Employers that offer certain programs designed to improve employee health must be mindful that such programs are subject to a number of different laws--and as recent guidance makes clear, compliance with one law does not necessarily mean that a wellness program will comply with other federal (or state) requirements.
Wellness Programs and HIPAA Nondiscrimination Rules
The federal Health Insurance Portability and Accountability Act (HIPAA) imposes several requirements on health-contingent wellness programs, i.e., those that require programs, are generally available without regard to an individual's health status.
Among other things, health-contingent wellness programs must be reasonably designed to promote health or prevent disease and must limit the maximum permissible reward to 30% of the cost of coverage (or 50% for wellness programs designed to prevent or reduce tobacco use). A new set of FAQs explains what it means for a health-contingent wellness program to be "reasonably designed." The FAQs also caution that compliance with HIPAA does not determine compliance with other federal or state laws.
The ADA and Wellness Programs
The federal Americans with Disabilities Act (ADA) restricts covered employers from obtaining medical information from employees, but allows medical examinations of employees and inquiries about their health if they are part of a "voluntary employee health program."
A new proposed rule provides that a wellness program is considered an employee health program within the meaning of the ADA when it is reasonably designed to promote health or prevent disease (similar to the standard currently applicable to health-contingent wellness programs). In addition, the proposed rule:
Due to the changing law and the complexity of the requirements that apply to employment-based wellness programs, employers are advised to check with a knowledgeable employment law attorney to ensure that any program complies with all applicable federal and state laws.