EEOC Seal

U.S. Equal Employment Opportunity Commission



Transcript

PARTICIPANTS

Equal Employment Opportunity Commission
EEOC Commission Members:
Jacqueline A. Berrien
Chair

Constance S. Barker
Commissioner

Chai R. Feldblum
Commissioner

Victoria A. Lipnic
Commissioner

Also Present

P. David Lopez
General Counsel

Peggy Mastroianni
Legal Counsel

Bernadette B. Wilson
Acting Executive Officer

Panelists

Christopher Kuczynski
Acting Associate Legal Counsel
U.S. Equal Employment Opportunity Commission

Judith Lichtman
Senior Advisor
National Partnership for Women and Families

A P P E A R A N C E S (Continued)

Jennifer Mathis
Deputy Legal Director
Bazelon Center for Mental Health Law on behalf of the Consortium for Citizens with Disabilities

Amy Moore
Partner
Covington and Burling, LLP on behalf of ERISA Industry Committee (ERIC)

Karen Pollitz
Senior Fellow
Kaiser Family Foundation

Leslie Silverman
Partner
Proskauer Rose, LLP
Former EEOC Commissioner (2002-2008)

Tami Simon
Managing Director
Knowledge Resource Center
Buck Consultants, on behalf of the American Benefits Council (ABC)

AGENDA

OPEN SESSION

Announcement of Notation Votes

Wellness Programs Under Federal Equal Employment Opportunity Laws

Opening Statements by the Commission

Commissioner Constance S. Barker
Commissioner Chai Feldblum
Commissioner Victoria Lipnic

Panelist Presentations

Christopher Kuczynski
Acting Associate Legal Counsel
U.S. Equal Employment Opportunity Commission

Karen Pollitz
Senior Fellow
Kaiser Family Foundation

Leslie Silverman
Partner
Proskauer Rose, LLP
Former EEOC Commissioner (2002-2008)

Jennifer Mathis
Deputy Legal Director
Bazelon Center for Mental Health Law
on behalf of the Consortium for
Citizens with Disabilities

Amy Moore
Partner
Covington and Burling, LLP on behalf
of ERISA Industry Committee (ERIC)

Judith Lichtman
Senior Advisor
National Partnership for Women and Families

Tami Simon
Managing Director
Knowledge Resource Center
Buck Consultants, on behalf of the
American Benefits Council (ABC)

EEOC Commission Responses and Questions

Motion to Close

Adjourn


P R O C E E D I N G S

OPEN SESSION

CHAIR BERRIEN: Good morning everyone. This meeting of the Equal Employment Opportunity Commission will now come to order. I want to first of all thank everyone for being here bright and early this morning. In accordance with the Sunshine Act, today's meeting is open to public observation of the Commission's deliberations and voting.

At this time I am going to ask Bernadette Wilson, our Acting Executive Officer, to announce any notation votes that have taken place since the last Commission meeting, Ms. Wilson?

MS. WILSON: Good morning. And before I begin, is there anyone in need of sign language interpreter services?

(No audible response.)

MS. WILSON: Okay. Good morning again. Madam Chair, Commissioners, General Counsel, Legal Counsel, I'm Bernadette Wilson from the Executive Secretariat. We'd like to remind our audience that questions and comments from the audience are not permitted during the meeting, and we ask that you carry on any conversations outside the meeting room, departing and re-entering as quietly as possible. Also, please take this opportunity to turn your cell phones off or to vibrate mode.

I would also like to remind the audience that in case of emergency, there are exit doors to the right and left as you exit this room. Additionally, the rest rooms are down the hall to the right and left of the elevators.

During the period March 20th, 2013, through May 7, 2013, the Commission acted on eight (8) items by Notation Vote:

Approved Litigation on two cases;

Approved Amicus Participation in one case;

Approved the Spring 2013 Regulatory Agenda;

Approved Obligation of Funds for OIT 2013 Acquisitions;

Approved a Nationwide Mail Management System;

Approved the FY 2013 Budget Allocations for State and Local Programs; and

Approved a Resolution in Memory of Gerald D. Letwin.

Madam Chair?

CHAIR BERRIEN: Thank you Ms. Wilson. This morning we are here for an important discussion of the interaction between the Americans with Disabilities Act, the Genetic Information Nondiscrimination Act, and other statutes enforced by the EEOC with the broader statutory and regulatory framework governing employer-sponsored wellness programs. While there has been broad bipartisan support among policymakers at the federal level for expanded use of wellness programs to both improve employee health and reduce health care costs, it is essential that employers design and implement wellness programs in a manner that is consistent with the important nondiscrimination and privacy provisions contained in federal Equal Employment Opportunity law.

We look forward to a robust discussion this morning of this topic, and we very much appreciate the time that our panelists have devoted and the effort that you have given to being here today, first of all, and to preparing for this meeting. We do appreciate it, and I want to thank you very much on behalf of the entire Commission.

Before we begin the discussion, I would like to briefly acknowledge and thank Commissioner Lipnic and her staff for working with my staff, and particularly Sharon Alexander, to prepare for and organize our meeting today.

I also want to acknowledge an historic development in the EEOC's work to enforce the Americans with Disabilities Act, and it's timely given the subject of our meeting today. Last week, we had a very powerful reminder of the importance of the Americans with Disabilities Act when the work of employees in our Dallas District culminated with a history-making award of $240 million in damages to a group of intellectually disabled men who lived and worked in horrific facilities and were subjected to horrible harassment and physical abuse for decades. I congratulate Dallas Regional Attorney Robert Canino, District Director Janet Elizondo, and all EEOC staff members responsible for recovering such sizable compensatory, and punitive damages and for laboring for years to vindicate the rights of these men.

As important as the monetary recovery, though, is the potential of the verdict returned by the jury in Iowa to deter future violations of the Americans with Disabilities Act and other laws we enforce. The verdict sends an important message that the conduct that occurred is simply intolerable in this nation's workplaces in the 21st century.

Our discussion today will help to inform us about issues that we should take into account as employer-sponsored wellness programs become more commonplace and the interaction between the requirements of the Americans with Disabilities Act and the Genetic Information Nondiscrimination Act in this context is becoming a subject of increasing concern for employers and employees alike.

We greatly appreciate the willingness of this esteemed panel to participate in today's meeting, and we thank you in advance for your contributions to our discussion.

I would now like to invite my colleagues on the Commission to make any opening statements or comments, and we'll begin with Commissioner Barker.

COMMISSIONER BARKER: Thank you, Madam Chair. And my appreciation to everyone who agreed to be a panelist this morning and took the time to draft testimony and to appear before us this morning, and my appreciation to everybody who is in the audience who took the time to join us this morning.

I want to start by seconding what the Chair said about the Henry's Turkey case. You know, this to me, you're absolutely right, it was a horrendous situation, and this to me is exactly the type of litigation that the EEOC needs to focus its efforts and its resources on, and I'm very proud of the results and kudos to the attorneys and staff who successfully tried that case.

We are here today to discuss wellness programs. And this is particularly timely because for the last few years you couldn't pick up a newspaper or turn on the TV without seeing some sort of report about the nation's health and concerns from all types of experts on how, as a nation, you know, our health is deteriorating, and in response to those concerns, the White House has really focused on encouraging employers to do things to help employees improve their own health, and the White House and the Administration are encouraging companies to invest in what are being called "wellness programs". The First Lady is encouraging kids to eat healthy foods and get out and get exercise. So it's very much a focus nationwide for all of us.

Let me start by saying that I'm not crazy about the term "wellness."

(Radio playing.)

COMMISSIONER BARKER: We're picking up some feedback somewhere?

(Radio stops playing.)

COMMISSIONER BARKER: Oh, a radio station.

(Laughter.)

COMMISSIONER BARKER: But, you know, I'm not crazy about the term "wellness programs." I mean, to me, it's not a question of sickness or wellness. I mean, you can be perfectly well but benefit from a -" wellness program." To me, it's more of an issue of health, you know, there are health programs and healthy lifestyle, healthy life choices programs instead of wellness to me kind of indicates that if you're not in a wellness program, you've got the flu or something. So I like to think of them as healthy lifestyle programs.

But as much as we are excited about these healthy lifestyle, I'll call them, programs and the fact that a number of companies are getting on board, and they're buying gyms for their employees and starting programs; the programs have raised and do raise certain social issues, and our focus this morning, even though we may hear from a broad range of issues, our focus at the EEOC is on discrimination in the employment setting and ensuring that those groups who are specifically identified by Congress as warranting extra protections under Title VII of the ADA and the other federal discrimination laws are given the equality of opportunity to access these programs and equality of opportunity to enjoy any sort of rewards that may be given for achieving certain health goals.

So within our jurisdiction of protecting those who are protected under the federal employment laws, our specific focus, and our most important focus, and I think the focus today, will be on the disabled. And if, as a Commission, we decide to issue revised guidances or a new guidance, then the aim of that guidance needs to be to reiterate and reinforce the fact that every wellness program, healthy life choices program, that any company offers has to provide equal access to every employee who can reasonably be accommodated, that there is an absolute obligation to provide reasonable accommodations so that every employee can access that program. And secondly, and just importantly, that there be adjustment of standards for any sort of rewards that may be set so that every person who is disabled under the ADA has an equal opportunity to access those rewards.

So with that in mind, I look forward to the testimony. And my only other thought is that with this in mind and keeping in mind the White House's focus on encouraging us all to improve our health for the sake of our own longevity and our enjoyment of a quality of life; that if new guidances are drafted, that we need to be very careful that we don't inadvertently undermine the White House's efforts to encourage these programs.

Thank you Madam Chair.

CHAIR BERRIEN: Thank you Commissioner Barker.

Commissioner Feldblum?

COMMISSIONER FELDBLUM: Thank you Madam Chair. Thank you Madam Chair, for holding this meeting, and thank you, Commissioner Lipnic, for requesting that we discuss this topic at a Commission meeting. You and I have been talking about the need for certainty and clarity in this area I think probably since we worked on the GINA regulations. As a matter of fact, you and I have in fact met with some of the people sitting in front of us here today.

COMMISSIONER LIPNIC: Or they used to work for us.

COMMISSIONER FELDBLUM: Or they used to work for us.

(Laughter.)

COMMISSIONER FELDBLUM: Madam Chair, I have a longer written statement that I am submitting for the record to be posted on the website associated with this meeting.

Employer-sponsored wellness programs are, in fact, as you've heard, growing rapidly, and both employers and employees deserve certainty and clarity with regard to the legal restrictions that might apply to these programs. The provisions of the Health Insurance Portability and Accountability Act, HIPAA, and the provisions of the Affordable Care Act, as they amend HIPAA with regard to wellness programs, have received significant attention by the appropriate agencies with jurisdiction to enforce those laws. It is time for the EEOC to be engaged on this issue as well.

With regard to the ADA, I believe the EEOC must consider at a minimum three primary questions:

What accommodations are employers required to provide to employees with disabilities who participate in wellness programs?

When is a medical examination or inquiry "part of an employee health program"? and,

When is a medical examination or inquiry that is part of an employee health program considered a "voluntary examination or inquiry?"

I look forward to hearing from our witnesses on all of these questions.

At the outset, let me note that I believe there are some easy aspects and some hard aspects to these questions. On the easy front, I think it is clear the ADA has something to say about wellness programs. For example, I think most people would agree that the ADA requires reasonable accommodations for people with disabilities who participate in wellness programs, but, of course, that's just the starting point, and the Commission has much to consider with regard to what such accommodations might look like in the context of wellness programs.

A more complicated legal question, I think, arises with regard to whether a medical exam or inquiry is part of a  "voluntary wellness program." This issue usually arises at the outset of wellness programs when employees are asked to answer questions about their health status.

Now, separate and apart from the nondiscrimination provision of the ADA, there is a separate prohibition in the ADA that prohibits an employer from requiring current employees to undergo a medical exam or answer medical inquiries unless such exams or inquiries are "job related and consistent with business necessity." But the statute then includes an explicit exemption for medical exams and inquiries that are " voluntary," and that are part of an employee health program."

The question that the EEOC must answer is, what precisely do those terms mean as a practical matter?

I look forward to engaging with our witnesses as we explore these questions. I agree with my colleagues in thanking you for giving both your time and attention to this matter. And I look forward to working with my colleagues on the Commission in answering these questions in a thoughtful manner guided by our obligation to interpret the statute as passed by Congress.

Thank you Madam Chair.

CHAIR BERRIEN: Thank you Commissioner Feldblum.

Commissioner Lipnic?

COMMISSIONER LIPNIC: Thank you, Madam Chair. Good morning. Welcome to our witnesses. I also want to thank the Chair for convening this meeting this morning and for taking me up on my suggestion that we have a hearing related to wellness plans. This is a topic that, as Commissioner Feldblum mentioned, over the last, well, almost 3 years now that we've been hearing a great deal about from employer groups and advocates and trade associations and those who are interested in promoting wellness plans. So I think it's important that we have this meeting today and that we all have the opportunity to get up to speed on all of the issues surrounding wellness plans. And many thanks to the Chair and her staff for working on this hearing.

As we will hear this morning, the issue of health wellness programs as a component of employer-sponsored health insurance is a hot topic among employers, advocacy groups, health plan designers, providers, administrators. The use of wellness programs has become more and more prevalent fostered in part by the health care initiative of this Administration, and we can be certain that these issues will generate more interest and scrutiny as those plans develop more and more over the next few years.

Certainly as a benefit of employment, employer-sponsored health wellness programs implicate many, if not all, of the statutes the Commission enforces: the ADA, the Genetic Information Nondiscrimination Act, Title VII, ADEA, and potentially others. Insofar as it is our mission to interpret and enforce these laws, I believe it is the Commission's duty where possible to let the regulated community and all interested stakeholders know exactly what our position on these important questions are. This issue is not new to the Commission. Dating back to at least 2000, the Commission has articulated in fits and starts some positions related to wellness plans and compliance with the ADA. By and large, however, with respect to these programs, we have not provided the kind of certainty that allows employers to structure their wellness plans in a manner where they will be sure that they are on sure footing for compliance with all of our laws. Granted, of course, that certainty must be protective of our statutory obligations.

