Many employers are implementing wellness programs to improve employee health and create a healthy work environment. These programs are valuable because improved employee health leads to decreases in absenteeism, increased productivity and lower health care costs. Wellness programs vary greatly. In the past, wellness programs often included discounted gym memberships, educational materials and changes in vending machine selections. Wellness programs are becoming far more sophisticated and now often include health risk assessments and biometric screenings which test employees' blood pressure, cholesterol, glucose levels and body fat. Many programs also include smoking cessation programs, weight loss programs, walking programs and personal counseling sessions. These programs have been credited with helping employees live healthier lives and even saving lives.
While these programs are bringing positive results to the workplace, employers must be careful to make sure their programs comply with numerous state and federal laws including but not limited to: Age Discrimination in Employment Act ("ADEA"), the Americans with Disabilities Act as Amended by the ADA Amendments Act of 2008 ("ADA" and "ADAAA") , the Genetic Information and Nondiscrimination Act ("GINA"), the Employee Retirement Income and Security Act ("ERISA") as amended by the Health Insurance Portability Accountability Act of 1996 ("HIPAA"), state employee privacy laws, and state laws against lifestyle discrimination.
According to Equal Employment Opportunity Commission guidelines, wellness programs are permitted under the ADA as long as they: (1) are voluntary; (2) any employee can participate regardless of disability; (3) the information is not used for the purpose of limiting health insurance or advancement in employment; and (4) any and all medical records acquired as part of the wellness program are kept confidential and separate from personnel records. A wellness program is considered voluntary as long as an employer neither requires participation nor penalizes employees who do not participate. Programs are generally considered voluntary if the incentive to participate does not exceed 20 percent of the cost of the employee only or employee and dependent coverage under employer provided health plans. Proposed ADAAA regulations also require an employer to provide reasonable accommodations to allow all employees to participate in wellness program offerings.
GINA prohibits group health plans and insurers from collecting genetic information, including but not limited to family medical histories, as part of a wellness program before or in connection with enrollment or at any time for underwriting purposes. GINA also prohibits group health plans from adjusting premiums or contributions on the basis of genetic information. Additionally, GINA prohibits employers from collecting genetic information (including family medical history) as part of a health risk assessment for a wellness plan if that information is linked to any incentive offered through the wellness plan. Thus, if a health risk assessment is part of an employer's wellness program and there is an incentive (financial or otherwise) for participating in the program, then the health risk assessment should not request any genetic information or family medical history. An employer may include an addendum to the health risk assessment which requests family medical history, but such addendum must state that employees who do not fill out the addendum will still receive the incentive for completing the rest of the health risk assessment.
HIPAA prohibits group health plans and plan sponsors from using certain health factors to discriminate against workers when determining enrollment eligibility or premium contribution. If an employer's wellness program is linked to the employer's health plan, then it must comply with HIPAA's nondiscrimination provisions. There are two types of HIPAA compliant wellness programs: (1) participation-only wellness programs where an employee does not need to meet any requirements or standards; or (2) standard-based wellness programs which must satisfy additional requirements. Standard-based wellness programs are permitted if: (1) the individual incentive to participate does not exceed 20 percent of the total cost of employee-only coverage; (2) the program is reasonably designed to promote good health and disease prevention; (3) the individual must have the opportunity to qualify at least once a year; (4) a reasonable alternative standard or waiver of the otherwise applicable standard must be available for those with medical conditions that make satisfaction of the applicable standard unreasonably difficult or for whom it is medically inadvisable to attempt to satisfy the otherwise applicable standard; and (5) materials describing the wellness program must disclose the availability of the reasonable alternative standard or waiver. Participation-only programs may include: reimbursement for membership at a fitness club or weight management program; diagnostic testing program that provides reward for participating rather than outcomes; programs that encourage preventative care by waiving co-payments (such as waiver co-payments for prenatal care appointments); and programs that reimburse employees for the cost of a smoking cessation program without regard to whether the employee quits smoking.
Employers should also look into state laws prohibiting discrimination based on lifestyle choices and make sure that information or results obtained in connection with wellness programs are kept confidential and not used as a basis for making employment decisions. Employers should also be careful to ensure that any incentives for participating in wellness programs or meeting wellness standards do not have an adverse impact on older workers to be compliant with the ADEA.
Although there are many issues for employers to be aware of when implementing employee wellness programs, such programs have been successful at reducing costs and increasing employee morale. Additionally, the recently signed Patient Protection and Affordable Care Act has designated significant funds to provide grants to small employers who establish wellness programs. The funds will be available starting in 2011. Under the Patient Protection and Affordable Care Act, starting in 2014, employers may offer incentives of up to 30 percent of the cost of coverage for participating in wellness programs.
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