Somewhere tonight, someone is walking in tight circles around their kitchen island at 11:47 p.m., watching the number on their wrist creep toward ten thousand. They are not doing this for their heart. They are doing it because their employer’s wellness programme syncs with their health plan, and hitting the daily target keeps real money off the family premium. The enrollment email called this a voluntary rewards programme, and the kitchen-walker is, technically, a volunteer. They are earning a discount.
Now watch the same scene with the arithmetic exposed. An insurer prices a group plan to cover the expected claims of the group, plus overhead. If some members pay less because their data says they deserve to, the shortfall does not evaporate — the pool still needs its total, and everyone else pays more to close the gap. A discount for people who share their step counts is arithmetically identical to a surcharge for people who decline. The only difference between the two descriptions is a cheerful verb. “Reward” is not a description of the transaction; it is the mechanism that makes the transaction feel acceptable.
The exception with a citation
The distinction is not cosmetic, because in the ordinary case the transaction is illegal. Federal law generally forbids group health plans from varying premiums based on health factors — your coworkers’ medical conditions are not supposed to set your price. But final regulations issued in June 2013 by Treasury, the Department of Labor and the Department of Health and Human Services, under the Affordable Care Act, carve out an explicit exception: plans may vary premiums and cost-sharing as rewards for “adherence to programs of health promotion and disease prevention,” up to 30 percent of the total cost of coverage, or 50 percent for programmes targeting tobacco. The wellness discount is not a workaround of the ban on health-based pricing. It is the ban’s sanctioned reintroduction, with a cap.
The guardrails are softer than they sound. Health-contingent programmes — the kind that pay only if you hit a target — must offer a “reasonable alternative standard” to people who cannot meet it, which sounds protective until you notice that requesting the alternative means flagging yourself, to your employer’s vendor, as someone who needs one. And the requirement that programmes be “reasonably designed” asks only for a reasonable chance of improving health, no excessive burden, no subterfuge for discrimination, no “highly suspect” methods. As KFF has pointed out, the rules demand no scientific evidence that a programme actually works. A wellness programme can be useless as medicine so long as it functions smoothly as a price lever.
Because that lever is large enough to lean on people, other statutes crowd in. In May 2016 the Equal Employment Opportunity Commission issued final rules on how the Americans with Disabilities Act and the Genetic Information Nondiscrimination Act apply to employer wellness programmes that request health information — rules that bite whether or not the programme rides on a group health plan. They require written notice, confine what the employer itself can see to aggregate data, and forbid requiring workers to waive confidentiality or consent to the sale of their information. GINA draws brighter lines still: plans may request but never require genetic information, may not penalize a refusal to hand it over, and may not condition any inducement on a child’s health data. Even this compromise failed to hold. After AARP sued, a federal judge in Washington, D.C. vacated the incentive provisions in late 2017, finding the agency had never justified why a swing worth 30 percent of coverage costs could be described as voluntary. The legal line between carrot and stick remains, instructively, unresolved — and an offer from the people who set your salary carries a gravity that “voluntary” does not quite capture.
Where the steps go
Most people assume their step counts and biometric screenings sit under the same federal privacy law as their doctor’s records. Often they do not. HIPAA covers a workplace wellness programme only if it runs through a group health plan; when an outside vendor operates the programme, HIPAA simply does not apply, and the governing document is the vendor’s own privacy policy — a genre of writing not celebrated for its restraint. Vendors in that position “can legally share or even sell your information to advertisers,” as Dara Smith of the AARP Foundation told Consumer Reports. Small self-insured plans administered by the employer fall outside HIPAA as well. And the Labor Department’s own guidance concedes that complying with the wellness rules settles nothing about compliance with the ADA, GINA, HIPAA’s privacy provisions or state law. “We follow the rules” is not one claim. It is four, each with its own hole.
Step back from the compliance thicket and the deeper problem comes into focus. Insurance is a machine for pooling unpredictable risk, and its working ingredient is, oddly, ignorance: mutual aid is rational precisely because nobody knows who will draw the short straw this year. Continuous individual measurement is a solvent for that ignorance. A step count is not an unpredictable event like a car crash; it is a daily behavioral report. The more finely each person’s risk is measured and priced, the more the pool dissolves into a set of individuals paying their own way, plus a monitoring fee. Actuarial precision does not make insurance fairer. It makes it unnecessary for the people who can win the discount, and more expensive for the people who cannot.
Those people are not randomly distributed. The bodies least able to hit an activity target belong, disproportionately, to shift workers sleeping in fragments, people managing chronic illness or disability, caregivers with no unstructured hour in the day, employees whose jobs have already worn out their knees, and anyone whose neighborhood is not safely walkable at 11:47 p.m. The discount flows uphill, toward the already healthy and the already salaried; the surcharge flows down. The population least equipped to win the reward is, by and large, the population that most needs the coverage.
Which returns us to the kitchen. The midnight laps are not quite exercise; they are paperwork, performed with the body. The tracker is counting two numbers at once — steps accrued and, more quietly, the size of the pool the wearer is still permitted to belong to. A system that watches each member continuously and charges each one accordingly already has a name: paying your own way. The entire point of insurance was that we had agreed not to.