Determine wellness priorities

• Use surveys and research to set priorities.

Make sure the company’s wellness program supports the needs of its workforce through:

• Health risk assessments. Use aggregate data to gain a picture of which areas are most in need of improvement.
• Health plan utilization. An insurer or third-party administrator can provide aggregate data on how benefits are being used.
• Corporate surveys. Gain insights into programs employees find beneficial or would like to change.
• Wellness committee and wellness champions. Committees and champions generate grassroots support for wellness. Ask the employees involved for insights on what company wellness priorities should look like in the future.
• National statistics. There are some surprising differences across the United States when it comes to exercise, eating right, and the prevalence of obesity. Being aware of these statistics can help a company effectively target workplace wellness efforts. National statistics can be used in conjunction with employee surveys, wellness committee feedback, and biometric data from workplace wellness screenings to help set wellness program priorities and create a healthy workplace environment.

After reviewing the data and input, consider whether the company is targeting the conditions and health concerns that impact the greatest number of employees. Then set goals to address the areas of greatest concern.

Set wellness goals

• Use SMART goals to track wellness outcomes.
• Revisit goals often to stay relevant.

After establishing priorities for a company wellness program, set SMART goals—Specific, Measurable, Attainable, Relevant, and Time-bound—that help reach a desired outcome. These goals may revolve around participation in activities or other measures.

Just as a personal goal that’s too broad is difficult to achieve, a company with hazy wellness goals will have a tough time accomplishing them.

SMART goals are:

• Specific. What needs to be done?
• Measurable. How will it be assessed?
• Attainable. Is this something the company can do?
• Relevant. Why is this being done?
• Time-bound. When will this be done?

Use the following best practices to set SMART goals.

• Specific: In simple terms, describe what the company wants to accomplish.
• Measurable: Make the goal something the company can track in order to measure progress.
• Attainable: Make the goal one a company can reach.
• Relevant: Have the goal revolve around something that matters to the company and/or employees.
• Time-bound: Attach a timeframe to the goal.

For example, a company might aim to decrease the number of employees who smoke by 25 percent by 2021 or share one healthy recipe with employees each month.

The goals set will be specific to the company. Don’t set goals aside once completed! Review and update the goals to ensure they reflect the issues impacting workers today and address the primary health concerns of the workforce.

Information and activities

• Use a mix of print and online communications to share wellness information with employees.

Wellness information can be provided on the company intranet and during training sessions. It can be provided through:

• Newsletters with informative articles on wellness-related topics such as nutrition, exercise, ergonomics, sleep, and stress management,
• Videos providing information on wellness-related topics,
• Activities that promote well-being and encourage participants to make healthy choices,
• Lunch and learn sessions featuring information from professions in wellness-related fields,
• Challenges encouraging employees to live healthier lives, and
• Posters and flyers offering encouragement and tips.

Health assessments

• Health assessments often screen common risks to help employees and the company track trends for future wellness goal setting.
• Health assessments must comply with federal regulations related to privacy and anti-discrimination.

A health risk assessment provides an employee with information about an individual’s health status and areas of concern. It can include a questionnaire that asks about health habits that can identify risk factors and a medical screening that includes several tests. Health risk assessments commonly screen for:

• Weight,
• Cholesterol (total cholesterol, LDL-cholesterol, and HDL-cholesterol),
• Blood pressure, and
• Blood sugar (glucose).

Screening results can be used to direct employees to important resources or programs. Employees can also discuss the results with a primary care physician or health care provider.

A company may repeat these screenings annually and compare the aggregate information to previous years to look for trends.

Health assessments must comply with Health Information Portability and Accountability Act (HIPAA), as amended by the Affordable Care Act (ACA), the Genetic Information Nondiscrimination Act (GINA), and the Americans with Disabilities Act (ADA):

• Confidentiality: Personal information must be kept confidential, though employers can receive aggregate results. This data can help determine which type of program would best serve the workforce. It can help determine whether the program should focus on heart health, smoking cessation, or stress relief, for example.
• Non-discrimination: If employees receive a reward or incentive for participating in a health risk assessment, or if the results are tied to a reduction in health care premiums, employers must make sure the program does not discriminate. It needs to be voluntary and follow the HIPAA/ACA, ADA, and GINA guidelines.

Employee resources

• A wellness program can include access to outside resources an employee can turn to for support, information, and concerns.
• Resources can include an employee assistance program (EAP) or a health coach.

