Mandatory Wellness Programs

While often a healthy asset for organizations, the increasing use of mandatory wellness programs can also present liability risks for companies, including potential violations of employee privacy rights, the federal anti-discrimination laws, such as the Americans With Disabilities Act (ADA), the Health Insurance Portability and Accountability Act, and state legislation regarding the regulation of an employee's lawful off-duty conduct. In addition to the interplay of these programs with both existing federal and state law, the recently passed Genetic Information Nondiscrimination Act (GINA) of 2008, effective Nov. 21, 2009, must be factored into the administration of such plans. Although the Act provides that the EEOC will issue final regulations under GINA within the next year, it is imperative that employers act now to avoid liability. Employers should review current wellness plans to ensure compliance, especially with the Act's confidentiality provisions. Companies who violate the Act face severe penalties ' as much as $300,000 for each violation. The broad definition of “genetic information” under the Act puts even the best-intentioned employers at risk of a violation.

Avoiding the Legal Pitfalls

To avoid litigation, the proper balance must be struck between mandatory wellness programs and employee rights. As an initial matter, employers should have a business objective when implementing a mandatory wellness program. This may be as simple as stress reduction at work. Nonetheless, employers should be able to link the goals of the wellness program to employee job performance.

Compliance with the Americans With Disabilities Act (ADA)

Employers must be careful in designing mandatory wellness programs to ensure compliance with the law. Such programs, if not properly administered, may face myriad legal challenges under federal anti-discrimination statutes and privacy laws. One of the biggest challenges is reconciling mandatory wellness programs with the requirements of the ADA, which prohibits employers from discriminating against a qualified individual with a disability in any aspect of employment, including employee compensation and benefits. Specifically, employers must be mindful of the ADA's confidentiality requirements. For example, the ADA limits the disclosure of employee medical information. Therefore, an employer should retain an independent third party administrator to collect and analyze medical information obtained in connection with a mandatory wellness program to ensure that individual health data is not disclosed to the employer. Additionally, employers must be cognizant that although a disabled individual can perform the essential functions of his/her position, he/she may not be able to maintain certain health criteria required by the wellness program because of his/her disability. For example, a disabled employee may not be able to maintain a set body mass index because of certain health conditions.

Title VII of the Civil Rights Act

Another factor to be considered in implementing a mandatory wellness program is the implications of Title VII. As a practical matter, gender differences should be factored into the goals of the program. For example, a healthy body mass index for women is higher than it is for men. As such, both male and female employees should be held to the medically accepted standards of their respective genders.

State Law Protections Afforded to Lawful Off-Duty Conduct

Likewise, because many states have statutes that protect employees from adverse employment actions for lawful off-duty conduct, employers need to take caution when regulating employees outside of the workplace. Notably, under New York law, employers may not take adverse action against employees for any otherwise lawful off-duty conduct. Some states limit the scope of protection to specific off-duty conduct. In New Jersey, for example, an employer may not take adverse action against employees for the use of tobacco products. Consequently, mandatory wellness programs applicable to employees in states with such statutory protections may not penalize employees for their lawful off-duty conduct. As such, employers must consult relevant state legislation when implementing these programs.

Compliance with the Genetic Information Nondiscrimination Act of 2008

On May 21, 2008, President Bush signed GINA, which prohibits employers and group health plans from discriminating on the basis of “genetic information” and places strict limitations on the collection of such information. GINA imposes three main restrictions on employers: 1) employers cannot discriminate in the terms or conditions of employment based upon genetic information; 2) employers are prohibited from retaliating against an employee who opposes genetic discrimination; and 3) employers are barred from collecting genetic information about an employee or an employee's family member whether by request, mandatory disclosures, or purchase from a third party.

Although approximately 34 states have already passed laws prohibiting genetic discrimination in employment, GINA is notably broader than many of the existing state laws. Specifically, the Act's definition of “genetic information” is extremely broad. GINA does not preempt more restrictive state laws, however, its broad provisions place even the best-intentioned employers at greater risk of violation.

According to GINA, “genetic information” includes the results of genetic tests as well as an individual's family medical history. Specifically, “genetic information” is defined as information about: 1) an individual's genetic tests; 2) genetic tests of the individual's family members; and 3) and the manifestation of a disease or disorder in the individual's family members. Consequently, although an employer may not necessarily be obtaining information through traditional genetic counseling, information related to an employee's family medical history would nonetheless fall under the purview of the Act and should be treated accordingly. Moreover, GINA does not limit the information about medical conditions to biological relatives or hereditary disorders. Thus, it applies to spouses and adopted children of an individual, even though the employee does not share the same family medical history.

GINA carves out an exception, however, for requests for genetic information in connection with employer wellness programs. To qualify, four conditions must be met: 1) the employer offers health or genetic services (i.e., as part of a wellness program); 2) the employee provides prior, knowing, voluntary and written authorization; 3) only the employee and the licensed health care professional or board certified genetic counselor involved in providing the services may receive individually identifiable information related to the service; and 4) the employer receives information about such services only in aggregate terms that do not disclose the identity of the employee. Furthermore, companies are required to maintain genetic information as a confidential medical record under the ADA. As such, genetic information must be treated as confidential, maintained on separate forms and in separate files, and protected from unauthorized access.

