Wellness Program Incentives

Even in an at-will employment environment, people are still guarded from discrimination (including wrongful termination) by virtue of belonging to a protected class. Before implementing a Employee Wellness Program, companies need to be aware of the relevant legal restrictions and the potential affects these measures can have on benefi ts and employee behavior programs.

Title VII of the Civil Rights Act of 1964 – Prohibits employment discrimination based on race, color, religion, sex or national origin.

This means that standards and offerings need to be applied equally (or possibly proportionally) to all protected classes. In other words, if a business is offering access to gyms, it must make sure that men and women have equal access to facilities. Organizations must also consider whether individuals who may live in areas heavily populated by one race, religion or ethnicity also have access to facilities and programs. The easiest way to address this concern is to supply onsite Workplace Wellness Programs whenever possible. This not only ensures equal access, but according to Northwestern Memorial’s Krivy, also stimulates participation.

Businesses must also be aware that particular health issues may disproportionately affect protected classes. Health Risk Assessments and any incentives/rewards put in place may have to be customized to account for non-lifestyle related differences.

The Equal Pay Act of 1963 (EPA) – Protects men and women who perform substantially equal work in the same establishment from sex-based wage discrimination. Benefits, rewards and incentives and programs need to be applied equally to men and women. A employer cannot set a weight goal for men and not for women, even though a employer can set health parameters by job function. The Age Discrimination in Employment Act of 1967 (ADEA) – Protects people who are 40 years of age or older from discrimination based on age.

Policies not only need to be available to individuals of all ages, but program objectives, restrictions and incentives need to be designed with age appropriateness. While older workers (or retirees and dependents) may inherently pose a higher health risk, their actions should be judged in terms of demographically appropriate measures.

Title I and Title V of the Americans with Disabilities Act of 1990 (ADA) – Prohibits employment discrimination against qualified individuals with disabilities in the private sector, and in state and local governments. Similar to other workplace offerings, any Workplace Health Promotion Programs, such as a fitness center or health clinic, would have to make reasonable accommodations for employees with disabilities.

One area of equivocation is whether very overweight staff members qualify as disabled. The issue is complicated because weight is caused by several factors (genetics, environment, behavior), some of which may be out of the employee’s control. Generally, for staff members to qualify for disability based on weight, the condition must signifi cantly impair their physical or mental ability to perform their job. This determination would need to be made by a qualifi ed physician. Although this label may affect the types of incentives and rewards and program requirements provided, it likely would not affect the overall implementation of behavioral-focused initiatives.

Civil Rights Act of 1991 – Provides monetary damages in cases of intentional employment discrimination.

This legislation authorizes individuals to sue employers for improper treatment. Compensation can be in the form of actual damages such as lost or expected wages, compensatory damages for a circumstance that causes public embarrassment, or even punitive damages meant to send a message to a employer for egregious or habitual violations.

While these laws govern all corporation activities, there are even more stringent restrictions with regard to Health Care problems. Most policies, communications and data collection regarding employee health are governed by the Health Insurance Portability and Accountability Act of 1996 (HIPAA). Under HIPAA businesses can’t deny eligibility for benefits or charge a higher premium on the basis of:

• Health status
• Health condition (including both physical and mental illnesses)
• Claims experience
• Receipt of medical care
• Medical history
• Genetic information
• Evidence of insurability (covers activities such as riding a motorcycle, skiing, snowmobiling and other similar pursuits)
• Disability

Nonetheless, because wellness programs may not include healthcare treatment or be insurance related, and may instead be confined to behavioral initiatives, HIPAA’s nondiscrimination provisions do not completely apply. To address this, in 2001 the U.S. Department of Labor, the Internal Revenue Service and the U.S. Department of Health and Human Services jointly issued a proposed regulation to help clarify the lawful provisions of a “bona fi de Wellness Program” in the context of HIPAA’s existing language (See Box p. 14). Although the regulation is not yet final, corporations that comply with the measure will be viewed by the government as making a good-faith effort to avert discrimination in wellness programs.

Robust Company Wellness Programs are still relatively new to corporate America and the legal implications of implementation and enforcement are not totally known. By their very nature, these programs potentially expose employers to discrimination lawsuits, disengaged workers and detrimental public relations. Still, employers that make a good-faith effort to comply with current Medical Care-related laws, discover ways to involve workers, and communicate strategically, will be able to minimize these risks while finding plenty of room to develop a creative and effective Company Wellness Program.