Are employer wellness programs under attack by the EEOC?

Many employers or their group health insurance plans offer wellness programs to promote healthier lifestyles for their employees. These employer wellness programs (EWPs) often involve medical questionnaires, health risk assessments (HRAs), and weight, cholesterol, glucose and blood pressure screenings. Some employer and group health insurance plans offer financial and other types of incentives to participating employees or to those who achieve certain targeted health outcomes.

Until 2014, it seems to have been clear sailing for employers on the EWP front as long as they complied with certain federal nondiscrimination provisions. In 2014, however, the U.S. Equal Employment Opportunity Commission (EEOC) starting filing lawsuits against employers alleging that their EWPs were not voluntary as required by Title I of the Americans with Disabilities Act (ADA). While the courts have uniformly ruled in favor of the employers in these cases, the EEOC, nevertheless, proceeded to propose new regulations under the ADA and Title II of the Genetic Information Nondiscrimination Act (GINA) that imposed new standards and ignored an existing ADA “safe harbor” provision for bona fide employer benefit plans. Despite both Congressional concerns and numerous industry comments asking the EEOC to align its new ADA and GINA final rules with the requirements of the Health Insurance Portability and Accountability Act (HIPAA) (P.L. 104-191) and the HIPAA privacy and security breach notification requirements, with which employers had worked so hard to comply, the final rules made no concessions to these concerns.

This White Paper first examines the federal law applicable to EWPs, the recent court challenges by the EEOC, the new ADA and GINA final rules, and the status of proposed legislation to void the rules. It closes by providing the results of a Q&A session with industry experts and advice on what employers should do to ensure that their EWPs pass muster with the new EEOC rules, both applicable on January 1, 2017.

Read further, “Are employer wellness plans under attack by the EEOC?

FDA warns 55 retailers about e-cigarette, e-liquid, and cigar sales to minors

Warning letters for selling newly regulated tobacco products, such as e-cigarettes, e-liquids, and cigars, to minors have been issued by the FDA’s Center for Tobacco Products against 55 tobacco retailers. The announcement of these warning letters comes approximately one month after the August 8, 2016 effective date of the Final rule (81 FR 28973, May 10, 2016) extending the FDA’s authority over all tobacco products, and making it illegal to sell e-cigarettes, cigars, hookah tobacco, and other newly regulated tobacco products to anyone under age 18 in person and online, and requiring retailers to check the photo ID of anyone under age 27 (see FDA clears the air, ‘deems’ e-cigarettes, hookah tobacco, cigars worthy of regulation, Health Law Daily, May 10, 2016).

Before the Final rule, there were no federal regulations prohibiting retailers from selling e-cigarettes, hookah tobacco, or cigars to people under age 18. The Final rule contains the following restrictions:

  • not allowing products to be sold to persons under the age of 18 years (both in person and online);
  • requiring age verification by photo ID;
  • not allowing the selling of covered tobacco products in vending machines (unless in an adult-only facility); and
  • not allowing the distribution of free samples.

The warning letters were issued after compliance checks of major retail chains, tobacco specialty stores and online retailers found that minors were able to purchase some of the newly regulated tobacco products in a variety of youth-appealing flavors, including bubble gum, cotton candy, and gummy bear. The results from compliance check inspections of tobacco retailers are available in a searchable retailer inspection database. The database lists which inspected retailers received a warning letter, a civil money penalty, a NTSO, or were found to have no observable violations.

The FDA usually issues warning letters to brick-and-mortar retailers as well as online retailers and manufacturers the first time a tobacco compliance check inspection reveals a violation of the federal tobacco laws. Failure to promptly and adequately correct all violations and ensure compliance with all applicable laws and regulations may lead to FDA enforcement actions, including civil money penalties and no-tobacco-sale orders (NTSOs).

Under applicable compliance and enforcement rules, the FDA may pursue a NTSO against retailers that have a total of five or more repeated violations of certain restrictions within 36 months. Retailers are prohibited from selling regulated tobacco products at the specified location during the period of the NTSO. Retailers who receive an NTSO complaint from the FDA may either enter into a settlement agreement with the agency that results in a final order issued by the administrative law judge (ALJ) or choose to go to a full hearing before an ALJ.

$175M South Florida drug compounding fraud scheme alleged

Sixteen individuals have been charged by the U.S. Attorney’s Office for the Southern District of Florida in a two-year $175 million insurance fraud conspiracy involving the manufacture and distribution of compounded cream medications for the treatment of pain, wounds, scars, eczema, and other medical conditions. The conspiracy allegedly used various business entities, including Numed Care, LLC, ClinicalCorp, LLC, RX of Boca, LLC, and a failing compounding pharmacy located in Dallas, Texas, to perpetrate a complex fraud on numerous health care insurance providers.