As we will hear this morning, many of the most pressing questions on wellness programs involve the interaction of the laws within our jurisdiction, with other health-related statutes, most notably HIPAA. Among the most common questions raised to me have been, if a wellness plan complies with HIPAA nondis­crimina­tion requirements, will that mean it satisfies nondiscrimination requirements under other federal EEO laws? How does the Commission define "voluntary" with respect to wellness programs, and specifically, as Commissioner Feldblum mentioned, the ADA's exception for disability-related inquiries made pursuant to an employee health program? If financial incentives within a wellness plan fall within the range of acceptable limits under HIPAA, does that mean that they are voluntary for purposes of the ADA? Does the financial form that an incentive takes that is, is it a carrot or a stick, reward versus a penalty inform that question? And how do standards for voluntary wellness programs under GINA relate to standards under the ADA?

To date, the Commission has not adopted nor articulated a position on these matters, I believe leading to uncertainty and confusion and I am certain frustration among many stakeholders. A number of our witnesses this morning suggest that we should articulate a standard that deems a wellness plan to be in compliance with the ADA when it satisfies the complex scheme for ensuring that a plan does not discriminate on a health factor, such as disability, under HIPAA.

Given the parallel purposes of both laws, to ensure that a health plan does not discriminate on the basis of disability, I believe we would be on solid legal ground to articulate such a standard, and I believe that it is well within the power of the Commission, as regulators, to give meaning to the undefined term "voluntary" in the ADA. That said, I am most interested in hearing from our witnesses this morning as to both the benefits and consequences, if any, of that position.

Finally, I would make one final point, when this hearing was publicly noticed, a number of people immediately asked whether this meant the Commission was poised to take imminent action with respect to guidance on wellness programs or that if it had even made a decision to undertake any such effort at all. Sitting here this morning, I believe the answer to that is no, that we are deliberating on it. And as I said at the beginning, I view the purpose of this morning's meeting foremost as education for us, as a Commission, for us to know what the tough questions are so that we may determine whether and how we may answer them.

Let me be clear that it is my hope that after today's meeting we may find that there are points of consensus on which we can issue strong and clear guidance on a bipartisan basis, but that remains to be seen, and I look forward to working with my colleagues to determine whether that is possible.

Thank you Madam Chair.

CHAIR BERRIEN: Thank you, Commissioner Lipnic. And now I will turn to our panel. They are a very distinguished group, and their full bios will be available on the Commission's website, so I am going to just summarize so that we can move quickly to our discussion.

Christopher Kuczynski is EEOC's Acting Associate Legal Counsel and no stranger to us, given his expertise in the ADA and other laws related to the rights of people with disabilities. Chris heads EEOC's ADA GINA policy division within our Office of Legal Counsel.

Karen Pollitz is a Senior Fellow at the Henry J. Kaiser Family Foundation, where she directs and sponsors research related to consumer protections and transparency in private health insurance. She recently served as Director of the Office of Consumer Support, Center for Consumer Information and Insurance Oversight at the U.S. Department of Health and Human Services, and was a research professor at Georgetown University's Health Policy Institute from 1997 to 2012, and we share an undergraduate alma mater.

Leslie Silverman is a Partner at the law firm Proskauer Rose, where she counsels clients on complying with workplace laws. She is no stranger to us here at the EEOC, having served as a Commissioner and as Vice Chair between 2002 and 2008, and we are always delighted to welcome you back to the Commission.

Jennifer Mathis, also no stranger to us, is Deputy Legal Director for the Bazelon Center for Mental Health, a recognized expert in disability law, and a former member of the staff of Commissioner Feldblum. She will be speaking today on behalf of the Consortium for Citizens with Disabilities, a coalition of disability rights advocacy organizations, and it's good to welcome you back, Jennifer.

Amy Moore is a Partner at the law firm of Covington and Burling, where she chairs Covington's Employee Benefits and Executive Compensation practice and advises some of the world's largest multinational companies on the design and implementation of innovative benefit strategies. She is here today on behalf of the ERISA Industry Committee, or ERIC, a nonprofit association committed to the advancement of the employee benefits for America's largest employers. Welcome.

Judith Lichtman is Senior Advisor to the National Partnership for Women and Families, where she has served as a leading voice for working women and families for more than 40 years. Ms. Lichtman falls into the category of people who don't really need an introduction, and we are delighted that she is back with us at the Commission. We welcome you back.

Finally, Tami Simon is the Managing Director of Buck Consulting's Knowledge Resource Center, with more than 15 years of experience in consulting and private law practice and expertise on compliance issues affecting employers' health and welfare benefits. And we're delighted that you're here appearing on behalf of the American Benefits Council.

Thank you all very much for being here. And we'll begin with Chris Kuczynski.

Let me just mention in the middle of this console there is a set of timing lights, and it is like the traffic light system, so the yellow light will appear when you have a minute left, and the time allotted for your statements, and the red light appears when your time is expired.

So thank you, and we'll start with Christopher Kuczynski.

MR. KUCZYNSKI: Good morning, Madam Chair and Commissioners. It's a pleasure to testify this morning. My remarks are going to focus primarily on the application of the Americans with Disabilities Act to employer wellness programs, and specifically they will focus on wellness programs that offer financial incentives and that ask disability-related questions and/or require medical examinations such as programs that include health risk assessments and that use medical examinations to assess whether employees have achieved health outcomes. These types of wellness programs raise the most significant and complicated issues under the ADA. This is because of the ADA's rules that limit the circumstances under which employers may make disability-related inquiries of employees of employees that require them to submit to medical examinations, and because other federal laws, notably HIPAA and the Affordable Care Act, allow for incentives and even financial penalties in connection with wellness programs.

The Congress was aware of the existence of employer wellness programs as early as 1990 when it passed the ADA, and it included language in the statute that specifically said "that a covered entity may conduct voluntary medical examinations, including voluntary medical histories, which are part of an employee health program available to employees at the worksite."

EEOC's regulations to implement the ADA published in 1991 do not elaborate on the meaning of the term "voluntary" in this context, but Commission enforcement guidance issued in 2002 on the ADA and disability-related inquiries and medical examinations of employees does elaborate somewhat on this term. It explains that a wellness program under the ADA that includes disability-related inquiries and medical examinations must be voluntary, and that a program is voluntary if it neither requires participation nor penalizes employees for not participating. Not surprisingly perhaps, the guidance says nothing about the use of incentives or penalties in the extent to which that use would affect the voluntariness of the wellness program.

A March 6, 2009, letter from EEOC's Office of Legal Counsel, which is not binding on the Commission, opined that conditioning the provision of health insurance on participation in wellness programs, specifically completing a health risk assessment, would seem to render the program involuntary because denying health insurance would amount to a penalty for nonparticipation.

The EEOC's regulations implementing Title II of the Genetic Information Nondiscrimination Act are really the first are so far the only place in which the Commission has taken a position on wellness program incentives. The GINA regulations allow employer acquisition of genetic information, including family medical history, where an employer offers health or genetic services, including wellness programs, on a voluntary basis. Nevertheless, an employer may not, according to the regulations, condition receipt of any incentive connected with a wellness program such as an incentive for completing a health risk assessment or for achieving a certain health outcome on whether an employee provides genetic information. So incentives may not be conditioned on whether an employee provides genetic information.

The regulations do not limit an employer's obligations under the ADA. They make this explicit, including the obligation to provide reasonable accommodations to enable employees with disabilities to earn whatever incentives an employer offers in connection with its wellness programs. Thus, the regulations take no position on the ADA on whether the ADA permits financial incentives as part of wellness programs that include disability-related inquiries and medical examinations.

Any guidance that the Commission may be considering on the issue of financial incentives for participation in wellness programs that include disability-related inquiries and medical examinations may want to address some or all of the following questions.

First is offering a financial incentive for participation in a wellness program or engaging in certain activities as part of that program and for achieving certain health outcomes consistent with the ADA? If offering incentives is consistent with the ADA, are these incentives limited in any way -- the amount of the incentives?

Third, how should any limitations on wellness program incentives be limited if the Commission believes that they are permitted? Should compliance with HIPAA or the Affordable Care Act satisfy the requirement under the ADA that programs that include disability-related inquiries or medical examinations be voluntary?

Fourth, although HIPAA and the ADA permit both incentives and penalties, is there a rationale for distinguishing between the two and does the ADA require such a distinction?

And, finally, what is the role of reasonable accommodation in providing individuals with disabilities equal access to wellness programs, including equal access to any incentives that the Commission may deem to be permissible under the ADA?

Thank you for the opportunity to testify this morning, and I look forward to your questions.

CHAIR BERRIEN: Thank you very much.

And now we'll move to Karen Pollitz.

MS. POLLITZ: Good morning, Commissioners, and thank you very much. I'm a Senior Fellow at the Kaiser Family Foundation, and my field is health insurance regulation, not employment law, so I am here to offer some background on the ACA and HIPAA provisions and to try to answer questions related to those. And I just wanted to mention three points in my summary remarks.

First, as Commissioner Barker mentioned, there are lots of different kinds of wellness programs, and the ones of most interest recently are those that use differentials in premiums and cost sharing as an incentive to improve health. These programs are allowed as an exception to the HIPAA and ACA rules that prohibit discrimination based on health status under group health plans. The general rule is that a person's eligibility or contribution for benefits must not be based on health status, but plans can vary premiums or cost sharing as part of wellness programs that are reasonably designed that's the key word to promote health and prevent disease and that meet other standards. Interestingly, this concept of voluntariness doesn't come up under HIPAA or the ACA, it's all about reasonably designed, and so therefore there are tradeoffs inherent in this wellness exemption, and grappling with how to balance those is what faces you and other policymakers now.

While most large employers offer some kind of wellness program, currently few involve financial incentives that even begin to approach the large multi-thousand-dollar-per-person-per-year incentives that would be allowed under the proposed wellness regulations that were issued last Fall. Such incentives do raise questions about when might well-intentioned wellness programs cross the line into pressuring people to disclose personal/private health information or price health benefits out of the reach of people who are in poor health.

The rules that govern workplace wellness programs and nondiscrimination have evolved significantly over 17 years. When HIPAA first established the nondiscrimination rule, those implementing regs made clear that the exception for wellness programs were permitted only if these were participatory programs you know, if people went to classes or took part in certain behaviors but never could premiums or cost sharings be varied based on whether someone could actually achieve a specific health outcome.

In 2006, a new interpretation of that law was rendered, and the HIPAA nondiscrimination rules were rewritten to allow for the first time the so-called health contingent wellness programs. The 2006 regs said these programs had to be reasonably designed, that's where that term first introduced, but it went on to say that the reasonably designed standard was intended to be an easy one to meet.

Few objective measures for reasonably designed programs were articulated, the primary one being that the financial incentive could not exceed 20 percent of plan costs. The 2006 reg also made clear that compliance with HIPAA was not determinative of compliance under federal laws. In 2010, the ACA codified this approach and allowed health contingent wellness programs and expanded the maximum incentive to 30 to 50 percent of plan costs.

The ACA also required that a reasonably designed wellness program could not be overly burdensome or a subterfuge for discrimination based on health status. It was left to regulation to define those standards. And the proposed rules that were issued last November did not provide any definition or examples of wellness programs that would be considered to be overly burdensome or discriminatory. So this is something still to be worked out.

As wellness roles have evolved, so has the context in which employers make group health plan decisions. Health care inflation is continuing, and now that the ACA requires large employers to offer benefits, concerns about rising costs have intensified.

And that brings me to my last point, which has to do with whether or how worksite wellness programs may affect the cost of a group health plan. As Congress debated the ACA wellness provisions, health costs were an important concern, and back then one of the most ardent advocates of health contingent wellness programs argued that they ended health care inflation under his company's group health plan, a claim that was later reported to be inaccurate. Doctors tell us that dramatic improvements in a population's health status are difficult to achieve within a year, but actuaries will tell you that immediate cost savings in a group health plan can readily be achieved by excluding even a few of the sickest people within the group.

In my testimony, I cite an example of one wellness program vendor that sells a product called Incenticare that raises everybody's annual health plan deductible by $2,000 and then employees can buy that back down if they can pass four health outcome-related tests. The product advertises immediate cost savings to employers of 17 to 20 percent, but if you click around into the fine print, you'll see that they acknowledge that costs are reduced largely by larger deductibles and because some employees will leave and seek coverage elsewhere.

In conclusion, there is no question that worksite wellness is a worthy goal, and Congress made clear in the ACA that it is a priority to be pursued. Congress also made clear through the ACA that health insurance discrimination is harmful, it keeps the sickest people from being able to access coverage, and it is prohibited. How to balance those priorities is the challenge facing policymakers as well as employers.

The proposed wellness regulations issued last Fall begin to offer some guidance on how to strike that balance, and this Commission's deliberations surely will be an important contribution.

Thank you.

CHAIR BERRIEN: Thank you.

Leslie Silverman?

MS. SILVERMAN: Thank you. Good morning, Madam Chair and Commissioners. It's always a pleasure to be back before the Commission, but it's always more of a challenge to sit down here and speak very fast 

(Laughter.)

MS. SILVERMAN: facing tough questions rather than up there posing them. I want to thank Chair Berrien and Commissioner Lipnic and their staff for arranging this morning's meeting and for inviting me here today.

Let me start with a disclaimer that should shock no one here. I do know a great deal about the issues that we're discussing here today, but I am not a health benefits expert. You will hear from them shortly, have already. Rather, I was invited here today as a management side attorney in order to raise some of the key questions that my partners and I repeatedly hear from clients as they attempt to manage the issues surrounding rising health care costs, new federal health care structures, and the role of wellness programs in the workforce.

My testimony is solely my own. I do not represent my firm, its clients, or any organization with which I have affiliation.

Let's start with the premise that wellness programs, as a component of employer-sponsored health insurance, are here and here to stay. In a recent study conducted by SHRM, which I have included in my materials, nearly 9 out of 10 respondents indicated that worksite wellness initiatives are beneficial. Nearly all agreed that they help workers develop healthier lifestyles, and the majority agreed that they lower health care costs and increase worker productivity.

Employer and plan sponsors view wellness programs as an important tool to get employees actively engaged in management of their own health and to assist employers in controlling the ever-increasing costs for providing health care to their workers. But the employer community is not alone in embracing the use of wellness plans as a tool to both improve health and control health care costs. Indeed, as we've discussed, the signature achievement of the Obama Administration, the Affordable Care Act, prominently endorses the use of wellness plans. The Act codified and expanded the existing regulatory exemption for workplace wellness programs that included health-related standards and required that "wellness services and chronic disease management", be part of the core benefit package for health care plans offered through health care exchanges. Most recently, as contemplated under the ACA, the Administration issued draft regulations proposing to increase the amount by which health plans can vary their premiums for participation in workplace wellness plans.

