Creating quite a quandary, a provision in the Obamacare law is in direct violation of existing law.
The ACA encourages companies to institute wellness programs designed to cut down on health care costs by creating healthier employees. Employees are incentivised to participate in these programs by up to a 50% reduction in out-of-pocket health care costs (premiums, deductibles and other costs), which translates into hundreds and sometimes thousands of dollars in extra annual costs for those who do not participate.
The problem is, wellness programs are in direct violation of the American’s With Disabilities Act, which prohibits medical screening as part of employment. Obamacare mandates that employees must undergo medical testing to be eligible for reduced premiums, yet federal law says this is illegal.
U.S. CEOs threaten to pull tacit Obamacare support over ‘wellness’ spat
By Sharon Begley
Major U.S. corporations have broadly supported President Barack Obama’s healthcare reform despite concerns over several of its elements, largely because it included provisions encouraging the wellness programs.
The programs aim to control healthcare costs by reducing smoking, obesity, hypertension and other risk factors that can lead to expensive illnesses. A bipartisan provision in the 2010 healthcare reform law allows employers to reward workers who participate and penalize those who don’t.
But recent lawsuits filed by the administration’s Equal Employment Opportunity Commission (EEOC), challenging the programs at Honeywell International and two smaller companies, have thrown the future of that part of Obamacare into doubt.
The lawsuits infuriated some large employers so much that they are considering aligning themselves with Obama’s opponents, according to people familiar with the executives’ thinking.
“The fact that the EEOC sued is shocking to our members,” said Maria Ghazal, vice-president and counsel at the Business Roundtable, a group of chief executives of more than 200 large U.S. corporations. “They don’t understand why a plan in compliance with the ACA (Affordable Care Act) is the target of a lawsuit,” she said. “This is a major issue to our members.”
“There have been conversations at the most senior levels of the administration about this,” she added.
Business Roundtable members are due to meet Obama in a closed-door session on Tuesday, where they may air their concerns.
It is not clear how many members of the group, whose companies sponsor health insurance for 40 million people, are considering any action. It is also not clear if the White House can stop the EEOC from challenging wellness programs.