What to Do Now to Avoid Future Liability Under GINA

Prior to GINA's effective date, employers should take proactive measures to ensure that wellness programs are compliant with the Act's requirements. Employers should update their policies addressing the confidentiality of employee information. For example, an employer should examine how it collects and maintains genetic information, such as information about an employee's family medical history.

Employers must be careful before implementing an employee medical screening initiative that evaluates an employee's propensity for genetically linked medical conditions. If an employer uses health risk assessments to collect information as part of its wellness program, it should tailor the questions to avoid disclosure of genetically-linked medical conditions. If an employer chooses to obtain this information, however, it must ensure voluntary employee participation and obtain written consent before collecting the information. Additionally, third party administrators should collect such information as to keep specific employees' identities from being disclosed. Finally, all information obtained through genetic counseling must be maintained in separate files and internal access should be strictly limited to those with a need to know.

Conclusion

It is axiomatic that a healthier workforce will increase overall employee productivity and result in a reduction in health care costs. Although many employees appreciate the availability and benefits of an employer sponsored wellness program, employers must be mindful of the limitations inherent in these programs and ensure that they are compliant with both state and federal law. By updating practices on the collection of genetic information to ensure compliance with the requirements of GINA, employers will decrease their potential risk of liability under the Act.

Tiffani L. McDonough practices in the labor and employment group at Cozen O'Connor, Philadelphia. She has represented employers in a range of matters arising under federal and state statutes, including Title VII, FMLA, ADEA, ADA, retaliation and executive compensation. Ms. McDonough can be reached at 215-665-7261 or [email protected].

Most employees typically spend more than half of their waking hours at work. Unsurprisingly, work culture can have a serious impact on their health. As a result, many companies have designed wellness programs to promote a healthier work environment and prevent and manage diseases in an effort to maintain employee health and productivity. Another significant consideration for implementing a wellness program is combating the rising costs of health care coverage. Specifically, these programs are created to encourage a healthier lifestyle, with the expectation that such behavioral changes will, in turn, create a healthier work force resulting in lower employer insurance premiums. Because certain preventable health conditions, such as obesity and tobacco-related illnesses, are significantly contributing to the overall decline in employee health and rising expense of health care coverage, employers are responding by providing services such as discounted gym memberships and employee assistance programs including nutritional counseling and/or health coach services.

Voluntary vs. Mandatory

Although voluntary wellness programs are quite common, employers are increasingly implementing mandatory wellness programs, which require an employee to participate in the program or otherwise suffer a penalty. These programs may require, for example, that employees take a health risk assessment as a requirement of eligibility for health insurance coverage or participate in weekly stress management classes. Some more stringent programs require employees to refrain from unhealthy lifestyle choices, such as tobacco use or poor dietary choices. In some cases, companies monitor workers' lifestyle choices by mandating testing. For instance, if the mandatory wellness program requires employees to refrain from tobacco use, the employer may require them to undergo periodic nicotine testing.

While often a healthy asset for organizations, the increasing use of mandatory wellness programs can also present liability risks for companies, including potential violations of employee privacy rights, the federal anti-discrimination laws, such as the Americans With Disabilities Act (ADA), the Health Insurance Portability and Accountability Act, and state legislation regarding the regulation of an employee's lawful off-duty conduct. In addition to the interplay of these programs with both existing federal and state law, the recently passed Genetic Information Nondiscrimination Act (GINA) of 2008, effective Nov. 21, 2009, must be factored into the administration of such plans. Although the Act provides that the EEOC will issue final regulations under GINA within the next year, it is imperative that employers act now to avoid liability. Employers should review current wellness plans to ensure compliance, especially with the Act's confidentiality provisions. Companies who violate the Act face severe penalties ' as much as $300,000 for each violation. The broad definition of “genetic information” under the Act puts even the best-intentioned employers at risk of a violation.

Avoiding the Legal Pitfalls

To avoid litigation, the proper balance must be struck between mandatory wellness programs and employee rights. As an initial matter, employers should have a business objective when implementing a mandatory wellness program. This may be as simple as stress reduction at work. Nonetheless, employers should be able to link the goals of the wellness program to employee job performance.

Compliance with the Americans With Disabilities Act (ADA)

Employers must be careful in designing mandatory wellness programs to ensure compliance with the law. Such programs, if not properly administered, may face myriad legal challenges under federal anti-discrimination statutes and privacy laws. One of the biggest challenges is reconciling mandatory wellness programs with the requirements of the ADA, which prohibits employers from discriminating against a qualified individual with a disability in any aspect of employment, including employee compensation and benefits. Specifically, employers must be mindful of the ADA's confidentiality requirements. For example, the ADA limits the disclosure of employee medical information. Therefore, an employer should retain an independent third party administrator to collect and analyze medical information obtained in connection with a mandatory wellness program to ensure that individual health data is not disclosed to the employer. Additionally, employers must be cognizant that although a disabled individual can perform the essential functions of his/her position, he/she may not be able to maintain certain health criteria required by the wellness program because of his/her disability. For example, a disabled employee may not be able to maintain a set body mass index because of certain health conditions.