So the Administration's strong support of incentive-based wellness programs within employer-sponsored health care is pretty clear, but what is far less clear, and what is central to our discussion today, is what position the Commission will take with respect to these plans?

As Chris Kuczynski provided, the 2002 Enforcement Guidance is really all we have that's concrete, and yet it's not. It says a wellness program is voluntary as long as an employer neither requires participation nor penalizes employees who do not participate. And since that time, this agency has repeated this verbiage often, but offered very little guidance as to what this voluntary standard actually means in practice. The Commission's never adopted a formal position, and apart from the informal advisory opinion letters issued by Office of Legal Counsel, which do set out the far end of the spectrum of don'ts, it has yet to offer clear guidance as to the range of do's, and by that I mean, the financial incentives that would be permissible.

Given the rest of the Administration's consensus around these issues, the agency's failure to provide meaningful guidance has left employers and plan sponsors in a very gray and, dare I say, frustrating area. Clients ask, "If my plan is structured to comply with HIPAA and the Affordable Care Act requirements for wellness plans, will it be considered compliant for EEO purposes?" This is a question that we should be able to respond to with some certitude, but we cannot. We can't even say whether a pen -- whether it be a Cross or a regular, a gift card of a certain amount, or meeting the 20 percent or whatever it goes up to -- is compliant.

With the passage of the Affordable Care Act, Congress embraced employer-sponsored wellness plans that provide financial incentives within specified limits and determined that these plans should not be considered to discriminate on a health-based factor provided that they meet the other HIPAA protections, including offering alternative standards or waivers. In light of this clear policy decision, there is a powerful argument to be made that the Commission should hold wellness programs to the same specified incentives.

A second outstanding question is whether incentives for spousal participation in wellness programs are permissible under GINA. I understand that ERIC has addressed this issue in greater detail, but I want to add my 2 cents. While there may be some apprehension in allowing employers to offer incentives to employees for their spouse's participation, given the statutory language, the agency has found its way through similar issues in the past, and I have no doubt that it can find a simple, workable, and commonsense solution here.

Before I conclude, allow me one last observation. The continued legitimacy and integrity of this Commission will always be something of utmost importance to me. Within the last 7 years, federal health care policy has been transformed dramatically, and a host of federal agencies and regulators have staked claims over their respective pieces of the health policy pie, and during the same time period, the Commission has stood largely on the sidelines, failing to articulate a clear position on a number of the important issues that are raised this morning, and I'm concerned that if the Commission continues in this vein or, worse yet, adopts a position that is at complete odds with the rest of the Administration; the EEOC's credibility may suffer, and its relevance in this important national debate and others may be lost.

I want to thank each of you again for your time and your thoughtful consideration of these issues, and I'm looking forward to your questions, I think.

(Laughter.)

CHAIR BERRIEN: Thank you. Thank you Leslie.

And now if we could turn to Jennifer Mathis.

And I just want to briefly remind people that, we can't if you can remember, your full statements will be in our record. We appreciate your attention to the lights, but we also are transcribing this, so the CART reporter at some point can't keep up if you speed up too much. Thank you.

(Laughter.)

MS. MATHIS: Madam Chair, and Commissioners Barker, Feldblum, and Lipnic, thank you for making this timely and important issue the subject of today's public meeting. I am here on behalf of the Consortium of Citizens with Disabilities, or CCD, which is a coalition of disability organizations advocating for a national public policy that ensures full equality and inclusion of people with disabilities in all aspects of society, including employment.

Many wellness programs offer very useful tools to promote health and well-being. People with disabilities have significant concerns, however, about the potential of some of these programs to discriminate based on disability. Against the backdrop of dramatically low employment rates for people with disabilities, wellness programs that penalize employees with disabilities for being less well and for not disclosing information that the ADA allows them to keep confidential, make it even more difficult for individuals with disabilities to obtain employment on fair and equal terms.

As the EEOC has recognized, the ADA imposes requirements on employer-based wellness programs in addition to those imposed by other federal laws, such as the Affordable Care Act, HIPAA, and GINA. As virtually every person who has spoken so far has alluded to, there is a great deal of confusion that has been generated by the application of all of these different laws to wellness programs, and hence the Commission should clarify key requirements of the ADA and how the ADA interacts with these other laws as applied to employer-based wellness programs.

So I just want to talk briefly about a couple of different issues, the first being reasonable accommodations The Commission itself has acknowledged that the ADA does require employers to make reasonable accommodations to afford equal opportunity to employees with disabilities participating in wellness plans.

In health contingent wellness programs, a reasonable accommodation for an employee who cannot meet a particular health target due to a disability might be an alternative standard that is feasible to meet in light of her disability or waiver of the standard if there is no feasible alternative standard. And that has a somewhat similar requirement to the HIPAA regulations, but it's I think there are also differences, but it's a similar scheme of an alternative standard.

Participatory wellness programs must also provide reasonable accommodations. For example, an employer-based wellness program offering reimbursement for membership at a fitness center that is not physically accessible may need to make accommodations in order to provide equal opportunity to participants with disabilities. A wellness program must also ensure effective communication with participants, for example, by providing print materials in alternative formats or providing sign language interpreters when required by deaf and hard-of-hearing individuals.

Second, the ADA imposes limitations on the disability-related inquiries that are part of many wellness programs. The ADA does permit employers to make disability-related inquiries that it would otherwise bar if the inquiries are a part of a "voluntary workplace wellness program," but, the wellness program must be voluntary and the inquiries must be part of the wellness program. The Commission has already stated that inquiries conducted as part of workplace wellness programs are not voluntary under the ADA, where they are mandatory or include penalties for failing to complete such exams or inquiries. There is no logical reason why the denial of a reward or inducement should be treated any differently than a penalty. A penalty, by definition, is a disadvantage due to some action and actually denying a reward that others get I think functions exactly the same way as a penalty, and the Commission ought to make that clear.

So, for example, if a wellness program includes a health risk assessment, an employee cannot be required to answer any questions that are disability related, presuming they're not job related, cannot be penalized for refusing to answer them, and cannot be given financial rewards for answering them. As far as the part of the piece, the Commission should address the circumstances under which 

RECORDER VOICE: Please pardon the interruption. Your conference contains less than three participants at this time.

(Laughter.)

RECORDER VOICE: If you would like to continue, press star-1 now, or the conference will be terminated.

(Laughter.)

MS. MATHIS: As I was saying, the Commission should address the circumstances under which disability-related questions should be may be considered part of a wellness program, and in order to be part of a wellness program, the disability-related questions must be necessary for the wellness services that are actually provided. So, for example, health risk assessment questions about a participant's mental health should not be considered part of a wellness program but focuses on the management or improvement of other health conditions, such as high blood pressure and high cholesterol, and does not offer mental health services.

Finally, I just wanted to say a word about the case of Seff v. Broward County , which has gotten a fair amount of attention in this area. That's a case where a court allowed a public employer to dock an employee's salary for failing to answer medical questions as part of a wellness program. The court didn't consider whether the wellness program was voluntary but instead found the questions in the wellness program permissible under the ADA safe harbor for administering benefit plans based on underwriting and risk classification.

There are a couple of important things that the Seff decision I think doesn't address, and one is that wellness programs I think are fundamentally different in purpose and design from the underwriting activities that the safe harbor was designed to protect and should generally not fall within the ADA safe harbor. The safe harbor was never intended to create an end run around the ADA's careful structure with respect to medical inquiries, allowing employers to ask all manner of disability-related questions that are not job-related and to penalize employees for not answering those questions simply by offering vague assurances that using the information may be used someday to shape future benefit plans without any type of actuarial analysis of how the data will be used. And, in fact, if the safe harbor could be used in this manner, I'm not sure there would be a need for the ADA's wellness program exception.

Thank you for the opportunity to testify. And as my 3 minutes are up or 5 minutes are up.

CHAIR BERRIEN: Thank you. Ms. Moore?

MS. MOORE: Good morning. My name is Amy Moore. I'm a Partner at Covington and Burling, and I am here this morning to testify on behalf of the ERISA Industry Committee, or ERIC. ERIC's members are large public companies that provide comprehensive benefit programs to their employees, including programs that promote a healthy lifestyle choice. Collectively, ERIC's members provide health care to millions of workers and their families.

We appreciate the opportunity to appear before the Commission this morning and to share our concerns about the very significant challenges that face these programs as employers develop them.

Employers in this country provide a very large percentage of the group health coverage that Americans have. That was true before the Affordable Care Act was enacted, and the Affordable Care Act makes employer-provided health care really the centerpiece of a program to provide adequate health coverage to all Americans. So it is essential that employers be able to make this program work if they can. We're all in serious trouble, I think.

The burden falls very heavily on private companies in the United States because in this country, unlike many developed countries, probably most developed countries, the government does not really play a large role in providing health care to active workers or in controlling medical costs; so employers are somewhat on their own in trying to provide good health care to their workers, but to keep the costs within reasonable bounds as they do so. And it is therefore vitally important both to employers and to workers that employers be able to deploy tools that are effective in keeping health costs under control. Employers and employees share these costs in most companies, and so it's not merely an employer issue whether coverage is affordable, it's also an employee issue.

Effective workplace wellness programs are one of the very few tools that employers can deploy to help control health care costs, and these programs have proved effective, that's why they're popular among employers. They've proved effective in improving the health and productivity of workers and they also benefit the workers by promoting healthy lifestyles and by addressing health problems before they become more serious, more costly to treat, and more injurious to the worker.

In order to be successful, wellness programs have to be able to do two things:

Number one, they must provide workers with information about the worker's personal health risks, and that assumes that the employer is able to gather information about the worker's personal health situation.

The second thing they must be able to do is to offer workers incentives to participate in the wellness program. I think we all know just from our personal experience that we are more likely to participate in a program that offers us an incentive than in one that doesn't. I know that I receive surveys in my e-mail constantly. If the survey just says, "Please answer these 150 questions," I hit the delete button, but if it says, "Answer these questions and we will make a contribution of $50 to the charity of your choice," then I'm much more likely to answer the survey, and I think that's human nature and that's the experience that ERIC's members have had in implementing these programs.

We think Congress has very strongly endorsed incentive-based wellness programs in the Affordable Care Act. The Administration has spoken strongly in favor of these programs, so it is not merely employers that think incentive-based programs are important, it's also Congress and the Administration who share that view.

And we urge the Commission to make clear that an employer does not violate the ADA or the other federal statutes that the Commission is charged with administering merely because it provides a reasonable financial incentive to employees to participate in a program that is designed to improve the employee's health. We strongly support the Commission's goal to prevent discrimination in the workplace. That is not what these programs are about. We embrace and strongly support reasonable restrictions that prevent these programs from being used as a subterfuge for workplace discrimination, so we're not here to argue that these programs ought to be a mechanism for discrimination, we are on your side on that point, but we think they must be able to use incentives or they will just not be effective, and that's not in the interest of employers or in the interest of workers.

Thank you very much for the opportunity to speak with you this morning, and I look forward to your questions.

CHAIR BERRIEN: Thank you. Ms. Lichtman?

MS. LICHTMAN: Thank you all so much for inviting me. So I want to begin with a story, a story about a woman whose initials are TK, whose employer requires its workers to pay higher insurance premiums if they don't participate in wellness programs or can't meet a body mass index benchmark. TK suffers from diabetes, and although she passed all five fitness tests, she didn't meet the body mass index of 24. As a result, her employer imposed an 80 percent increase in her family's insurance premium resulting of an increase from $175 to $320 a month. After the birth of her baby, TK's doctor warned that any weight loss was medically inadvisable while she was trying to manage both her diabetes and breastfeed.

Since TK's employer refused to exempt her from the BMI target and required her to work with a trainer outside of working hours despite her need to breastfeed and care for the new baby, TK was required to pay out of pocket for all these sessions, and she continues to pay significantly more for her family's health insurance, a financial burden not placed upon other employees.

We are concerned that wellness programs can violate anti-discrimination laws, that these programs have the potential of having a disparate impact on those who are protected by our civil rights laws because they will create a burdensome situation and often be nothing more than a subterfuge for discrimination by imposing higher costs and/or withholding rewards from protected groups, including women, communities of color, older workers, and people with disabilities.

Many so-called "wellness programs" fail to promote health and violate non-discrimination laws, and, importantly, they can't be allowed to operate as the subterfuge for discrimination, cost shifting that reduces affordability, and access to health insurance for those who need it most. Further, there is no conclusive evidence that offering financial rewards or imposing penalties causes workers to adopt healthier behaviors.

Punitive wellness programs that tie financial rewards or penalties to health outcomes implicate non-discrimination statutes that we've talked about today, Title VII of the '64 Act, the Age Discrimination Age, the Americans with Disabilities Act, the Equal Pay Act, and I would also turn our attention to the anti-discrimination provisions of the Affordable Care Act itself, both its prohibitions against gender rating and a favorite of mine, Section 1557, which for the first time prohibits gender discrimination in health care.

Disproportionately, these programs have the potential for penalizing women, racial minorities, older workers, and people with disabilities. These groups are more likely to have to pay an increased cost associated with punitive wellness programs because they are more likely to experience significant health disparities and are particularly vulnerable to chronic illnesses, and therefore, these programs could have a very disparate impact on these groups protected by the civil rights laws I've outlined above. For example, women are more likely than men to have obesity and arthritis, people of color are more likely to suffer from heart disease and diabetes, older workers are more likely to have chronic conditions like obesity, hypertension, high cholesterol, and diabetes.

A well-designed, voluntary wellness program tailored to the health and well-being of individual employees can offer an avenue for improving and maintaining health while lowering costs for employers. For instance, allowing flextime for physical activity and offering health lifestyle education classes can have that positive effect. Employers should take into account personal circumstances, including family caregiving responsibilities or multiple jobs, which can make it difficult for employees to participate in wellness programs that take place outside of normal work hours. Employers should look to accredited wellness programs as guides. They can help workers achieve their wellness goals.

In contrast, punitive wellness programs that shift costs to employees based on rigid, biometric benchmarks have not been proven to improve health and can violate non-discrimination laws.

In conclusion, to ensure that employer wellness programs comply with equal employment opportunity protections, we urge the Commission to provide that clarity, to issue guidance, to engage in outreach and education, enforce the law, and provide important technical assistance to other government agencies, and so far it seems like we all agree about that.

