‘Wellness’ programs: a shot in the arm, or a legal headache?

More and more companies are adopting “wellness” programs that reward employees for healthy behavior. This would seem to be a “win-win” for companies and their workers, because workers are rewarded for getting in shape, and companies can reduce health insurance costs and absenteeism while boosting morale.

But there are a number of legal issues raised by these plans. Companies should know that the legal boundaries of these programs are sometimes unclear. And workers should know that there are limits on how far an employer can go in delving into their private medical information.

Wellness programs can reward employees for a wide range of health-related behaviors, such as filling out a health questionnaire, attending a wellness fair, joining a gym, reducing cholesterol levels or quitting smoking.

Rewards typically include defraying the cost of a gym membership or contributing to the employee’s individual health insurance premium.

Under the Affordable Care Act (better known as “Obamacare”), employers can now offer a worker up to 30 percent of the worker’s individual health care cost for participating in a “health-contingent” program. Such programs screen the workforce for at-risk employees; if an at-risk employee then achieves a certain outcome, such as reaching a particular body-mass index or blood-pressure goal, the employee can receive the reward. If the program is smoking-related, the employer can offer up to 50 percent.

However, there are some issues. For instance, the federal Americans with Disabilities Act says that employers cannot ask employees any disability-related questions that are not directly related to their job. That suggests that screening for at-risk workers could itself be illegal.

The Disabilities Act does contain an exception for wellness programs, as long as they are “voluntary.” But it’s not clear whether a wellness program that offers financial rewards for participation (or, looked at another way, treats employees less well financially if they don’t participate) is truly “voluntary.”

Back in 2009, the federal Equal Employment Opportunity Commission issued a letter saying that a program was “voluntary” if the reward was no more than 20 percent of the cost of health care coverage. But the Commission later withdrew the letter, leaving everyone up in the air.

The Obamacare regulations also make things more complicated by saying that if a worker can’t reach a targeted wellness outcome, the employer might have to offer a “reasonable alternative” program. So a worker who for whatever reason cannot reduce his or her cholesterol level below a certain number might still have to be rewarded for using medication or participating in a diet and exercise regimen.

Yet another federal law, designed to protect against discrimination based on genetic information, says that employers can’t ask workers about their family medical history. So any such questions on a health questionnaire must be flagged as optional, and no portion of a reward can hinge on answering those questions.

The bottom line is that wellness programs can be great for everyone involved, but employers need to be careful about what they offer and require, and employees need to know that they don’t have to give up all their medical privacy when they go to work.