Title VII of the Civil Rights Act

Another factor to be considered in implementing a mandatory wellness program is the implications of Title VII. As a practical matter, gender differences should be factored into the goals of the program. For example, a healthy body mass index for women is higher than it is for men. As such, both male and female employees should be held to the medically accepted standards of their respective genders.

State Law Protections Afforded to Lawful Off-Duty Conduct

Likewise, because many states have statutes that protect employees from adverse employment actions for lawful off-duty conduct, employers need to take caution when regulating employees outside of the workplace. Notably, under New York law, employers may not take adverse action against employees for any otherwise lawful off-duty conduct. Some states limit the scope of protection to specific off-duty conduct. In New Jersey, for example, an employer may not take adverse action against employees for the use of tobacco products. Consequently, mandatory wellness programs applicable to employees in states with such statutory protections may not penalize employees for their lawful off-duty conduct. As such, employers must consult relevant state legislation when implementing these programs.

Compliance with the Genetic Information Nondiscrimination Act of 2008

On May 21, 2008, President Bush signed GINA, which prohibits employers and group health plans from discriminating on the basis of “genetic information” and places strict limitations on the collection of such information. GINA imposes three main restrictions on employers: 1) employers cannot discriminate in the terms or conditions of employment based upon genetic information; 2) employers are prohibited from retaliating against an employee who opposes genetic discrimination; and 3) employers are barred from collecting genetic information about an employee or an employee's family member whether by request, mandatory disclosures, or purchase from a third party.

Although approximately 34 states have already passed laws prohibiting genetic discrimination in employment, GINA is notably broader than many of the existing state laws. Specifically, the Act's definition of “genetic information” is extremely broad. GINA does not preempt more restrictive state laws, however, its broad provisions place even the best-intentioned employers at greater risk of violation.

According to GINA, “genetic information” includes the results of genetic tests as well as an individual's family medical history. Specifically, “genetic information” is defined as information about: 1) an individual's genetic tests; 2) genetic tests of the individual's family members; and 3) and the manifestation of a disease or disorder in the individual's family members. Consequently, although an employer may not necessarily be obtaining information through traditional genetic counseling, information related to an employee's family medical history would nonetheless fall under the purview of the Act and should be treated accordingly. Moreover, GINA does not limit the information about medical conditions to biological relatives or hereditary disorders. Thus, it applies to spouses and adopted children of an individual, even though the employee does not share the same family medical history.

GINA carves out an exception, however, for requests for genetic information in connection with employer wellness programs. To qualify, four conditions must be met: 1) the employer offers health or genetic services (i.e., as part of a wellness program); 2) the employee provides prior, knowing, voluntary and written authorization; 3) only the employee and the licensed health care professional or board certified genetic counselor involved in providing the services may receive individually identifiable information related to the service; and 4) the employer receives information about such services only in aggregate terms that do not disclose the identity of the employee. Furthermore, companies are required to maintain genetic information as a confidential medical record under the ADA. As such, genetic information must be treated as confidential, maintained on separate forms and in separate files, and protected from unauthorized access.

What to Do Now to Avoid Future Liability Under GINA

Prior to GINA's effective date, employers should take proactive measures to ensure that wellness programs are compliant with the Act's requirements. Employers should update their policies addressing the confidentiality of employee information. For example, an employer should examine how it collects and maintains genetic information, such as information about an employee's family medical history.

Employers must be careful before implementing an employee medical screening initiative that evaluates an employee's propensity for genetically linked medical conditions. If an employer uses health risk assessments to collect information as part of its wellness program, it should tailor the questions to avoid disclosure of genetically-linked medical conditions. If an employer chooses to obtain this information, however, it must ensure voluntary employee participation and obtain written consent before collecting the information. Additionally, third party administrators should collect such information as to keep specific employees' identities from being disclosed. Finally, all information obtained through genetic counseling must be maintained in separate files and internal access should be strictly limited to those with a need to know.

Conclusion

It is axiomatic that a healthier workforce will increase overall employee productivity and result in a reduction in health care costs. Although many employees appreciate the availability and benefits of an employer sponsored wellness program, employers must be mindful of the limitations inherent in these programs and ensure that they are compliant with both state and federal law. By updating practices on the collection of genetic information to ensure compliance with the requirements of GINA, employers will decrease their potential risk of liability under the Act.

Tiffani L. McDonough practices in the labor and employment group at Cozen O'Connor, Philadelphia. She has represented employers in a range of matters arising under federal and state statutes, including Title VII, FMLA, ADEA, ADA, retaliation and executive compensation. Ms. McDonough can be reached at 215-665-7261 or [email protected].