Some employers are trying to make employees more health conscious by setting up wellness programs.
Logically, a healthier work force should lead to lower health insurance premiums. Employers may want to pass some or all of the savings on to wellness program participants by reducing those employees’ share of coverage costs.
Although this philosophy seems to benefit everyone involved, it raises questions about privacy and how far an employer should go to promote a wellness initiative.
Here are two examples:
–Company A says it will fire employees who smoke or fail to quit smoking within a year.
–Company B hires an outside vendor to run a voluntary incentive program that can cut out-of-pocket health care costs for employees who make healthy choices. Employees do not have to improve their health to get rewards. They simply have to show they have made an effort to improve their health.
Company A might make employees angry and get negative press.
But what about Company B? Is Company B’s program legal?
Federal law prohibits employers from discriminating based on age, gender, race, disability, national origin or religion. While most wellness initiatives do not fall under any of these categories, it is important for employers to know that the Health Insurance Portability and Accountability Act has guidelines that must be followed to ensure the wellness program is nondiscriminatory and considered ‘bona fide.’ Proposed factors that make a wellness program bona fide, by HIPAA standards, are as follows:
–The total reward that may be given to an individual is limited. A top award with a value equal to 10% to 20% of the total cost of employee-only coverage may be appropriate.
–The program must be reasonably designed to promote good health or prevent disease for individuals in the program.
–The reward must be available to all similarly situated individuals. More specifically, the program must give any individual for whom it is unreasonably difficult due to a medical condition to meet the wellness program standard (or for whom it is medically inadvisable to attempt to meet the wellness program standard) an opportunity to satisfy a reasonable alternative standard.
–All plan materials describing the terms of the program must disclose the availability of a reasonable alternative standard.
Programs such as smoking cessation classes, weight-loss programs, gym memberships and walking programs can be considered true wellness programs if all members are provided with reasonable alternative standards.
Employees may experience medical and physical limitations that prevent them from being able to achieve the wellness goal successfully. For instance, smoking is considered nicotine addiction–as powerful as any other drug addiction. This addiction may be an illness the member cannot control. Therefore, in order for a wellness program to be considered bona fide under HIPAA, it should reward participants for successful completion of a task, such as taking a class, even if the participants fail to meet the goal of improving their health.
In addition, HIPAA limits required documentation stating the employer may ask only for receipts for class completion or gym membership. They cannot request signed affidavits from course instructors or logs of a member’s progress. These programs are based largely on the ‘honor’ system.
Though the HIPAA regulations may seem to dilute the effectiveness of a given wellness program, it is important that the rewards are equally available to all employees willing to participate in the task. This may actually bolster participation and create awareness among those individuals who may not have otherwise participated.
The first step in changing behavior is changing employees’ way of thinking. If only one member attains the goal of quitting smoking, losing weight or lowering blood pressure, then the health plan possibly has avoided claim costs associated with a heart attack, stroke, diabetes or other long-term health problem. The intangible benefit, of course, is that a healthier work force often results in lower absenteeism and increased employee morale.