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By now you have likely heard about wellness programs and their increasing popularity. An employee wellness program is any corporate-sponsored program designed to boost the overall wellness of a company in an effort to reduce medical costs and increase employee productivity and morale. Other benefits may include reduced turnover, fewer sick days taken, tax incentives for small business owners, increased employee engagement, enhanced recruiting power and stronger camaraderie among employees. A new report by Grand View Research, a market research and consulting company, reports that the size of the global corporate wellness market is expected to reach 97.4 billion by 2027, expanding at a compound annual growth rate of 6.9%.

Whether you currently have a wellness program in place, or are considering implementing one, careful consideration should be given to the program’s design and operation to ensure compliance obligations are met under a number of different laws including, but not limited to, 
the Americans with Disabilities Act (ADA), the Affordable Care Act (ACA) and the Genetic Information Non-Discrimination Act (GINA). As promised in Smart HR’s Wellness Programs – A Healthy Workforce and Bottom Line blog, here is an overview of the ADA as it relates to wellness programs.

The Americans with Disabilities Act (ADA) and Wellness Programs

The ADA states an employer cannot discriminate against a qualified employee on the basis of disability with regard to the terms, conditions, and privileges of employment and must make reasonable accommodations in order for a disabled person to perform their job duties. A wellness program is considered a privilege of employment and, as such, most are subject to the provisions of the ADA.

Compliance and Best Practices

There are complexities associated with ADA compliance that are best handled by an employment attorney. The following is intended to raise awareness about the ADA and its impact on the proper design of corporate wellness programs.

  • Ensure that qualified employees with disabilities have equal access to the program’s benefits and will not have to satisfy greater obligations to obtain equal benefits under the program.
  • Unless it causes undue hardship, provide reasonable accommodations to enable employees with disabilities to earn whatever financial incentive an employer offers as part of the wellness program. For example, an employer offering an incentive for employees to attend a nutrition class must provide a sign language interpreter for a deaf employee who needs one to participate in the class.
  • Ensure medical examinations and inquiries are voluntary. The ADA generally prohibits an employer from requiring medical examinations or making medical inquiries, unless it is job related and consistent with business necessity or is voluntary and part of an employee health program. An example of a medical examination that is part of a wellness program is a medical screening for high blood pressure or cancer detection. Any information obtained from a medical examination or screening in a voluntary wellness program:
    1. Must be maintained according to the confidentiality requirements of the ADA and is only disclosed to employers in aggregate form that does not disclose and is not reasonably likely to disclose, the identity of specific employees.
    2. Cannot be used to discriminate against an employee.
  • Ensure that any health program that may be offered in connection with a wellness program is reasonably designed to promote health or prevent disease, taking into account all the relevant facts and circumstances. Generally, ensure the program:
    1. Has a reasonable chance of improving the health of, or preventing disease in, participating employees.
    2. Is not overly burdensome.
    3. Is not a subterfuge for violating the ADA or other laws prohibiting employment discrimination.
    4. Is not highly suspect in the method chosen to promote health or prevent disease.

An example of a program not reasonably designed is one that exists mainly to shift costs from the employer to targeted employees based on their health. An example of a reasonably designed program may be a biometric screening of employees for the purpose of alerting them to health risks about which they may be unaware.

  • Ensure participation in the wellness program meets the definition of “voluntary” meaning the employer:
    1. Does not require employees to participate.
    2. Does not deny coverage under any group health plan for nonparticipation or reduce benefits for nonparticipating employees.
    3. Does not take any adverse employment action or retaliate against, interfere with, coerce, intimidate, or threaten employees.
    4. Provides a notice to employees explaining how medical information will be collected, used and kept confidential. The EEOC has provided a sample notice for employers to use.

Wellness Program Incentives and the ADA

For many years, the EEOC did not definitively address whether incentives to participate in wellness programs are permissible under the ADA and, if so, in what amount.  For example, would health plan premium reductions offered to encourage employee participation programs subject to the ADA actually make participation “involuntary.” In an effort to clarify, in May 2016, the EEOC published final rules stating that incentives, whether in the form of rewards or penalties, could be offered in amounts up to 30% of the cost of self-only coverage to encourage employee participation in a wellness program. As a result of a lawsuit filed by AARP charging the 30% threshold was arbitrary, the court vacated the 30% safe harbor for incentives effective January 1, 2019. The EEOC is expected to issue new rules addressing permissible incentives for wellness plans in early 2020 so be on the lookout.

In summary, current law does not expressly prohibit or permit offering incentives to participate in a wellness program. Until the EEOC issues new rules, if a more conservative approach is desired, employers should consider removing all incentives associated with wellness programs subject to the ADA for the time being.

Need Help Navigating the ADA and Wellness Programs?

As you can see, it isn’t sufficient to simply decide to implement a wellness program. There are many steps involved including conducting a thorough analysis of what type of wellness program fits into your company’s culture that employees would find beneficial, a cost analysis to determine program feasibility, plan design in a legally-compliant manner, plan roll-out and successful plan implementation. Smart HR consultants have worked with over 80 clients with varying employee demographics and needs. When you hire a Smart HR consultant, you have access to a broad range of knowledge that comes from almost 20 years of experience working with clients just like you. There is no need for you to waste valuable time and resources researching and designing your wellness program. Smart HR can do the work quickly, efficiently and cost-effectively. Call Smart HR at 703-952-3177 and ask for a consultation appointment today.