Wellness Programs for a Healthy Workplace

At the Fifth Annual Gibbons Employment & Labor Law Conference for clients of the firm, we presented a program entitled “Wellness Programs for a Healthy Workplace.” Cathy Kenworthy, President and CEO of Interactive Health, discussed the business case for implementing wellness programs in our workplaces, while I addressed the numerous laws impacting such programs. Below are some top takeaways from our presentation:

• Implementing a wellness program can result in soft dollar and hard dollar benefits, as well as improve workplace culture. Lowering the cost of health care is just one of the tangible benefits of a wellness program. Employers also see improvements in productivity and work quality and an increased ability to recruit and retain employees. Interactive Health’s data illustrates health improvements in all risk levels by year two of a wellness program.
• The business principles associated with what makes for an effective wellness program are the very same principles that are reinforced with emerging case law, rules and the regulatory environment. Interactive Health’s data showed that 95% of the programs implemented among their client base both achieve significant impact and are “green” with regard to legal risk, i.e., they do not cross into any of the issues recently pursued in courts.

• As one example, wellness programs with incentives impact participation; the greater the incentive, the greater the participation. Best practices for programs with an incentive are that the incentive provides a positive encouragement (“carrot”) for participation rather than a punitive consequence (“stick”).
• Strong legal advice should always be a part of the program design effort. Wellness programs must comply with laws including the Health Insurance Portability and Accountability Act (HIPAA), the Affordable Care Act (ACA), the Americans with Disabilities Act (ADA) and the Genetic Information Nondisclosure Act (GINA).
• HIPAA and ACA permit rewards and penalties under only certain conditions. For example, non-discriminatory health-contingent programs, those that require individuals to meet a specific standard related to their health in order to obtain a reward, have detailed requirements under ACA.
• The ADA permits disability-related inquiries or medical examinations only in very limited circumstances, such as in the context of voluntary medical examinations and activities which are part of an employee health program or relative to a bona fide employee benefit plan. Because the concept of “voluntary” was creating confusion, the Equal Employment Opportunity Commission (EEOC) has issued proposed rules, now in the “final rule stage,” to clarify requirements and conditions for voluntary programs. These include: a) a prohibition on requiring employees to participate in order to maintain health coverage or their employment; b) a requirement that employers provide clear notice to employees concerning what medical information will be obtained, how it will be used, and how it will be maintained as confidential; c) a limitation on permitted incentives; and d) the availability of reasonable accommodations within the program for employees with disabilities.
• GINA also permits employers to obtain genetic information only in very limited circumstances, similar to the ADA, such as when the employee voluntary provides the information or in the context of a group health plan that offers a wellness program. Because many employees have spouses covered by their employer health plans, the EEOC recently issued proposed rules explaining the conditions and permissible incentives related to health status information provided for an employee’s spouse.
• When considering your wellness program, consider: establishing objectives for your program, evaluating what activities and information are necessary for the program’s objective, ensuring information collected will be maintained confidentially, evaluate what incentives are legally permitted – aim for reasonable rewards/incentives that do not result in significant penalties, build in the opportunity for reasonable alternatives and accommodations, and either ensure the plan is voluntary (taking into consideration the legal requirements) or part of a bona fide employee benefit plan.
• Watch for future Gibbons Employment & Labor Law blogs for updates on the EEOC’s above-noted proposed wellness program rules for the ADA and GINA.