With increasing employee health costs, many employers are adopting or expanding their health wellness programs. In the retirement plan area, some employers are also adopting programs to assist their employees with managing their finances and planning for retirement (sometimes referred to as "financial wellness programs"). This article is limited to health wellness programs and such programs will herein be referred to as "wellness programs".
A wellness program is broadly defined as any program of health promotion or disease prevention. Wellness programs encompass a wide range of activities which may or may not be treated as a part of the employer's group health plan. A common element to many wellness programs is a participant's receipt of a reward for either participating in the program or meeting a specific health outcome.
Examples of wellness programs include: (1) employer provided fitness facilities or the employer's reimbursement of all or a portion of the membership costs to a fitness facility; (2) educational programs (e.g., written communications, on-line programs or meetings on health topics such as exercise, diet, stress reduction, substance abuse, etc.); (3) smoking cessation programs; (4) employer sponsored social events and sports (e.g., healthy cooking classes, softball and basketball teams, walking or exercise programs and running clubs); (5) diagnostic testing programs; (6) health risk assessments; (7) employer provided preventive care (e.g., employer provided flu shots); (8) workplace modifications (such as increasing healthy food options at canteens or dining facilities, offering stand up desks, and programming elevators to skip floors); (9) activity tracking or activity challenges through wearable monitoring devices; and (10) disease management activities.
Generally, the legal analysis applicable to a wellness program focuses on whether the wellness program is part of the employer's group health plan. If the wellness program is part of a group health plan, the wellness program: (1) is subject to the privacy, security, and breach notification rules under the Health Insurance Portability and Accountability Act ("HIPAA"); and (2) must comply with the HIPAA prohibitions against discrimination based on a health factor.
The HIPAA privacy rule regulates the uses and the disclosures of protected health information ("PHI"). The HIPAA security rule requires covered entities (such as a group health plan or health care providers) and business associates (i.e., certain persons providing services to a covered entity) to implement administrative, physical and technical safeguards to secure electronic PHI. Finally, the HIPAA breach notification rule requires covered entities to notify affected individuals, the Department of Health and Human Services, and, in some cases, the news media of the improper disclosure of PHI. When a wellness program is offered as part of a group health plan, the individually identifiable health information collected from or created about the participants is PHI and protected by the HIPAA privacy, security, and breach notification rules.
In addition, HIPAA prohibits a group health plan from discriminating with respect to eligibility for plan participation, eligibility for benefits, or the amount of premiums and contributions based on any health factor (e.g., health status, medical conditions, claims experience, receipt of health care, medical history, genetic information, evidence of insurability, and disability). Alternatively, the HIPAA regulations also permit a group health plan to provide more favorable eligibility and cost sharing rules to individuals with adverse health factors. Significantly, the HIPAA regulations provide an exception from the health factor discrimination prohibition for wellness programs that meet certain eligibility, size of reward, reasonable design, reasonable alternative standards and notice requirements. When a wellness program is offered as part of a group health plan, the components of the program need to satisfy the HIPAA regulations on nondiscriminatory wellness programs. See 29 CFR Section 2590.702.
While a wellness program that is not a part of a group health plan is not subject to HIPAA, the program may be subject to state laws. In addition, wellness programs must comply with other federal laws, if applicable (such as the Americans with Disabilities Act and the Genetic Information Nondiscrimination Act).
Most of the employers (that I have advised) treat their wellness program as part of their group health plan. In these situations, the analysis of a wellness program's HIPAA compliance is relatively straight forward (i.e., confirming the program's satisfaction of the applicable HIPAA requirements). As such, until recently, I haven't viewed wellness programs as a fruitful topic for an article.
However, a February 1, 2018 report by the Interdisciplinary Center for Health Workplaces at the University of California, Berkeley (in collaboration with the Transamerica Center for Health Studies) contains an interesting framework for analyzing wellness programs. This report entitled "2018 Employer Guide: FINDING FIT: IMPLEMENTING WELLNESS PROGRAMS SUCCESSFULLY" (the "Guide") is designed to assist small and medium organizations in implementing wellness programs.
Significantly, the Guide: (1) provides a framework for categorizing wellness programs based on the level of employer involvement, (2) identifies employer factors or characteristics which either facilitate or create a barrier to a successful wellness program; (3) contains an assessment checklist which an employer may use to determine the employer's "fit" with a particular category of wellness program activities; and (4) provides suggestions on how to increase participation in wellness programs.
In addition, the Guide includes a table of external resources dealing with "assessments, tool kits, planning guides, educational articles, wellness technology" and other supplemental sources (organized under the following topics: Physical Activity, Nutrition and Weight Management, Tobacco Cessation, Stress Management, Clinical Preventive Screening/Biometrics, High Blood Glucose Management, Sleep Hygiene, Social Connectedness, Alcohol Management, and other resources).
Hopefully, this article provides an introduction to health wellness programs and identifies a valuable resource for employers who are considering adopting or who maintain a wellness program. In future articles, I intend to address: (1) the Guide's categorization of wellness programs by employer involvement versus HIPAA's categorization by participatory or health contingencies, (2) the Guide's identification of certain factors which either facilitate or give rise to a barrier to the success of a wellness program; and (3) the Guide's suggestions for increasing participation in wellness programs.