Last week the House Committee on Education and Workforce of the U.S. House of Representatives approved a bill that would expand the reach of wellness programs to include Genetic screening of employees and their dependents and increase the financial penalties for those who choose not to participate. It would also resolve current conflicts between various laws such as the Americans with Disabilities Act (ADA) and the Genetic Information Nondiscrimination Act (GINA).
It is not clear that employers would want to utilize the greater leverage over employees that the bill would offer. But it raises many concerns that employers should consider.
The bill, the Preserving Workplace Wellness Programs Act (H.R. 1313), was introduced by Representative Virginia Foxx, the North Carolina Republican who chairs the House Committee on Education and the Workforce. Having passed the GOP-d0minated committee by a 22-17 party-line vote, the bill now goes to the House Committee on Ways and Means. The Senate’s Committee on Health, Education, Labor, and Pensions should soon consider similar legislation. It will probably be folded into a comprehensive bill for repealing and replacing the Affordable Care Act (ACA) before it reaches the floor. In such a comprehensive bill, this provision is not likely to spur much debate, so understanding it now is important.
The key provisions of the bill are as follows:
- Employers would be allowed to run genetic tests on their employees and their families as part of participatory wellness programs and to fine those who refuse to participate. Employers currently are not allowed to genetically screen spouses and children as part of wellness programs. (This can be done “voluntarily,” as Aetna does, but there is some confusion about what that means.)
- Self-insured employers (those who establish their own funds to cover the medical expenses of employees and their families and only use insurance carriers for administration and, if they have stop-gap insurance, to cover expenses if their fund runs out) still would not see individual results, due to the Health Insurance Portability and Accountability Act (HIPAA). However, independent wellness vendors are not regulated by HIPAA. Therefore, they could share this individual genetic testing information with employers. Either way, employers will know who did not agree to the testing and would be allowed to fine noncompliant employees, up to 30% for nonsmokers and 50% for smokers, but now those percentages could be multiplied by the cost of the full family policy, rather than the individual employee’s. For example, if an employee costs $5,000 to insure and a family costs $10,000, the 30% cap on penalties increases from $1,500 to $3,000.
- ADA and GINA, which prohibit use of genetic and family history information for hiring, firing, or underwriting insurance coverage, would no longer apply to wellness programs. Consequently, genetic and family history information could be used in assessing employee risk of future disease for purposes of a wellness program.
- Insurance carriers and employers will be able to use aggregated data to prioritize wellness initiatives and predict health insurance costs. This should allow more-accurate cost predictions. For example, a self-insured company that learns its employees have certain genetic characteristics might want to become fully insured or vice versa.
The current combination of a fast-moving news cycle, often dominated by discussion of an ACA replacement, and the speed with which the bill could become law means employers have many unanswered questions, including the ones that follow.
Does this mean we are mandated to offer genetic testing as a covered benefit? No. Genetic Testing as a covered benefit is not the subject of the bill. Coverage is not affected. The genetic testing in question would be financed as an administrative cost, rather than as a regular medical claim, and would be for the benefit of the employer, not to inform the confidential doctor-patient relationship.
Does this mean GINA no longer applies in the workplace? No. Employers still may not discriminate on the basis of genetic information in hiring or insurance underwriting, meaning you can’t charge someone more because they have a certain genetic predisposition. This law applies only to testing in the context of wellness programs. Even then, it applies only to participation in the testing rather than the outcome of the test (see the next question).
Does this affect outcomes-based wellness programs, participatory wellness programs, or both? Outcomes-based programs, known formally as health-contingent wellness programs, attach financial rewards to the achievement of certain goals, such as weight loss, reduced cholesterol, or number of steps walked. Participatory programs do not require a specific outcome, just participation. So an outcomes-based program could require weight loss, while a participatory program could require only participation in a weight-loss program.
This bill would affect only participatory programs, which still constitute the large majority of programs.
What is the cost of genetic screening to the employer? One of the few vendors providing the service, Newtopia, recently quoted $500 per employee. This figure is likely to decline as genetic testing technology improves and more vendors get into the market.
What type of genetic tests are involved? Testing for predispositions for obesity, diabetes, heart disease, and some kinds of cancer are contemplated.
Would employees and spouses see their genetic test results? That is not required. For example, finding out one has a gene for obesity might make one less likely to try to lose weight. In such a scenario, sharing the results with employees could confuse them, since so little is known about the link between genetics and weight. But it is certainly plausible that employees will want to see their results. As a practical matter, it is unlikely that an employer would not authorize the testing company to share the results with employees. Newtopia does share the results with employees in the hope that if they learn they have certain genes, they will change their behaviors.