Employee assistance program: An EAP offers professional assistance and counseling services for a variety of issues. These can include issues that impact an employee’s mental health, including marital and family problems, job stress, health issues, legal problems, and drug and alcohol concerns. Providing employees with resources for dealing with these challenges can help improve employee well-being.

The confidential service is usually offered to both employees and dependents. Encouraging the use of EAP services to address personal problems before they become unmanageable can help prevent an employee from turning to alcohol or illegal drug use to cope.

Many firms provide special considerations for individuals who voluntarily come forward, admit to a substance abuse problem, and seek assistance. EAP services can also be used by employees who have tested positive for alcohol or illegal drugs and are required to complete a substance misuse evaluation and treatment program.

Employers should make sure employees are aware of the availability of EAP services and that these services are confidential. An employee may be suspicious and wonder if an employer will be alerted to problems or will be made aware of information shared with the provider.

Share with employees the steps the company takes to keep EAP information confidential. This may include assuring employees that billing is done in a way that does not reveal the name of the patient or that the only report the company receives will be the number of visits and, in some situations, the nature of the problem being addressed.

Health coach: A health coach works with employees to improve well-being. A coach with expertise in well-being, nutrition, and other aspects of physical health can motivate and encourage employees to make lifestyle changes that support good health. A health coach can offer advice on a personal level.

The coach and employee can address specific areas of concern or work on issues that were uncovered during a healthcare assessment. They can meet virtually or in person to create a plan. The coach often works with employees to set goals toward a healthier lifestyle, bringing positive, long-term changes to diet and exercise habits.

A health coach may help employees:

• Lose weight,
• Improve diet,
• Find ways to be more active,
• Manage diabetes,
• Manage high blood pressure, and
• Reduce stress.

A company can contract with an outside firm to provide these services, work with a local healthcare provider, or hire a health coach and have this resource on staff.

As with an EAP, confidentiality should be stressed. The health coach needs to follow Health Information Portability and Accountability Act (HIPAA) requirements; personal health information must not be shared with the employer.

Healthy eating

• Promote a healthy lifestyle by making it easier for workers to eat right.

Here are ways a company can encourage workers to have a healthy, nutritious diet:

• Don’t fill vending machines with candy bars. Offer healthier options, such as nuts, yogurt, fresh fruit or veggies with dip.
• Promote water, coffee, tea, or other beverages rather than putting the spotlight on sugary sodas. One study found that workers reduced their waistline and lowered consumption of sugary beverages after the employer took sugar-sweetened beverages out of its cafeterias and vending machines.
• Don’t make doughnuts and cookies go-to snack for meetings. Try fresh fruit or trail mix.
• Try team-wide events such as a healthy potluck. Employees could bring a favorite dish and share the healthy recipes. Examples could be a stir-fry, minestrone soup, quinoa salad, or meatless lasagna.

Moving more

• Encourage workers to take more steps and move more during the workday.

One study found that replacing 30 minutes of sitting each day with any type of movement was associated with better health. That means moving for any amount of time, at any intensity level. It could involve a brief walk, climbing a set of stairs, or doing some deskside stretches.

Physical activity helps employees manage weight, improve cardiovascular health, and alleviate the effects of stress.

To encourage employees to move more, try these ideas:

• Offer healthy activity challenges such as lunchtime walking programs, an after-work bike club, or a step challenge where teams or individuals compete to see who has taken the most steps at the end of the week or month.
• Reward employees who park in the back of the parking lot with special recognition.
• Offer the option to use sit-stand workstations.

Work/Life balance

• Paid time off, workday structure and boundaries, and checking in with employees promotes good work/life balance within the company and enhances employee well-being.

Encouraging employees to have a healthy balance between work and their life away from work supports employee well-being and good mental health. A company can do this in the following ways:

• Encourage time off: Encourage workers to use paid time off to ease stress, recharge, and restore energy levels. Make sure employees can work with supervisors to adjust the workload or schedule so the employee can have time away from work. One way to encourage workers to use vacation is to place limits on how much can be carried over from year to year. If this is company policy, remind workers of this throughout the year to avoid a large bank of paid time off in December.
• Provide structure: When the workday ends, make sure it’s truly over. Set boundaries for communication. It’s possible for workers to be in touch with the office 24/7, but being constantly on call takes a toll. Place limits on emails and make it clear that workers are not expected to respond to emails received after a certain time.
• Check in: Talk with employees to see how projects are going and assess workload levels. Regular check-in sessions, one-on-one meetings, or an email to ask how things are going can help managers gain an understanding of how staff members are doing. For staff members in the office, a manager can walk through the department on a regular basis to chat and see how things are going. Touchbase video chats are an option for casual conversations with remote employees.

