Is your wellness program on the right side of the law?

While employee wellness programs have been around for almost two decades, it’s only been in the last five or so years that these efforts have gained traction, with little to no clear rules or guidance surrounding these programs. That is until recently. The flurry of court cases highlight the risks and complexities of introducing wellness programs that may unwittingly fall afoul of any number of relevant laws.

The Health Insurance Portability and Accountability Act included a broad clause prohibiting discrimination due to a health factor; however, it wasn’t until the Affordable Care Act – when wellness provisions came into effect – that this clause was amended and clarified. The jointly proposed rules were designed to reflect changes to existing provisions made by the ACA and to encourage appropriately designed, consumer-protective wellness programs.

The US Equal Employment Opportunity Commission has presented the courts with four cases against employers with “illegal wellness programs,” the latest being Honeywell. The intricacies of this case and what will inevitably be future cases bring to the surface the major concern which has been in the back of every benefit manager’s mind: How really does one balance HIPAA and the ACA with the Americans with Disabilities Act, the Genetic Information Nondisclosure Act A and other functions of the Civil Rights Act?

Also see: EEOC sues second employer over wellness program

With the first two cases, the court focused on whether or not the programs were truly voluntary and employees could not be required to participate in medical tests or questions not related to their jobs and large penalties could not be imposed for employees who choose not to participate. For example, Orion Energy required those who did not participate to pay the entire cost of their health care, and even fired one employee when she wouldn’t participate.

Alternatively, Honeywell and the standards they hold their employees to throughout their wellness program are not as extreme. How the courts choose to rule on these standards could provide the first true insight as to where the courts are drawing the line between “voluntary” programs and those that are not. In Honeywell’s program, those employees who do not participate in a questionnaire and biometric screening are assessed a $500 surcharge on their medical plan costs, can lose $1,500 in company contributions to health savings accounts and be docked $2,000 more in tobacco-related surcharges, according to the EEOC’s complaint. (The case is Equal Employment Opportunity Commission v. Honeywell International Inc. 14-cv-4517, U.S. District Court, District of Minnesota (Minneapolis).)

Also see: Newest EEOC wellness program lawsuit draws further industry ire

The EEOC is contesting this program based on the ADA, which bars employers from compelling medical examinations that aren’t job related, and GINA, stating the biometric screening may also breach a federal law prohibiting discrimination based on genetic information. These claims infer the EEOC finds no protection in the ACA guidelines.

After hearing arguments, the U.S. District Court denied the agency’s request to block the company from assessing the surcharges. While the U.S. District Courts prepare to hear arguments, the decisions made in that court could have a large and lasting impact on corporate wellness.

Also see: Industry lauds EEOC court decision, wellness battle continues

Questions employers must ask to ensure they are on the right side of the law include: Are penalties allowed in any amount for lack of participation? If such penalties are allowed, is the court going to decide on what can be considered a reasonable value? Finally, and most importantly, does adherence to ACA guidelines infer a company is also complying in terms of the ADA and GINA?

In the wake of these new cases, it’s important to speak to an expert when moving toward implementing a wellness program. There is so much gray area involved in these laws individually, let alone when considered in conjunction with one another.

Building a program or using a provider that takes a conservative approach and is at a minimum cognizant and educated on all the regulations in play could save a company from a headache in the future. Until the courts set a precedent for how these laws are to be interpreted with one another, the best anyone can do is provided a reasonably designed wellness program with the goal of promoting wellness and encouraging all employees to participate. Looking for proof that it works for all ages and health levels is important, as well as always seeking legal counsel in making a wellness provider selection.

Lauren Chana, Esq., is assistant counsel, The Vitality Group, a wellness rewards program provider.

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