Support through your toughest HR challenges: A network of 285,000 HR professionals.
Shawn Premer shows how doing the right thing for employees leads to positive business results.
Is your employee handbook keeping up with the changing world of work? With SHRM's Employee Handbook Builder get peace of mind that your handbook is up-to-date.
Build competencies, establish credibility and advance your career—while earning PDCs—at SHRM Seminars in 12 cities across the U.S. this spring.
#SHRM18 will expand your perspective – on your organization, on your career, and on the way you approach HR. Join us in Chicago June 17-20, 2018
Members may download one copy of our sample forms and templates for your personal use within your organization. Please note that all such forms and policies should be reviewed by your legal counsel for compliance with applicable law, and should be modified to suit your organization’s culture, industry, and practices. Neither members nor non-members may reproduce such samples in any other way (e.g., to republish in a book or use for a commercial purpose) without SHRM’s permission. To request permission for specific items, click on the “reuse permissions” button on the page where you find the item.
The growing popularity of employer-sponsored wellness programs is starting to raise questions about how far employers can go in their efforts to change employee behaviors.
Many employers are offering incentives, often in the form of lower health insurance premiums, to employees who enroll in these programs. For example, some employers are subjecting employees who smoke to a higher health insurance premium unless these employees quit smoking or agree to be actively enrolled in a smoking cessation program.
And this is where the trouble can begin. What happens when employees lie about their smoking habits in order to receive the lower premium? Whirlpool Corp. has just started to find out. In April 2008, the company suspended 39 workers for smoking on company premises after they had signed statements saying that they did not smoke and received a reduced, nonsmoker’s health insurance premium. Even though the disciplinary move was linked to the fact that employees had lied in a signed statement rather than that they continued to smoke, the case has garnered international media attention and put the spotlight squarely on employers’ wellness efforts.
“There is a fine line when trying to motivate employees to change their behavior,” says Sharon Cohen, group and health care benefits counsel with Watson Wyatt in Washington, D.C.
Wellness Program Boundaries
In general, the boundaries of wellness programs are defined by employee relations issues and legal concerns. When it comes to employee relations, the major issue for many employees is one of privacy. “There is great sensitivity among employees about how much an employer can intrude upon employees’ private lives and employees’ choices when it comes to their health,” says Cohen. For that reason, it is essential that employers focus on getting employees to buy into the wellness concept to avoid the feeling that the employer is trying to force something onto employees.
Maintaining employee morale and getting buy-in means ensuring the program is not viewed as a way to save money at employees’ expense. “The program needs to meet legal requirements, but it also shouldn’t offend people,” says Tiffani Hiudt, an attorney with the labor and employment law firm of Fisher & Phillips LLP in Atlanta. “Employers start to get into trouble when they try to make wellness programs mandatory. The better approach is to find a way to make employees want to comply and participate in the program.”
-------------------------------------------------------------Employers start to get into trouble when they try to make wellness programs mandatory.-------------------------------------------------------------
To that end, Hiudt recommends that employers take things slow and carefully communicate the wellness program, its goals, and why it is so important. Incentives should be focused on participation and not performance. “It is often better for employers to be a cheerleader than to be holding a stick,” agrees Cohen. “It may take longer to generate participation, but the effort is likely to generate a better result.”
Be Aware of All Related Laws
The Whirlpool case serves as a reminder to employers to make sure that their wellness programs adhere to all applicable laws and regulations. It is also a good idea to determine how the company will respond to legal issues related to wellness programs, such as employees lying about their behavior.
For example, companies that provide a lower health insurance premium to nonsmokers and to smokers who are enrolled in smoking cessation programs need to think through what will happen if the company discovers employees lied about their smoking status. When employees fill out forms and sign statements about their behaviors and health status, they need to know the repercussions of not answering truthfully.
Beyond that, companies face an array of legal and regulatory issues.
The main legal issue is complying with the wellness program regulations issued by the U.S. Department of Labor as part of the Health Insurance Portability and Accountability Act of 1996 (HIPAA) spelling out how employers can structure wellness programs that comply with HIPAA.
Under HIPAA regulations for wellness programs, employers must, among other things, offer a reasonable alternative, such as enrolling in a smoking cessation program, that allows employees to gain access to that better premium rate. Eligible individuals must have an opportunity to qualify for available discounts at least once a year, and employers must provide a reasonable alternative standard or waive the standard for individuals with a medical reason why they cannot achieve the goal.
The DOL has developed a Wellness Program Checklist that provides a series of questions employers can answer to determine if their wellness program complies with the regulations.
But simply complying with HIPAA’s requirements regarding wellness programs might not be enough. The Americans with Disabilities Act (ADA) and other federal employment laws, as well as various state and local laws, can come into play. For example, 31 states have some form of smoker protection law, according to a list of State Smoker Protection Laws compiled by the American Lung Association.
In addition, employers need to be vigilant to recognize changes to the legal and regulatory environment. As more aggressive wellness programs take hold in more companies, the legal issues surrounding these programs are likely to evolve over time. “We will probably see employees challenging these programs, so it will be important to see what courts do with those lawsuits,” says Anne Ciesla Bancroft, a partner with Fox Rothschild in Princeton, N.J.
Too Much Pressure?
Overall, the key to successful wellness programs is to make them a win/win for all involved. Ironically, an employer that puts too much emphasis on wellness activities could be adding to the problem without realizing it. “Employers need to keep in mind how stress in the workplace affects workers and productivity,” says Cohen.
Joanne Sammer is a New Jersey-based business and financial writer. Her articles have appeared in a number of publications, including Business Finance, Consulting, Compliance Week and Treasury & Risk Management.
You have successfully saved this page as a bookmark.
Please confirm that you want to proceed with deleting bookmark.
You have successfully removed bookmark.
Please log in as a SHRM member before saving bookmarks.
Please sign in as a SHRM member before saving bookmarks.
Please purchase a SHRM membership before saving bookmarks.
An error has occurred
Recommended for you
Become a SHRM Member
SHRM’s HR Vendor Directory contains over 3,200 companies