Wellness Regulations

DOL v. Macy’s

The Department of Labor (DOL) recently filed suit against Macy's Department store for allegedly failing to comply with regulations applicable to its tobacco-free incentive.

Even though Macy's clearly offered a cessation program and allowed employees six months to complete it, the employer failed to notify employees that a waiver of the requirement to complete the cessation program was available. If the individuals’ personal physician deemed that it would be medically inadvisable or unreasonably difficult for the individual to quit using tobacco products (or to complete the cessation program) because of a medical issue, they were exempt from the program. Additionally, the DOL claimed that Macy's failed to properly apply the discounted premium retroactively for individuals who did in fact complete the cessation program.

They say the best offense is a strong defense! At Bravo, we know you trust us to be your compliance experts; a responsibility we don't take lightly. Did you know that we've had at least five clients see the past few years of their wellness and incentive program be included in a detailed audit of their self-funded medical claims by the Department of Labor?

Make no mistake, the DOL is aggressively looking to assure compliance with HIPAA and ACA regulations. We see auditors request the following (among other information):

  • Copies of all employee communications concerning the program used over past years (up to seven).
  • Proof that every communication piece that referred to a potential incentive or penalty and stated a goal (i.e., "Earn $500 by being tobacco free!") included information about the reasonable alternative(s) available to help individuals earn the full reward by different means.
  • Verification that anyone who failed to earn the incentive was clearly made aware of the reason they failed to qualify and the alternative(s) available to them.
  • Confirmation that all employees eligible for the incentive were made aware that their personal physician could join in a request for a medical waiver or a modified alternative standard.
  • Demonstration that those eligible were given a reasonable time to complete what they needed to, a reasonable time to request an alternative and a reasonable time to complete the alternative.
  • Evidence that program requirements and alternatives were not "overly burdensome", requiring an unreasonable amount of effort.

Affirmation that those impacted by the failure to achieve the incentive and were penalized, and who subsequently completed the alternative standard or qualified for a waiver were "financially made whole" (i.e., the credit was applied retroactively).

We are very proud to report that in all cases where we've been made aware of the audit and supported the response, our clients passed! Of course, we haven't heard Macy's side of this story, and they may very well prevail in the end. However, we felt it was important to share the types of questions our clients (and apparently, Macy's) are encountering during routine claims audits.

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