Wellness programs seem like a simple, appealing way to reduce skyrocketing healthcare costs. But be aware that some programs can run afoul of federal and state laws.
Wellness programs encourage employees to adopt or maintain healthy lifestyles—or at least take the first steps toward learning about healthy alternatives.
Choosing healthier alternatives to reduce cholesterol levels, for example, may reduce an employee’s chances of suffering from heart disease.
Less disease means you can lower your plan utilization, thus lowering the cost of health benefits, and in turn, increasing profits. There are additional benefits as well, such as increased productivity, fewer workers’ compensation claims, better attendance, and improved morale.
However, wellness programs must be carefully crafted. For example, a wellness program that offers financial incentives to employees who walk a certain number of miles per week may discriminate against employees whose disabilities preclude them from reaching the target number.
Be sure to have your legal counsel review your wellness program before it is presented to employees.
Learn the key differences between the California safety rules and the federal with our brand-new, comprehensive report.
Key Legal Issues
There are several federal and state laws that affect the design of a wellness program.
For example, the Americans with Disabilities Act (ADA) requires you to offer a reasonable accommodation to an employee with a known disability, and it prohibits you from making medical inquiries or requiring medical examinations (unless job-related and consistent with business necessity). It’s also unlawful under the ADA to take any adverse employment action based on an individual’s actual or perceived disability.
The Equal Employment Opportunity Commission (EEOC) offers some guidance with regard to the ADA’s restrictions on medical inquiries and examinations. Under the guidelines, you may conduct medical examinations and activities that are part of a voluntary wellness and health screening program.
Therefore, offering employees the opportunity to voluntarily participate in health screening programs for high blood pressure and cholesterol monitoring are not likely to violate the ADA, as long as there is no penalty (economic or otherwise) for not participating. You must treat any information acquired as a confidential medical record.
The Health Insurance Portability and Accountability Act (HIPAA) makes it illegal for group health plans to base eligibility on the following health-related factors: health status, medical condition (including physical and mental illnesses), claims experience, receipt of healthcare, medical history, genetic information, evidence of insurability (including conditions arising out of domestic violence), or disability.
Therefore, under HIPAA’s provisions, a group health plan can’t require an individual to pay a greater premium on the basis of any “health status-related factor.”
However, adopting a wellness program that offers incentives for behavior, rather than health status, would likely be in compliance with the law. Group health insurance plans are permitted to provide discounts on premiums, or to adjust co-payments or deductibles, for employees who participate in a “bona fide wellness program.”
Don’t make a costly—and preventable—safety mistake by assuming that Cal/OSHA’s rules are the same as OSHA’s: They’re not. Learn the crucial differences with our new report.
The Genetic Information Nondiscrimination Act (GINA) generally prohibits employers from requesting, requiring, or purchasing genetic information about job applicants and employees, or their family members, at any time. Genetic information includes information about an individual’s genetic tests, genetic tests of a family member, and family medical history. (State law prohibits inquiring about the existence or nature of “genetic characteristics.”)
The law does, however, recognize six limited exceptions. Under one of them, an employer can acquire genetic information about an employee or family member when it offers health or genetic services, including wellness programs, on a voluntary basis.
An employer, through its third-party or in-house health or genetic service providers, can use that information voluntarily provided to guide an individual into an appropriate disease management program.
Under this exception, the individual receiving the services must give prior voluntary, knowing, and written authorization. Still, while individualized genetic information can be provided to that individual and his or her health or genetic service providers, it may only be provided to the employer in aggregate form, lumped together with other individuals’ information in a way that doesn’t reveal the identity of any participants.
Employers that have negotiated a collective bargaining agreement with a union are required by the National Labor Relations Act (NLRA) to bargain over “wages, hours, and other terms and conditions of employment.” Therefore, a union could claim that a wellness program is a term or condition of employment that mandates bargaining.
You should also check the governing collective bargaining agreement to see if a wellness program falls under a subject the union has agreed to negotiate. For example, a bargaining agreement may mandate negotiation over the amount of employee-paid insurance premiums but not health insurance or other employee insurance benefits.
There are also state laws protecting the off-duty conduct of employees. Some laws are limited to smoking, the use of tobacco products, or the use of “lawful products,” but others, including California’s, have broader coverage that includes any lawful activity occurring away from the employer’s premises during nonworking hours.
Cal/OSHA vs. Fed/OSHA: A Comprehensive Guide To the Crucial Differences
Whether you’re a California employer looking to expand into another part of the country or an employer from outside California planning to expand your business into the state, California’s occupational safety and health program and rules are likely to be an issue for you.
California: Not Like Everywhere Else
California is one of 26 states that run their own OSHA programs. In many of these so-called “state-plan states,” the rules mirror the federal rules almost exactly; the state merely holds the responsibility for enforcing them.
California, though, is one of a handful of state-plan states that has created a program that differs in many important ways from federal OSHA’s program, both in its administrative and regulatory structure and in its regulatory coverage.
Ignorance of these differences can put you at risk for costly government citations—even if you have the best intentions in the world.
Extensive Analysis of the Key Differences Between California and Federal Safety Rules
Our exclusive Safety Management & Compliance Report, Cal/OSHA vs. Fed/OSHA: A Comprehensive Guide To the Crucial Differences, extensively reviews the differences between Cal/OSHA and federal OSHA that are most likely to affect employers operating in both jurisdictions.
This guide identifies and discusses—in easy-to-read plain English—the differences in Cal/OSHA’s and federal OSHA’s regulations as well as differences in the two agencies’ approaches to:
- Standard structure and applicability
- The general duty clause
- Injury and Illness Prevention Programs
- Recordkeeping and reporting requirements
- Hazardous chemicals
- Infectious diseases
- Permit-required confined spaces
- Ergonomics
- Heat-related illness
- Sanitation
- Agriculture
- Code of safe practices
- Multi-employer worksites
- Young workers
- Enforcement practices
- Required postings
- Citations
- Appeals
- And more!
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Re GINA and the offering of financial incentives for the completion of health risk assessments that include questions about family medical history or other genetic information under certain conditions, I’ve read that the best approach is to use a two-part form. The first section has the questions that don’t seek genetic information, so the financial incentive would depend on completion of this section only. The second section has the questions about family history or other genetic information and must be clearly marked as optional.
Re GINA and the offering of financial incentives for the completion of health risk assessments that include questions about family medical history or other genetic information under certain conditions, I’ve read that the best approach is to use a two-part form. The first section has the questions that don’t seek genetic information, so the financial incentive would depend on completion of this section only. The second section has the questions about family history or other genetic information and must be clearly marked as optional.