How To: Figure out the legal implications of workplace wellness programs
Patricia Lamberti
Workplace wellness programs can create many positive changes in employee health and office culture, but employers sponsoring a wellness program should also be aware of federal and state compliance concerns when structuring their program.
What would be some of the concerns and challenges for a small employer's relatively simple offering of a premium reduction of $100 a month for each employee that volunteered to complete a health risk assessment and coaching session?
Since the program is entirely voluntary, implementing a health risk questionnaire, or HRA, would be permitted under the Americans with Disabilities Act, which otherwise prohibits employers of 15 or more employees to make disability-related inquiries and requiring medical examinations after hire only if they are job related and there is a business necessity. If instead the employer had structured the program to require certain health standards measured through the HRA be met, like exercise targets or not smoking, the wellness program becomes a Health-Contingent Wellness Program and would involve additional requirements, such as providing reasonable alternative standards. Including disability-related questions or medical examinations limits the incentives allowed under ADA regardless of whether the program is health-contingent or not.
Beware of HIPAA concerns
Say this employer has also decided to tie the wellness program to its health plan by a reduction in the employee premium contribution. That makes the wellness program subject to the Health Insurance and Portability and Accountability Act, or HIPAA, non-discrimination rules. HIPAA generally prohibits group health plans from using health factors to discriminate among similarly situated individuals with regard to eligibility, premiums or contributions. Health factors include health status, medical condition, receipt of health care, medical history, genetic information, and disability among others. In our original example, a participatory wellness program, where participation in the wellness program only required completion of the HRA and coaching session, the plan meets the non-discrimination standard under HIPAA as long as it is made available to all similarly situated individuals, regardless of health status.
For a Health-Contingent Wellness Program to maintain compliance under HIPAA, employers are required to offer alternative standards for employees who cannot reasonably be expected to complete the program due to a medical condition. For activity-only wellness programs, health plans can require employees to have a physician verify that their health condition makes it medically inadvisable to participate in the activity-only wellness program as designed. For outcome-based wellness programs, which require the completion or maintenance of certain health outcomes, health plans can ask for a physician to verify that the initial standard is medically inadvisable or too difficult because of a medical condition.
If a wellness program is part of a group health plan, the Genetic Information Nondiscrimination Act prohibits employers from offering incentives for completing a health risk assessment that asks for genetic information. Genetic information includes genetic tests and a family medical history.
Well-intended pitfalls
Wellness program incentives could include gym membership, contributions to an employee's health savings account or an employer-sponsored health reimbursement account, both of which present additional concerns. To retain their tax-exempt status, HSA contributions must never exceed the employee's maximum contribution limits for the year. HRAs have their own nondiscrimination rules to note.
Avoiding these issues make getting a review by legal counsel critical for employers when structuring a wellness program, in order to fully take advantage of all the healthy benefits they provide.
Patricia Lamberti is manager of exchange operations at Cross Employee Benefits in Portland. She can be reached at plamberti@crossagency.com
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