[Senate Hearing 114-514]
[From the U.S. Government Publishing Office]




                                                        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

                               __________

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          COMMITTEE ON HEALTH, EDUCATION, LABOR, AND PENSIONS

                  LAMAR ALEXANDER, Tennessee, Chairman

MICHAEL B. ENZI, Wyoming                     PATTY MURRAY, Washington
RICHARD BURR, North Carolina                 BARBARA A. MIKULSKI, Maryland
JOHNNY ISAKSON, Georgia                      BERNARD SANDERS (I), Vermont
RAND PAUL, Kentucky                          ROBERT P. CASEY, JR., Pennsylvania
SUSAN COLLINS, Maine                         AL FRANKEN, Minnesota
LISA MURKOWSKI, Alaska                       MICHAEL F. BENNET, Colorado
MARK KIRK, Illinois                          SHELDON WHITEHOUSE, Rhode Island
TIM SCOTT, South Carolina                    TAMMY BALDWIN, Wisconsin
ORRIN G. HATCH, Utah                         CHRISTOPHER S. MURPHY, Connecticut
PAT ROBERTS, Kansas                          ELIZABETH WARREN, Massachusetts
BILL CASSIDY, M.D., Louisiana


               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)

  


   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.
    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 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 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?
    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.

   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.
    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.
    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.
    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 
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 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 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 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.
---------------------------------------------------------------------------
    \1\ Kaiser Family Foundation, Employer Health Benefits 2014 Annual 
Survey_Wellness Programs and Health Risk Assessments 196 (2014) 
[hereinafter KFF Survey].
    \2\ Sloan Center on Aging & Work at Boston College, Fact Sheet 38: 
Health and Wellness Programs in the Workplace 1 (July 2014).
---------------------------------------------------------------------------
                clear rationale for employer engagement
    Key Points:

     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,
---------------------------------------------------------------------------
    \3\ McKinsey Global Institute, Overcoming obesity: An initial 
economic analysis (November 2014).

          ``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 2\1/2\ 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\
---------------------------------------------------------------------------
    \4\ World Economic Forum, Global Risks 2010 (2010).
---------------------------------------------------------------------------
    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.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


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

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    

    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\
---------------------------------------------------------------------------
    \6\ Institute of Medicine, Business Engagement in Building Healthy 
Communities: Workshop Summary (July 2014).
---------------------------------------------------------------------------
    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.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


    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.
                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.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


    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.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


    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:

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


    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:

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


    The following chart shows the progress in achievement over time of 
scores and the increasing number of sites achieving higher milestones.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


    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\
---------------------------------------------------------------------------
    \7\ http://www.mihia.org.

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  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.
    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.

 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\
---------------------------------------------------------------------------
    \16\ KFF 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)

    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\
---------------------------------------------------------------------------
    \17\ Aon Hewitt, 2014 Health Care Survey 33 (2014).
---------------------------------------------------------------------------
    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\
---------------------------------------------------------------------------
    \18\ Buck Consultants Survey Executive Summary, supra note 3, at 3.
    \19\ Optum, supra note 12 at 7.
---------------------------------------------------------------------------
    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 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\
---------------------------------------------------------------------------
    \20\ See Code Sec.  9802, ERISA Sec. 702, PHSA Sec. 2705.
    \21\ See Code Sec. 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 Sec. 9802(a)(1).
---------------------------------------------------------------------------
    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\
---------------------------------------------------------------------------
    \23\ Nondiscrimination and Wellness Programs in Health Coverage in 
the Group Market, 71 Fed. Reg. 75,014 (Dec. 13, 2006).
    \24\ See 26 C.F.R. Sec. 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.
    \25\ See 26 C.F.R. Sec. 54.9802-1(f)(2). Examples include not 
smoking, attainment of certain biometric screening results, and 
achieving exercise targets.
---------------------------------------------------------------------------
    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 medically 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.
---------------------------------------------------------------------------
    \26\ 78 Fed. Ref. 33158
---------------------------------------------------------------------------
    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\
---------------------------------------------------------------------------
    \27\ PPACA Sec. Sec. 4303, 10404.
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     Health plan quality-of-care report and employee 
notice.\28\
---------------------------------------------------------------------------
    \28\ PPACA Sec. 1001.
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     Small-employer wellness program grants.\29\
---------------------------------------------------------------------------
    \29\ PPACA Sec. 10408.

