Overview: Employers use wellness programs to supplement their employee benefit programs in an effort to prevent illness and lower health care costs by motivating employees to adopt and maintain healthful behaviors. Studies have shown that employers can benefit by implementing and maintaining an employee wellness program. Over time, benefits reported by employers include reduced health care related costs, increased productivity, reduced absenteeism, higher morale and increased employee retention.
The type of wellness program offered depends on a variety of factors including an employer's size, culture, resources and industry. Some programs are simple and inexpensive to implement and manage, while others are more complex and require substantial financial resources.
Most wellness programs are aimed at combating preventable conditions such as obesity, diabetes, heart disease and lung cancer. There are many types of wellness programs an employer can choose based on budget, employee demographics, and location and health goals. Common examples include:
Employer wellness programs must comply with a variety of federal and state laws. At the federal level, wellness plans have to comply with the Health Insurance Portability and Accountability Act (HIPAA), the Americans with Disabilities Act (ADA) and the Genetic Information Nondiscrimination Act (GINA).
Trends: Under the Affordable Care Act, beginning in 2014, an employers' ability to reward employees for participation in wellness programs will be expanded.
Tracy Morley, SPHR, Legal Editor
Employee wellness programs are typically used to prevent illness by motivating employees to adopt and maintain healthful behaviors. An employer creating or managing an employee wellness program has many legal and internal considerations to take into account such as what the program will include and how laws such as the ADA and ACA will affect the program.
The US Department of Labor (DOL) has issued frequently asked questions (FAQs) regarding the implementation of the market reform provisions of the Affordable Care Act (ACA) and the Mental Health Parity and Addiction Equity Act (MHPAEA).
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The Health Information and Privacy (HIPAA) section of the Employment Law Manual has been updated to reflect the new rule regarding wellness programs under the Affordable Care Act.
Health Insurance Portability and Accountability Act (HIPAA) protects health insurance coverage for employees and their dependents that lose coverage or change jobs. This section reviews HIPAA's limitations on pre-existing condition exclusions, along with HIPAA's Privacy Rule for safeguarding protected health information (PHI) and Security Rule for protecting electronic PHI (ePHI).
The Departments of Treasury, Labor and Health and Human Services issued a final rule regarding wellness programs under the Affordable Care Act.
Updated audit protocols from the DOL's Employee Benefits Security Administration include a review for compliance with the Affordable Care Act (ACA), the Genetic Information Nondiscrimination Act (GINA) and wellness plans. Based on the change in audit protocols, it seems that the EBSA is increasing its review efforts, with a particular focus on compliance with the ACA.
This section of the XpertHR best practice manual discusses the business case for investing in employee well-being and explains how to develop and implement a well-being program.
Employee wellness programs can help reduce health care related costs, increase productivity, reduce absenteeism, increase morale and increase employee retention. Employers should review this How To on implementing and managing an employee wellness program and incorporate those items that best fit the employer's size, budget restrictions, needs and resources.
HR guidance on workplace wellness programs and the impact to health care costs.