Employer wellness programs intersect various state and federal laws, depending on what they aim to achieve, and an understanding of today’s uncertain regulatory environment is essential for HR execs involved with future implementations.
The current regulatory environment can be best described as a clash between federal and social policies toward wellness and the protection of individuals against discrimination, including disability discrimination and genetic information discrimination. In this first of two posts I share the latest insights on wellness and health reform from Ed Fensholt, Lockton’s senior vice president and co-director of Compliance Services.
While health reform improves the game, the state of wellness programs is complicated by the Equal Employment Opportunity Commission’s uncertain regulatory stance and the issues connected with various types of wellness programs, from reactive disease management and employee assistance programs, to proactive programs like health screenings, preventive care, smoke cessation, weight loss and cardiovascular improvement. The EEOC conducted public hearings recently regarding what its response should be to typical corporate wellness programs, so EEOC guidance may be imminently expected.
HIPPA prevents a health plan from discriminating based on eligibility, benefits or premiums based on health conditions, claims history, e.g., smoker/non-smoker rates. But HIPPA privacy and security rules also limit the use and disclosures of protected health information, which can create issues when wellness vendors need to share certain information with employers.
ADA prohibits discrimination on the terms and conditions of employment—including benefits—based on a protected disability, and the ADA Amendments Act of 2008 significantly expanded the universe of protected disabilities.
GINA prevents employers or health plans from discrimination based on genetic information. In practice, GINA regulations have largely prohibited the collection of any family medical history.
ERISA imposes a variety of regulations, including COBRA rights, on benefits programs that supply health care. Wellness programs are affected, since they often supply health care.
Mental Health Parity is another consideration related to six benefit classifications. Health plans may not have more restrictive financial requirements or treatment limits for mental health or substance abuse than for medical or surgical care in these six categories. This intersection of law creates issues when an employer’s EAP is the gateway for accessing a plan’s mental health or substance abuse benefits, or where smoke cessation program have a special cost-sharing arrangement.
State Laws also come into play with regard to disability discrimination, smokers’ rights, and medical privacy, creating problems with wellness programs that aren’t shielded by ERISA preemption.
Wellness Programs and Issues
For example, common wellness programs like health risk assessment are typically incentive-based, awarding cash, gift cards, or health plan premium discounts in exchange for participation. But this poses no HIPPA risk because the reward is based on participation in the health risk assessment. Conversely, if the reward related to the health plan and was made contingent on a health condition non-discrimination laws would apply.
ADA also presents a potential conflict. Employee medical inquiries are generally not permitted unless voluntary, and under the ADA an inquiry is not considered voluntary if there is a penalty for non-participation. But the ADA does not reach “bona fide benefit plans,” and in a recent federal court case involving Broward County, Florida, the court concluded that a routine health risk assessment that penalized employees by increasing health insurance premiums a few dollars per paycheck, where the employee declined to participate in the assessment, was a “bona fide benefit plan” exempt from ADA scrutiny.
What’s more, GINA regulations consider family medical history to be genetic information that employers can’t collect at open enrollment, or for an incentive at any time. Many wellness vendors have simply stopped asking for family medical history.
Which issues are most pressing for your organization’s wellness program? Share your comments below. Please be sure to check out post number two on this topic, health plan-related incentives and penalties based on health status.
For more information on how Lockton can help your organization identify the best solution for your employee health-care benefits program, please contact me at firstname.lastname@example.org.