Smart businesses know that proactive effort, deliberately and consistently implemented, will lead to results. Recent wellness regulations uphold this basic idea. As with most business regulations, the workplace wellness rules announced by the U.S. Equal Employment Opportunity Commission (EEOC) in May were met with mixed reactions.
In our view, though, the EEOC’s final rules are a strongly positive development, reinforcing the efficacy of well-designed programs and providing clarity to both employers and employees on where the EEOC stands on essential issues such as privacy, incentives and program guidelines. This creates a win-win situation that results in strong workplace wellness programs and healthier workplaces and employees.
Here are four reasons we believe the final rules are a boon to employers:
Clarity is reassuring
Until now, there has been significant uncertainty surrounding what companies can and can’t do with their wellness programs, in part because of highly publicized lawsuits between the government and businesses. With the new EEOC regulations in place, companies can feel confident in implementing well-designed wellness programs intended to improve the health of their employees.
Privacy is required
Most employers know that programs that build employee confidence work best. Well-established guidelines on privacy enable employers to alleviate employee fears because they know that their health data is protected by federal government regulations.
The guidelines make clear that any wellness program provider with access to health information must adhere to the Health Insurance Portability and Accountability Act (HIPAA). Medical information collected through an employee health program may only be shared with entities and business associates covered under HIPAA and may only be provided to an employer in aggregate terms that do not disclose the identity of any individuals.
The rules also mandate that employees are provided written notice that describes what medical information will be obtained, who receives that information, how it will be used, restrictions on its disclosure and the methods used to prevent improper disclosure. This level of transparency and the protections in place help provide employees the reassurance they need to feel secure that their private information remains private when they participate in a workplace wellness program.
The use of incentives has been affirmed
The new ruling confirms what was allowed by the Affordable Care Act (ACA): Wellness program incentives are permitted as long as they do not exceed 30 percent of the total cost of employee-only health insurance coverage.
Additionally, the guidelines confirm that providing incentives to spouses is allowed. In particular, spouses can receive an incentive that does not exceed 30 percent of the total cost of employee-only health insurance coverage. This eliminates previous inconsistencies around incentive amounts across various regulations.
The regulations are clear that participation in these programs must be perceived as voluntary, not mandatory, by both employees and regulators alike and validates that a program that offers incentives within the allowable range constitutes a voluntary program. Employers can confidently implement incentives with the assurance that such practices are legal.
Programs must be reasonably designed
Most employers want to spend their time and effort on initiatives that work, not hobbies that are possibly well-intended, but not demonstrated. Workplace wellness programs must demonstrate a reasonable chance of improving the health of, or preventing disease in, participating individuals, based on evidence.
Further, punitive or ill-conceived programs that are designed to shift cost to the employee will not stand up to the EEOC guidelines. Comprehensive programs that have a real likelihood to measurably improve health outcomes are the key to reasonable design.
For companies that are serious about helping employees achieve good health, there is great assurance and affirmation to be found in this announcement. For companies that don’t have a program, or at least not a comprehensive program, now is an opportunity to get started the right way.
Now is the time for a fresh perspective. Review your wellness program, incentives and data management practices. Make adjustments as needed to protect the company and employees. As these regulations have made clear, workplace wellness programs are substantive efforts. They are a strategic and important undertaking and need to be treated as such.