Wellness Program Employer Obligations

Wellness Programs and Compliance

Employers these days may have found that just offering basic medical, dental and vision benefits aren’t enough to attract and keep talent. Many look to offer additional incentives for employee wellness and health. Value adds such as wellness programs, fitness, onsite check-ups, biometric screening, employee assistance programs  are just a few of these optional programs.

Establishing these additional programs is a great way to encourage healthy lifestyles with employees, providing tools and resources and incentives for participating in these activities. However, they may also come with regulatory compliance measures under HIPAA, the ACA, the ADA or GINA (Genetic Information Nondiscrimination Act) that require employers to comply with additional rules to protect employee rights and privacy.

In May 2016, the EEOC issued two final rules the offered guidance to employers about how their wellness programs should comply with the nondiscriminatory acts under ADA and GINA. These new rules went into place effective January 1, 2017. According to an article in SHRM (May 2016), the new rules “govern the extent to which employers may use incentives to encourage participation in wellness programs connected to group health plans without being considered involuntary.” And in order for a wellness program to be considered voluntary, the employer must not require or deny or limit coverage under its company health plan for not participating in the wellness.

Most wellness programs fall under one of three categories: participation, activity or outcome. If the employer does offer these wellness programs, there are five requirements that may need to be met in terms of legal compliance:

First, the wellness program may not exceed applicable incentive limits based on the various established Acts. For example, under HIPAA and ACA, the limit is 30% of the total cost of coverage. Secondly, that the wellness program is designed to promote health and prevent disease. So in essence, the primary focus is about the well-being of the employee or their family members.

The third requirement is that it offers an opportunity to qualify for the reward at least once per year. The fourth obligation is that it offers a reasonable alternative standard (RAS) for those who perhaps can’t meet the original standard due to a physical disability and you have to disclose to them that the RAS is available.

For example, let’s say your reward program is based on the number of steps or an annual walking requirement. If an employee is unable to walk, then the employer must offer up a reasonable alternative to meeting this goal.

And the last obligation is that all of the wellness options are voluntary and not a requirement in order that the employee be eligible for other health care programs.

Wellness programs can be an excellent win-win approach for employees and the employer. However, before establishing or offering any value-add plan, please consider your legal obligations, as well as consult an HR or benefit broker to discuss your options.