HOW WELLNESS PLAN SPONSORS CAN AVOID COMPLIANCE PITFALLS
By Kenneth R. Pelletier, PhD, MD (hc)
Seventy-nine percent of employer groups now have some type of wellness program, according to a survey by the National Business Group on Health*. Opportunities for employers to implement and enhance such programs to improve the health and productivity of their workforces are substantial. However, there also are some regulatory pitfalls that must be avoided. Here are some strategies that can help you identify pitfalls to avoid.
Four Strategies to Avoid Compliance Pitfalls in Your Wellness Program
1. BE KNOWLEDGEABLE
Let the regulations be your guideposts for avoiding compliance pitfalls. Here are four key considerations:
a. Understand the evolving parameters for wellness program incentives. The Affordable Care Act’s nondiscriminatory wellness program rules provide that an employer can incentivize employee participation by as much as 30 percent of health insurance premium costs and an additional 20 percent (for a total of 50 percent of such costs) for programs also designed to prevent or stop tobacco use. However, under the recently released final regulations from the Equal Employment Opportunity Commission (EEOC), incentive levels are capped at 30% of the total cost of self-only coverage when the wellness program includes a medical exam that tests for the presence of nicotine (e.g., a biometric screening).
b. Comply with federal and state regulations, such as those outlined by the IRS, EEOC, Department of Labor (DOL) and the Department of Health and Human Services (HHS), among others.
• Make sure your plan is non-discriminating.
• Ensure that your plan maintains strict confidentiality.
• Programs must be voluntary. Programs must not compel the use of a particular medical intervention, such as mandating that employees take a biometric screening to receive benefits. Employees must feel assured that they have the right to make their own decisions about their health care and health information.
• Do not offer inducements to employee’s children in exchange for information about their current health status or about their genetic information. (Applies to adult and minor children.)
• Ensure your program does not result in individuals opting-out of their employer-sponsored health insurance program, giving them less access to health care benefits, and does not limit an employee’s coverage under their employer-sponsored health plan. The EEOC’s ADA regulations prohibit any adverse action against an employee who chooses not to answer disability related questions or undergo medical exams, as well as any retaliation against an employee who declines to participate in an employer’s wellness program. The EEOC’s GINA regulations prohibit any employer from denying access to health insurance benefits to an employee whose spouse refuses to provide information about his or her manifestation of disease or disorder to an employer-sponsored wellness program. Retaliation is also prohibited.
c. Develop a program that is safe and equitable for participants.
• Incentives should motivate behaviors that are both safe and effective in promoting health.
• A program consisting of a biometric screening or PHA without providing results, follow-up information, or advice designed to improve the health of participating employees is not reasonably designed to promote health or prevent disease.
• If a program exists mainly to shift costs from the covered entity to targeted employees based on their health is not reasonably designed either.
• Alternatives must be available so that all individuals across various populations can participate in a safe and equitable manner. (See more under Reasonable Accommodations below).
d. Get help interpreting the information.
Even with the abundance of information in the media regarding how to develop a legally defensible employee work-site wellness program, managers can become overwhelmed with information without clear interpretation. Make sure you have an attorney, broker or vendor with the necessary expertise to guide you. Not all attorneys or employee benefits advisors understand all the nuances, so be sure the individuals who support you have a proven track record of experience to help manage compliance risks applicable to your program and benefits design.
2. ASK FIRST; BUILD LATER
Avoid first designing a program that you or others in your organization like, and then seeking the evidence and legal advice to support it.
a. Start with careful review of the current regulatory and clinical evidence about what makes a program legally compliant and clinically evidence-based.
b. Once you have identified those legal and evidence-based characteristics that form the foundation and principles of the program, then add cultural characteristics and personal creativity for implementation.
3. PROVIDE REASONABLE ACCOMODATIONS
Wellness programs must provide for reasonable accommodations for individuals who have a health status that would not enable participation. Obtain appropriate legal and consultative advice about what constitutes (i) special needs, (ii) how those needs are documented and managed, and (iii) what accommodations are available and reasonable in the context of the wellness program expectations. An example of an accommodation is enabling a person to take a series of on-line health improvement classes or have a visit with their Medical Doctor to earn an incentive in lieu of completing a designated physical activity.
4. VET YOUR VENDORS
Many vendors provide wellness programs. The types and varieties of programs range from simple web-based health content to comprehensive programs that include incentives, challenges, fitness tracking, health coaching and more. Be sure your vendors are knowledgeable about state and federal rules that impact wellness programs (i.e., GINA, HIPAA, and the ADA). Vendors should demonstrate compliance and a track record of monitoring such applicable state and federal laws to ensure they are not recommending programs that may fall outside the letter or spirit of the law. Also, choosing an accredited wellness program may be appropriate for your company. Accreditation doesn’t ensure legal compliance, but the accreditation process itself does demonstrate that the company is making efforts to be compliant and also demonstrates a culture of accountability and oversight within the organization.
Wellness programs are an important human capital investment and, as such, should be compliant with regulatory and legal requirements. Consider these points as you design or evaluate programs for your organization.
(This information is intended for educational purposes only and is not provided as legal advice. It is important to review issues and concerns regarding program compliance with your legal advisor and vendors.)
About the Author
Kenneth R. Pelletier, PhD, MD (hc) is a Clinical Professor of Medicine, Department of Medicine, and a Professor of Public Health at the University of Arizona College of Medicine and a Clinical Professor of Medicine in the Department of Family and Community Medicine and in the Department of Psychiatry at the University of California School of Medicine, San Francisco (UCSF). He also is vice president, Health Affairs at Healthyroads, one of the nation’s largest population health programs.