There are great potential benefits to creating a successful wellness program, including but not limited to lowering your health care costs as an employer, improving employee morale and company loyalty, lowering rates of absenteeism, and simply having a workforce of healthy employees who will likely be more productive and engaged. A well-constructed wellness program can be a huge team-building and morale enhancing culture contributor for companies that ensure they are removing any barriers from employee participation.
It’s been a few years since the concept of corporate wellness programs entered the mainstream business environment, and we’ve previously discussed some of the ways wellness programs are evolving to keep up with ever-changing technological developments. However, incentivizing participation in healthy activities where employees are often asked to share personal medical information has raised red flags on the legal front. As a result, new legislation continues to emerge in the interest of balancing an employer’s interest in incentivizing employees to participate in wellness programs with the avoidance of potential discrimination based on health status, disability, and genetic information.
In May, the U.S. Equal Employment Opportunity Commission (EEOC) finalized a rule change set to take effect next year which may impact your wellness program. Let’s take a deep dive into all of the regulations surrounding wellness programs, especially these newer laws, the background on why they exist, their implications, and how to determine if your program is compliant.
Rules to abide by
Your wellness program must comply with the most restrictive limitation of each of these laws, as they apply to your program, in order to be considered compliant. The way your program is designed determines how these laws may apply to you, and many legal sites offer downloadable tests that will help you determine this.
Below is a brief description of the scope of each set of rules. The content below should be viewed as a brief overview only and we strongly advise that you consult your broker, an HR professional, and/or lawyer to determine the impact of this legislation on your specific program. Also be sure to investigate any state specific laws as well – only Federal laws are detailed below.
HIPAA
What does it stand for? Health Insurance Portability and Accountability Act.
What’s it all about? Personal health record privacy and security.
What does it mean for wellness programs? Among many other directives, HIPAA dictates what kinds of personal health information may be collected from an employee by an employer. Adequate separation between employees who administrate the plan and those who participate is also required.
What’s the take away? Consider having a third party collect and store any personal health information you are collecting from employees as a part of your wellness program. As mentioned above, this isn’t a stated requirement, but it’s a good way to play it safe.
When must I comply? The rules described are currently in effect.
Learn more! This website is a great resource for HIPAA related information.
ACA
What does it stand for? The Affordable Care Act.
What’s it all about? Comprehensive healthcare reform.
What does it mean for wellness programs? The ACA increased limits on incentives in wellness programs. (This legislation built upon HIPAA’s regulations concerning what types of incentives or rewards may be offered and how those rewards may or may not be related to group health plan benefits, such as a reduction in premiums.) The ACA also imposes restrictions on programs that differ depending on whether the program falls under the definition of “participatory” or “health contingent.”
What’s the take away? The ACA is seeking to encourage employers to create or expand their wellness programs while ensuring that the programs are “reasonably designed.”
When must I comply? The rules described are currently in effect.
Learn more! The Department of Labor has a great fact sheet that spells out how the ACA impacts wellness programs. Also see this document that combines HIPAA and ACA wellness program-related requirements.
ADA and the ADAAA
What does it stand for? Americans with Disabilities Act and the ADA Amendments Act of 2008.
What it’s all about? Protects employees and candidates for employment from discrimination on the basis of a disability and requires an interactive process around reviewing reasonable accommodations.
What does it mean for wellness programs? The ADA and ADAAA require that all programs that, regardless of whether they are connected to a group health plan or not, obtain personal disability-related information from participants must be voluntary programs. They must also be accessible to every employee. The ADA and ADAAA also dictate how an employee’s agreement to share personal disability-related information may or may not be incentivized.
What’s the take away? The two key words here are “voluntary” and “disabilities.” Ensure that your program is voluntary by referring to #9 on this page. Additionally, find out whether your company is asking for information that is encompassed by the legal definition of “disabilities.”
When must I comply? As of the first day of the first plan year that begins on or after January 1, 2017. (For example, if your plan year begins on April 1, 2017, that is the first day your program must comply.)
Learn more! This helpful fact sheet on the EEOC website provides context for the rule changes.
GINA
What does it stand for? The Genetic Information Nondiscrimination Act.
What’s it all about? Protection of employees from discrimination on the basis of their genetic information.
What does it mean for wellness programs? GINA prohibits genetic discrimination and outlines specifics around the misuse of genetic information.
What’s the take away? The thought behind this limitation is that if an employer were to obtain knowledge that an employee’s parent or child has a medical issue that is transmitted genetically, they may conclude that the employee also has said medical issue and discriminate against that employee. Note that spouses and adopted children are exempted from this, so a health risk assessment completed by a spouse or adopted child is permissible.
When must I comply? As of the first day of the first plan year that begins on or after January 1, 2017. (For example, if your plan year begins on April 1, 2017, that is the first day your program must comply.)
Learn more! This page on the EEOC website details GINA’s impact on wellness programs.
What does this all boil down to?
Aside from doing your due diligence and ensuring that your program is not mistreating employees, ensuring your program is compliant will also protect your company from potential lawsuits. A poorly constructed program, however well-intended, may still have an impact that could be construed as discriminatory. The noble intentions involved in the creation of such a program do not absolve even a perceived slight in the eyes of the law. It is well worth your while, not only in regards to the structure and content of your wellness program, but also other areas of your company to ensure that you are not in potential hot water. Then you can safely step back and enjoy the many benefits your forethought will bring to employees and employer alike.