Wellness Programs May be an Unhealthy Employer Choice

As published in Nashville Business Journal.

Skyrocketing health care costs and their impact on the financial well-being of many employers have forced these employers to take a hard look at the structure and manner in which they provide health care benefits to their employees. Annual increases in the deductibles and premiums paid by the employees are no longer sufficient to keep pace with the rising costs of providing health care, forcing many employers to take a more creative approach.

Believing that a healthy workforce will reduce absenteeism, increase productivity and significantly decrease health care costs, many employers are trying to directly change their employees' behavior and beliefs toward living a more healthy lifestyle. Employers have opted to encourage employees to give up their intake of unhealthy foods such as greasy cheeseburgers and the use of cigarettes and alcohol. Many employers have adopted anti-smoking policies, anti-drug or anti-alcohol use policies, exercise encouragement or fitness programs, and tiered benefit plans which may either charge more, or offer less of a benefit, to those employees seen as having made poor choices in the care of their bodies.

For the first time, employers are trying to change the employee's off-duty behavior and lifestyle. If not established or operated correctly, however, these programs may run afoul of federal and state law, subjecting the employer to significant liability.

Adoption of a wellness program may violate federal law, such as the Americans with Disabilities Act, if participation in the program is mandatory. Even though an employer may not require an employee to participate in the wellness program, the program may be considered mandatory if the employer provides financial incentives or benefits to employees who complete the program.

Increasing an employee's share of the premium for health insurance if the employee chooses to not participate also may, arguably, make the program mandatory. The more significant the financial benefit or cost, the more likely the wellness program will be considered mandatory.

The Fair Labor Standards Act also may be implicated in connection with certain aspects of a wellness program. A employer may violate the law if it penalizes its employees who make unhealthy lifestyle choices by requiring such employees to pay a fine or to contribute to a program or to the employer.

Many wellness programs require employees to complete questionnaires to ascertain health status of an employee before the employee is allowed to participate in the program. The employer must be careful in framing the questions as well as in safeguarding the answers in order to avoid liability. Employers will want to avoid asking questions that are designed or could be construed as designed to obtain information about the existence, nature or severity of a disability, such as "How much alcohol do you drink per week?" Instead, ask questions that focus more on employee behaviors, such as "Do you drink alcohol?"

Once employers obtain health information, they need to ensure that the information is protected and used properly. Employers should avoid disclosing the information in a way that violates the law. An employer should not use the information in connection with employment decisions, including hiring, promotions or terminations. Above all, an employer should not use the health information to discriminate against employees who are not as physically fit as the employer believes they should be.

Several states have adopted laws addressing what critics of wellness programs call "lifestyle discrimination." California and Colorado prohibit employers from disciplining or discriminating against an employee for engaging in lawful, off-premise, off-duty activities such as tobacco use, unhealthy eating. Tennessee has yet to adopt such laws, but has enacted legislation that essentially prevents an employer from discharging an employee solely because the employee uses tobacco products. The employee can still be discharged for smoking at work in violation of a no-smoking policy, but not just for smoking when off work time.

While some see wellness programs as being unfairly intrusive into an employee's private life, used properly, they can be an effective tool to benefit both the employee and the employer. When creating and operating a wellness program, employers should consider application of any federal and state laws governing lifestyles or disabilities. All programs should be voluntary.

Employers are cautioned to avoid penalties and encouraged to characterize awards for participating in the program as rewards. Employers should establish a system to safeguard the health information that is obtained to ensure it's not used improperly. They should secure the support of top management and to provide opportunities for success by offering healthy choices at company functions and in cafeterias and vending machines.

A wellness program can be a healthy choice for the employer leading to reduced health insurance premiums and health care costs, lower turnover, decreased absenteeism and increased productivity if it is established and operated properly.