    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 I generally prohibits a group 
health plan and a health insurance issuer in the group market from:
---------------------------------------------------------------------------
    \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).

     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\
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    \31\ Interim Final Rules Prohibiting Discrimination Based on 
Genetic Information in Health Insurance Coverage and Group Health 
Plans, 74 Fed. Reg. at 51,665.

    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\
---------------------------------------------------------------------------
    \32\ Code Sec. 9832(d)(10)(B).
    \33\ 26 C.F.R. Sec. 54.9802-3T(d)(1)(ii); 29 C.F.R. Sec. 2590.702-
1(d)(1)(ii); 45 C.F.R. Sec. 146.122(d)(1)(ii).
    \34\ 26 C.F.R. Sec. 54.9802-3T(a)(3); 29 C.F.R. Sec. 2590.702-
1(a)(3); 45 C.F.R. Sec. 146.122(a)(3).
---------------------------------------------------------------------------
    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.
---------------------------------------------------------------------------
    \35\ Interim Final Rules Prohibiting Discrimination Based on 
Genetic Information in Health Insurance Coverage and Group Health 
Plans, 74 Fed. Reg. at 51,669.
---------------------------------------------------------------------------
    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\
---------------------------------------------------------------------------
    \36\ Regulations Under the Genetic Information Nondiscrimination 
Act of 2008, 75 Fed. Reg. 68,912 (Nov. 9, 2010).
---------------------------------------------------------------------------
    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.
---------------------------------------------------------------------------
    \37\ See 29 C.F.R. Sec. 1635.4.
---------------------------------------------------------------------------
    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\
---------------------------------------------------------------------------
    \38\ See 29 C.F.R. Sec. 1635.8(b)(i). See also Commission Informal 
Discussion Letter (June 24, 2011), http://www.eeoc.gov/eeoc/foia/
letters/2011/ada_gina_incentives.html.

    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.
---------------------------------------------------------------------------
    \39\ See 29 C.F.R. Sec. 1635.8(b)(2)(ii).

    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\
---------------------------------------------------------------------------
    \40\ 29 C.F.R. Sec. 1635.8(b)(2)(iii).
---------------------------------------------------------------------------
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\
---------------------------------------------------------------------------
    \41\ 42 U.S.C. Sec. 12112(a).
    \42\ 42 U.S.C. Sec. 12112(d).
---------------------------------------------------------------------------
    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\
---------------------------------------------------------------------------
    \43\ See Commission Informal Discussion Letter (Jan. 18, 2013), 
http://www.eeoc.gov/eeoc/foia/letters/2013/ada_wellness_programs.html; 
Commission Informal Discussion Letter (June 24, 2011), http://
www.eeoc.gov/eeoc/foia/letters/2011/ada_gina_incentives.html; 
Commission Informal Discussion Letter (May 6, 2009), http://
www.eeoc.gov/eeoc/foia/letters/2009/
ada_disability_medexam_healthrisk.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.
    \44\ See 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.
---------------------------------------------------------------------------
    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\
---------------------------------------------------------------------------
    \45\ See Commission Informal Discussion Letter (Jan. 23, 1998) (on 
file with Council).
---------------------------------------------------------------------------
    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 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\
---------------------------------------------------------------------------
    \46\ See Commission Informal Discussion Letter (Mar. 6, 2009), 
http://www.eeoc.gov/eeoc/foia/letters/2009/
ada_disability_medexam_healthrisk.html.

