As employers look ahead, incentives will likely continue to be a core part of their wellness programs – with 72 percent of employers providing $650 in wellness incentives on average, and 84 percent of employers planning to continue or expand their wellbeing programs in the next three to five years. But just as companies are gaining confidence in their wellbeing strategies, the threat of a lawsuit may be looming.
With the release of the new Equal Employment Opportunity Commission rules earlier this year and the recent clarification by the IRS regarding taxability of incentives, many are concerned and confused as they get ready to launch their 2017 wellness programs – especially because the AARP recently filed a lawsuit against the EEOC. The suit seeks to stop the enforcement of final rules for workplace wellness programs claiming they violate anti-discrimination laws aimed at protecting workers’ medical and genetic information. AARP also alleges such programs are not voluntary when the price of not participating can be high and may be considered a financial burden to employees. Given these developments, it’s important to have a strategy in place to ensure your programs remain compliant. Here are three important steps employers should take to ensure their wellness programs are compliant:
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Here are three important steps employers should take to ensure their wellness programs are compliant.
Review and Refresh
Review and refresh your wellness program every year to ensure it meets all compliance requirements. Key questions you should ask include:
- Have there been any recent changes to compliance requirements that may impact my program?
- Are any of the current or newly proposed elements of my program out of compliance?
- Do I need to consider any pending legislation, regulations, or lawsuits that may impact my program?
This year, some of the changes that may need to be made include:
- Reducing the amount offered to employees to ensure the program is within the 30 percent cap.
- Implementing administrative processes necessary to withhold and report tax liability for rewards earned by employees.
- Updating program materials and websites to provide the required notifications regarding availability of alternatives, as well as how participants’ health data will be gathered and used.
Take the time to review and refresh your wellness rewards program to not only avoid government scrutiny but also achieve the desired cost, health and engagement results you want.
Respect the Requirements
Several laws and regulations interpreting them impose requirements on employer-administered wellness programs, including the Health Insurance Portability and Accountability Act (HIPAA), the Americans with Disabilities Act (ADA), the Patient Protection and Affordable Care Act, and the Genetic Information Nondiscrimination Act.
As if all of the acronyms themselves weren’t difficult enough to keep straight, the requirements have an added layer of complexity for certain populations, such as Medicare. It’s critical to understand and respect all the requirements to ensure your program remains compliant.
Find the Right Partners
While larger employers may have consultants, legal staff or outside counsel available to help navigate the waters of regulatory compliance, most employers don’t have the resources to tackle this important task. That’s why it’s important to find a partner that will not only provide a platform and process administration that is compliant, but one that can also keep you informed of changes to the compliance landscape, how it impacts your program design, as well as provide guidance on how to build a strategy that not only meets compliance requirements but also organizational goals and objectives.
While the landscape of incentive programs has become more complex and regulated, there is still a great deal of value in implementing them – from financial ROI for employers and payers, to better health outcomes for consumers. It’s important that employers realize this value, while staying up-to-date on the latest regulatory policy and remaining compliant to protect themselves and their workers. If employers can find good partners, respect the requirements and remain committed to updating their policies annually, then it’s a win for all involved.
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