Physical health

• Good physical health includes weight management, eating a nutritious diet, exercising, and getting enough sleep.

Eating right: Support employee nutritional health by sharing the importance of a healthy diet.

Tips like these can help employees with diet improvements:

• Portion sizes: To keep portions in control, try using a smaller plate. Portions are in the eye of the beholder, and a serving looks more generous when it’s on a smaller plate. In addition, try to eat more slowly. This gives the body a chance to sense when it’s full and makes it easier to say no to another helping.
• Eat the rainbow: To choose healthier foods, think about color. Vibrant fruits and vegetables contain important nutrients that reduce the risk for chronic disease.
• Fresh, not processed: Fresh fruits and vegetables have several advantages over processed or packaged foods. Whether sliced, chopped, steamed, or roasted, fresh fruits and vegetables are a great choice.
• Go for whole grains: Whole grains bring fiber into our diet, as well as important vitamins and minerals. Choose brown rice over white, mix barley into vegetable soup, or have a quinoa salad.
• Exercise: The CDC recommends people get 150 minutes of moderate aerobic exercise weekly or 75 minutes of vigorous exercise. In addition, strength training exercises are recommended on two or more days of the week.

Tips like these can help employees get the recommended amount of exercise:

• Start slow: Try moving for just a few minutes. Individuals will probably want to keep going because it feels good.
• Make time: One way to fit exercise into the day is to schedule it. Many people find that planning an activity first thing in the morning is a great way to get moving.
• Take a walk: Walking is a great form of exercise and requires no more equipment than a pair of comfortable shoes.

Use workplace challenges to encourage employees to move more. These can include:

• Exercise goals. Employees can set physical activity goals that are specific and time-bound. For example, a goal could be to walk for 10 minutes per day, five days per week for one month. After that goal is met, a new goal can be set. Associates can team up to encourage each other to meet their goals.
• Step counting. Associates can aim to take a certain number of steps per day, such as 8,000. Those who meet the goal could be rewarded with a new pair of walking shoes. Teams of associates could compete in a step challenge or aim to log enough miles to cover a certain distance in a month (such as from coast to coast, or from one city to another.)

Sleep: While sleep is vital to good health, more than one-third of Americans struggle to get a good night of rest. Getting enough sleep can help keep a person from getting sick and can reduce the risk of chronic diseases such as diabetes and heart disease. Sleep will also improve mood and reduce the risk for injuries.

Offer employees tips for getting a good night’s rest:

• Establish a regular bedtime and get up at roughly the same time each morning.
• Create a relaxing sleep environment that’s dark and quiet.
• Cut back on caffeine, especially late in the day.
• Cut back on screen time for 30 minutes before going to bed.
• Try a meditative activity such as yoga or relaxation exercises before going to bed.

Mental health

• Take steps to reduce mental health stigma at work.
• Help employees avoid burnout caused by chronic stress and overwhelming job demands.
• Provide support for mental health to foster a culture of wellness.

Worker mental health can be strained by stressors experienced at work and home, including workload, tight deadlines, illness, and family troubles.

Employers don’t have control over an employee’s home life, but can control what happens at work. The World Health Organization lists several workplace risks to mental health, including:

• Poor communication and management practices,
• Limited participation in decision-making,
• Low control over one’s area of work,
• Inflexible working hours,
• Unclear tasks or organizational objectives, and
• Inadequate health and safety policies.

A company can promote mental wellness by:

Reducing mental health stigma: Workers want information on how to deal with mental health issues but may be afraid to discuss the issue at work because of a stigma associated with mental health. To break down the stigma associated with mental health, take steps to create a culture that supports mental health. For example:

• Be flexible with leave.
• Create flexible schedules.
• Use anti-harassment and anti-bullying policies to support a respectful workplace.
• Train leaders to understand the importance of mental health issues and how they impact the workforce.
• Train supervisors to recognize warning signs of mental health issues.
• Promote resources such as an employee assistance program (EAP) and other mental health resources.
• Share information about mental health resources during team meetings.

