Yesterday’s Advisor talked about smoking bans. Today we’ll discuss antismoking “bribes”—more politely, incentives–and a guide that has helped thousands of companies to develop wellness programs of their own.
Under federal law, employers may establish employee health assessment and promotion programs as long as the programs meet the following requirements:
- Employee participation is voluntary;
- Information obtained from the examination is confidential; and
- Information from the examination is not used to discriminate against any employee.
If a participant’s ability to achieve a reward is limited because of the participant’s disability, the program must provide an alternative standard for the employee to meet.
To encourage participation in wellness programs, employers generally offer incentives. It’s important to present these as incentives [toward wellness success] rather than [as something withheld] as a penalty for failure to participate, says attorney Antoinette Pilzner, a shareholder in the Ann Arbor, Michigan, law firm of Butzel Long, P.C. Pilzner made her comments in our sister publication, the HR Manager’s Legal Reporter.
There is no limit to the size of the rewards you can offer if they are outside the benefits program. However, rewards of cash or cash equivalents (gift cards, gift certificates) or noncash rewards that are not de minimis (IRS legalese for ”too small for us to care about”) generally must be reported as taxable compensation to the employee.
Wellness is win/win for employers and employees, and BLR’s new Workplace Wellness shows you how to achieve it, step by step. Check it out at no cost or risk.http: Click for info
However, if the program is part of the health plan (for example, if the incentive involves waiving co-pays, eliminating deductibles, or reducing premiums), and the participants’ ability to achieve a reward is based on a health factor (like losing weight or controlling cholesterol), rewards must meet the following five criteria, as outlined in BLR’s guide, Workplace Wellness:
1. The amount of the reward must be limited to 20 percent of the cost of coverage, for both employees and dependents. The 20 percent limitation applies to all of a plan’s wellness programs that require individuals to meet a standard related to a health factor.
2. The plan must be reasonably designed to promote health or prevent disease.
3. Individuals who are eligible to participate must be given a chance to qualify at least once per year.
4. The reward must be available to all similarly situated individuals and the program must offer a reasonable alternative standard if it is unreasonably difficult or medically inadvisable to attempt to satisfy the standard.
5. The plan must disclose the availability of a reasonable alternative in all plan materials describing the program.
A Tool to Build Your Wellness Program
However you run them, studies continue to show that well-structured and well-run wellness programs can make employees more productive and less expensive. But the key words are well-structured and well-run, because poorly structured programs just spin wheels—no health benefit and no cost savings either.
Many readers have told us that BLR’s comprehensive guidebook, Workplace Wellness: Healthy Employees, Healthy Families, Healthy ROI has helped them get programs up and running that achieve wellness objectives with a great ROI, while avoiding the legal hassles that, these days, seem to attend any worthwhile venture in HR.
Corporate wellness programs show great ROIs. And as one expert noted, there’s little downside—even small improvements make a difference. Check out Workplace Wellness. Read more
It’s 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 that both structure your program and provide the metrics to prove its effectiveness to management’s satisfaction.
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 can arrange for you to do so. Click here and we’ll be happy to set it up.