Aggressive Employee Wellness Programs Effective: But Use Caution

Posted on Monday, March 18, 2019

Employers cannot afford to ignore growing threats to the health of their employees, particularly the obesity "epidemic." These statistics command attention:

Key Legal Precautions

Employers need to ensure that:

Wellness incentives don't exceed legal limits;
Procedures are in place to protect the privacy of employee health information; and
Programs are voluntary

More than one-third (34 percent) of Americans are obese (defined as having a BMI of 30) or above, and the "morbid" obesity (BMI above 40) rate has risen six-fold (to 6 percent) since 1960.

Obesity contributes to higher absenteeism, with obese men taking 5.9 more sick days than average, and obese women taking 9.4 more days, according to Duke University health economist Eric Finkelstein

Workplace productivity losses attributable to obesity even when obese employees are on the job cost employers an average of $3,792 per obese man and $3,037 per obese woman, said Finkelstein.

The Journal of Health Economics reported recently that obese men incur an incremental $1,152 in annual health care spending, and obese women account for an additional $3,613.

The effectiveness of company-based wellness programs in bringing about healthy behaviors (not limited to maintaining healthy weight) will vary according to the quality of the program, how it is communicated and the overall "wellness culture" within a workplace. But providing financial incentives for participation can bring employees who might otherwise ignore such programs on board. Without employee participation, it doesn't matter how good the program components are.

Under current law, employers can give employees wellness program participation incentives, such as discounts on health premiums, worth up to 20 percent of the cost of employees' health care coverage, notes Joseph A. Kroeger, an employment attorney in Tucson, Arizona.  Under the Affordable Care Act recently upheld by the U.S. Supreme Court, the maximum incentive will jump to 30 percent next year, and potentially as high as 50 percent down the road.

Is this a case of punishing good deeds?

Kroeger believes in the value of employment-based health promotion, but is warning clients not to run afoul of several employment laws when designing their wellness programs.  Employers must be proactive to avoid falling victim to what he calls the "no good deed goes unpunished" syndrome.

Consider the Americans with Disabilities Act (ADA).  That law traditionally has not been interpreted to treat nicotine addiction and obesity as disabilities protected by the law. However, the Equal Employment Opportunity Commission recently has taken the position that obesity can qualify as a disability and conditions associated with obesity such as diabetes and high blood pressure have been found to be disabilities.

Keep Programs Voluntary

This means employers must design and implement wellness programs such that they do not violate ADA's disability discrimination prohibition. Keeping programs strictly voluntary helps to achieve that result.

Similarly, any wellness programs that entail health screenings that may be deemed as "medical exams" must not require employee participation, "nor penalize employees who do not participate," Kroeger advises. Also, medical records obtained through a wellness program "must be kept confidential and separate from an employee's personnel file," as required of any employee "personal health information" under the Health Insurance Portability and Accountability Act,  the ADA and the Genetic Information Nondiscrimination Act.

That may be easy for employers who lack access to the data because they use an outside wellness program vendor. But small employers that run their own wellness programs, and perhaps have only one individual handling human resource functions, must avoid lumping all employee information together.

If practical, employee wellness program data could be turned over to another senior manager within the organization. One reason for doing so is to blunt a potential accusation that an adverse action (denied raise or promotion, disciplinary move) was influenced by the manager's knowledge of the employee's health status.

Yet another legal pitfall: Being accused of having a policy that has a "disparate impact" on employees within protected classes as defined by the Age Discrimination in Employment Act and Title VII of the Civil Rights Act. "A wellness program that has a disparate impact on older employees, or favors men more than women, could arguably create a disparate impact claim under one of these statutes," Kroeger warns. Employers should therefore simply consider whether the design of their wellness program could open a door to such charges, and modify it accordingly.

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