Helping employees avoid burnout: When chronic stress and overwhelming job demands are not addressed, they can lead to burnout.

Burnout strains the mental and physical health of workers and results in less-than-stellar experiences for customers.

Employees who are burned out may feel:

• Exhausted,
• Depleted,
• Negative and cynical, and
• Distanced from work.

Supporting mental health: To create a culture that supports worker mental health and reduces the risk for burnout, pay attention to the way the organization manages and leads employees. Listen to worker concerns, paying close attention to:

• Workload: Managers should be advocates for employees and find solutions when workloads become heavy.
• Deadlines and time pressure: A lack of time to get work done is often cited as a reason for burnout.
• Expectations: Unclear expectations create stress for employees. Make sure managers discuss responsibilities and goals with employees, are open to questions, and allow employees to have input into decisions that are made.
• Support and recognition: Managers should get to know employees and recognize their efforts.
• Fairness and trust: Policies that favor certain employees, such as unfair compensation, mistreatment, and bias, all play a role in burnout.
• Safety: Employers are required by law to provide workers with a safe work environment.
• Boundaries: Don’t send after-hours emails, and don’t expect workers to be tuned in to work during their off time.

In addition, help workers reduce stress and avoid burnout by encouraging them to:

• Know limitations,
• Prioritize tasks,
• Talk with managers regarding control over projects and deadlines,
• Leave time in the schedule for some breathing room,
• Make time for exercise, and
• Reach out to an employee assistance program or healthcare provider for additional assistance.

Financial health

• Help employees improve financial health with information such as the basics of creating a budget, cutting back on spending, and planning for retirement.

Financial worries can strain employee health. Concerns about debt or foreclosure, uncertainty about how to budget properly, and worries about the future can distract employees and keep them from doing a good job.

Budgeting: Creating a budget involves writing down sources of income and deciding where that money will go.

• Encourage employees to use a spending tracker to track how much is spent on things such as eating out, rent or mortgage payments, groceries, and pets. This will provide ideas for places to trim spending.

Savings ideas: To keep a budget in line, employees can:

• Take the free entertainment challenge. Brainstorm with family members to find fun, free events and activities. Options might include tennis at a local park, a bike ride around town, a trip to the local library, or concerts in the park.
• Pay attention to streaming services. Online streaming and cable expenses can add up. Cancel services that aren’t used.
• Map out meals. Plan a week of meals to enjoy at home rather than grabbing dinner at a fast-food restaurant.

These tips can also help employees reduce financial strain:

• Involve the family. Write down ideas for reducing expenses.
• Leave debit and credit cards at home. Avoid impulse buys by bringing only a budgeted amount of cash.
• Ask for help. Talk to credit card or utility companies about payment plans. Look into financial education programs.

Activities that improve financial health:

• Have a representative from the company 401(k) provider do a lunch and learn session on retirement savings.
• Give employees an opportunity for a one-on-one meeting with a 401(k) provider representative to more effectively address each financial situation.
• Bring in a representative from a local financial institution to talk about savings options, how to wisely use a credit card, create a spending tracker, or answer questions about debt reduction.

More ways a company can promote wellness

• Worker flexibility, policies, training, resources, and good communication further show a company’s commitment to wellness.

Employers can create a culture that supports employee health and well-being. Here are some ideas to consider:

• Be flexible with leave: Allow sick days to be used for reasons relating to mental health and provide periods of leave for therapy appointments. The Americans with Disabilities Act (ADA) and Family and Medical Leave Act (FMLA) can apply when leave is requested for mental health care; make sure supervisors understand this.
• Create flexible schedules: Offer flexible scheduling options that give workers more control over when work gets done. Set boundaries around after-hours emails and other communication.
• Set policies: Use anti-harassment and anti-bullying policies to support a respectful workplace. A negative work environment strains mental health and worker well-being.
• Train leaders: Leaders should understand the importance of mental health issues and how they impact the workforce. Leaders can set a proactive tone by championing policies that support mental health and by prioritizing the leader’s own mental health care.
• Train supervisors: Train supervisors to recognize warning signs of mental health issues. Supervisors should know how to respond appropriately and refer individuals to resources. In addition, training in communication and emotional intelligence fosters a supportive work environment.
• Promote resources: Use flyers, posters, and the company intranet to publicize an employee assistance program (EAP) and other mental health resources. Emphasize that assistance programs are confidential.
• Team communication: Share information about physical, mental, and financial health resources during team meetings.