What is the purpose of the legislation? The narrow purpose is to end the conflict between ADA, GINA, and ACA, in favor of the employer. The broader purpose is, as stated in the bill’s preamble, to give employers more discretion in how they administer wellness programs and, in the case of extending the penalty provision to dependents, more leverage over employees.
There are health and savings arguments. Some people believe that genetic testing provides a more accurate picture of employee risk than current biometric screens. If employers can manage employee risk, the conventional wisdom goes, they can save money. For instance, the commercially insured population suffered 158,895 heart attacks and had 126,710 diabetes-specific admissions in 2014, the last year for which statistics are available. Roughly 55% of the country (about 175 million people) were privately insured, yielding a total event rate of 1.6 per 1,000. The Health Enhancement Research Organization pegs the cost of these events at $22,500. Hence a typical employer’s health spending includes $36 per employee per year (PEPY) for heart attacks and diabetes events that might be predicted through genetic screening. (More-complicated diabetes events would take place in employees who were already diagnosed, and hence would not need to be genetically screened.)
The chair of the Health Project, an industry-financed group that evaluates wellness programs and annually bestows the C. Everett Koop award on the year’s best, is Ron Goetzel of IBM Watson Health and the Johns Hopkins Bloomberg School of Public Health. He says that current programs reduce risk by up to 2% in two to three years. Assuming he is correct, heart attack and diabetes event costs might fall by a similar percentage, saving employers $0.72 PEPY in a traditional wellness program. If genetic testing were effective enough to double that risk decline, employers could save $1.44 in two to three years.
Is there any evidence that genetic testing is effective in doubling the effectiveness of wellness programs (i.e., in improving health or reducing costs)? There is ample evidence of ineffectiveness. An Aetna study showed no meaningful change in risk factors after one year between at-risk groups that were or were not offered genetic testing, using the standard randomized control trial. Experts in the field have not endorsed the notion that genetic testing for chronic disease predisposition is effective, though that could change as the technology improves.
There is also some unreliability in test results. Interpretations varied 22% of the time, according to a study reported in Genetics in Medicine.
Why would an employer want to spend $500 now to save $1.44 later, especially given the lack of evidence that these programs are effective? They may not, but notwithstanding the actual economics above, employers tend to focus cost management efforts on diabetes and heart disease, due to a misperception that a very large percentage of employer health expense is consumed by these two wellness-related hospitalization events, which are theoretically avoidable. Government data indicates instead that the typical employer spends much more hospital money on birth events and musculoskeletal events than on diabetes or heart attacks, which are far down the list. (After retirement, though, the cost of both skyrockets.)
This spending pattern provides support for a viewpoint that the way to save money through genetic testing is by relying on employees who resent the testing’s intrusiveness to refuse to comply. One vendor advertised noncompliance as a source of savings even without genetic testing.
Here’s how that would work. In some instances, such as this 2013 Penn State case, where employees protested against a wellness program that included an opt-out financial penalty, a simple fine is all that’s involved. In the Penn State case, the employee’s annual deductible stayed the same, but employees who refused to comply were fined $1,200 over the course of the year. Suppose a similar fine were in existence now. It is likely that many employees would not submit to genetic testing. For each who refused, the employer would save $1,200, while paying $500 for each who complied.
It would be more common for employers to switch to offering a high-deductible plan that increases the annual deductible by, say, $1,000, but prevent it from looking like a pay cut by offering employees the chance to earn the $1,000 back by participating in the wellness program. On paper, that is an “incentive.” If an employee were to forgo genetic testing, they would not collect the incentive but would still have the higher deductible.
To put this in perspective, the average fine/incentive in 2015 was $693. Typically, larger employers made employees put larger amounts at risk.
Would employees be likely to oppose this? Based on the “fierce opposition” of consumer, health, and privacy advocacy groups, as reported by the New York Times, it is fair to say that employee reaction would be very negative, though it may be hard to distinguish their sentiments on wellness programs in general from their particular feelings about genetic testing. A quick perusal of the comments on the STAT article on the bill (one of the first to report on the measure) or on other news outlets gives you a sense of those feelings.
Given the cost, lack of effectiveness, and likely employee reaction, why would an employer want to do this? In my opinion, they wouldn’t.