Leading U.S. CEOs, angered by the Obama administration's challenge to certain "workplace wellness" programs, are threatening to side with anti-Obamacare forces unless the government backs off, according to people familiar with the matter.
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.
A threat
of a corporate backlash comes at a time when Obama faces criticism even
from his Democrats' ranks that he had devoted too much political capital
to healthcare reform.
Such
action could take the form of radical changes in health benefits that
employers offer. It could also mean supporting a potentially
game-changing challenge to Obamacare at the Supreme Court next year and
expected Republican efforts to eviscerate the law when they take control
of Congress in 2015.
CARROTS AND STICKS
Obamacare
allows financial incentives for workers taking part in workplace
wellness programs of up to 50 percent of their monthly premiums,
deductibles, and other costs. That translates into hundreds and
sometimes thousands of dollars in extra annual costs for those who do
not participate.
Typically,
participation means filling out detailed health questionnaires,
undergoing medical screenings, and in some cases attending weight-loss
or smoking-cessation programs.
One of the arguments presented
in the lawsuit against three employers is that requiring medical testing
violates the Americans with Disabilities Act.
That
1990 law, according to employment-law attorney Joseph Lazzarotti of
Jackson Lewis P.C. in Morristown, N.J., largely prohibits requiring
medical tests as part of employment.
"You can't make medical inquiries unless it's consistent with job-necessity, or part of a voluntary wellness program," he said.
The
lawsuits are based on the view that it is no longer voluntary if
employees face up to $4,000 in penalties for non-participation, loss of
insurance or even their jobs.
Employers,
however, see the lawsuits as reneging on the administration's
commitment to an important part of the healthcare reform.
On
Nov. 14, Roundtable president John Engler sent a letter to the Labor,
Treasury and Health and Human Services cabinet secretaries who oversee
Obamacare asking them to "thwart all future inappropriate actions
against employers who are complying with" the law's wellness rules, and
warning of "a chilling effect across the country."
Asked
for a response to the letter, an administration official told Reuters
that it supported workplace health promotion and prevention "while
ensuring that individuals are protected from unfair underwriting
practices that could otherwise reduce benefits based on health status."
UNDERMINING OBAMACARE
In practical terms, large corporations have several ways to undermine Obamacare if they decide to.
One
is to support legal challenges to the subsidies given to low-income
individuals who buy health insurance on the federal exchange established
under the law. Neither the Business Roundtable nor any of its CEO
members have done this so far. The Supreme Court is expected to hear
oral arguments in the case in 2015.
Another
option is to make top executives available for hearings on repealing or
diluting Obamacare. "We never did this before," said the person
familiar with the executives' thinking. "But they could turn up the
noise. I don't think the White House would want the CEOs turning on them
and supporting these efforts on the Hill."
The
nuclear option would be to radically change employer-sponsored health
insurance. Large corporations are highly unlikely to eliminate it, but
they might give workers a fixed amount of money to buy coverage on a
private insurance exchange. That would allow employers, almost all of
which pay workers' medical claims out of their earnings, to cap their
healthcare spending.
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