Gather information

• Survey employees for input on the company wellness program.

A company can utilize data and comments from employee surveys to improve existing wellness programs and initiatives. For best results:

• Allow anonymity: Employees may hesitate to provide input for fear the ideas shared aren’t good enough or that there might be repercussions if comments are critical. The option to be anonymous provides confidentiality and can bring feedback that is open, honest, and creative.
• Make limitations clear: There’s simply not enough time or money to implement every idea or tackle every challenge, so let employees know that up front. At the same time, let workers know the company values all insights: “Although we can’t put every suggestion into practice, we read every comment and appreciate the time you’re taking to provide input.”
• Set a deadline: Deadlines provide structure and encourage employees to deliver a timely response.

Analyze responses

• Review input employees provide on a wellness program.

A company may wish to use wellness champions to help analyze employee responses. Gather a team of employees from various areas of the company who are engaged in wellness. These wellness champions can:

• Sort through the ideas received,
• Select one or two ideas to implement right away,
• Prioritize other ideas, and
• Brainstorm solutions for challenges that need to be addressed.

Follow up

• Express gratitude and address concerns about the company wellness program in a timely manner.

Thank employees for input and let workers know how the company will move forward based on the comments provided. Let employees know why the company chose the suggestions it did. If certain popular ideas can’t be implemented at this time, let employees know why.

In addition, address concerns as soon as possible. If the company can’t come up with a workable solution in a timely manner, let employees know it’s being worked on and provide a potential timeline.

When do HIPAA regulations apply to a wellness program?

• HIPAA regulations apply to a wellness program when it is connected to a group health plan.
• Other federal and state laws may still apply to wellness programs NOT in connection with a group health plan.

The Health Insurance Portability and Accountability Act (HIPAA) privacy and security rules apply only to covered entities and business associates — and not to employers in their capacity as employers. Whether or not HIPAA applies to workplace wellness programs depends on the way in which a wellness program is structured.

Group health plan: Employers may offer a workplace wellness program as part of a group health plan for employees. For example, employers may offer certain incentives or rewards related to group health plan benefits, such as reductions in premiums or cost-sharing amounts, in exchange for participation in a wellness program.

When a workplace wellness program is offered as part of a group health plan, HIPAA non-discrimination regulations apply. In addition, the individually identifiable health information collected from or created about participants in the wellness program is protected health information (PHI) and is protected by the HIPAA rules.

Program offered directly: An employer may choose to offer a workplace wellness program directly to employees, and not in connection with a group health plan.

If a wellness program is totally disconnected from a health plan and is not itself a group health plan, the HIPAA wellness plan rules will not apply.

In addition, where a workplace wellness program is offered by an employer directly and not as part of a group health plan, the health information that is collected from employees by the employer is not protected by the HIPAA rules. However, other federal or state laws may apply and regulate the collection and/or use of the information.

How do HIPAA nondiscrimination provisions affect wellness plans?

• When a wellness program is connected to a group health plan, HIPAA’s nondiscrimination provisions apply.
• Employers may reward employees for wellness program participation but must follow certain rules.
• Whether or not a company wellness plan is participatory or health contingent changes how HIPAA affects it.

HIPAA nondiscrimination provisions generally prohibit plans from treating people differently based on a health factor, but they contain an exception for wellness programs. Under HIPAA, an employer may not charge similarly situated individuals different premiums or contributions based on a health factor. The regulations also generally prohibit plans from requiring similarly situated individuals to satisfy differing deductible, copayment, or other cost-sharing requirements. However, the HIPAA regulations provide an exception for wellness programs if certain conditions are met.

HIPPA provisions do not prevent a plan from offering a discount or rebate to employees who participate in a wellness program. A employer could also offer modified copayments or deductibles in return for adherence to wellness programs.

Thus, there is an exception to the general rule prohibiting discrimination based on a health factor if the reward, such as a premium discount or waiver of a cost-sharing requirement, is based on participation in a wellness program.

This exception requires employers to meet certain conditions and follow regulations. Different rules apply based on whether employees are rewarded for simply participating in the wellness program or whether they must meet certain health goals in order to receive a reward.

A participatory plan

Under these programs, none of the conditions for obtaining a reward are based on an individual satisfying a standard related to a health factor. Additionally, these programs must be made available to all similarly situated individuals (again, regardless of health status).

