HR Management

Wellness: A Win-Win … If You Avoid the Legal Pitfalls

Corporate wellness seems like a win-win, and it is, except for a few legal pitfalls. We’ll tell you what to watch for, and share a solution that will help you set up a program that is effective and legal.

Yesterday’s Advisor gave examples of wellness programs that are working. Employees are losing weight, eating more healthfully, and bringing down cholesterol and blood pressure. And that means they are also spending a lot fewer of your corporate dollars on health care.

Actually, experts suggest that wellness programs achieve ROIs of up to 300 percent. So what could go wrong?

In spite of how simple and beneficial they seem, wellness programs must be carefully structured with an eye to the legal restrictions that apply.

Many of our readers have found that BLR’s comprehensive guide, Workplace Wellness, has helped them structure such a program. Here’s some of what this acclaimed reference says about legal issues:

Wellness programs expose employers to four potential sources of legal trouble: the ADA, HIPAA, the NLRA, and state laws.


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Wellness and the Americans with Disabilities Act (ADA)

Since wellness concerns may be linked to disabilities, employers must keep the ADA in mind. The ADA prohibits employers from making medical inquiries or requiring medical examinations unless job related and consistent with business necessity, and it prohibits taking any adverse employment action based on an individual’s disability.

Fortunately, the Equal Employment Opportunity Commission has said that employers may conduct medical examinations and activities that are part of a voluntary wellness and health screening program without violating the ADA.

In designing your program, make sure that individuals with disabilities are offered alternative ways to participate if their disabilities would otherwise prevent their taking part.

Wellness and the Health Insurance Portability and Accountability Act (HIPAA)

HIPAA’s nondiscrimination provisions generally prohibit group health plans from charging similarly situated individuals different premiums, deductibles, or co-payments, or offering rewards based on a health factor (e.g., health status, medical condition, claims experience, and medical history). However, there are exceptions for wellness programs.


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If a reward is based on participation only, the following activities would be acceptable (assuming participation is made available to all similarly situated individuals):

  • Reimbursing the cost for fitness center memberships
  • Offering a diagnostic testing program that rewards participation but does not base the reward on outcomes
  • Reimbursing employees for the costs of smoking cessation programs, regardless of the outcome.

If a wellness program conditions a reward on an individual satisfying a standard related to a health factor (e.g., lowering blood pressure or losing weight), it must meet five requirements:

1. The total reward must not exceed 20 percent of the cost of employee-only coverage.

2. The program must be reasonably designed to promote health and prevent disease.

3. The program must give individuals eligible to participate the opportunity to qualify for the reward at least once per year.

4. The reward must be available to all similarly situated individuals, and must allow a reasonable alternative standard (or waiver) to individuals unable to satisfy the regular standard because of a medical condition.

5. The plan must disclose in all materials describing the terms of the program the availability of the alternatives in requirement 4.

Wellness and the National Labor Relations Act (NLRA)

A wellness program may be a “term and condition” of employment under your collective bargaining agreement and might, therefore, be subject to bargaining.

Wellness and State Laws

Several states have laws protecting the off-duty conduct of employees. Many of these are really smokers’ rights bills in disguise. Nevertheless, consider such laws before completing the planning of your wellness program.

That’s a roundup of legal issues as covered in Workplace Wellness, but the best-selling program offers much more than that. It is a comprehensive guide that takes you step by step through setting up a program, from convincing management to creating and implementing a workable plan for your workplace. The guide also includes a vast collection of ready-to-use forms, handouts, and checklists.

If you’d like to examine Workplace Wellness: Healthy Employees, Healthy Families, Healthy ROI on a no-cost, no-obligation basis for 30 days, we’ve arranged for you to do so. Click here and we’ll be happy to set it up.


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