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Does Macy's workplace wellness program violate ERISA?

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Wellness programs provide employees the opportunity to take proactive steps in improving health and well-being. These programs can be included in a health plan, or offered separately. Regardless of how the benefit is obtained, employees can use the platforms to increase their health and work productivity.

However, employers must recognize that ongoing wellness program management requires strict adherence to the federal law called Employee Retirement Income Security Act (ERISA).

According to the Department of Labor (DOL), Macy's is falling short in their efforts to comply with ERISA. The DOL is taking the prominent retailer to court over a smoking cessation plan that they consider discriminatory. Both Macy's and subsidiaries of Anthem and Cigna are accused of alleged mismanagement going back to 2011 and failure to meet ERISA requirements.

In Acosta v. Macy's Inc., the DOL claims Macy's specifically did not notify employees of their decision to change wellness programs. In addition, the defendants failed to offer a reasonable alternative to help workers who did not meet the new plan's standards.

Upon implementation of the new program, Cigna and Anthem increased reimbursement rates for processing out-of-network claims that led to significant overpayments. Employees who did not qualify found themselves with a monthly $35 to $45 surcharge that went towards claims and plan expenses.

ERISA mandates that plans provide members with information about features and funding, specifically when it comes to any changes or updates. The law also requires those with fiduciary duties in managing and controlling plans to offer grievance and appeals processes. If disputes are not settled, participants have the right to sue upon discovering a breach of responsibilities.

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