If a company program is like this, the employer has no more requirements to meet. Some examples of programs in which no further work is required include the following:

• Programs that reimburse all or part of the cost of a fitness center club membership.
• A diagnostic testing program that provides a reward for participation and does not base any part of the reward on outcomes.
• A program that encourages preventive care through the waiver of copayment or deductible requirements. (Note, though, that the Affordable Care Act already requires non-grandfathered health plans to provide benefits for certain preventive health services without cost sharing.)
• A program that reimburses employees for the costs of smoking cessation programs without regard to whether the employee quits smoking.
• A program that provides a reward to employees for attending a monthly, no-cost health education seminar.
• A program that provides a reward to employees who complete a health reimbursement arrangement (HRA) regarding current health status, without any further action required by the employee about the health issues identified as part of the assessment.

There is no limit on financial incentives that plans may provide in relation to participatory wellness programs.

A health-contingent plan

Health-contingent wellness programs generally require participants to either satisfy a standard related to a health factor or undertake more than a similarly situated individual based on a health factor. Two types of such programs include activity-only programs, and outcome-based programs.

Activity-only programs require an individual to perform or complete an activity related to a health factor in order to obtain a reward. Examples include a walking, diet, or exercise program.

Outcome-based programs require an individual to attain or maintain a specific health outcome (such as not smoking or attaining certain results on biometric screenings) in order to obtain a reward.

• Health-contingent plans must meet five key HIPAA requirements.

1. Opportunity to qualify: The program must give individuals the opportunity to qualify for the reward at least once per year. This once-per-year requirement was included as a bright-line standard for determining the minimum frequency that is consistent with a reasonable design for promoting good health or preventing disease. Even if a participant repeatedly fails to meet a goal or complete a particular requirement, he or she must be offered an opportunity to requalify for the reward each year.

2. Size of the reward: The total reward for all the plan’s wellness programs that require satisfaction of a standard related to a health factor is limited — generally, it must not exceed 30 percent (or 50 percent for programs designed to prevent or reduce tobacco use) of the cost of employee-only coverage under the plan. If dependents (such as spouses and/or dependent children) may participate in the wellness program, the reward must not exceed 30 percent (or 50 percent) of the cost of the coverage in which an employee and any dependents are enrolled.

(Note that other laws may also limit the size of the reward. Under the Americans with Disabilities Act (ADA) and Genetic Information Nondiscrimination Act (GINA), wellness programs that use employee health data must be voluntary, and the reward cannot be so large that it is considered coercive.)

3. Reasonable design: A health-contingent wellness program must be reasonably designed to promote health or prevent disease. A program complies with this requirement if it:

• Has a reasonable chance of improving the health of, or preventing disease in, participating individuals;
• Is not overly burdensome;
• Is not a subterfuge for discrimination based on a health factor; and
• Is not highly suspect in the method chosen to promote health or prevent disease.

The determination of whether a health-contingent wellness program is reasonably designed is based on all the relevant facts and circumstances. The wellness program regulations are intended to allow experimentation in diverse and innovative ways for promoting wellness. While programs are not required to be accredited or based on evidence-based clinical standards, those that are may have greater success.

Wellness programs designed to dissuade or discourage enrollment in the plan or program by individuals who are sick or potentially have high claims experience will not be considered reasonably designed.

A program that collects a substantial level of sensitive personal health information without assisting individuals to make behavioral changes such as stopping smoking, managing diabetes, or losing weight, may fail to meet the requirement that the wellness program must have a reasonable chance of improving the health of, or preventing disease in, participating individuals. Programs that require unreasonable time commitments or travel may be considered overly burdensome. Such programs will be scrutinized and may be subject to enforcement action by the enforcing agencies.

4. Uniform availability and reasonable alternative standards: The wellness program regulations also state that, in order to be reasonably designed, an outcome-based wellness program must provide a reasonable alternative standard to qualify for the reward, for all individuals who do not meet the initial standard that is related to a health factor. This approach is intended to ensure that outcome-based wellness programs are more than mere rewards in return for results in biometric screenings or responses to a health risk assessment, and are instead part of a larger wellness program designed to promote health and prevent disease, ensuring the program is not a subterfuge for discrimination or underwriting based on a health factor.

For activity-only programs, a reasonable alternative standard (or waiver of the otherwise applicable standard) must be offered to any individual for whom it is unreasonably difficult due to a medical condition to satisfy the otherwise applicable standard, or for whom it is medically inadvisable to attempt to satisfy the otherwise applicable standard. Plans can seek physician verification with respect to a request for a reasonable alternative standard, if the request is reasonable under the circumstances.

