Is Your Workplace Wellness Program Compliant?

by | Sep 6, 2018 | Employment Law, Human Resources, Wellness

A workplace wellness program may be subject to a number of different federal laws, depending on how the program is structured. An employer’s wellness program that provides medical care (for example, biometric screenings) is generally subject to ERISA, COBRA and the HIPAA privacy and security rules. These laws require employers to:

  • Explain the wellness program’s terms in a summary plan description (SPD);
  • Provide qualified beneficiaries with the opportunity to elect COBRA coverage after experiencing a qualifying event; and
  • Protect the individually identifiable health information collected from or created about participants in the wellness program.

To simplify their compliance obligations, employers often incorporate their wellness programs into their group health plans. This would allow them, for example, to include the wellness program in the group health plan’s SPD.

Wellness Program Design

As employers look for ways to control health care costs, many consider workplace wellness programs. Workplace wellness programs can encourage employees to make lifestyle changes to improve their health or adhere to a particular course of treatment.

Workplace wellness programs can take a variety of different forms—for example, some programs offer only educational services, while other programs offer gym memberships, biometric testing and health counseling. Wellness programs often incorporate incentives or rewards to encourage employee participation, such as gift cards, free or discounted gym memberships, or reductions in group health plan premiums.

There are a number of federal nondiscrimination rules that should be considered when designing a wellness program, such as those in HIPAA, the Americans with Disabilities Act (ADA) and the Genetic Information Nondiscrimination Act (GINA). These laws, for example, may limit the maximum reward offered by the wellness program.

In addition, employers should evaluate how sponsoring a wellness program impacts their compliance obligations under the HIPAA privacy and security rules and other federal laws, such as ERISA and COBRA.

ERISA

ERISA sets minimum standards for employee benefit plans maintained by private-sector employers. ERISA exempts only two types of employers from its requirements—governmental and church employers.

Many plans or programs that provide benefits to employees are considered employee benefit plans that are subject to ERISA. In order for a wellness program to be considered an ERISA-covered employee benefit plan, it must satisfy all of the following requirements:

  • There must be a plan, fund, or program…
  • That is established or maintained by an employer…
  • For the purpose of providing medical, surgical, or hospital care…
  • To participants and their beneficiaries.

For additional information, check out these links and resources, or call Sequoyah Group today!