Dual Fixes for Wellness Programs Are Causing Double Trouble for Employers
Tuesday August 16th, 2016
Estimated time to read: 1 minute, 45 seconds
Workplace wellness programs are a great way for employers to improve their workers’ health habits. Employees like the rewards they receive and the feeling that they are partnering with their company toward a larger goal. And employers like the reduced sick-leave days and lower insurance costs that can result from such a partnership.
But there are two legal problem areas that can keep a wellness program from reaching these desired goals: privacy and discrimination.
For one thing, most employers that offer wellness programs for their workers also have group health plans for those same workers. So employers have to make sure their wellness efforts don’t expose any protected health information.
The other problem is that because wellness plans are benefit plans, they are subject to federal discrimination laws. So employers have to make sure their incentive programs don’t unfairly exclude specific classes of workers based on age, race, or disability.
To help alleviate the privacy problems, the Department of Health and Human Services has provided employers with clearer instructions about where to draw the line between their workers’ private health information and the safer, more public-ready data that wellness plans typically share. These instructions have been codified in regulations to the Health Insurance Portability and Accountability Act (HIPAA) and the Affordable Care and Patient Protection Act (ACA).
As for the discrimination concerns, the Equal Employment Opportunity Commission issued rules in May that amend the Americans with Disabilities Act (ADA) and the Genetic Information Nondiscrimination Act (GINA). The rules explain how employers can offer inducements for wellness plan participation while ensuring that they don't coerce employees to submit to involuntary medical exams or to divulge genetic information or medical history, which could trigger discrimination lawsuits.
Done and done, right? Not quite. Unfortunately, these separate solutions have now created one big, new problem: The two sets of regulations often contradict each other, leaving employers confused about which guidelines to follow when.
For example, the HIPAA/ACA rules set a limit—up to 50 percent of insurance costs—on the financial inducements that employers can give employees under certain types of wellness plans.
The ADA/GINA rules also let employers offer insurance discounts as inducements—but only up to 30 percent, and that limit applies to all types of wellness benefits.
These and other discrepancies haven’t been lost on the employment community. Since the EEOC rules were made public in May, they have drawn criticism from business owners, management attorneys, the U.S. Chamber of Commerce, and even some Congressional lawmakers.
In the Senate, two Republicans have introduced bills to block the EEOC regulations from taking effect in 2017, claiming that they pose too much of a disincentive for employers to offer wellness programs.
Whether these differences can be ironed out remains to be seen. In the meantime, employers will have to pull double duty to make sure their wellness programs are as legally healthy as they can be.
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