Thank you.

CHAIR BERRIEN: Thank you. And now we'll move to Tamara Simon.

MS. SIMON: Thank you. Last but not least, right?

Good morning, Chairwoman and Commissioners. Thank you so much for inviting us today to speak on behalf of the American Benefits Council. My name is Tami Simon. I'm the Managing Director of the Knowledge Resource Center of Buck Consultants, which is a member of the American Benefits Council.

And in case you don't know, the Council is a public policy organization representing principally Fortune 500 companies and other organizations that assist employers in providing benefits to their employees. Collectively, the Council's members either sponsor directly or provide services to health and retirement plans that cover more than 100 million Americans, so it's a good cross-section of America.

Again, thank you so much for inviting us today, and I hope that my perspective presenting on behalf of the Council is helpful to you as you consider how to address the treatment of wellness programs under the federal Equal Employment Opportunity laws.

We recognize that employers, other stakeholders, and regulators share a common goal, which is the desire to improve the health of employees and their families while obviously providing important and necessary protections for individuals with disabilities. We believe that HIPAA-compliant employer-sponsored wellness programs provide an effective vehicle for achieving this shared objective, and the HIPAA non-discrimination rules provide a comprehensive legislative and regulatory framework for this goal.

You know, employer-sponsored wellness program prevalence is increasing, and the reason employers are sponsoring them isn't simply motivated by a desire to constrain rising health care costs. Survey data underscore that wellness programs have become an important tool for improving worker productivity by reducing absenteeism due to sickness and disability and also improving workforce morale and engagement.

As other panelists have noted, existing guidance from the Commission is not clear regarding what constitutes a voluntary wellness program under the ADA, and questions also remain regarding how GINA applies to the various aspects of some common wellness program designs, including the use of wellness incentives in connection with spousal and dependent health risk assessments, or HRAs.

The continued legal uncertainty with respect to the ADA and GINA has left many employers confused as to how to proceed, and left unaddressed, we are concerned that it will have chilling effect on the ability of employers to design and implement wellness programs even though those programs would be fully comprehensive and compliant with the comprehensive rules under HIPAA and the Affordable Care Act, or the ACA.

As I noted a moment ago, our main point today is that this uncertainty can be solved by using the robust regulatory framework that already exists in the form of comprehensive rulemaking by Department of Labor, Department of Health and Human Services, and Treasury with respect to HIPAA's non-discrimination rules. The rules already cast a broad protective net not only to protect individuals with disabilities, but actually all American workers and other plan participants more generally.

Now, we're talking a lot about HIPAA, so let's just look at it really quick because I think it's very important. Specifically, the provisions under HIPAA are intended to prohibit discrimination against individuals based on a health factor, which includes, among other things, disabilities. The current regulations impose a host of factors that those programs must satisfy in order to allow incentives to be provided to participants asked to satisfy a health factor.

First, there must be a limit on the total reward up to 20 percent of the cost of coverage, which is going up to 30 percent in 1/1/2014 because of the Affordable Care Act and 50 percent for smokers. The program must have a reasonable chance of improving the health of or preventing disease, is not overly burdensome, is not a subterfuge for discriminating based on health factors, and is not highly suspect. The program must be offered at least once a year. The reasonable alternative standard or waiver of that standard must be made available to any person for whom it is unreasonably difficult due to a medical condition or it is medically inadvisable to satisfy the applicable standard. And then, finally, the program materials must describe the available alternative.

As you know, on November 26th, 2012, the DOL, IRS, and HHS published new proposed rules on wellness plans reflecting the changes to existing HIPAA wellness provisions made by the ACA, including several new requirements intended to protect consumers from unfair practices. We understand that those final regulations will be published very soon.

Summing up, the Council fully respects the Commission's existing and longstanding authority to implement and enforce the ADA as well as other federal statutes. As the Commission now considers possible further wellness program standards, we urge you to recognize the comprehensive regulatory framework that already exists, including its protections for individuals with disabilities and beyond.

We respectfully request that the Commission give effect to both the broad and protective reach of HIPAA as well as Congress's expressed bipartisan endorsement for HIPAA-compliant wellness programs as part of its enactment in the ACA.

Thank you so much for your time, and I will be happy to answer any questions.

CHAIR BERRIEN: Thank you. And now I would like to invite my colleagues on the Commission to make statements or comments or ask questions of the panel. Each of us will have 5 minutes for one round of questions and comments, and then we'll repeat it. And we will begin with Commissioner Barker.

COMMISSIONER BARKER: Thank you. A little bit of microphone problems this morning. Here we go. There. Is that working?

CHAIR BERRIEN: Yes.

COMMISSIONER BARKER: Thanks to all of the panelists. Such a wide range of information from each of you that collectively did a great job of covering all the issues. It occurs to me that we're talking about several things that we should probably focus on here. The first is what Chris addressed primarily, and Jennifer, that talked about the ADA and reasonable accommodations to programs and also reasonable accommodations or any sort of rewards that are offered, which I think it's a given that that's there and we need to address it and need to define it.

The second thing is there has been a lot of talk about the safe harbor under the ADA, and that language that you know, generally the ADA prohibits medical examinations, but that exact language, the safe harbor says, "a covered entity may conduct, may conduct, voluntary medical examinations, including voluntary medical histories, which are part of an employee health program available to employees at that worksite." I think it's interesting that it doesn't say "which are part of a voluntary employee health program." So I've heard the words "voluntary program" used several times, but the ADA really doesn't talk about a voluntary program, it talks about a health program where medical examinations, medical histories, can be sought if they are voluntary. So the question is not the voluntariness of the program, it's the voluntariness of the exam and the history.

So this to me is I think going to be the difficulty that we, as a Commission, have in trying to figure out what that voluntariness means, as Chai talked about, in light of the Affordable Care Act and HIPAA, and I think that's going to be a delicate walk to find that balance where we're ensuring the protections of the ADA without going counter to what the Affordable Care Act says.

So I guess my first question is to Leslie and Amy and maybe Tami, and that is, since each of you talked about that, I wonder if each of the three of you would be willing to suggest some language to the Commission to define that and what those voluntary exams are. You know, I'd love the insight of your perspectives on that, not to be done today, but, I mean, as we advance, would you consider suggesting some interpretation of that language? Particularly, Leslie, because you've spent your time as a Commissioner doing this sort of thing, so I'm sure it will just be easy for you, right?

(Laughter.)

COMMISSIONER BARKER: I think that would be very helpful.

But my specific question is Judith, or Judy, discussed her concern about health care programs that she defines as punitive, and I wonder, Amy, Leslie, do either of you have any response to the concerns that Judy expressed?

MS. MOORE: Well, if I can go first, we agree that a wellness program should not be punitive, we certainly share that view. We think that a program, in order to be voluntary under the ADA, can't impose penalties or can't offer rewards that are so great that a person is basically faced with an offer they can't refuse. I'm old enough to remember 

COMMISSIONER BARKER: Excuse me, Amy, can you pull your mic a little bit closer? I'm having a hard time hearing you. I don't know if people in the audience can hear.

MS. MOORE: Is that better?

COMMISSIONER BARKER: That's better. Thank you.

MS. MOORE: I'm old enough to remember the Jack Benny skit where a robber points a gun at Jack Benny and says, "Your money or your life?" and Jack Benny's response is, "Don't rush me, I'm thinking about it."

(Laughter.)

MS. MOORE: I think most of us, though, would agree that there are incentives that are coercive, whose magnitude is so great that the person is really not given a reasonable opportunity to decline the incentive and decline to provide the information. We would be delighted to work with the Commission to try to define where those lines are drawn. I don't have a position on that here today on behalf of the ERISA Industry Committee, but we would welcome an opportunity to develop those thoughts.

But at the same time, we don't believe that the word "voluntary" can be interpreted reasonably to prohibit all incentives. If I say to you, "Please fill out this health information survey, and if you do, I'll give you a coffee mug," I don't think that's an involuntary program. So I think the inquiry, the difficult job that all of us collectively have to take on, is to determine what incentives are punitive and what incentives are permissible.

COMMISSIONER BARKER: Leslie?

Thank you, Amy.

MS. SILVERMAN: I understand what you're saying, but when you put "voluntary" with just health risk assessments and medical incentives, then the assumption is that you could separate them out and then people just wouldn't have to do them, and then the program would be voluntary, but what we understand is that wellness programs don't work as well without health risk assessments and sometimes medical exams, depending on what they're doing.

And what I struggle with is I hear what Jennifer is saying, and I understand it, but if you say that any award of money renders it involuntary, related to this, you're basically writing out everything that the rest of the Administration is doing. I don't know how the Commission can do this. It's operating in a vacuum. And I think the things that really bother the Commission about these programs are how they target people and what they make people do, but you're working with very limited tools to get there. I mean, I can't underscore the you know, the reasonable alternative standard is not reasonable accommodation but it's awfully close, and I do think there is a lot you can do there, but that's only on an individual basis, and I'm sure that that bothers you as well.

So, I mean, I think some things have been brought up here and some concepts are here, but this is going to be a very strange fit for the Commission because where you want to go, you're really limited. You're boxed in here, and I think acknowledging that would be helpful, but you can't do what Jennifer wants and what we want together because it doesn't work, and so you're going to have to make a decision.

COMMISSIONER BARKER: Tami, is there anything that you'd like to add to that? Oh, I'm sorry, my time is up.

UNIDENTIFIED FEMALE SPEAKER: Chairwoman, is that all right?

COMMISSIONER BARKER: Why don't you answer that in the context of someone else's so we don't get off target. Thank you.

CHAIR BERRIEN: Great. Thank you. Okay. Commissioner Feldblum?

COMMISSIONER FELDBLUM: So my questions will follow up on this, so you'll be able to answer. So about a month ago, the health unit of the EEOC sent out an e-mail to all employees announcing a free cholesterol and blood sugar screening, and I'm sure they sent it out mostly to get people who have not had their cholesterol or blood sugar checked, and this way was a way of letting people know about that and then maybe they'll start changing their behavior, but they also sweep in sort of ultra-competitive people like me, who had had my cholesterol tested 6 months before, had been told I had high cholesterol, and I'm like, oh, great free screening, let's see if all that Raisin Bran has done anything. Okay. So I signed up.

So a series of four questions, the first three, I'm just going to say what I think your answer is and you'll tell me if it's different, and then the last one, which is the real question, I'll just go in seriatim.

So the health unit did not offer any incentive to those who participated, and there were no penalties imposed on those who opted not to take the cholesterol and blood sugar screening. Would you consider this to be a voluntary medical examination under the ADA? And assume for this purpose that the health unit is an agent of EEOC, which it may or may not be, but for purposes of this, ADA applies. So I'm assuming that everyone here would agree that that was a voluntary. Would anyone disagree?

(No audible response.)

COMMISSIONER FELDBLUM: Okay, I'm taking silence as assent. Okay.

What if the EEOC had said that failure to participate in the cholesterol and blood sugar screening would result in termination? Would you consider that to be a voluntary medical examination under the ADA?

(Heads shaking.)

COMMISSIONER FELDBLUM: Okay, I'm seeing nods. So I would assume people think that's not voluntary. Is there anyone here who wants to say that that would be voluntary? This is the Jack Benny.

(No audible response.)

COMMISSIONER FELDBLUM: Okay.

(Laughter.)

COMMISSIONER FELDBLUM: What if the EEOC had offered a $10 gift card to Starbucks to everyone who agreed to participate in the cholesterol and blood sugar screening? Would that be a voluntary medical exam? I'm assuming everyone is going to say yes on that, even Jennifer Mathis.

(Heads nodding.)

COMMISSIONER FELDBLUM: Okay.

(Laughter.)

COMMISSIONER FELDBLUM: Okay, on the record, Jennifer Mathis says a $10 gift certificate to Starbucks. Okay.

So now is the real question right? and obviously when you answer, I'm looking for you to answer not only in the context of ADA, but because we are obliged to interpret laws in the context of all the laws right? What is your answer to this? Let's imagine for the moment that an employee's monthly premium for health insurance at the EEOC is $300, it's not, but let's just now assume it's $300. What if employees were told that they would receive a $100 credit on their monthly premium payment if they participated in this cholesterol and blood sugar screening? So it would go from $300 to $200. Okay? And then also what if they were told that it would result in a $100 surcharge on their monthly insurance premium? So it would go from $300 now to $400. Okay, would that be a voluntary medical exam under the ADA?

Why don't we start with Jennifer because I sort of feel I know her answer, but, I am very much interested in hearing from Leslie, Amy, Tami, about how, looking at this in the context of other laws, whether this, in fact, is voluntary.

So, Jennifer.

MS. MATHIS: Right. I, as you probably surmised, think that that would not be voluntary under the ADA, and you're talking about essentially a $1,200 disadvantage to a person for not doing that, $1,200 a year?

COMMISSIONER FELDBLUM: Yeah, that's right. We kept going back from 15 to 100, so for a while it was 600. I was trying to just get something that was 30 percent but also big, and I know it's okay.

Leslie.

MS. SILVERMAN: You really posed two questions, one is the carrot and the stick. And, you know, it's intellectually dishonest to say, oh, it can only be a carrot and not a stick, although we all feel better about carrots than sticks, and I think employers do, too, for the most part. So you need to make a decision about that because people are trying to read the tea leaves with that, and, you know, again 

COMMISSIONER FELDBLUM: So that's why I want you to answer, if you can, the question of let's assume it was a carrot, so let's just I thought about asking them separately, but 

MS. SILVERMAN:  I think if it's a carrot, and if it's within the 20-percent rule, which will be the 30-percent rule, then I do not see how the Commission, based on the ADA alone, can say that this is not okay.

COMMISSIONER FELDBLUM: Amy, and then Judy.

Amy?

MS. MOORE: I believe, as I think many of us do, that the carrot and the stick are economically indistinguishable and ought to be treated the same way, so I would not make any distinction between a surcharge and a discount. And I also think that if the incentives are within the limits imposed by the HIPAA standards, that it would be a voluntary program.

COMMISSIONER FELDBLUM: Okay. Judy, the last bit of my time limits.

MS. LICHTMAN: So I have two things. One, I want to remind everybody about what I believe the Affordable Care Act does say and I think I may have said it three or four times and I'll say it again which is, these programs can't be burdensome and they can't be a subterfuge resulting in discrimination.

