4 Key Laws When Structuring Health and Wellness Programs

BY Lucy Fang
Jul 02, 2020

Health and wellness incentive programs have major benefits both for employees’ health and in reducing companies’ spending on health care. More and more companies are implementing health and wellness incentive programs every day. When considering the legality surrounding health and wellness incentive programs there are several laws that must be taken into consideration. Here are four examples of some of those laws.

The Age Discrimination in Employment Act

The Age Discrimination in Employment Act (ADEA) was signed into law in 1967 by President Lyndon B. Johnson. ADEA forbids age-based discrimination against employees and applicants with respect to benefits. As a result of ADEA’s protections, if a wellness program decreases rewards, terminates, or in any other way discriminates against employees who are over 40, the program could be found to be in violation of ADEA.

The Genetic Information Nondiscrimination Act

The 2008 Genetic Information Nondiscrimination Act (GINA) is an Act of Congress that prohibits employers from discriminating against their employees in regard to compensation, conditions, terms, or privileges of employment on the basis of  “genetic information”. GINA’s prohibitions include:

  • An employer must maintain all genetic information as confidential medical records.
  • An employer may not require, request, or purchase genetic information.  
  • Any disclosure of genetic information must be subject to strict limits.

The Health Insurance Portability and Accountability Act

The Health Insurance Portability and Accountability Act (HIPAA ) was signed by President Bill Clinton in 1996. When creating your health and wellness program there are two main elements to consider in regard to HIPAA. The two elements are the Non-Discrimination and Privacy & Security sections of HIPAA.

Health and wellness incentive programs are subject to the HIPAA nondiscrimination rules if they offer rewards that are related to a health plan that requires participants to complete a particular health-related action in order to receive the program’s reward – this can include things such as an exercise program or diet plan. According to HIPPA, group health plans are required to ensure that they do not discriminate in health coverage among individuals on the basis of a “health factor,” in terms of benefits, costs, or eligibility. When providing health coverage, there are eight “health factors” that cannot be used in order to discriminate against individuals:

  • Health status
  • Genetic information
  • Evidence of insurability
  • Medical history
  • Disability
  • Claims experience
  • Receipt of health care
  • Medical conditions such as physical or mental illness

The second element of HIPAA that must be taken into consideration is privacy & security. A lot of health programs will be subject to HIPAA’s privacy and security regulations. The exceptions are smaller health programs such as small business self-insured group health plans, which are established and maintained by the employer and have fewer than 50 eligible individuals.

The Americans with Disabilities Act

Under The Americans with Disabilities Act (ADA), there are two main areas of concern with regard to health and wellness incentive programs. Firstly, ADA forbids employers from discriminating against people with disabilities. A wellness program may discriminate against individuals who have a disability if the program provides a reward to participants based on a health condition. Even if the program is designed so that it complies with the HIPAA nondiscrimination requirements, this may cause a violation of ADA. Secondly, ADA limits when employers may conduct medical examinations or make medical inquiries.

All of these various laws will apply in different degrees to the four main types of health and wellness incentive programs. 

No matter the type of health and wellness incentive program your company is planning to implement, it is important to seek legal counsel to ensure compliance will all applicable laws and regulations. When assembling your company’s health and wellness rewards program, working with experienced professionals who a knowledgeable regarding both program types, their various applicable legal requirements, and the technology necessary to make them run smoothly. All Digital Rewards appreciates your company’s commitment to your employee’s health and wellness and understands the concerns and requirements associated with establishing a quality health and wellness rewards program. Our Healthy Choice Rewards, Living Well Reward ™ card, and robust Health and Wellness point’s based platform technology all of which can be fully branded and personalized, will allow you to quickly and effectively reward your health and wellness incentive program, participants. With our vast experience in offering rewards programs, we can customize a program that will be an excellent fit for your company’s needs and meet all applicable legal requirements. Give our Health and Wellness Reward Program experts a call at 866-415-7703 or click the “Schedule a Demo” button below!