Encouraging employees to adopt healthier lifestyles–for instance, by offering an incentive to workers who quit smoking–can often be a win-win for both employers and employees, but be careful that your program does not violate the federal Health Insurance Portability and Accountability Act (HIPAA).
Wellness Programs and HIPAA Nondiscrimination
HIPAA’s nondiscrimination provisions generally prohibit group health plans from charging similarly situated individuals different premiums or contributions or imposing different deductible, copayment or other cost sharing requirements based on a health factor. However, there is an exception that allows plans to offer wellness programs. In general:
- Programs that do not require an individual to meet a standard related to a health factor in order to obtain a reward are not considered discriminatory under HIPAA, such as a program that reimburses employees for the cost of smoking cessation aids regardless of whether the employee quits smoking.
- Programs that require individuals to satisfy a standard related to a health factor in order to obtain a reward must meet five additional requirements to comply with HIPAA. An example of this type of program is one that requires an individual to obtain or maintain a certain health outcome in order to obtain a reward (such as being a non-smoker or exercising a certain amount).
In order to be subject to HIPAA’s nondiscrimination requirements, a wellness program must be, or be part of, a group health plan. If an employer operates a wellness program as an employment policy separate from the group health plan, the program may be covered by other federal or state nondiscrimination laws, but it would not be subject to HIPAA’s nondiscrimination regulations.
As with any employee program, check with a knowledgeable employment law attorney to ensure that your program complies with all applicable state and federal laws, including nondiscrimination laws other than HIPAA.