My second answer goes back probably something that, if my memory serves me right, may be 40 years ago, and borrowing from Justice Brennan and the important Frontiero case where in a threshold argument, opinion, about special advantages that were provided to women employees, and he admonishes us in this opinion, he says be careful, watch it, watch it of course, he doesn't say that, I'm saying it watch it, watch it, don't let the pedestal become the cage. And that's what I'm reminded of here.

Incentives sound really good, rewards sound really good, but lots of my co-panelists here say, but, whether it's Groucho Marx or Justice William Brennan, those rewards, those incentives, quickly become penalties to whole hosts of protected people under the Civil Rights Act. So under those various civil rights protected classes, under the statutes that you all enforce, and the two that trip off my tongue with respect to the Affordable Care Act, I think your leadership role with respect to HHS, DOL, and, God love them, the Treasury Department, is going to be very important, and I am very wary. I believe your example is not an incentive, I believe it has a disparate impact on the very protected classes you care about, and indeed is just a hydra-headed penalty.

MS. SIMON: Chairwoman, may I for 2 seconds, please?

CHAIR BERRIEN: Yes.

MS. SIMON: I agree with everything that Amy and Leslie had said, so I don't want to duplicate their answers, but I just wanted to add one more thing. The one reason why it's so important to give employers the flexibility of different program designs is because, as you can imagine, every organization is different, every organization has its own culture, different things work for different workers. You may have one employer where a poster in the cafeteria saying, "Great job!" is all they need, and you may have another organization where a premium discount on their group health plan is more appropriate.

And so all I would add to what was already said is I think that in order for these programs to be successful and do the best work that they can do, giving employers some opportunity to have flexibility in designing those programs, to take into account what's really going to resonate with their employees is very important.

CHAIR BERRIEN: Excuse me, Tami, while you have the floor, can you go ahead and answer or follow up on that, if you had any follow-up to the other question that Commissioner Barker posed in the first panel?

MS. SIMON: What was the question again?

(Laughter.)

CHAIR BERRIEN: That's exactly why I wanted to do it now.

(Laughter.)

COMMISSIONER BARKER: I asked you if you had any response to Judy's concerns about what she described as punitive health programs.

MS. SIMON: Right. Well, you know, again, I think that at the end of the day the Council views no distinction between the carrot or the stick really, and so in our minds they really are economically equivalent to one another. And there are different ways to design it, but from our perspective, it really is two sides of the exact same coin.

MS. POLLITZ: I wanted to offer a twist on your question, which I would then not presume to try to answer, but this is an unanswered question that we've noted in one of our issue briefs about the proposed wellness rule that came out under HIPAA and the ACA. You've talked about all employees facing the $100 sort of penalty/reward, but it's not clear yet under the proposed rule whether those rewards could vary by employees. In the market rules governing rating of health insurance sold to individuals, HHS made clear in the regulations that the 50 percent tobacco surcharge could vary by age, so it would be okay you know, 50 percent is the outer limit but it would be okay, for example they offered this as an example for the insurance company to charge a 10 percent premium surcharge to a 20-year-old but a 50 percent surcharge to a 60-year-old.

In creating the wellness incentive limits, outer limits, the wellness rule didn't address whether that was allowed, although they specifically referenced the tobacco rating as a rationale for going all the way to 50 percent for the wellness incentive if that included a tobacco component to the program.

So it's not clear. I don't know how much flexibilities employers seek or whether this would be allowed because it just wasn't addressed, but whether a 20-year-old worker might be offered a $20 per month incentive to participate whereas a 60-year-old worker would be offered a much greater incentive.

CHAIR BERRIEN: Anyone else from this panel want to weigh in on that question, the question that's pending?

(No audible response.)

CHAIR BERRIEN: Okay. All right. I'll turn to Commissioner Lipnic now for questions.

COMMISSIONER LIPNIC: Thank you Madam Chair. Okay. So, so far in all of your testimony we've heard about reasonably designed plans, reasonable restrictions, reasonable alternatives under HIPAA, reasonable accommodations under the ADA, and reasonable chance of improving health outcomes. So it's all the hated reasonableness tests.

(Laughter.)

COMMISSIONER LIPNIC: Great. So this will be really easy to figure out.

So let me ask Tami and Amy in particular well, and actually Jennifer, too so is there any real difference between the reasonable alternative, which, Tami, you described is very protective under HIPAA, and reasonable accommodation under the ADA? Do you believe that there is any real difference there?

MS. SIMON: I don't pretend to be an ADA expert, so from my perspective, I think that that could very well be a nuanced question. From our perspective, however, we think that reasonably designed and reasonable alternatives would in fact probably collectively be similar to reasonable accommodation.

MS. MOORE: I agree with that. We certainly believe that individuals with disabilities ought to have a full and fair opportunity to participate in these programs, to benefit from them, to earn rewards or incentives that are offered and whether you call that reasonable accommodation of individuals with disabilities or whether you call it a program reasonably designed with reasonable alternatives, I think you really come to the same place, that the program has to be inclusive, it has to be not only facially available but practically available to everyone.

COMMISSIONER LIPNIC: Jennifer?

MS. MATHIS: It's a really good question I've been wondering about myself. I don't know the answer at this point. I think in part I've been waiting to see what the DOL final regulations will say about the reasonable alternative standard. I think there is different language, and I have not seen it interpreted. I don't really know what it means that a standard is medically inadvisable for somebody to meet, that it is unreasonably difficult for somebody to meet. That sounds a little different to me from reasonable accommodations to provide equal opportunity, which is the ADA standard. It may turn out to be the same. I know that we have 20-plus years of law on reasonable accommodation under the ADA. We have virtually nothing interpreting this standard under HIPAA. And so one of the things that we actually said in our comments to the DOL regs is, we think you ought to interpret this to be consistent with the ADA, or if you don't, if you think that it's different, then you should make clear that the ADA also applies.

COMMISSIONER LIPNIC: Leslie, did you have any thoughts on that?

MS. SILVERMAN: I think they're similar enough, and one does not really have any meat on the bones yet, that you can certainly work, you know, with that, and whatever you do can say, you know, a reasonable alternative also means a reasonable accommodation, and here is what we think that should entail. And I would think that would cover a lot of the individualized situations that you're concerned about.

COMMISSIONER LIPNIC: Okay. Yes. Go ahead, Karen.

MS. POLLITZ: I just wanted to mention that the DOL rule did add a new category of exceptions, so it went beyond offering a reasonable alternative for people who have a medical reason why they can't meet a standard to say that an alternative, a reasonable alternative, though not defined, had to be offered to anybody who couldn't achieve the health outcome. So, you know, for whatever reason, the case that Ms. Lichtman mentioned of the mother of a newborn who just didn't have time to go to the company gym however many hours a week, that potentially could be addressed under this, although the rule did not go on to define what would be overly burdensome. Is an hour a night burdensome for a newborn mother versus someone whose kids are grown? They didn't get into any of that in the proposed rule.

COMMISSIONER LIPNIC: Leslie, did you have some other thoughts on that?

MS. SILVERMAN: No, I mean, I think that covers it.

COMMISSIONER LIPNIC: Okay.

COMMISSIONER LIPNIC: Well, actually, I have one more 

MS. SILVERMAN: They haven't decided yet for sure what that even means. I know there were comments back about that, like, are you what does that so we're all waiting for those HIPAA rules to come out. And although it would have been better if EEOC could have somehow jumped in there with interagency coordination instead of doing it after the fact, I still think there is room for this agency to build on what they do say.

COMMISSIONER LIPNIC: Tami?

MS. SIMON: The other thing that I really want to point out is sort of understanding the way employers tend to sort of deal with these situations. When someone walks into the HR Department and says, "I just can't do it, and this is the reason why," the alternative that needs to be available, the reasonable alternative, sometimes employers have one that just sort of applies to everybody right? if you can't stop smoking because you're addicted to nicotine, then take a smoking cessation program. But the rules say that if that particular alternative doesn't work for that individual, you've got to come up with something that does work for that individual, and in many cases what this results in is that the employer ends up working with that individual to figure out, "Look, what's going to work for you? What's going to happen?"

You know, maybe in this particular situation a nutritional program where the individual is learning about how to best eat good foods and get the proper vitamins while they're breastfeeding would be the most appropriate alternative for that individual.

So I just think it's really important to understand that employers are very willing, I think, in most cases, at least certainly in my experience, to work with the employees to figure out what that alternative is going to be that that individual can actually address in a positive way.

COMMISSIONER LIPNIC: And can I just ask I see my time is up, but just so I'm clear, you're saying in most cases. So it sounds like what you're describing is essentially an individualized assessment, right?

MS. SIMON: I think under HIPAA it sometimes comes to that because ultimately what you need to do is, although sometimes the backdrop or the fallback is something more generic, if the individual walks into your HR department and says, "I can't do it because of X, Y, Z," then you've got to come up with a reasonable alternative standard for that individual. So, yes, some of these programs have a lot of individually tailored alternatives.

CHAIR BERRIEN: I think I saw 

COMMISSIONER LIPNIC: I'm good.

CHAIR BERRIEN: Well, I'll move to my questions, and I'll start it looks like Judy Lichtman had something to add on.

MS. LICHTMAN: I used an example, of course, of someone for whom a personally accommodated solution didn't happen, and she ended up with a much increased insurance premium and some cost shifting obviously from employer to employee on purpose.

So there is no evidence, as I understand it and I'm going to look at Karen to make sure I'm right about this there is very little evidence that shows that punitive programs and I am interested to know that Tami includes in punitive programs both incentive programs and penalty programs that ties those penalty programs to that tie health insurance premiums to better health outcomes.

So if that's right, if what I think is correct, then I think the Commission quickly gets to the question about whether or not these punitive programs, both incentive and penalty, have a disparate impact on protected classes. That's where you quickly get. And HIPAA doesn't get you there, the Affordable Care Act's anti-discrimination provisions might, but for sure your own statutes that you all enforce get you to a disparate impact analysis. And I think the tenor, the tone, the concern I've expressed and Jennifer as well, most specifically with the Americans with Disability Act is whether or not these programs, if they don't have much scientific evidence that prove that they work to improve people's health, but they do have a disparate impact in shifting costs to employees, result in a disparate impact on those protected people.

CHAIR BERRIEN: Karen, did you want to add anything or can you confirm that?

MS. POLLITZ: I think the jury is out on that. There was an overview of wellness programs and wellness research that was submitted to the Department of Labor by the RAND Corporation reviewing programs and the literature on this, and their conclusion very clearly said the overall effects of incentives are poorly understood.

UNIDENTIFIED FEMALE SPEAKER: I'm sorry, I couldn't hear.

MS. POLLITZ: The overall effect of incentives are poorly understood.

UNIDENTIFIED FEMALE SPEAKER: Poorly?

MS. POLLITZ: Poorly. And that there are no data on potential unintended effects such as discrimination against employees based on their health or health behaviors. So that was the conclusion of this rather broad review of programs in literature.

MS. SILVERMAN: I just wanted to mention something. When we talked about carrots versus sticks earlier, what I didn't think was clear here is that sometimes what these plans do is they target people with certain conditions and offer those people an incentive. So I'm getting it if I do it, and I'm not if I don't know, but I wouldn't get it if I didn't have the condition anyway. And yet that still is the same voluntary question that's still that box you're in.

And I just wanted to mention the study that I mentioned in my testimony, the recent Mayo study on weight loss where they took 100 people and looked at them over a year, and they gave incentives and disincentives to people in one group and nothing to the other group, and even those that had to pay into a pot when they didn't lose their requisite amount per month, stayed in the program longer and tended to lose more weight than those that had no incentives. I mean, I don't know how many studies are out there, that's where my lack of health expertise, but I do think there is a lot of human nature here, and there is a reason that we're having this debate.

CHAIR BERRIEN: Let me move to a question, and I'd like to hear from hopefully the whole panel on this issue. It seems I think I've heard consensus that the existing laws will require some flexibility in the application of standards, like glucose or cholesterol levels, where a disability makes achieving the standard impractical or impossible to achieve or medically inadvisable to achieve. Is that right? Everybody agrees with that.

(No audible response.)

CHAIR BERRIEN: Would the answer be the same if age instead of disability was the reason for an inability or an impracticality in achieving that level? In other words, do you think that a plan would have to require some flexibility to account for the age of participants?

MS. POLLITZ: Madam Chair, the proposed rules talked about anyone who again, this isn't about participating in the program and filling out the HRA, but in terms of meeting a target, if that is required under a wellness program in order to achieve the premium discount, the proposed rules from last November said that anybody who couldn't meet the target for whatever reason age, didn't feel like it, whatever had to be offered an alternative way, "an" alternative way. It didn't say that you had to keep working with people until you could find a way to get them to do something, but they had to be offered an alternative. It didn't say if the alternative had to be, "Well, what if you meet this lower target, not quite as high as the one we had?" It didn't say, "Well, you have to go to a class." It was unclear.

What it did say was that if the alternatives were certain specified things and there was a list in the rule if it was a class, then the employer had to go to the effort to identify the class, make it available, pay any tuition on your behalf. If it was a weight loss program, they had to pay the fee for that on your behalf, and so forth.

So there were some sort of options that could be the alternatives and some standards that applied to some of those options, but those were not the universe of options that were identified, and this other question about age and whether the incentives could vary based on age, it just was not addressed under the proposed rule.

CHAIR BERRIEN: And I think one of the questions that we may need to address is if the proposed rule is silent, do we need to weigh in on that factor as well, given that we also have responsibility for enforcing the Age Discrimination in Employment Act? So I'm hoping to hear 

MS. POLLITZ: And the proposed rule did not amend the earlier language that said that compliance with this rule is not determinative of compliance with other rules. So I don't think they disturbed that sort of outline that acknowledged that this is not the only game in town, that there are these other laws that have a broader approach and a different effect as well.

CHAIR BERRIEN: Well, I'd be interested in hearing, and particularly for those of you who are advising currently and would be in a position to advise in the future about how this applies, if you do that variation, that it's not disability, it's age that may account for an inability to meet a standard or need for accommodation to meet a standard, would you think that the Commission ought to take that into account in whatever we say?

MS. MOORE: If I may take that on?

UNIDENTIFIED FEMALE SPEAKER: But definitely speak into the mic.