For outcome-based programs, the reasonable alternative standard (or waiver of the otherwise applicable standard) must be offered to any individual who does not meet the initial standard based on the measurement, test, or screening. If the reasonable alternative standard is, itself, another outcome-based wellness standard, the reasonable alternative cannot be a requirement to meet a different level of the same standard without additional time to comply that takes into account the individual’s circumstances and an individual must be given the opportunity to comply with the recommendations of their personal physician as a second reasonable alternative standard (if the physician joins in the request).

It is not reasonable for plans to seek physician verification that a health factor makes it unreasonably difficult for the individual to satisfy, or medically inadvisable for the individual to attempt to satisfy a standard under an outcome-based wellness program.

For all health-contingent wellness programs (whether activity-only or outcome-based), all facts and circumstances are taken into account when determining whether a plan has provided a reasonable alternative standard, including but not limited to the following:

• If the reasonable alternative standard is completion of an educational program, the plan or issuer must make the educational program available or assist the employee in finding such a program (instead of requiring an individual to find such a program unassisted), and may not require an individual to pay for the cost of the program.
• The time commitment required must be reasonable (for example, requiring attendance nightly at a one-hour class would be unreasonable).
• If the reasonable alternative standard is a diet program, the plan or issuer is not required to pay for the cost of food but must pay any membership or participation fee.
• If an individual’s personal physician states that a program standard (including, if applicable, the recommendations of the plan’s medical professional) is not medically appropriate for that individual, the plan or issuer must provide a reasonable alternative standard that accommodates the recommendations of the individual’s personal physician with regard to medical appropriateness. Plans and issuers may impose standard cost sharing under the plan or coverage for medical items and services furnished pursuant to the physician’s recommendations.

5. Notice of reasonable alternative: The plan must disclose in all materials describing the terms of the program the availability of a reasonable alternative standard (or the possibility of a waiver of the initial standard).

It is sufficient to disclose that some reasonable alternative standard will be made available. Any plan materials that describe the general standard would also have to disclose the availability of a reasonable alternative. However, if the program is merely mentioned (and does not describe the general standard), employers are not required to include such a disclosure.

The following language can be used to meet this requirement:

• “If it is unreasonably difficult due to a medical condition for you to achieve the standards for the reward under this program, or if it is medically inadvisable for you to attempt to achieve the standards for the reward under this program, call us at [insert telephone number] and we will work with you to develop another way to qualify for the reward.”

HIPAA privacy and security rules

• When a wellness program is connected to a group health plan, employers must follow HIPAA privacy and security regulations.

HIPAA’s privacy and security rules protect an individual’s health information. The privacy rule addresses how a covered entity may use and disclose this information. When an organization is covered by HIPAA, it must put safeguards in place to make sure an individual’s health information is protected.

HIPAA places restrictions on the circumstances under which a group health plan may allow an employer/plan sponsor access to personal health information (PHI), including PHI about participants in a wellness program offered through the plan, without the written authorization of the individual.

An employer may obtain a summary of health information relating to individuals in the program. This summary of information does not identify individuals, so it does not violate employee privacy. An employer may use this summary to modify a wellness program to better address employee needs and decide which to health and well-being issues to emphasize.

In some cases, an employer may need to perform administrative functions for a wellness program. These functions may require access to personal health information (PHI). When this is the case, HIPAA privacy and security regulations must be followed.

If administrative functions are performed

• Employers must follow privacy regulations when administrative functions require access to protected health information (PHI).

When an employer/plan sponsor is involved in administering wellness program benefits offered through the plan, the group health plan may provide the employer with access to PHI necessary to perform its plan administration functions, but only if the employer amends the plan documents and certifies to the group health plan that it agrees to, among other things:

• Establish adequate separation between employees who perform plan administration functions and those who do not;
• Not use or disclose PHI for employment-related actions or other purposes not permitted by the privacy rule;
• Where electronic PHI is involved, implement reasonable and appropriate administrative, technical, and physical safeguards to protect the information, including by ensuring that there are firewalls or other security measures in place to support the required separation between plan administration and employment functions; and
• Report to the group health plan any unauthorized use or disclosure, or other security incident, of which it becomes aware.