    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.
---------------------------------------------------------------------------
    \47\ Seff v. Broward County, 691 F.3d 1221 (11th Cir. 2012).
---------------------------------------------------------------------------
         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 EEOC\48\ 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\
---------------------------------------------------------------------------
    \48\ http://www.americanbenefitscouncil.org/documents2013/
wellness_eeoc_council-simon-testimony050813.pdf.
    \49\ http://www.americanbenefitscouncil.org/newsroom/
2020vision.cfm.
---------------------------------------------------------------------------
    This legal uncertainty has been exacerbated by certain enforcement 
actions initiated by regional offices of the EEOC with respect to 
employers' HIPAA and PPACA-compliant 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 semi-
annual 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.
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 semi-
annual 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 vice-versa) 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 well-being 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.

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 providers 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.
    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 highest-quality 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 school-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.
---------------------------------------------------------------------------
    \1\ McGinnis JM, Williams-Russo P, Knickman JR. The case for more 
active policy attention to health promotion. Health Affairs (Millwood) 
2002; 21(2):78-93.
---------------------------------------------------------------------------
    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.
---------------------------------------------------------------------------
    \2\ Goetzel, 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.
---------------------------------------------------------------------------
    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\
---------------------------------------------------------------------------
    \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.
---------------------------------------------------------------------------
    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 study\4\ showed about half of employers in 
2013 offered workplace wellness initiatives of some kind, there is a 
lot of variation. This makes measuring effectiveness and standardizing 
best practices difficult.
---------------------------------------------------------------------------
    \4\ Mattke, 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/research_reports/RR200/RR254/RAND_RR254.sum
.pdf.
---------------------------------------------------------------------------
    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 employee-only 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.
---------------------------------------------------------------------------
    \5\ Mattke, et al., p. xix.
---------------------------------------------------------------------------
    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);
     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\
---------------------------------------------------------------------------
    \6\ King County application, Harvard Innovations in Government 
Award.

    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\
---------------------------------------------------------------------------
    \7\ Ibid.

    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\
---------------------------------------------------------------------------
    \8\ Ibid.
---------------------------------------------------------------------------
    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:

          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\
---------------------------------------------------------------------------
    \9\ King County application, Harvard Innovations in Government 
Award and Vestal, Christine.

    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 incredible 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 participation 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, 
at-risk 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.
---------------------------------------------------------------------------
    * 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.
---------------------------------------------------------------------------
    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 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 marathon 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 self-
determination, 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 one-third 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 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 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\
---------------------------------------------------------------------------
    \1\ The 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.

    The ADA prohibits discrimination on the basis of disability with 
regard to the ``terms, conditions, and privileges of employment,'' 42 
U.S.C. Sec. 12112(a), including in contractual relationships with 
fringe benefits providers that have the effect of discriminating 
against employees with disabilities, id. at Sec. 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. 
Sec. 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 Sec. 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'').
---------------------------------------------------------------------------
    \2\ There 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.
---------------------------------------------------------------------------
    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 employers to ensure that individuals 
        in the workplace can efficiently perform the essential 
        functions of their jobs.\3\
---------------------------------------------------------------------------
    \3\ EEOC Guidance, General Principles.

    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\
---------------------------------------------------------------------------
    \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.
---------------------------------------------------------------------------
    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. 
Sec. 1635.8(b)(2)(i)(A). Accordingly, an employer ``may not offer a 
financial inducement for individuals to provide genetic information.'' 
Id. Sec. 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.
---------------------------------------------------------------------------
    \6\ 42 U.S.C. Sec. 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.

    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 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)
---------------------------------------------------------------------------
    \7\ 78 Fed. Reg. 33158, 33165.
---------------------------------------------------------------------------
                                 * * *
          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)
---------------------------------------------------------------------------
    \8\ Id. at 33168.

