Wellness programs are an important way to get your employees energized and involved in maintaining healthy lifestyles. They’re also a good way to manage your health care costs and lower health insurance premiums and deductibles. The programs are designed to give some type of incentive, typically monetary, for meeting certain health requirements.
But before you start implementing your program, you need to make sure it’s compliant with many of the health care laws.
“You run into some large financial penalties if you do not comply with these laws,” says Nick Tomlinson, an associate with Baker, Donelson, Bearman, Caldwell & Berkowitz, PC.
Smart Business learned more from Tomlinson about making sure your wellness program is compliant with the various statutes.
What compliance issues are associated with wellness programs?
The two big ones are the Health Insurance Portability and Accountability Act (HIPAA) and the Genetic Information Nondiscrimination Act (GINA). The HIPAA rules make sure you’re not discriminating against the least healthy of people, those who would benefit the most from wellness programs.
GINA has a broad prohibition against the collection of genetic information. This affects wellness programs because many use health risk assessments (HRAs) to collect medical information on members. The HRA should not contain any information regarding family medical history, because that is considered genetic information under GINA.
What penalties do you run into by not complying with these statutes?
Penalties for employers who violate GINA range from $50,000 to $300,000, as it is a violation of Title VII of the Civil Rights Act. GINA also has a built-in penalty for health plans. There is a $100 fee for each day and each participant that a plan is not compliant. For example, if you’re noncompliant for 10 participants for 10 days, you’ll receive a $100,000 penalty. There is a $500,000 cap on this. So it can go on for a while and adds up fairly quickly.