MS. MOORE: Okay. I think that any program of this sort has to comply with the ADEA, and in order to comply with the ADEA, either it cannot draw distinctions on the basis of age, or if it does, they have to be cost-justified distinctions that are part of a bona fide benefit program. So I think that the existing laws do address that issue, they address it in an appropriate way, and I think employers understand that they need to comply with that set of rules.

So to take the example we had earlier of a program that imposed a higher incentive on the older worker than on the younger worker for smoking, or a higher penalty, I think you would have to satisfy the age discrimination existing rules in order to have that kind of program, and that's what I would advise an employer. If age is simply making it more difficult for an older worker to meet a health standard, then I think the HIPAA standard addresses that in an age-neutral way. It says if it is medically inadvisable for you to meet a standard or if it is unreasonably difficult for you to meet a standard, you have to be offered a reasonable alternative, and that would apply to the older worker, the younger worker, any worker that is participating in that program.

CHAIR BERRIEN: And I see my time is up. Let's go to a second round of questions, and we'll again start with Commissioner Barker.

COMMISSIONER BARKER: I want to go back to the voluntary question again because I'm very bothered by the fact that we've got the Affordable Care Act, which says it's okay for employers to offer I think it's up to 50 percent I'm sorry, what, Leslie?

MS. SILVERMAN: Only for smoking cessation.

COMMISSIONER BARKER: Okay. What is the base?

MS. SILVERMAN: It's going to be 30 percent.

COMMISSIONER BARKER: It's got to be 30 percent?

MS. SILVERMAN: Right now it's 20 percent. They call it the 20 percent rule.

COMMISSIONER BARKER: Okay. Let's ignore the smoking thing and just say Affordable Care Act, 30 percent. HIPAA is 20 percent going up to 30 percent? Is that right?

MS. SILVERMAN: Yeah.

COMMISSIONER BARKER: So we basically have a baseline of 30 percent or will under HIPAA and the Affordable Care Act. So if we're looking at this voluntary language under the safe harbor provision of the ADA, if we just come up with some arbitrary number that's not 30 percent, you know, that really bothers me. I mean, I would hate for employers to say, "Well, I've got to comply with Affordable Care Act, I've got to comply with HIPAA, and, oh, yes, I've got the EEOC setting an entirely different standard." So I think unless we have some real good science behind coming up with something other than 30 percent, we ought to pay attention to guidelines that have already been set.

But my question is and I'd ask each of you, just a yes or no, do you think if our voluntary standard, our standard for voluntariness, were compliance with as an employer, if I'm in compliance with HIPAA's guidelines on maximum incentive I can get, am I in compliance with the safe harbor provisions of the ADA? Yes or no? Tami?

MS. SIMON: Yes.

COMMISSIONER BARKER: Okay. Judith?

MS. LICHTMAN: Not necessarily.

COMMISSIONER BARKER: Amy?

MS. MOORE: Yes.

COMMISSIONER BARKER: Jennifer?

MS. MATHIS: No, not necessarily, and I just want to point out that the HIPAA standards and the Affordable Care Act standards are not about what's voluntary. And I went back and I looked through the regs, and there is no mention of the word "voluntary" in any of those regulations, and so I think it's really a different question. And so when you're talking about 20 percent can be a lot of money, hundreds and thousands of dollars, out of somebody's pocket per year. So if you're saying, "Just answer these questions or you're going to lose $1,000 or $2,000 this year," no, I don't think that's voluntary even if it falls within 20 percent or 30 percent because I don't think that's about voluntariness.

COMMISSIONER BARKER: Okay, thank you. Leslie?

MS. SILVERMAN: Yes. I mean, that was the thrust of what I've been saying.

COMMISSIONER BARKER: Okay. Karen?

MS. POLLITZ: As Jennifer said, the 20/30 percent standard has been outlined under HIPAA and the ACA as a standard for a reasonably designed program, one that isn't discriminatory or that doesn't cross the line into being subject to the non-discrimination rule generally. So voluntariness was just not it's not come up in the HIPAA discussion.

COMMISSIONER BARKER: Chris, I don't want to put you in an awkward position. Do you want to weigh in? It's up to you.

MR. KUCZYNSKI: I think, as I pointed out in my oral and written testimony, that's one of the questions that the Commission needs to deliberate, about whether compliance because obviously it's not clear whether compliance with HIPAA or the ACA will constitute compliance for ADA purposes in terms of whether the program is voluntary. So I can't really say now because this is the very issue we're sort of thinking about.

COMMISSIONER BARKER: Leslie, do you want to weigh in on that a little bit further?

MS. SILVERMAN: If you flip it on its head and say it's not voluntary, then what happens? How is that going to work? How is that possibly going to work? I mean, either you're going to get into an intergovernmental fight that I don't think the EEOC wants to have, and I don't think that's good, or you're going to be ignored, or you're I mean, I just don't see how you can come out in a different way at this point. And I'm just being really practical and honest here, I just don't see. I understand it wasn't a voluntary standard, but this is that little piece that you're working with, so I don't know where you can go beyond you know, otherwise, if you come up with a narrower standard, that's still out there, and three departments have already agreed to it, Congress and the President.

COMMISSIONER BARKER: Tami?

MS. SIMON: I've thought a lot about the use of the term "voluntary" right? because we've got different words that we're talking about here, and one of the things that I really tried to think about was, why are we using these different words? Right? What's sort of the point of this? What's the intent of the use of these terms? And I think that's where we all come together, which is at the end of the day and actually Jennifer Mathis put this in her written testimony the reason the medical examination and disability inquiry standard exists is -" this information often was used to exclude and otherwise discriminate against individuals with disabilities, and the ADA's provision concerning disability-related inquiries and medical examinations reflect Congress's intent to protect the rights of the applicants and their employees." The point of that language is to say we're trying to stop people from discriminating against individuals with disabilities, and the way you do that is X, Y, and Z.

Now, HIPAA never uses the word "voluntary," I absolutely agree to that, but, one of the things that I noticed when I was going back and reminding myself the reason why HIPAA was structured the way it was is that even though it doesn't use the word "voluntary," the provision relates, I think, squarely to the same concept of volition. Right?

The preamble of the rule explains that the limit is high enough to be an incentive for particular behaviors but low enough to protect participants against onerous standards. And so, again, those are two different ways that I'm coming up with the same answer, which is HIPAA is doing what we want it to do already in a structure that has been vetted by three other agencies, Congress, and the Administration.

COMMISSIONER BARKER: Thank you very much. I'm sorry. I'm over time.

CHAIR BERRIEN: Okay. Commissioner Feldblum.

COMMISSIONER FELDBLUM: Thank you. And I actually agree with all of that. I also am cognizant of just sort of channeling Justice Scalia for the moment 

(Laughter.)

COMMISSIONER FELDBLUM: that, you know, we also just have words that we have to deal with. And actually I agree with Justice Scalia, that any agency has to start with the words of a statute, but then it is complicated, that's what I said, this is the not easy question.

So I want to just come to another question that has to do just with the statutory language that Jennifer touched on briefly but no one else did, so I'm curious about other folks' reactions.

So the exemption for the voluntary medical inquiry says that a covered entity "may conduct voluntary medical examinations, including voluntary medical histories," and now it's this part, "which are a part of an employee health program available to employees at that worksite." So you can have voluntary medical histories which are a part of an employee health program. And I'm wondering what impact our witnesses think this second requirement may have on the shape of health risk assessments or other medical inquiries.

And, again, just to make it concrete, when I went to get my blood test, I voluntarily, voluntarily, filled out a questionnaire, okay, just completely voluntary, but I did note that I had a I was answering the questions, I noted I had a head injury in 1974, that I was diagnosed with depression and anxiety disorder in 1993, and that I take Zoloft, and, you know, there was a piece of me that said, "And this has what to do with my cholesterol and my Raisin Bran?" But I voluntarily okay? filled it out.

But I am curious about what you think this other part of the ADA that says you can conduct these voluntary medical histories which are a part of an employee health program. Does that in fact limit in any way the type of inquiries that an employer might be allowed to ask? That is, what needs to be the nexus between the inquiries and the actual type of health program, employee health program, that's being offered?

So, Tami, we get to start with you.

MS. SIMON: Oh, well, I think that's a really interesting question, and I'm not a social scientist, so I would submit that I would love to read more about it and perhaps take it back to the members of the Council to see if they have any other thoughts, but the one thing that I can say, however, is that, at least in my experience, that the conditions that are most often focused on in wellness programs are those that have been identified scientifically in an evidence-based way as most likely to lead to chronic health conditions down the road. You know, they're very well vetted, they do a lot of research, those vendors out there and those organizations that create these wellness programs, and they have chosen conditions that they believe are the ones that are indicators for some more serious stuff down the road. So I don't think that they're random and I think that there is a lot of thought that goes into those, but I would certainly be interested in hearing more from the social science community about that nexus.

MS. LICHTMAN: Well, I'm smiling because there is probably nobody in the room who knows more about those words than you do.

So I think while I would want to look to experts in addition to social scientists, I think we ought to probably look to medical science because the extent to which any one of those indicia, including and maybe most especially looking at BMI screenings and agreeing to those, beyond the personal information that you've decided to be forthcoming about, whether or not they really measure your good health. It is I think under some scientific question, and so it keeps taking me back to whether or not there is an appearance of a neutral impact a neutral principle that really isn't neutral at all and ends up being that disparate impact, and I think that's true in this case as well, unless the science is a lot better than I think it is.

MS. MOORE: I think the words do have meaning, and what they mean is that the program has to be designed and intended to make the employee aware of health risks and hopefully to encourage the employee, help the employee, to address those risks. Conversely, I think if the employer is collecting this information in order to decide who's going to get a poorer performance rating because they might be an expensive person to employ, that's an example of what these programs should not be used for and I believe are not used for.

MS. MATHIS: And I think Tami is right in pointing out that there may be many questions that are designed to identify things which may become issues down the road, and that's fine. I guess my concern is just that regardless of that, they still need to be tailored and tied to what the program is. So it shouldn't become an excuse to ask about anything under the sun that is about your disabilities and your health conditions simply because it is supposedly part of a wellness program. If the program itself really has nothing to do with and doesn't address the health conditions that are asked about in some of these questions, and they're not needed for the administration of the program, I would say that it's not part of the program.

MS. SILVERMAN: You know, one thing I haven't heard today is anyone saying I mean, the reason people don't like this for the most part is that confidentiality issue, and we haven't really heard anyone say that they've heard of the wellness program the information from the wellness program leaking into the workplace, and I think when we think about this, we have to think about the fact that most employers that do any kind of sophisticated wellness program, number one, they don't do it onsite. We all don't have Nurse Judy or whoever the nurse is now, but it was a fabulous thing. So if we're going to be that literal with the statute, just start with that. But second, it's usually a third party vendor, and they're taking the information and then doing something with it.

But I think we're also missing the fact that my understanding is what happens with health risk assessments is that sometimes year one of the wellness program is simply having people fill out the survey, and filling out the survey is supposed to help people understand and sometimes you get feedback based on it of what issues you have to work on, just like you learned that you have high cholesterol and actually are doing something about it, unlike me, so 

(Laughter.)

COMMISSIONER FELDBLUM: I didn't learn that from an employee wellness program, I learned it from going to my 

MS. SILVERMAN: But then you did something.

COMMISSIONER FELDBLUM: Yeah.

MS. SILVERMAN: But it's the same idea. And then in year two, they may focus on certain aspects and offer things based on those, and I just you need to understand all of this and how these work and the different iterations, and you really need to spend time understanding that. And I think you know, Tami talked about the flexibility before you go in and say what's okay and what's not. And that's all I have to say about that.

COMMISSIONER FELDBLUM: My time is up, so 

CHAIR BERRIEN: Commissioner Lipnic.

COMMISSIONER LIPNIC: Thank you, Madam Chair.

Okay, so I want to follow up on a little bit what Commissioner Barker was asking about in terms of voluntary.

And, Tami, you were getting to this at the end.

And then, Jennifer, I want to ask you to comment on this.

So because you had said you went back and checked HIPAA, and HIPAA doesn't use the term "voluntary," but the concept, it seems like, is actually addressed in the preamble to the 2006 HIPAA rules. Right? So I'm going to read this. It says in the preamble to the HIPAA rule, "The percentage limit is designed to avoid a reward or penalty being so large as to have the effect of denying coverage or creating too heavy a financial penalty on individuals who do not satisfy an initial wellness program standard that is related to a health factor."

So, do you think, Jennifer, in concept that that is the same as voluntariness?

MS. MATHIS: No, I don't actually, and I actually have spent some time thinking about that because I looked at that language as well, and I agree that to some extent, yes, if you're concerned about, is this too large that somebody isn't going to be able to afford health insurance? Yes, that may be one aspect of voluntariness, but I think that the voluntariness under the ADA, I think what we're concerned about is really related to questions, and nobody is saying, I think, that you can't have any incentives or penalties in wellness programs under the ADA at all. The question really comes in around questions, what kinds of medical questions you can ask, and are those voluntary?

And I don't think that the whole answer to whether asking somebody disability-related questions that are otherwise prohibited by the ADA is a part of a voluntary wellness program is solely about, can you get health insurance? I think that to say, "We're going to penalize you," you know, the ADA was structured the way it was because of significant concerns about what happened with peoples' disability-related information for many years, and this was a very deliberate structure to keep that information confidential, and now to say, well, you know, it may be 30 percent of your premiums, it's not about, you know, you're going to not be able to get your health insurance, but if you don't answer these questions, which were supposed to be things that employers didn't need to know and weren't relevant and were prohibited because of the potential for discrimination, that, well, maybe you're not going to lose your health insurance, maybe you're still going to be able to get it, but you're just going to pay several thousand dollars for refusing to answer those questions, I think that is not voluntary. And so I think it is a related concept, but I don't think that it is the same thing as under the ADA.

COMMISSIONER LIPNIC: Okay. And does anybody Amy or Tami, did you have any thoughts on that? And then I have a follow-up for Jennifer.

MS. MOORE: I agree with Tami, that really they are different words that point in the same direction. The question is, what is a reasonable incentive? And that question to me is the same under the ADA voluntariness inquiry as it is under the HIPAA non-discrimination inquiry.

COMMISSIONER LIPNIC: Would you agree with the point that Jennifer is making, that there is a related concept? So the one concept is just the incentives or penalties, however we whatever we want to call it, but then the second is, what are the actual questions that are being asked? So can you get to that second point, too?