    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), Sec. 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. 
Sec. Sec. 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. Sec. Sec. 2705(j)(1)(B), (j)(2).
---------------------------------------------------------------------------
    \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. 
Sec. 2705(j)(3)(B), (D).

    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 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/springfield_ma_soi.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 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 enforcement 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 Act\1\ in 1990. 
That law permits disability-related inquiries and medical examinations 
that are part of a ``voluntary'' wellness program. Specifically, the 
ADA states:
---------------------------------------------------------------------------
    \1\ See 42 U.S.C. Sec. 12101 et seq.

          ``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\
---------------------------------------------------------------------------
    \2\ 42 U.S.C. Sec. 12112(d)(4)(A).

    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\
---------------------------------------------------------------------------
    \3\ 42 U.S.C. Sec. 12112(d)(4)(B).

    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\
---------------------------------------------------------------------------
    \4\ 42 U.S.C. Sec. 12201(c)(2). This is sometimes referred to as a 
``safe harbor'' provision.

    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 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\
---------------------------------------------------------------------------
    \5\ See ERISA Section 702(a), 29 U.S.C. Sec. 1182(a).
    \6\ See Department of Labor Regulations, 29 C.F.R. 
Sec. 2590.702(f).
    \7\ See 78 Fed. Reg. 33158.
---------------------------------------------------------------------------
    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\
---------------------------------------------------------------------------
    \8\ 42 U.S.C. Sec. 300gg-4(j)(3)(A).

---------------------------------------------------------------------------
    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\
---------------------------------------------------------------------------
    \9\ Id.

         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
---------------------------------------------------------------------------
    \10\ See http://www.eeoc.gov/policy/docs/guidance-inquiries.html.

        ``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\
---------------------------------------------------------------------------
    \11\ See EEOC Opinion Letter, Jan. 6, 2009 at 2, rescinded on March 
6, 2009, http://pdfserver.amlaw.com/cc/WellnessEEOC2009.pdf.

---------------------------------------------------------------------------
    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\
---------------------------------------------------------------------------
    \12\ Id.

    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
---------------------------------------------------------------------------
    \13\ See http: //www.eeoc.gov/eeoc/foia/ letters/2009/ada _ 
disability _medexam _healthrisk
.html.

        ``[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\
---------------------------------------------------------------------------
    \14\ See http://www.eeoc.gov/eeoc/foia/letters/2013/
ada_wellness_programs.html.

    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.
---------------------------------------------------------------------------
    \15\ See http://www.eeoc.gov/eeoc/newsroom/release/5-8-13.cfm; 
http://www.eeoc.gov/eeoc/meetings/5-8-13/index.cfm.
---------------------------------------------------------------------------
    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 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\
---------------------------------------------------------------------------
    \16\  See Seff v. Broward County, 691 F.3d 1221 (11th Cir. 2012).
    \17\ Id. at 1223-24.
---------------------------------------------------------------------------
    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\
---------------------------------------------------------------------------
    \18\ See http://webapps.dol.gov/FederalRegister/
HtmlDisplay.aspx?DocId=26880&AgencyId=8&
DocumentType=2.

                  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\
---------------------------------------------------------------------------
    \19\ See 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).
    \20\ Plaintiff 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.
    \21\ Defendant Orion Energy Systems' Answer at 4-5, EEOC v. Orion 
Energy Systems, Inc., Case No. 14-1019 (E.D. Wis. filed Oct. 16, 2014).
---------------------------------------------------------------------------
    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\
---------------------------------------------------------------------------
    \22\ See 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).

    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\
---------------------------------------------------------------------------
    \23\ Defendant Flambeau's Answer, EEOC v. Flambeau, Inc., Case No. 
14-638 (W.D. Wis. filed Nov. 24, 2014).
---------------------------------------------------------------------------
    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,'' the Eleventh Circuit's decision is wrong, and that 
``compliance with HIPAA and the ACA are not defenses to the ADA. \28\
---------------------------------------------------------------------------
    \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.
    \28\ Plaintiff 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).
---------------------------------------------------------------------------
    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
---------------------------------------------------------------------------
    \29\ Honeywell Int'l, Inc., Civil No. 14-4517, 2014 U.S. Dist. 
LEXIS 157945, at *5-10.