According to the complaint, the charged individuals prepared medications in bulk quantities that were purported to be compounded for specific patients and falsely represented to the health insurance providers that these medications were prepared in limited quantities for individual patients, making them exempt from inspection by the FDA. The health insurers then compensated the charged individuals for the alleged costs of the ingredients for such medications.

The complaint further alleges that the charged individuals:

  • concealed from the health insurance providers that they made illegal kickbacks to physicians for the issuance of the compounded medications;
  • unlawfully provided physicians with pre-printed prescription pads;
  • used mass marketing techniques and call centers, which made material misrepresentations in order to solicit potential patients; and
  • induced owners of failing pharmacies throughout the United States to take part in the fraud.

The conspiracy charges against the individuals include conspiracy to commit racketeering, money laundering, and mail and wire fraud. Additional charges include making a materially false statement to federal law enforcement and subscribing to a false federal income tax return.

The charged individuals face a range of penalties, from five years and a $250,000 fine, to 23 years and a $500,000 fine. The complaint is an accusation only and the charged individuals are deemed innocent until proven guilty.

Highlight on Iowa: Update on West Nile, Zika, and HIV diagnoses

The Iowa Department of Public Health (IDPH) recently announced the first human West Nile virus cases of 2016, that new HIV diagnoses were up 27 percent in 2015, and that 13 Iowans were infected with Zika in summer 2016.

West Nile

The IDPH announced that testing at the State Hygienic Laboratory (SHL) in Iowa has confirmed the first human cases of West Nile virus disease in 2016. A female child (0-17 years of age) and an adult male (41-60 years of age), both of Sioux County, were hospitalized due to the virus but are now recovering. “These cases serve as a reminder to all Iowans that the West Nile virus is present and it’s important for Iowans to be using insect repellent when outdoors,” according to IDPH Medical Director, Dr. Patricia Quinlisk.

Iowans are advised by the IDPH to: (1) use insect repellent with DEET, picaridin, IR3535, or oil of lemon eucalyptus (DEET should not be used on infants less than two months old and oil of lemon eucalyptus should not be used on children under three years old); (2) avoid outdoor activities at dusk and dawn; (3) wear long-sleeved shirts, pants, shoes, and socks whenever possible outdoors; and (4) eliminate standing water around the home.

Since West Nile first appeared in Iowa in 2002, it has been found in every county in Iowa, either in humans, horses, or birds. The virus peaked in 2003, when 141 were sickened and six died. In 2015, 14 cases of West Nile virus were reported to IDPH. The last death caused by West Nile virus was in 2010, and there were two deaths that year.

Zika

According to a August 12, 2016 Zika virus update from IDPH, the mosquitoes that are transmitting Zika virus in Central and South America and threatening parts of the southern United States are not established in Iowa, so the risk to Iowans occurs when they travel to Zika-affected areas. The Centers for Disease Control and Prevention (CDC) has issued Level 2 travel alerts to Zika-affected areas advising travelers to take measures to prevent mosquito bites. Thirteen Iowans have been confirmed to have Zika in summer 2016, but all were believed to be infected while traveling in affected regions.

HIV

The IDPH annual HIV Surveillance Report for 2015 finds there were 124 new HIV diagnoses in 2015, an increase of 27 percent from the 98 cases reported in 2014. This increase marks a return to the levels seen in 2013, and is a reversal from the drop in cases from 2013 to 2014.

The IDPH speculates that since 2014 was the first year of full implementation of the Affordable Care Act (ACA), it is possible that fewer HIV tests were performed because providers were dealing with the influx of new patients, leading to fewer confirmed cases. The 2015 increase may be because providers were more prepared for the increase in patients, and were more likely to perform HIV testing. This speculation is supported by the fact that the largest diagnoses decreases in 2014 and increases in 2015 occurred in private physician offices, hospital-based clinics, and community health centers (compared to public test sites, correctional settings, and blood banks).

Of the 2,367 diagnosed persons (both in and out of care) in Iowa, 76 percent were virally suppressed.  Nationally, an estimated 42 percent of persons diagnosed with HIV (both in and out of care) had attained viral suppression, so Iowa does very well by comparison.

In addition, the IDPH reports that the number of deaths among HIV-infected persons diagnosed in Iowa continues to decrease since peaking at 103 deaths in 1995. Since 2000, the number of deaths has fluctuated from a low of 20 to a high of 44.  Preliminary data indicate 20 HIV or AIDS-related Iowa deaths in 2015.

IDPH and its community partners are currently creating Iowa’s 2017-2021 Comprehensive HIV Plan, which will be released in fall 2016.