Working Well

Incentives, Penalties and Disagreements in Workplace Wellness

Some recent workplace wellness scuffles in the workplace highlight the messy debate over acceptable practices.

Workplace wellness is in the weeds this week at Macy’s. As Bloomberg BNA reported, the Labor Department claims that Macy’s tobacco cessation program doesn’t meet certain regulatory requirements.

The Labor Department claims that Macy’s tobacco cessation program doesn’t meet certain regulatory requirements, according to Bloomberg BNA.

Here’s an excerpt from the report:

“Since 2011, Macy’s tobacco cessation program hasn’t met the regulatory requirements to be a nondiscriminatory wellness program under the Employee Retirement Income Security Act, the department alleged in a lawsuit filed Aug. 16 in federal court in Ohio. That’s because the program didn’t provide a reasonable alternative standard to avoid a surcharge that ranged from $35 to $45 for individuals who couldn’t meet the standards of the program, the lawsuit said.

“In addition, since 2011, participants who entered the retailer’s tobacco cessation program were still required to pay a surcharge that ranged from $35 to $45 per month, the lawsuit said. Those funds were to be deposited into Macy’s welfare benefits plan trust and would be used to pay medical claims and plan expenses. At some point, and following Macy’s instructions, Cigna and Anthem started using a less-favorable reimbursement rate to process out-of-network claims, which caused participants to overpay certain claims, the lawsuit said.”

The story also said that this lawsuit might be one of the first filed by the Labor Department involving a large employer’s wellness plan.

As a wellness blogger, I’m intrigued by this for a several reasons. First, “smoking is bad for your health” is generally a widely accepted sentiment, even by smokers themselves. Meanwhile, compare smoking cessation programs to other health-related initiatives: Do yoga! Take this corporate mindfulness class! Get 10,000 steps a day! Get a standing desk! At least to me, it seems like smoking is seen as the “Big Bad” of health while most other health-related practices are more often associated as just being trendy.

Smoking cessation is also one of the first noteworthy health-related practices employers addressed in the workplace. In the 10-year span starting in 2000, “smoke free workplaces, restaurants, and bars went from being relatively rare to being the norm in half the states and Washington, D.C.,” according to a report by the CDC.

And that’s just on the state level. Before that period in 2000 when the push for smoking cessation skyrocketed, many offices had already changed their tune. Read this Los Angeles Times article from 1993, for example, in which smokers in cities including New York City and Los Angeles voice their concerns:

Davis, smoking in front of the water district building, said he believed that smoking sometimes determined who would be promoted.

“I think it’s becoming a problem,” he said.

Hall agreed, saying he believed many company executives–as well as those who aspire to their jobs–are afraid to admit that they smoke.

“I think the business executive is hiding out,” Hall said. “Now, there is the connotation that if you smoke, you are a lowlife.”

Looks like somewhere in between the “Mad Men” era of the 1960s and 1993, a lot has changed.

This brings me to my takeaway on this. Here’s a universally acknowledged bad habit, a program that aims to eliminate it, and a federal agency filing a suit against one particular program. Keeping in mind that the allegations against Macy’s have not been proven true or false yet, I agree with the Labor Department’s general argument here. Just because smoking is a bad habit, it doesn’t give any employer the right to mismanage a program and get money out of people unethically.

Lately I’ve been thinking about that fine line between employers’ exerting an appropriate amount of power and exerting too much power on employees, especially when it comes to penalizing behavior — whether that behavior is smoking or any other behavior that could be considered to have negative health effects. Where’s the line?

That’s why I was fascinated to come across this news on the EEOC’s final regulations on workplace wellness financial incentives:

The U.S. District Court for the District of Columbia has ordered the EEOC to reconsider its final regulations on the extent to which an employer may offer incentives to participate in a wellness program without violating the Americans with Disabilities Act (ADA) or the Genetic Information Nondiscrimination Act (GINA), reported the Employee Benefits and Executive Compensation Blog. It’s important to note the court is allowing this rule to remain in effect, pending the EEOC’s review.

This blog goes over many important, technical details. It’s worth a read for those who are interested.

The bottom line, however, is that a court has brought up doubts on the definition of “voluntary” in regards to wellness programs. That’s been an important characteristic of wellness programs involving sensitive medical information; they must be voluntary. But even programs that are officially voluntary get flak, because those who opt out may have to pay much more money for health care. When the Preserving Employee Wellness Programs Act was introduced in March 2017, many people felt outraged that they would be coerced into opting in the program.

These two recent events highlight some messy undertones of workplace wellness. It’s not all free yoga classes, step challenges and skinny, attractive people drinking smoothies in the breakroom. There’s a complicated web of regulation and rules by multiple parties, including the Affordable Care Act, HIPPA, GINA, the ADA and the EEOC.  Companies could potentially mismanage a program, though the verdict is still out on our lead story. And the regulations themselves are not only up for debate but already heatedly debated.

[Related content: “One Employee Says He’s Sick of Wellness Carrots and Sticks”]

Andie Burjek is a Workforce associate editorComment below, or email at editors@workforce.com. Follow Workforce on Twitter at @workforcenews.