        ``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\
---------------------------------------------------------------------------
    \30\ Id. at *13-15. This paper does not address the issues 
involving Genetic Information Nondiscrimination Act (``GINA'').
---------------------------------------------------------------------------
                             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?
    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 
Affordable 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--disability-
related 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 
disability-
related 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 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?
    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 self-
insured 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 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 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 instances 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 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 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-the-ground 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 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 non-
discrimination 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 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 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.
    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.
    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.]

                          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\
---------------------------------------------------------------------------
    \1\ Mercedes 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).
---------------------------------------------------------------------------
    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.
---------------------------------------------------------------------------
    \2\ See 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.
---------------------------------------------------------------------------
    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-discrimination 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\
---------------------------------------------------------------------------
    \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-and-health-
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/
05_0209.pdf.
---------------------------------------------------------------------------
    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\
---------------------------------------------------------------------------
    \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).
---------------------------------------------------------------------------
    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.
---------------------------------------------------------------------------
    \11\ 42 U.S.C.  300gg.
    \12\ Id.
    \13\ 42 U.S.C.  300gg-4(a) to (b).
---------------------------------------------------------------------------
    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.
---------------------------------------------------------------------------
    \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.
---------------------------------------------------------------------------
    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 
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\
---------------------------------------------------------------------------
    \20\ 42 U.S.C.  2000e et seq.
---------------------------------------------------------------------------
    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\
---------------------------------------------------------------------------
    \21\ 42 U.S.C.  2000e-2(a)(1).
    \22\ See, 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).
---------------------------------------------------------------------------
    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.
---------------------------------------------------------------------------
    \25\ See 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).
---------------------------------------------------------------------------
    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 obesity\28\ and arthritis.\29\ Racial minorities are more likely to 
face heart disease,\30\ obesity\31\ 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.
---------------------------------------------------------------------------
    \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.
    \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).
    \33\ See 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.
---------------------------------------------------------------------------
    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\
---------------------------------------------------------------------------
    \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)).
    \43\ Williams v. Colorado Springs, Colo., Sch. Dist. No. 11, 641 
F.2d 835, 841 (10th Cir. 1981).
    \44\ Jones 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).
---------------------------------------------------------------------------
    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 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.
---------------------------------------------------------------------------
    \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)).
    \48\ See supra note 2.
---------------------------------------------------------------------------
    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\
---------------------------------------------------------------------------
    \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).
---------------------------------------------------------------------------
    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.
---------------------------------------------------------------------------
    \51\ See 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.
---------------------------------------------------------------------------
 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\
---------------------------------------------------------------------------
    \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).
---------------------------------------------------------------------------
  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 the ADEA, and an employer cannot 
discriminate against older workers in the provision of that benefit.
---------------------------------------------------------------------------
    \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).
---------------------------------------------------------------------------
    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,
---------------------------------------------------------------------------
    \60\ Smith v. City of Jackson, 544 U.S. 228, 240 (2005).
    \61\ Meacham v. Knolls Atomic Power Lab., 554 U.S. 84, 100 (2008).
    \62\ Id. at 93-98; 29 C.F.R.  1625.7.