MS. MOORE: Sure, yes. I think the questions being asked and this perhaps goes back also to Commissioner Feldblum's question, whether the questions have to have a relationship to an employee health program, and I think that they do. I don't think you can use a wellness program to ask questions that are unrelated to the employee's health risks and unrelated to any program reasonably designed to address the employee's health risks.

On the other hand, I think that if you are an employer eliciting information about health risks, there are many protections, and very appropriate protections that wall off that information and prevent that information from making its way into personnel files and from being used for inappropriate purposes. So I think there is a balance here between what you should be asking and what you should be doing with the information you get.

MS. SIMON: So I agree with everything that Amy just said, and let me just add. One of the again, once you've seen one wellness program, you've seen one wellness program. Right? They are all designed very differently from one another, in part because of what I was mentioning earlier, which is that every employer is also different from every other employer.

One of the things that you'll often see, however, is that when that information is gathered in a confidential manner and I'll talk about that in just a second some programs, for example, end up having a coach that calls you up and says, "Now, let's talk about the results of this information and figure out what it may be that you need." Many employers offer disease management programs, they offer lifestyle management programs, that address a huge variety of different conditions. In some cases, the coach or the information may say, "Look, we've identified these things. Go talk to your doctor about it."

And so while I agree it seems logical to have some kind of a nexus, it seems like even today that nexus does exist in most situations, and whether we need to put more definition around that I think really remains to be seen, and we'd be happy to think a little bit harder about that.

The other HIPAA that I want to talk about very briefly, though, is the HIPAA privacy and security regulations, that's the other chapter of the same book, right? And it just so happens that employers are thinking about HIPAA with respect to their group health plans a lot right now because we had final omnibus regulations that just came out and they're going to be effective very, very soon. I will tell you that at least certainly with regard to my clients, this is top of mind in thinking about who exactly gets any protected health information related to the group health plan. Who is going to be trained appropriately to deal with that information within our organization? What contracts do we need to have with our business associates in order to make sure that that information is kept confidential? Let's make sure that our IT guys know exactly what those rules are so nobody can hack into the system and sell that information, et cetera, et cetera. They're very robust, and if any of you are familiar with those rules, they're really hard.

And so I just wanted to bring that up as a reminder that there is yet another mechanism in place on the group health plan piece of the equation, as well as, by the way, other covered entities under HIPAA, you know, group providers and health care clearinghouses, but also make sure that that information is really treated in a very, very sensitive way.

COMMISSIONER LIPNIC: Darn, my time is up.

(Laughter.)

COMMISSIONER LIPNIC: I've got five follow-up questions here.

Madam Chair, are we going another round by chance?

CHAIR BERRIEN: We might have time for another round if we stick in this.

COMMISSIONER LIPNIC: Okay. All right.

CHAIR BERRIEN: Let me move on now to my round of questions.

I want to ask, first of all, Karen Pollitz, you said something in your written statement about some wellness programs identifying participants based on information that comes in about certain conditions that they might have, whether it comes in well, can you explain how exactly is that information that the employer knows because the employee is a participant in a health risk assessment?

And particularly I was concerned when I saw that part of your statement about the privacy questions that Tami just began to touch on. If people are targeted for participation in particular types of wellness programs based on that information, what kind of protections are available to make sure that that information is not available to people who could use it for prohibited reasons?

MS. POLLITZ: Okay. I'm not the health privacy expert, but our survey work shows I can tell you a little bit about the findings that I included in my statement, and I'm happy to get you additional follow-up information later that these health risk assessments seem to be the primary way that employers identify workers and others to participate in wellness programs, but sometimes they gather information other ways, including through claims. And I don't know the particulars of that, if they are looking at specific claims or just overall magnitude, you know, you make more claims than somebody else or you make claims for certain conditions, that I could try to follow up and see if this is something we've picked up in our survey data, and I would certainly defer to the other employer members.

My understanding of the HIPAA privacy rules is that those pertain to claims information, so they and they don't apply to employers per se, they apply to health plans, which is sort of a distinct legal entity under the HIPAA rubric and the ERISA rubric. So I'm not aware if the wellness rules, the proposed rules, from last fall didn't really address this kind of privacy, but that could be another of the laws that, you know, must be complied with in addition to the HIPAA rules governing discrimination.

CHAIR BERRIEN: Well, it would be useful if you could provide any more information about when and how claims information is used as a basis for assessing or determining who might participate in particular wellness programs. If you're able to get any additional information, we would appreciate it.

Let me ask you also, a number of panelists have argued here that we should stipulate the compliance with the 30 percent standard in HIPAA would constitute compliance with the ADA. What is the average if this is something you can answer or provide information do you know the average yearly health insurance premium?

MS. POLLITZ: It is approaching $6,000 for self-only coverage, and about $16,000 for family coverage. It's just under those two levels, as of our 2012 survey.

CHAIR BERRIEN: Okay. Do we know several of you have, in your written statements, expressed concerns about incentives and whether it would be 30 percent of the figures you've cited to us or otherwise, but incentives that are so great, or penalties, if you opt the other way, that are so great, that coverage would no longer be practically available to people, and I think one of the challenges we have here is that obviously one of the goals as well of the Affordable Care Act is coverage, and if people are actually covered by health insurance wherever possible and to the full extent possible.

So I think while we obviously do have to address the concern of the interaction between the laws that we enforce and HIPAA and ACA, we also have this concern I think that at some point the financial implications of participating in a wellness program or meeting certain standards are not in a wellness program could reach a point of unaffordability.

So really I'd like to ask anyone on the panel if you could speak to how we might approach drawing that line or making that determination if you think that there are factors that we ought to be considering as we look at how to strike a balance between addressing the affordability concerns or, in fact, the possibility, as I think Judy's hypothetical was suggesting, that coverage would become cost prohibitive to a person who can't meet a particular standard.

MS. POLLITZ: Madam Chair, the Treasury Department since between the time of this meeting and when we were asked to submit our statements, the Treasury Department did publish another proposed rule about how these wellness incentives would be evaluated in determining whether an employer was offering affordable group health plan coverage. The standard under the ACA is that an employer's coverage is affordable if the premium contribution that the employee pays, their share of the premium, doesn't exceed 9-1/2 percent of income, and so that's the standard that's laid out in the ACA, so it's kind of sliding scale. And if your employer offers you coverage but doesn't make a sufficient contribution, then you are entitled to come into the exchange and purchase coverage on your own, and you're eligible for subsidies that are also sliding scale based on income.

The Treasury guidance that was issued it's a proposed rule said that these wellness penalties, when applied to premiums, would be assumed to be in sort of the base cost of the plan, not the tobacco part, but the 30 percent part would just be assumed. So if the plan would otherwise, in Commissioner Feldblum's example, pay well, I'm sorry, I can't even do that math in my head, but if there would be, for example, in addition instead of the employer paying 80 and you pay 20 percent, which is sort of typical now, this 30 percent penalty is possible, so it could shift to 50-50, then the IRS would just assume the 50-50 in determining whether your coverage was affordable when you went into the exchange, and then the penalties that can apply to the employer flow from there.

So I don't know, that was not a short answer to your question, but I hope that was helpful.

CHAIR BERRIEN: I definitely feel like I need a calculator for sure.

(Laughter.)

CHAIR BERRIEN: But I thank you. And anyone else on the panel who wanted.

MS. SILVERMAN: I mean, wellness services and chronic disease management, which is what we're talking about here, which is the in for employers, are also part of the core benefits package for the health plans offered through the health care exchanges. So they are there, too. I just wanted to make that point.

MS. LICHTMAN: I was going to say one thing. I am struck by our acronym of the Affordable Care Act, and what we are talking about really is whether or not ultimately health insurance is going to be affordable for the most vulnerable and, and by coincidence not at all, the most protected classes that EEOC deals with. So I think your question is most apt, and I'm sorry that Commissioner Barker had to leave because I wanted to harken back to something she said in the very beginning in our opening statement where both times that she referred to the important work of the First Lady, she talked about encouraging wellness programs, and I don't think that's a mistake in, -- words matter -- the First Lady's extraordinarily important work is encouraging, which takes into account the voluntariness.

And I want to add one quick thing to something that Tami said. She talked about two important legs of a three-legged stool. The uniqueness of the programs, the uniqueness of the employers, and, guess what, the uniqueness of the employee's own health status. And so one size fits all, i.e., BMI metrics, biometrics, that don't have anything to do with measuring the individual health status of that employee, I would suggest to you also has to be something that you all look at when you're fashioning what you're doing, not two out of three.

CHAIR BERRIEN: Thank you. Commissioner Barker did have to leave early, but we do have an opportunity I think to do one more round of questions without doing violence to the commitments we've made to you all about your schedules today.

So we would like to do one more round of questions with the remaining members of the Commission, as we are a quorum.

So we'll start with Commissioner Feldblum.

COMMISSIONER FELDBLUM: Okay. Thank you, Madam Chair. So actually this question is going to go to Chris Kuczynski and Jennifer, as well as then to Leslie, Amy, Tami, and Judy and Karen can opine if you want. Okay?

Because, Jennifer, I don't remember yeah, I think, Chris, you did in your testimony as well you both said the Eleventh Circuit in the Seff case was wrong, that the insurance safe harbor that says if you're involved in underwriting risks, et cetera, you just have this safe harbor. So I am curious to hear from you since clearly people seem to be doing these wellness programs in order to ultimately bring down their risk, I mean, bring down the overall risk of the population of their employees, why is it that the two of you think that we don't even have to even think about voluntary, think about nexus, think about anything, because this is somehow connected to underwriting risks? Okay, so that's my question to the two of you.

And then my question to the folks who say and I think some of you said in your testimony and, by the way, you could also just adopt the Seff approach.

So again just channeling Justice Scalia, which I seem to be doing a lot here, if that's the case, that the insurance safe harbor provision just takes care of all of this, what's the purpose of having had the explicit safe harbor provision that Commissioner Barker kept referring to the provision about voluntary?

So first, why do you think they were wrong? And then for those who think they were right, what do we do with this other provision in the statue?

MR. KUCZYNSKI: Sure, I'll start, I guess, Commissioner. The Seff case, in applying the insurance safe harbor, interpreted it in such a way and the language from the decision, the relevant language from the decision, is in my written testimony. I didn't talk about the case, because of time constraints, in my opening statement, but the rationale for adopting the safe harbor is essentially that this is a program that is designed to reduce risks maybe at some point in the future, that the purpose of this is imposing the surcharge of $20 every 2 weeks on people who didn't complete the health risk assessment, the purpose of this is that at some point health risks will be reduced.

Any reference to the safe harbor, both in the legislative history, to the extent there is limited legislative history on the subject, or in the EEOC's interim guidance, enforcement guidance, on the application of the ADA to employer-provided health insurance, talks about having sound actuarial data, that sound actuarial data is important in underwriting and risk classification in administering risks, and there is no evidence that there was any actuarial data to support the structure of the employer's wellness program in Seff , that the incentives or penalties that were imposed bore any relationship to any diminution of risk factors now or in the future.

In fact, the two cases that the Court cites, the Barnes v. Benham Group case and the Zamora-Quezada case are both cases in which the courts I won't go into the particular facts of them but both of the cases involved Barnes involved a situation where the company was trying to obtain a rate, insurance rate, for a small group of 37 employees, and that was a situation in which the insurance company was doing or the employer was doing exactly what's done in insurance when trying to obtain premium rates for a small group. That seemed to be an acceptable practice.

Zamora-Quezada focused on the lack of actuarial data that the defendants failed the fact that the defendants failed to put forward any actuarial data justifying the way that HMOs made treatment decisions about individuals with disabilities and therefore found in favor of the plaintiffs in that case in the absence of that actuarial data.

So the two cases that Seff cites for support of its proposition involve very different facts, involve situations where employers are doing exactly what happens when they obtain insurance rates, which seems perfectly acceptable, and a case in which the court insisted on the existence of sound actuarial data to support the defendants' conclusions about treatment.

MS. MATHIS: And I would just add one thing to what Chris said, which I agree with everything he said, I just would add that there is some legislative history to the safe harbor in the ADA, and obviously what Congress was concerned about was insurance companies being able to take into account disability in the ways that they used to routinely did when they did underwriting and risk classification, and here, if the purported use of the safe harbor is to say, well, every wellness program essentially is about mitigating risks and reducing health care needs and health care costs, and that by itself is enough to trigger the safe harbor, why is there an exception for information through voluntary wellness plans? I don't think you would ever need it; it would be surplus language in the statute.

COMMISSIONER FELDBLUM: Okay, well, that then goes to my just to get your answer on the I mean, because let's assume that it was somehow connected to underwriting risks. I mean, you know, what does one do with this other provision?

MS. MOORE: Well, I think there are two exceptions, either or both of which might apply to many wellness programs. I think if the information is provided voluntarily in the context of an employee health program, you don't have to answer the question whether you are underwriting or administering or classifying risks. On the other hand, if the information is not provided voluntarily, whatever that might mean, then you've got to meet a different standard, and it's whether the Eleventh Circuit was correct or incorrect that the Broward County case met that standard, I don't know enough about the facts to judge, but I think it's two different standards, either or both of which might apply to wellness programs.

CHAIR BERRIEN: Thank you.And, Commissioner Lipnic?

COMMISSIONER LIPNIC: Thank you, Madam Chair. Okay, I'll be quick.

Karen, in your experience with the ACA, are there and it's encouraging wellness plans, I want to get to this issue concerned about voluntariness and the questions that are asked for wellness plans are there questions that are asked that would be sort of beyond inappropriate medical inquiries, so something that they're asking someone, as Commissioner Feldblum was talking about, "What do these questions have to do with my cholesterol level?" Is there anything that the ACA encourages employers in developing their wellness plans to collect medical information, say, in the aggregate because they are trying to come up with what the cost of their health insurance is going to be?

MS. POLLITZ: I think the ACA rules that we're focusing on today have to do with a really tiny subset of employer wellness programs that are out there today. Our data show that mostly employers aren't making these incentives into the health plan itself, into the premiums, into the deductibles and the co-pays. Some are. Mostly they're not. And when they are, they don't seem to be getting anywhere near the 20 percent limit that is currently allowed. And then there is a whole other universe of wellness programs that may get their information through health risk assessments, you know, that you've heard about here, very wonderful programs that promote health, that do or don't have incentives.

