*Adapted from Columbus Bar Association, Employment Law Committee Meeting and United States
Employee wellness programs can provide obvious and not so obvious benefits to employers. First, healthy employees equal a more productive and consistent workforce and monetary incentives provided for maintaining good physical health may assist in attracting desirable candidates who care about health and wellness. Perhaps most importantly, employee wellness programs can help lower health care costs for employers. As the saying goes, an ounce of prevention is worth a pound of cure.
There are two types of wellness plans and both options should be evaluated for the savvy employer.
Participatory plans: A participatory wellness plan is generally available without regard to an individual’s health status. Either no rewards are offered, or no required goals must be met prior to obtaining the reward.
Health-Contingent plans: In a health contingent plan the employee is required to complete a specific activity prior to receiving the benefit of the plan.
Health Contingent Plans are subject to the following five requirements pursuant to United States Department of Labor Guidelines:
- The opportunity to qualify for the reward must be given 1X per year, typically at the time of enrollment. Where a new hire is brought on such requirement can be waived.
- The size of the reward to the employee may not exceed 30% of the cost of employee- only coverage. For example, if the total cost to the employee for health insurance is $500, with the employee contributing $200 and the employer contributing $300, the amount of the award may not exceed 30% of $500(or $150.).
- Such program must be reasonably designed to promote health and prevent disease rather than acting as a subterfuge for discrimination based on health. Such analysis would likely include whether or not the requirements of the plan are overly burdensome to employees.
- Uniform availability meaning that for an individual who does not meet the minimum standard for participation, alternatives may need to be provided. Relevantly, if the employee claims they are not able to participate, a doctor’s note may be requested for an activity based program only. However, employers should also be aware of other potentially applicable laws and regulations with respect to requesting a doctor’s note.
- Notice must be provided concerning the availability of a reasonable alternative standard. The United States Department of Labor recommends the following prescribed language:
Numerous laws apply to Wellness Programs including but not limited to the Americans with Disabilities Act, Affordable Care Act, Health Insurance Portability and Accountability Act, and the Genetic Information Nondiscrimination Act of 2008. Employers who wish to offer such programs should work closely with their health insurance providers and legal counsel in crafting the most legally sound and beneficial programs.