Health is a sensitive subject in America. Anything that touches on the health of your employees must navigate a tangled web of federal and state regulations designed to protect the privacy of your employees and ensure everyone is treated equally, regardless of their health status.

Designing a corporate wellness program can involve a significant amount of legal planning. Making matters more difficult, laws concerning corporate wellness programs aren’t always clear.

Here are some of the compliance regulations to keep in mind:

Participatory vs. Health-Contingent Wellness Programs

The federal Affordable Care Act (ACA) and the Health Insurance Portability and Accountability Act (HIPAA) allow for two types of corporate wellness programs: participatory and health-contingent programs.

• Participatory programs are open to anyone who wants to participate. Incentives are awarded purely for taking part; they are not tied to any specific health outcome. Participatory programs can include gym membership reimbursement, diagnostic testing, and educational workshops.
• Health-contingent programs award incentives for either achieving specific health standards (such as weight-loss or blood glucose levels) or performing healthy activities (such as exercise).

In general, the regulations concerning health-contingent programs are stricter. Most importantly, health-contingent programs must offer a “reasonable alternative standard” so that people who cannot reasonably be expected to achieve the original health goal—due to illness or other factors—have another way to earn incentives.

For example, if your program includes walking as a wellness challenge, it must also include an activity for people with impaired mobility. Otherwise they aren’t able to access the same rewards as their coworkers, making for an inequitable situation.

The Definition of ‘Voluntary’

Federal privacy regulations say employees cannot be required to share health and genetic information with a corporate wellness program and its vendors. Such disclosures can only be voluntary.

However, some organizations may not realize how coercive their incentives may be, says attorney Barbara J. Zabawa, an industry expert on health and wellness law topics and the founder and president of the Center for Health and Wellness Law, LLC. “We hope that by the end of 2019 the EEOC (Equal Employment Opportunity Commission) will propose new guidance on the incentive amounts that are allowed under the ADA and GINA. Currently all we have is a subjective assessment of whether an incentive—whether it's monetary, paid time off, or some other reward—is a reasonable reward for voluntarily providing health information.”

Right now, many organizations make the mistake of attaching multiple strings to what should be voluntary participation.

“I’ve met with many clients who believed their program was voluntary, but then used words like ‘mandatory’ or required,’ which completely undermines the entire concept of it being voluntary,” adds Zabawa. “You can’t say it’s voluntary for people to share health information but then say that they must complete a Health Risk Assessment before they can be eligible for any other program rewards.”

Yale University learned this lesson the hard way. 

A class-action lawsuit on behalf of Yale University employees was filed this summer in U.S. district court in Connecticut. The Yale employees claim  the university’s stiff penalty for not submitting to medical tests—$1,300 per year—strips them of their right to voluntarily choose whether to take part in the wellness program.

The resolution of the Yale lawsuit may provide some clarification on how the government defines “voluntary.” In the meantime, it’s worth reviewing your wellness program with your attorney to make sure you’re not pushing something on your employees against their will.

Data Privacy

Wellness programs collect a lot of information about participants—including their health history, biometric data, and the results of genetic testing—that may be subject to federal privacy laws.

The government says HIPAA only applies to wellness programs that are part of a group health plan. Independent programs that are offered to all employees are not subject to HIPAA.

However, it may be a good idea to protect your employees’ health information to HIPAA-like standards, anyway. Most people consider their health to be a personal matter. Your employees may be uncomfortable with you sharing their information with unknown third parties (as this group of Houston municipal employees was).

Avoiding Discrimination

As we noted above, outcome-based incentives present compliance challenges with discrimination against people who are ill or otherwise unable to achieve certain standards. More subtle forms of discrimination can creep into your program as well.

For example, the rates of some chronic diseases, such as diabetes and high blood pressure, tend to be higher among certain racial groups. You’ll want to work with your legal team to make sure you’re not inadvertently discriminating against these groups in the design of your wellness program.

An Ounce of Prevention

Much like preventative healthcare helps an employee avoid a costly medical bill down the road, being proactive with the legal elements of your wellness program can help your organization avoid a similarly nasty surprise.

Our best advice for understanding the regulatory complexities of your corporate wellness program is to consult with an attorney early in the program design process. Companies often think of their legal counsel as life preservers to grab onto in case of emergency. But your lawyer can actually help you design a better, more compliant program and avert issues down the road.

In addition, don’t forget to listen to your employees. The design of any wellness program should start with getting to know your employees, their needs, and their desires. If you build employee feedback into your program from the outset, it becomes much easier to keep both them and your local regulatory bodies much happier.