Checklist for Avoiding Wellness Program Legal Entanglements

Jones, who is a partner at Pillsbury Winthrop Shaw Pittman LLP in Los Angeles, offered his wellness guidance at a recent Benefits Boot Camp sponsored by BLR and HRHero.

Lawsuit Avoidance Checklist for Your Wellness Program

• Keep corporate wellness and employment decisions separate. Achievement on a health program shouldn’t be a basis for promotion, for example.
• Use a third party, such as your insurance provider, to run your wellness program. They have more experience in designing programs, and all of the protected health information goes to them.
• Have your health insurance provider do your program—it’s simpler and all the protected health information is in one place.
• Limit participation to participants in your health plan.
• Include the wellness program in your Summary of Plan Benefits and other health plan materials.
• Focus on voluntary wellness activities, such as employer-paid annual physicals, on-site exercise facilities, and smoking cessation programs. (If you condition rewards on achieving a health goal, you have to put a lot of protections in and offer alternatives.)
• Aim for participation, not performance.
• If you do offer a reward for meeting a health standard, make an alternative available for employees who cannot meet the standard.
• Enter into a business associate agreement with your wellness provider, and include an indemnity for any failure to safeguard PHI or genetic information.
• If you must request medical information for an employee, direct the individual or provider not to provide genetic information.
• If you have a health risk assessment, identify questions relating to family medical history as “optional.”
• Train workers who implement and manage your corporate wellness programs to comply with the law and company policy.

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Watch Out for Tax Consequences

Don’t forget the tax consequences of your wellness program (for both you as the employer and your employees)! says Jones.

• Rewards that take the form of cash or cash equivalents (for example, gift cards) are taxable, and must be reported on the employee’s W-2.
• Discounts or waivers of premiums, copayments, or deductibles or employer contributions to HSAs and FSAs are generally not taxable.
• Other rewards are generally taxable (for example, exercise equipment, weight-loss club memberships).
• However, “nontaxable fringe benefits” (for example, employee discounts on employer products, on-site gyms) are not taxable.

Employers should obtain guidance from a tax professional before offering a wellness program, as tax laws are complex and change frequently.

Taxation of fringe benefits—just one more daily challenge. In HR, if it’s not one thing, it’s another. Like FMLA intermittent leave, overtime hassles, ADA accommodation, and then on top of that, whatever the agencies and courts throw in your way.

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Privacy. The director of information services can override any individual password and thus has access to all e-mail messages in order to ensure compliance with company policy. This means that employees do not have an expectation of privacy in their company e-mail or any other information stored or accessed on company computers.

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E-mail review. All e-mail is subject to review by management. Your use of the   e-mail system grants consent to the review of any of the messages to or from you in the system in printed form or in any other medium.

Solicitation. In line with our general policy, e-mail must not be used to solicit for outside business ventures, personal parties, social meetings, charities, membership in any organization, political causes, religious causes, or other matters not connected to the company’s business.

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