Where a group health plan has knowledge of a breach of unsecured PHI at the plan sponsor (i.e., an unauthorized use or disclosure that compromises the privacy or security of the PHI), the group health plan, as a covered entity under the Health Insurance Portability and Accountability Act (HIPAA) rules, must notify the affected individuals, the United States Department of Health and Human Services (HHS), and if applicable, the media, of the breach, in accordance with the requirements of the breach notification rule.

If administrative functions are not performed

• The group health plan is only permitted to disclose select information about individuals to employers that do not perform administrative functions.

Where the employer does not perform plan administration functions on behalf of the group health plan, the group health plan is generally permitted to disclose to the plan sponsor only:

• Information on which individuals are participating in the group health plan or enrolled in the health insurance issuer or health maintenance organization (HMO) offered by the plan; and/or
• Summary health information if requested for purposes of modifying the plan or obtaining premium bids for coverage under the plan.

The ADA requirement to be voluntary

• Participation in a wellness program must be voluntary.

Under the Americans with Disabilities Act (ADA), participation in a wellness program must be voluntary. Because the ADA does not define “voluntary,” the U.S. Equal Employment Opportunity Commission (EEOC) published proposed rules describing how employee wellness programs can comply with the ADA.

These rules were initially published in 2016. However, they were vacated by a court decision in 2017. Since then, employers have been waiting for future guidance from the EEOC on how to create a wellness program that meets the agency’s definition of “voluntary.”

In January 2021, the EEOC announced that it had created proposed rules on wellness programs, but the proposed regulations were withdrawn from publication in the Federal Register. Until the new rules are available, employers can follow the Health Insurance Portability and Accountability Act (HIPAA) and Affordable Care Act (ACA) guidance or offer wellness programs that do not require employees to provide medical information. Another option is to offer no incentive or penalty related to wellness program participation.

Reasonable accommodations for wellness programs under the ADA

• A wellness program must provide reasonable accommodations that enable employees with disabilities to participate and earn offered incentives.

Under the Americans with Disabilities Act (ADA), employers must provide reasonable accommodations that enable employees with disabilities to participate and earn whatever incentives the employer offers. For example:

• An employer that offers an incentive for employees to attend a nutrition class must, absent undue hardship, provide a sign language interpreter for a deaf employee who needs one to participate in the class.
• An employer also may need to provide materials related to a wellness program in an alternate format, such as large print or Braille, for someone with vision impairment.
• An employer may need to provide an alternative to a blood test if an employee’s disability would make drawing blood dangerous.

How does GINA affect health risk assessments and disease management programs?

• A health risk assessment must meet certain criteria in order to comply with the Genetic Information Nondiscrimination Act (GINA).
• To be complaint with GINA, a disease management program must be available to everyone.

Employers are not allowed to offer a financial incentive for employees to provide genetic information. They are allowed, however, to provide monetary incentive for the completion of a health risk assessment (HRA) that properly addresses questions about family medical history or other genetic information. They can also reward employees for participating in a disease management program if the program meets certain conditions.

Health risk assessments: When offering a financial reward for completing a health risk assessment, an employer must make it clear to employees that the incentive will be available whether or not the employee answers the questions that ask for genetic information.

For example, if an employer offers $150 to employees who complete a 100-question HRA and the last 20 questions ask about family medical history, HRA instructions must make it clear that employees who complete the first 80 questions will receive the $150, whether or not the final 20 questions are answered. This would be acceptable under GINA.

However, if the instructions did not indicate which questions requested genetic information, nor made it clear which questions must be answered in order to obtain the $150, the HRA would violate Title II.

Disease management programs: Employers can also offer financial incentives to encourage employees to participate in disease-management programs and other programs designed to promote healthy lifestyles or meet particular health goals.

To comply with GINA, these programs must be offered to all employees, not only to those whose genetic information indicates they are at increased risk of acquiring a health condition in the future. This means workers who have current health conditions or whose lifestyle choices put them at increased risk of developing a condition must also be allowed to participate.

For example, an employee who discloses a family history of diabetes on an HRA and another employee who currently has diabetes are both offered $150 to participate in a diabetes management wellness program. The program offers additional financial incentives for employees who achieve certain health outcomes, such as lowering their glucose levels or losing weight. This type of program would be acceptable under GINA.

Note, however, that any program requiring employees to meet a particular health standard in order to receive a reward must meet the Health Insurance Portability and Accountability Act’s (HIPAA) nondiscrimination requirements.