So the ACA rules don't really contemplate how the information gets collected, they just don't address it, it's just kind of assumed that they know. You step up and offer it or they ask you a question, or somehow that all kind of is known, but that there is just somehow there is a test, and you either do or you don't have normal cholesterol, and if you don't, you pay a higher premium, or you pay a higher deductible. I mean, that's the kind of concern, that that is the sum total of the program, that's the Incenticare program that I talked about. The employer, I believe, in that program, I'm not sure, doesn't even collect it, you go to the Incenticare people and they send somebody to check your information, and then that just determines what premium you pay or what deductible you pay.

So I think this kind of other HRA information collection my husband is a fourth grade teacher, so I know about Venn diagrams I think this little ACA provision is a little piece of this much bigger universe of wellness programs where employers for a variety of reasons are seeking information trying to identify risks, trying to help people manage risks, and the only intersection with the ACA world is when this incentive is actually built into the health insurance benefit plan, not the wellness program, but the benefit plan.

COMMISSIONER LIPNIC: Okay. And let me ask another. So, Jennifer and Tami and probably Leslie, so, again, on sort of, Jennifer, your concern about the questions that are being asked and the medical information. But the ADA protects right? or prohibits using disability-related information to discriminate against someone who that's already made unlawful by the ADA, so if the ADA already protects the misuse of medical information, then why is that not sufficient?

MS. MATHIS: Well, if that was the only concern, then the ADA wouldn't also have the bar on asking medical questions, right? I mean, the ADA allows employers to ask, for example, post-conditional job offer, any medical questions they want, they just can't use it to deny somebody a job unless there is a job-related reason for that. So if the ADA if Congress just wanted to say you can't use disability-related information to discriminate against somebody, that's what they would have said, but they didn't. They also recognized that discrimination happens in lots of ways that are very difficult to get at, and, therefore, they were going to protect against employers getting information when somebody was an employee unless it was job related and consistent with business necessity. And so it went beyond simply ensuring that disability-related information is not used to discriminate against people. You can't require people you can't even not only require people, you can't ask people these questions in the first place unless they're job related and consistent with business necessity because we're concerned about what happens when employers have that information.

COMMISSIONER LIPNIC: Leslie, did you have any thoughts on this? If not, I'm going to ask another question.

MS. SILVERMAN: I mean, I find the whole thing a little ironic given what we're seeing at OFCCP, so let me just add that, where folks will go out and ask.

(Laughter.)

MS. SILVERMAN: I mean, what is the ultimate goal here? And we've just decided, well, they're not necessarily discriminating, but you just can't ask it, and it's to what end? And this end is because we want to continue to have the kind of health care we have in this country, and I think that's a good end. So if we can put in enough protections, I mean, I think that's okay. And that's why I just want to know, what is the basis for that being in there? And I think Commissioner Feldblum is in the best position to say, she worked on it, so, I mean, really we should ask you that question.

(Laughter.)

COMMISSIONER LIPNIC: Okay, then my time is up.

(Laughter.)

COMMISSIONER LIPNIC: And I am not asking her that question.

(Laughter.)

COMMISSIONER LIPNIC: Okay, one last thing. So, Jennifer, based on what Tami said earlier, so assume that the questions that there is no problem with incentives in the medical information, okay, and assume that the questions are all appropriate, so there are no extraneous questions that are being asked, but then Tami said in some wellness plans, that may then engender a follow-up by a health coach or someone 

MS. SIMON: In some cases.

COMMISSIONER LIPNIC: In some cases, right. So, what would your position be then on the follow-up by the health coach as to concerns about the medical privacy? You can think about it or 

MS. MATHIS: So you have voluntary questions and there are no incentives or penalties, and then the wellness program is that based on your answer that a job coach 

COMMISSIONER LIPNIC: Right.

MS. MATHIS: offers you some sort of wellness service?

COMMISSIONER LIPNIC: Right.

MS. MATHIS: I think that's fine.

COMMISSIONER LIPNIC: Okay. Okay. Thank you.

CHAIR BERRIEN: Okay. The 30 percent cap that we've been talking about for HIPAA only applies to the achievement of particular health outcomes, right? Now, HIPAA is silent about incentives or if there is a cap on the level for participation, and I'm interested and I'd like to begin with you, Jennifer if you could speak to whether that silence creates an opening or a necessity for us, as the EEOC, to address levels, or acceptable levels, for participation incentives.

MS. MATHIS: So for participation incentives, right, I mean, I think that it's the same I mean, you're still working with a voluntary standard under the ADA right? and so I think the question is still, what's voluntary participation under the statute? And I do think that the fact that HIPAA doesn't speak about and I don't know if you're talking specifically about the health risk assessments or participation. Okay. Right. I don't actually see there being a big conflict between HIPAA and the ADA in the sense that HIPAA allows for incentives. I think the ADA allows for incentives in many cases, just not for the questions. And so for participation in the program, the ADA requires reasonable accommodation. It's the questions where there is concern about incentivizing or penalizing information that otherwise you couldn't ask under the ADA, and since HIPAA doesn't speak to incentivizing, it doesn't particularly talk about it, it doesn't preclude it necessarily, but it doesn't speak to incentivizing, the need to incentivize people or penalize people for answering the health risk assessments, I'm not sure that there is this conflict between HIPAA and ADA. And I think that the silence is interesting in that regard, but I think that, again, the standards that you would speak to under the ADA, is it voluntary or not? And I don't think there is 30 percent I don't think the 30 percent is necessarily relevant anyway, as I've talked about before.

CHAIR BERRIEN: And I'd like to ask particularly Judy Lichtman's testimony, written statement and to some extent also live testimony today has focused on, heavily on, Title VII and the disparate impact standard and concerns that at least some markers, whether it's BMI, is one that you've mentioned a couple of times this morning, that using that as a basis for setting premiums or determining whether there is a financial consequence, or a financial consequence, to participation may have a disparate impact on particular groups. And I'd like to know particularly from Amy, you had said broadly that the goal of your members is certainly not to discriminate. What do you think the interaction is between that disparate impact standard, as Judy has described it in her testimony, and the concerns that she believes we ought to consider as we enter this sphere and the goals that your members have, and is there a way from your perspective to reconcile what the law requires in terms of disparate impact and employer consideration of disparate impact and avoiding a disparate impact that would violate Title VII with the maintenance and the guidelines that apply to wellness programs?

MS. MOORE: Well, we believe that HIPAA itself addresses this issue because it does not allow employers to provide incentives or withhold incentives or impose penalties based on a factor like BMI if it is medically impossible or unreasonable for the person to meet the standard or if it is just unreasonably difficult for the person to meet the standard. So HIPAA is saying you can't just tell the person, "Reduce your BMI or you're out of here." It's saying, We think it would be better for your health to reduce your BMI. We would like to work with you to do that. We have a program that's reasonably designed to do that, but if you are medically unable to meet that standard, then here is a reasonable alternative, you can take nutrition education or engage in some other alternative standard.

So I have a hard time seeing how individuals are going to be disparately impacted in a way that's inappropriate. They are being asked to meet standards, to be sure, but those are standards that the HIPAA requirements ensure that they are able to meet and that it's reasonable to ask them to meet.

CHAIR BERRIEN: And, Judy or Jennifer, did you have any more to add on this point? I know you particularly raised it in your testimony and statements.

MS. LICHTMAN: Well, I think my I want to articulate my concern by saying in response to what Amy just said, is that sometimes that biometric measure, I shouldn't just pick on BMIs, although it's my favorite whipping person for me, may not have anything to do with the health of many individuals. And when those biometric measures don't, writ large, it isn't whether or not an individual person can meet that measure, it's whether or not the use of the measure itself has a disparate impact if there is no correlation between the use of the measure in somebody's health. So it's almost a prior inquiry to whether or not an alternative has to be provided to that individual.

MS. MATHIS: Right. And, yeah, I guess just speaking from the ADA perspective, I think reasonable accommodation ought to be able to address it. I think for other laws there are disparate impact issues which I think are a little different.

MS. POLLITZ: And, Madam Chair, I would just add the HIPAA regulation that's in effect now as well as the proposed one from last November, while it requires an alternative be offered if people can't meet it for a medical reason or for any reason, it doesn't require that that alternative not be outcomes based, it doesn't say that. So it's possible that the rule could be you have to meet a target or BMI of 24 to get the lower premium, and if you miss that, well, maybe you can hit 26, and if you can't make that, well, then you pay the penalty. So additional sort of accommodations need to happen if there is a medical reason, and the proposed rule that came out in November added a lot of language there, so not only said if your doctors says that there is a medical reason, that there must be deference to your doctor, the company doctor can't overrule the worker's doctor, your doctor has something to say about what the reasonable alternative is and has to agree that it's medically appropriate for you. If that changes over time, your doctor has kind of the final say on how that accommodation needs to be changed.

So in that medical realm there is a lot more language, but it doesn't say that if you can't meet this target, then you only have to go to a class or you only have to do something else that tries. It does not require that. Some of the comments to the proposed rule suggested that it might be better if the final rule did make that clear, that the accommodation is just that you make an effort, that you take a class, that you go to a coach, or so forth, and we'll see if that's what turns up in the final rule, but so far that is not what is required under HIPAA.

And the 2006 rule made clear that the wellness program can be the incentive, period; that there doesn't have to be anything else, there don't have to be health coaches or gyms onsite or anything like that, the incentive can be the program as long as this reasonable alternative for medical need is accommodated.

CHAIR BERRIEN: Thank you.Well, I would like to ask if anyone wants to make a closing statement. We have brief time for that, or a comment.

Commissioner Feldblum?

COMMISSIONER FELDBLUM: Thank you. Well, first of all, I want to commend you, Madam Chair, for having this meeting. I want to commend Commissioner Lipnic for continuing to push and encourage that we really just begin this discussion. I endorse what Commissioner Lipnic said, that this is not one of those where, oh, we're having a meeting because we have everything done and next week there is something to show you. This is truly the beginning of a process.

So I am glad that's happening because I think, as really all the witnesses have indicated, not having clarity and certainty from the EEOC is not fair to either employees or employers, and I will say personally I think it's even more not fair to employers because the fact is the EEOC has said something about this. Right? As Chris Kuczynski noted in both his written and oral testimony, we have said in 2002 that a wellness program is voluntary if employees are "neither required to participate nor penalized for nonparticipation."

So an employee who wants to go and think something is problematic, can file a charge, can bring a lawsuit, I mean, the EEOC has said something, but for employers who are trying to figure out what in fact they can and cannot do, that's not a particularly helpful sentence.

So I commend the Chair and Commissioner Lipnic for starting us on this conversation.

I will say that I believe as we look at these what I think are complicated questions, the statutory interpretation rule I never did know what the Latin meant, "in pari materia," I should, but the rule being that you have to look at statutes as a whole and the entire body of law as a whole. So that rule means that as we look at the ADA, we have to make sure that we're interpreting provisions so they work with each other, but there is not just the ADA obviously there are other laws that we are responsible for enforcing but beyond that, there are other laws that are out there: ACA, HIPAA. I don't think the statutory interpretation rule means that it has to be holistic with the First Lady's programs right? I mean, but it is about other laws, you know, and I think that is an obligation on us as we interpret any law, to be cognizant of the entire body of law that's out there, even if that's not always an easy situation.

CHAIR BERRIEN: Thank you. Commissioner Lipnic?

COMMISSIONER LIPNIC: Thank you Madam Chair.

Mostly I want to thank our witnesses. This has been a really excellent panel and very thoughtful comments, and I hope that we are able to craft something in some consensus manner out of this. I don't think it's going to be easy, but I did learn a lot and appreciate all your thoughts and all the work that went into it.

Thank you very much.

CHAIR BERRIEN: I echo that thanks to the panel. It's just terrific information that will, I think, certainly help us as we go forward. I also want to thank again the staff of Commissioner Lipnic's office, Paul Kehoe and Jim Paretti, and Sharon Alexander and Patrick Patterson in my office, who worked closely with the panel to prepare for this meeting and certainly helped us prepare.

I do thank Commissioner Lipnic for the leadership in keeping this issue in our minds and helping to move to this meeting where we are advancing it on our agenda. It is, as you've heard, a beginning of a conversation, but we think an important conversation for us to have.

And then I finally wanted to acknowledge that as we meet today, this is actually in the middle of Public Service Recognition Week, and I opened in my opening statement I mentioned the work of our Dallas Office in the Henry's Turkey's case, but that really is just one example of the many, many really countless examples of the hard, hard work that our employees do every day across the country and of the difference that they make in the lives of men and women all over the country. So as we recognize Public Service Recognition Week, I would like to particularly say that not only the staff in Dallas responsible for the Henry's Turkey's case, but our entire staff I think deserves appreciation. Certainly I appreciate and want to thank them for the hard work that they do every day and particularly now in a context where it's sometimes difficult fiscally and otherwise.

So we thank you, I thank you, and I believe my Colleagues will join me in that as well.

And some final administrative details.

Oh, and I'm sorry, I should also say we have a nearly full house today, and for those who are watching, I know that there are always many more people who are a part of our meetings than are actually in the meeting room, but today our meeting room is quite full, and I think that that also is an important thing for us to see and an important affirmation that it was important for us to have this discussion today. So I thank all of you who have taken time to be here, whether you are here live and in person or whether you're here virtually through our streaming capacity.

The meeting record will be open for 15 days following this meeting. Any member of the audience and any member of the public is invited to submit written comments on any issue or matter discussed at this meeting. And your comments should be mailed to Commission Meeting, EEOC Executive Officer, 131 M Street, NE, Washington, D.C. 20507, or e-mailed to Commissionmeetingcomments all one word @EEOC.gov. The comments you provide will be made available to members of the Commission and to Commission staff working on the matters discussed at this meeting. In addition, your comments may be disclosed to the public, and by providing comments in response to the solicitation, you are consenting to their use and consideration by the Commission and to their public dissemination. Accordingly, we want to remind you not to include information in submitted comments that you would not want made public, such as personal information.

CHAIR BERRIEN: And with that, if there is a motion to adjourn?

COMMISSIONER FELDBLUM: I move to adjourn.

CHAIR BERRIEN: Is there a second?

COMMISSIONER LIPNIC: Second.

CHAIR BERRIEN: All in favor?

(Chorus of ayes.)

CHAIR BERRIEN: No?

(No audible response.)

CHAIR BERRIEN: Hearing no opposition, our meeting is adjourned. Thank you.

(Whereupon, the Equal Employment Opportunity Commission Meeting was adjourned at 11:53 a.m..)