CVS Causing Corporate Wellness Programs To Get a Bad Rap
The media has been buzzing recently with the news that CVS CareMark Corp. is requiring employees to disclose their weight and other health information or pay a fine of $600. While this is technically true, the media has cast a negative light on this program, leading to inaccurate assumptions about corporate wellness programs.
CVS CareMark has embarked on a wellness initiative which asks employees to undergo a screening with their physician to measure weight, body fat and glucose levels. CVS CareMark will pick up the cost of this screening. If employees do not complete this screening by May 1st, they will have to pay $600 more per year for health insurance.
Despite the fact that this wellness initiative is clearly optional for employees, the media has focused on alarmist headlines like, “CVS CareMark demands workers disclose weight, health info!” from the LA Times, a statement which is simply untrue. In fact, there are several aspects of the CVS wellness program that are not addressed properly in the media; the issues of (1) privacy, (2) penalty cost and (3) why employers are adopting these types of wellness plans.
PRIVACY. Are corporate wellness programs legal? Absolutely! Employers are allowed to incent employees to complete a wellness screening, with premium differentials, because the employer never actually sees any individual health information. The results of the CVS screening, for example, are provided to WebMD Health Services Group and are available to the employer on an aggregate basis only. An employer may see that 25% of the employees who have completed the screening have elevated glucose levels, but they are not given the identity of these individuals.
Patient Privacy Rights founder Dr. Deborah Peel was quoted in the Boston Herald as saying, “employers are desperate to get rid of workers who have costly health conditions, like obesity and diabetes.” When, in fact, corporate wellness programs do not exist to allow employers to terminate employees based on their personal health information. In fact, under the Health Insurance Portability and Accountability Act (HIPAA), it is illegal for an employer to improperly utilize an employee’s personal health information. Corporate wellness programs, instead, are designed to manage and mitigate the health risks present in their population.
Critics of the CVS wellness program have also implied that the program may be in violation of the Americans with Disabilities Act and MA Chapter 151B. A voluntary wellness program that measures glucose and weight/body fat, like the CVS program, is not a violation of either statute. According to Mintz Levin, “If an employer takes an adverse employment action against an (individual) employee based on the results of the wellness testing (such as an increase in benefit costs) and IF those results reveal the existence of a disability under the ADA or 151B, then there could be a cognizable claim for disability discrimination.” However as long as employers limit reporting they receive to aggregated results, an ADA violation is significantly decreased.
COST? CVS CareMark will charge employees an additional $50 per month for health insurance if the employee does not complete the screening. Again, this is perfectly legal, and encouraged by current and emerging legislation under PPACA. The current regulations allow employers to charge up to 20% more to employees that do not complete the wellness program. The 20% is based on the cost of individual coverage under the employer’s health plan. For example, if the monthly premium for an individual on the plan is $500, the differential can be up to $100. If employees who complete the wellness requirements contribute $100 per month, the employer can charge those employees who do not up to $200 per month. While the individual premium cost for CVS’s health plan has not been disclosed, I think we can safely say that CVS could be charging more than the current penalty.
Further, under PPACA, the 20% differential maximum will increase 30% in 2014 and up to as much as 50% for tobacco use. (Source below)
WHY WELLNESS? The motivation behind health screenings of this nature is twofold.
- First, employers know that a healthy and strong workforce is more productive. Since many employees do not make time for screenings and wellness visits, the first step is to education. Incent employees to take a Health Risk Assessment. Also, give on site opportunities for employees to measure and improve their biometric numbers. This is often coined as a “Know Your Numbers” campaign.
- Second, employers should analyze aggregate reports which outline the health of their population. This information can be used to create a wellness program that is targeted to address the needs of a specific population. For example, depending on the aggregate results of a health screening, an employer might want to offer a seminar series on healthy eating, reduce stress, or incorporate exercise into a daily routine.
The truth is that CVS CareMark is not the first employer to implement a health screening requirement for lower insurance premiums. For the past two years WGA has required employees to complete a Health Risk Assessment (HRA) questionnaire and undergo a health screening in order to receive “engaged” status which gives an employee access to lower health insurance rates. The response has been outstanding. As an added bonus, William Gallagher Associates has been named a finalist for the “Healthiest Employers” by the Boston Business Journal, an award that honors the most outstanding corporate health and wellness program.
A well-crafted wellness program offers effective opportunities for employees to improve their health while also lowering healthcare costs for employers. With a constant need to battle rising healthcare costs and major PPACA provisions in support of corporate wellness programs (in 2014), we can expect to see more and more employers following suit.
Source: Federal Register/ Vol. 77, No. 227 / Monday, November 26, 2012 / Proposed Rules