QUESTION: We have a wellness program that is a feature of our insured group health plan. We are familiar with the ERISA, COBRA, HIPAA, ADA, and GINA considerations for wellness programs. What other federal laws should we be considering?
ANSWER: Even if you are well-versed in how ERISA, COBRA, and HIPAA apply to wellness programs, and you are familiar with the ADA’s rules regarding disability-related inquiries or medical examinations and GINA’s rules regarding genetic information (see our Checkpoint article), there are other laws you might need to consider. Here are a few:
Age Discrimination in Employment Act (ADEA). The ADEA prohibits employers from discriminating against employees and job applicants on the basis of age with regard to employment and the compensation, terms, conditions, or privileges of employment, including benefits. The ADEA’s protections apply to individuals who are at least 40 years old and could affect wellness programs that decrease incentives, impose surcharges, or otherwise discriminate against employees or groups of employees who are age 40 or older.
Title VII of the Civil Rights Act of 1964. A wellness program that makes distinctions based on race, color, sex (including pregnancy), religion, or national origin would likely violate Title VII. The EEOC has also taken the position that sexual orientation is inherently a “sex-based consideration,” and that an allegation of discrimination based on sexual orientation is necessarily an allegation of sex discrimination under Title VII (see our Checkpoint article).
Fair Labor Standards Act (FLSA). The FLSA requires that covered, nonexempt employees be paid not less than time and one-half the employee’s regular rate for time worked over 40 hours in a workweek. Employers requiring participation in wellness programs (particularly health risk assessments) will need to review carefully under the FLSA whether the wellness program is mandatory, which could result in the time spent completing the program being considered compensable time under the FLSA (see our Checkpoint article).
Internal Revenue Code. While health benefits provided under a wellness program (e.g., diagnostic tests) are likely to be tax-free, rewards for participating in these programs might be taxable. Rewards such as health plan premium subsidies or employer contributions to a health FSA, HRA, or HSA can be excluded from an employee’s income and are not subject to wage-withholding or employment taxes if applicable nondiscrimination requirements are satisfied. Other rewards such as cash or cash equivalents (e.g., gift cards or gift certificates) are includible in employees’ income and are subject to wage-withholding and employment taxes.
Some of these laws have exceptions (e.g., for certain small employers). You will want to take these exceptions into consideration, but be careful because the conditions for the exceptions vary according to the statute. Of course, if an exception is not available for a particular law, you will need more detailed information than we can provide in this brief summary.
For more information, see EBIA’s Consumer-Driven Health Care manual at Section VI (“Wellness and Disease-Management Programs”) and EBIA’s Group Health Plan Mandates manual at Sections XIX.C (“Analyzing Health Benefits Under the ADEA”) and XXI.A (“What Is Title VII, as Amended by the PDA, and Who Must Comply?”).
Contributing Editors: EBIA Staff.