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Small Business Employee Benefits and HR Blog

Employee Health Benefits: Wellness Programs Get a Federal Overhaul

Workplace wellness programs are popular tools among employers to create happier, healthier, and more productive employees. These programs are a form of employee health benefits that range from simply offering information to workers, to subsidized nutritious lunches, fitness education, or a company gym. Employees are the most valuable assets to a company, so wellness programs matter.

What are the Issues?Wellness_programs_get_an_overhaul-1

While these wellness programs improve employee well being and increase job satisfaction, along with raising retention rates, they are not without their problems. Employee health benefits experts say there are some holes that need to be filled and clarifications that need to be made in long-awaited federal rules that would govern the use of financial incentives in workplace wellness programs.

Do It Or Else

This has been the approach taken by employers more increasingly who offer financial incentives for workers to take part in wellness programs that incorporate serious preventative health measures, such as blood pressure, cholesterol and body mass index, among other things, although there has been resistance to these programs from the Americans with Disabilities Act.  

New Proposal

On April 17, the U.S. Equal Employment Opportunity Commission proposed new rules including stricter limits on the structure and dollar value of incentives that employers can use to drive employee participation and better health outcomes through a wellness program. In addition, there are new notification requirements for employers that collect workers’ medical information.

These proposals anticipated backlash from the American with Disabilities Act and the federal health care reform law, but have received a generally positive reception from business groups and health benefits experts, though some say changes are needed.

“The proposed rules clarify a major concern, but we still have some concerns about the details and will be addressing them when we submit our comments,” Steve Wojcik, vice president of public policy at the National Business Group on Health in Washington, said in an email. “We hope that the effect of the rules will be to promote employer-sponsored wellness initiatives and not stifle them.”

Annette Guarisco Fildes, president and CEO of the Washington-based ERISA Industry Committee, said the EEOC plan is a step in the right direction and that the employer benefits lobbyists plan to work with the agency to refine the rules to allow employers to aggressively seek to improve the well-being of their employees and their families, while also protecting the rights of all individuals.

Details of the Plan

The crux of the EEOC’s proposal would revise existing rules under Title I of the ADA to more closely follow the provisions of the Patient Protection and Affordable Care act and the Health Information Portability and Accountability Act that raised limits on the dollar value of incentives associated to certain types of wellness and health programs. They could, however, impose higher deductibles or other financial penalties.

The EEOC proposal also requires employers whose wellness programs collect employee medical information, including health risk assessments and biometric screenings, to provide participants with a written notice of what information will be collected, how it will be used, who can access it, and what steps will be taken to prevent inappropriate disclosure of the information.

Conclusion

Employee wellness programs are an excellent and rather necessary employee health benefit. The current deadline for additional comments on the EEOC’s plan is June 19. In the meantime, experts suggest employers begin reviewing their wellness programs for potentially compliant elements.

What are your thoughts on employee wellness programs and the way they are being regulated? Please share with us below.

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