        ``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''
---------------------------------------------------------------------------
    \63\ 29 C.F.R.  1625.7(e)(1).

and the employer considered the impact on older workers and the extent 
of the harm suffered.\64\
---------------------------------------------------------------------------
    \64\ 29 C.F.R.  1625.7(e)(2).
---------------------------------------------------------------------------
    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 1990\65\ and 
the Rehabilitation Act of 1973,\66\ both as amended). Studies have 
shown that obesity,\67\ hypertension,\68\ high cholesterol\69\ and low 
bone density,\70\ as well as more serious conditions such as 
diabetes,\71\ heart disease\72\ and arthritis\73\ 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.
---------------------------------------------------------------------------
    \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).
    \76\ L.P. Fried, LP & J.M. Guralnik, Disability in older adults: 
evidence regarding significance, etiology, and risk, J. 45 Am. 
Geriatric Soc. 92-100 (1997).
---------------------------------------------------------------------------
    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 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.
---------------------------------------------------------------------------
    \77\ See supra note 2.
    \78\ 29 C.F.R.  1625.7(e)(2).
    \79\  1625.7(e)(2)(i).
    \80\  1625.7(e)(2)(ii).
    \81\  1625.7(e)(2)(v).
---------------------------------------------------------------------------
    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.
---------------------------------------------------------------------------
    \82\ 29 U.S.C.  623(f)(2)(b).
    \83\ 29 C.F.R.  1625.10(a)(1).
    \84\ Id.
---------------------------------------------------------------------------
 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\
---------------------------------------------------------------------------
    \85\ 29 U.S.C.  206(D)(1).
---------------------------------------------------------------------------
    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.
---------------------------------------------------------------------------
    \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).
    \88\ See, 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).
---------------------------------------------------------------------------
  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\
---------------------------------------------------------------------------
    \89\ 26 U.S.C.  9802; 29 U.S.C.  1182; 42 U.S.C.  300gg-1.
---------------------------------------------------------------------------
    HIPAA prohibits discrimination in participation, eligibility, 
premiums and contributions for health coverage\90\ 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.
---------------------------------------------------------------------------
    \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/
faq_hipaa_ND.html (last accessed Jan. 28, 2015).
---------------------------------------------------------------------------
    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 low-wage workers who would be impacted by 
wellness program cost-shifting measures 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\
---------------------------------------------------------------------------
    \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).
    \93\ 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).
---------------------------------------------------------------------------
    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\
---------------------------------------------------------------------------
    \94\ Health Enhancement Research Org., et al., Fact Sheet: 
Statistics About Workplace Wellness (July 2012), http://hero-
health.org/wp-content/uploads/2014/03/FactSheet_wellness-stats_
FINAL_071512.pdf.
    \95\ L. 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).
---------------------------------------------------------------------------
    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.
---------------------------------------------------------------------------
    \98\ M.J. Franz, et al., Weight-loss outcomes: A systematic review 
and meta-analysis of weight-loss 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 long-term weight 
control. 12 Obesity Research 151S-162S. 11 (December 2004).
---------------------------------------------------------------------------
    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 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\
---------------------------------------------------------------------------
    \100\ Steven A. Burd, How Safeway Is Cutting Health-Care Costs, 
Wall St. J., June 12, 2009, http:// wsj.com/article/
SB124476804026308603.html.
    \101\ Id.
---------------------------------------------------------------------------
    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.
---------------------------------------------------------------------------
    \102\ Larry 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.
---------------------------------------------------------------------------
    Several States penalize employees if their BMI--one of the most 
popular biometrics used by employers to measure health\107\ and 
obesity\108\--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\
---------------------------------------------------------------------------
    \107\ Mike 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.
    \108\ Obesity Action Coalition, Measuring Weight and Obesity, 
http://www.obesityaction.org/understanding-obesity/measuring-weight 
(last visited Jan. 28, 2015).
    \109\ Shari Roan, Alabama to place ``fat tax'' on obese State 
employees, L.A. Times Blog, Aug. 25, 2008, http://
latimesblogs.latimes.com/booster_shots/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.
---------------------------------------------------------------------------
    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\
---------------------------------------------------------------------------
    \111\ See 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-
Improve-Workforce-Health-and-Performance.
---------------------------------------------------------------------------
    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.
                             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-related 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\
---------------------------------------------------------------------------
    \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.''

    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.
    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 [email protected].

                             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. Employer-based 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 protection, 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.
                            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.]

                                   