According to the most recent UBA Health Plan Survey, 49 percent of firms with 200 or more employees offered wellness programs in 2016. Corporate wellness programs have been a mainstay in the workplace for decades now, and there’s no question a successful program can reap benefits such as lower healthcare costs, improved employee health and morale, and lower absenteeism rates.
Striking a balance between incentivizing your employees to participate and staying compliant with the maze of ever-evolving laws is important if you want to avoid falling into a pit of legal and financial hazards.
The incentive-for-information trap
In the past, regulations issued under HIPAA and the ACA have limited the maximum reward or penalty for employee or spouse participation in outcomes-based programs to 30 percent of the total cost of coverage. However, things could get even more complicated when you offer incentives to participate in a program that requires your employees to disclose family medical history or other genetic information. Previously, regulations under the Americans with Disabilities Act of 1990 (ADA) and the Genetic Information Nondiscrimination Act of 2008 (GINA) limited the maximum reward or penalty for employee or spouse participation in programs that require disclosure of such information to 30 percent of the total cost of self-only coverage. But in 2017, AARP sued the Equal Employment Opportunity Commission (EEOC), claiming the 30 percent limit could be a financial burden for employees and the 30 percent penalty or incentive makes the program involuntary.
More recently, a federal court vacated the 30 percent limit portion of the EEOC regulations. The court concluded that the EEOC’s basis for establishing this incentive level was not well reasoned and not entitled to deference from the court, so the rules were vacated.. However, the EEOC has not issued any further guidance, leaving employers in limbo.
How do you ensure your wellness program isn’t jeopardizing your organization’s financial wellness?
First, be familiar with the laws that apply to your wellness program, including:
- ERISA (Employee Retirement Income Security Act)
- HIPAA (Health Insurance Portability and Accountability Act)
- ACA (Affordable Care Act)
- ADA (Americans with Disabilities Act)
- GINA (Genetic Information Nondiscrimination Act)
- ADEA (Age Discrimination in Employment Act)
Your wellness program must comply with each of these laws and each has its own guidelines. But here are four tips to help you stay compliant with multiple guidelines:
- Offer a program that’s “reasonably designed” and voluntary. The purpose of a wellness program is to promote health for all employees, and it shouldn’t be an unreasonable burden for anyone to participate or receive the incentives. You must offer reasonable alternatives for qualifying for those incentives, especially for employees who have medical conditions that make it unreasonably difficult to meet specific health-related benchmarks. If employers stay at or near the original 30 percent cap under HIPAA (and also used by the EEOC), it would seem unlikely that the EEOC would challenge any such program.
- Provide proper notice to all eligible employees. The EEOC provides a sample notice online. Always include information about the incentive you’re offering for different programs, how you manage information privacy and security, and who to contact for questions. Also, make sure you are mentioning the availability of a reasonable alternative standard for any outcomes-based programs.
- Know the numbers. Recent changes in the ACA increased the maximum allowable wellness program reward, and other laws and important numbers are always evolving. Understanding these numbers is crucial for compliance.
- Use caution with family medical history questions. According to the EEOC, employers are allowed to request information about the current or past health status of an employee's family members or spouse as long as the employer follows GINA rules. Since this is a complex area, you might want to keep it simple and leave genetic services and genetic counseling out of your wellness program.
If your wellness program is out of compliance, you’re putting your organization’s financial health in serious jeopardy. Contact the corporate wellness team at Higginbotham Insurance today to learn more about keeping your employees – and your business – in good health.