC’s 

regulatory and enforcement activities have been tremendously significant in opening 

workplace doors and expanding opportunities for people with disabilities to become 

self-sufficient. 

We support the EEOC’s activities to enforce the rights of people with disabilities 

with respect to wellness programs. The EEOC’s litigation in this area has focused 

on an issue of grave concern to us: punishing employees’ failure to answer wellness 

program medical inquiries through penalties so steep that an employee’s ‘‘choice’’ to 

answer the questions can hardly be considered voluntary. We believe that the Commission’s enforcement activities in this area aim to safeguard a critical ADA protecVerDate Nov 24 2008 11:07 Jan 09, 2017 Jkt 000000 PO 00000 Frm 00080 Fmt 6633 Sfmt 6621 S:\DOCS\93181.TXT CAROL
77 

tion, and they are also consistent with the ACA. Wellness programs can and should 

work well for all employees, including people with disabilities. 

Sincerely, 

JENNIFER MATHIS, 

Bazelon Center for Mental Health Law. 

MARK RICHERT, 

American Foundation for the Blind. 

CURT DECKER, 

National Disability Rights Network. 

SANDY FINUCANE, 

Epilepsy Foundation of America. 

CO-CHAIRS, 

CCD Rights Task Force. 

U.S. EQUAL EMPLOYMENT OPPORTUNITY COMMISSION, 

OFFICE OF COMMUNICATIONS AND LEGISLATIVE AFFAIRS, 

WASHINGTON, DC. 20507, 

February 6, 2015. 

Hon. LAMAR ALEXANDER, Chairman, 

Committee on Health, Education, Labor, and Pensions, 

U.S. Senate, 

Washington, DC 20510. 

DEAR CHAIRMAN ALEXANDER: Please accept this statement for the record from the 

Equal Employment Opportunity Commission (EEOC) in response to the Senate 

Committee on Health, Education, Labor, and Pensions’ January 29, 2015 hearing 

entitled, ‘‘Employer Wellness Programs: Better Health Outcomes and Lower Costs.’’ 

We write to provide additional information about the EEOC’s enforcement and policies with respect to employer wellness programs in response to concerns raised at 

the hearing. 

As you know, the EEOC is responsible for enforcing Title VII of the Civil Rights 

Act of 1964, the Age Discrimination in Employment Act of 1967, the Equal Pay Act 

of 1963, the Americans with Disabilities Act of 1990, Section 501 of the Rehabilitation Act of 1973, the Civil Rights Act of 1991, the Genetic Information Nondiscrimination Act of 2008, the ADA Amendments Act of 2008, and the Lilly 

Ledbetter Fair Pay Act of 2009. Vested with this responsibility, the Commission is 

dedicated to achieving our national vision of justice and equality in the workplace 

by preventing, stopping and remedying unlawful employment discrimination. 

The EEOC agrees that wellness programs can play an important role in controlling health care costs and promoting healthful lifestyles. We appreciate your statement that wellness programs cannot discriminate and that they must provide a reasonable alternative if an employee cannot meet the program’s standard requirement. 

NOTICE OF PROPOSED RULEMAKING (NPRM)

Several statements by Members and witnesses urged the EEOC to issue a rule 

to clarify the application of the ADA to workplace wellness programs. The Commission’s fall 2014 regulatory agenda includes plans to publish a Notice of Proposed 

Rulemaking (NPRM) that will address the interaction between Title I of the ADA, 

which permits an employer to request medical information as part of a voluntary 

wellness program and HIPAA rules concerning wellness program incentives, as 

amended by the ACA. See http://resources.regulations.gov/public/custom/isp/navigation/main.isp. 

Interested stakeholders will be invited to submit written comments on any issues 

related to the proposed rule. We will then carefully consider all comments we receive while developing the final rules. 

The EEOC has been engaged in coordination with the Departments of Labor, 

Health & Human Services, and Treasury on these issues and continues to coordinate with these agencies as we move to publish the NPRM, consider the comments 

submitted during the public comment period, and prepare the final rules. The Commission appreciates the need for rulemaking in this area and intends to issue the 

NPRM as soon as possible. 

78 

EEOC ENFORCEMENT

The EEOC has filed two lawsuits on the merits concerning wellness programs, 

both of which were approved by a bi-partisan vote of the Commissioners. The first 

case filed was EEOC v. Orion Energy Systems, Civil Action I:14-cv-01019. In that 

case, the EEOC alleges that Orion violated the ADA by requiring an employee to involuntarily submit to medical exams and inquiries that were 

not job-related and consistent with business necessity. The EEOC alleges that 

the employer fired an employee in retaliation for declining participation in the program. 

As set out in the EEOC’s complaint, the wellness program at issue in Orion required employees to disclose their medical history and have blood work performed. 

The employee declined to participate in the wellness program. The EEOC alleges 

that if the employee had agreed to participate in the program, Orion would have 

covered the entire cost of her health insurance. 

Because she declined to participate, the employee was required to pay the entire 

premium. In addition, the EEOC contends that Orion assessed an additional monthly penalty because she declined to participate in a fitness component of the program. 

Within approximately 6 weeks after the employee declined to participate pate, Orion 

fired her. The EEOC alleges that Orion fired her because she raised objections to 

the wellness program and declined to participate. 

The second case filed was EEOC v. Flambeau, Civil Action No. 3:13-cv–00638. As 

with the Orion case, the EEOC alleges that Flambeau violated the ADA. The 

EEOC alleges that Flambeau’s wellness program required that employees submit to 

biometric testing involving blood work and measurements and to disclose medical 

history. The EEOC alleges that Flambeau told employees that participation in the 

wellness program was mandatory in order to remain on the company’s health insurance plan and that failure to appear for medical testing would result in unspecified 

disciplinary action. When one employee did not attend the scheduled medical testing, EEOC alleges that Flambeau notified him that it was canceling his health insurance and that he could apply for health insurance at the COBRA premium rate. 

The EEOC alleges that employees who participated in the wellness program, by 

comparison, were offered health insurance and were required to pay only 25 percent 

of their premium cost. 

Regarding the Commission’s recent application for preliminary relief with respect 

to its investigation into charges concerning Honeywell International, Inc., it is important to note that this action was not a lawsuit on the merits. The ADA and 

GINA empower the Commission to file actions for temporary relief, whenever the 

Commission concludes on the basis of a preliminary investigation that prompt judicial action is necessary to carry out the statutes’ purposes. In this case, the Commission sought an injunction only to delay Honeywell from imposing penalties on employees (or their spouses) who chose not to participate in Honeywell’s wellness program while the EEOC’s investigation of the relevant charges continued. The Commission did not seek monetary damages or fines from Honeywell. In other words, 

under the limited relief the Commission sought, Honeywell would have been free to 

continue testing employees (and spouses) who voluntarily submit to biometric 

screening; Honeywell simply would have been prohibited from penalizing non-participating employees until the Commission had completed its investigation and processing of the charges. The district court denied the Commission’s request for temporary relief. Consequently, the Commission’s action for preliminary relief has concluded. There is no pending court action in this matter. 

We appreciate the opportunity to provide additional information for the record 

and hope this information is help to you. 

Sincerely, 

TODD A. COX, 

Director, Office of Communications 

and Legislative Affairs. 

[Whereupon, at 11:31 a.m., the hearing was adjourned.] 

Æ