Dive Brief:
- The U.S. Department of Labor (DOL) is suing Macy’s Inc. and subsidiaries of Anthem and Cigna for allegedly mismanaging the smoking cessation program in the retailer's employee wellness plan, Benefits Pro reports. In Acosta v. Macy’s Inc., DOL claims that Macy's tobacco cessation program hasn't met Employee Retirement Income Security Act (ERISA) requirements since 2011.
- DOL says in the suit that Macy's wellness program failed to offer a reasonable alternative that would have allowed employees who couldn't meet the program's standard to avoid a $35 to $45 surcharge. Employees in the program also paid a $35-$45 monthly surcharge, which was used for claims and plan expenses.
- According to Benefits Pro, Macy's changed plans but failed to notify plan participants. Meanwhile, at Macy's direction, Cigna and Anthem started using higher reimbursement rates for processing out-of-network claims, causing certain claims to be overpaid.
Dive Insight:
Wellness programs are an invaluable benefit for both employers and workers to maintain a healthy and productive workplace. The programs can be part of a group health plan, like Macy's, or a separate program. But employers need to avoid pitfalls that can jeopardize participants' rights and generate lawsuits.
First, employers need to understand ERISA's provisions. The law has specific, and sometimes complex, regulations governing private-sector health and pension plans to protect plan participants. ERISA requires plans to provide participants with information about plan features, funding and the fiduciary responsibilities of those who manage and control plans. ERISA also requires those with fiduciary duties to provide participants with a grievance and appeals process, and gives them the right to sue if there are breaches in fiduciary responsibilities.
Employers also must notify plan participants when plans change or are updated, as ERISA requires. Keeping participants updated can lower an employer's chances of being sued for violating the law.
