Corporate Wellness Incentive Plans

Even in an at-will employment environment, people are still guarded from discrimination (including wrongful termination) by virtue of belonging to a protected class. Prior to implementing a Corporate Wellness Program, organizations 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 organization is offering access to health clubs, it ought to make sure that men and women have equal access to facilities. Corporations ought to 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 provide onsite Workplace Health Promotion Programs whenever possible. This not only ensures equal access, but according to Northwestern Memorial’s Krivy, also enhances participation.

Companies must also be aware that particular health problems may disproportionately affect protected classes. Health Risk Assessments and any incentives/rewards put in place may have to be personalized 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, incentives/rewards and programs need to be applied equally to men and women. A business cannot set a weight goal for men and not for women, although a business can set health parameters by job function. The Age Discrimination in Employment Act of 1967 (ADEA) – Protects individuals 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 goals/objectives, restrictions and incentives and rewards need to be designed with age appropriateness. While older staff members (or retirees and dependents) may inherently pose a higher health risk, their conduct ought to be assessed in terms of demographically appropriate measures.

Title I and Title V of the American citizens 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 Corporate Wellness Programs, such as a fitness center or health clinic, would have to make reasonable accommodations for workers with disabilities.

One area of uncertainty is whether obese staff members qualify as disabled. The issue is complicated because obesity 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 obesity, 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 available, 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 allows individuals to sue businesses 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 Healthcare topics. Most policies, communications and data collection regarding employee health are governed by the Health Insurance Portability and Accountability Act of 1996 (HIPAA). Under HIPAA organizations can’t deny eligibility for benefits or charge a higher premium on the basis of:

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

Still, because wellness programs may not include medical treatment or be insurance related, and may instead be confined to behavioral initiatives, HIPAA’s nondiscrimination provisions do not totally apply. To address this, in 2001 the American Department of Labor, the Internal Revenue Service and the American 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.

Comprehensive Company Wellness Programs are still relatively new to corporate America and the legal implications of implementation and enforcement are not fully known. By their very nature, these programs potentially expose organizations to discrimination lawsuits, disengaged staff members and negative public relations. Nonetheless, organizations that make a good-faith effort to comply with current Medical Care-related laws, find ways to engage staff members, and communicate strategically, will be able to minimize these risks while finding plenty of room to develop a creative and effective Company Wellness Program.