Workplace Wellness Compliance And Your Bottom Line: It Pays To Comply!

As a workplace wellness attorney, I get a lot of compliance questions, especially around incentives. The desire to comply with wellness laws and regulations usually stems from wanting to do what is right.

I applaud that.

But, it is also important to know what could be at stake with a business’s finances and reputation should a company fail to comply with wellness laws.

This blog post will summarize potential penalties and repercussions if a company does not comply with some pertinent wellness laws.

HIPAA Nondiscrimination

What the law says:

Group health plans and health insurance issuers may not discriminate against participants and beneficiaries in eligibility, benefits, or premiums based on a health factor.[1]

 

What happens if you fail to comply:

The maximum civil money penalty is $100 for every day of noncompliance.[2]

 

What are the exceptions:

No penalty will be imposed if a violation is due to reasonable cause and not willful neglect, and the violation is corrected within 30 days after discovering the violation.[3]

 

Who enforces the law:

States have enforcement authority of these Health Insurance Portability and Accountability Act (HIPAA) provisions with respect to health insurance issuers within the state, but Health and Human Services (HHS) will step in to regulate if the state fails to enforce the laws.[4]

Guidance notes that “the states may enforce the provisions of HIPAA as they pertain to issuers, but that the Secretary of HHS must enforce any provisions that a state chooses not to or fails to substantially enforce.”[5]

In determining the penalty for violations, the HHS Secretary takes into account the previous record of compliance and the gravity of the violation.[6] If noncompliance relates to genetic information,[7] a violation not corrected upon notice by HHS is subject to a $2,500 penalty, $15,000 for penalties that are more than “de minimis” (minor) violations.[8]

 

What the law says:

Workplace wellness programs must be available to all employees, regardless of disability, and must offer reasonable accommodations for qualified individuals.

Also, employers cannot make disability-related inquiries or require employees to undergo medical examinations unless an exam is job-related and consistent with business necessity or the medical exam is “voluntary” and part of an employee health program available at the worksite,[9] including workplace wellness programs.[10] The term “medical exam” can include a health risk assessment or biometric screen.

Wellness programs must also meet a number of Americans with Disabilities Act (ADA) requirements, including restrictions on financial incentives that may be offered to increase participation using medical exams or disability-related questions.[11] Other ADA provisions impose notice requirements when collecting medical information,[12] and govern confidentiality and security requirements in addition to numerous other compliance issues not mentioned or detailed in this article.[13]

Additionally, employers “may not take any other adverse action against employees who choose not to answer disability-related inquiries or undergo medical examinations.”[14] This would include retaliation for declining to participate in the wellness program or declining to provide medical information collected as part of the program.[15]

 

What happens if you fail to comply:

Employee or employees alleging employment discrimination by employers can seek compensatory damages, including out-of-pocket costs and damages for emotional harm, as well and punitive damages for reckless or malicious acts of discrimination.[16]

The amount of punitive damages is capped: $50,000 for employers with 15 to 100 employees; $100,000 for employers with 101 to 200 employees; $200,000 for employers with 201 to 500 employees; and $300,000 for employers with more than 500 employees.[17] A party who prevails can also obtain reasonable attorney’s fees, litigation expenses, and costs.[18]

In egregious cases involving a pattern of retaliation, civil penalties can rise to $50,000 for a first offense, $100,000 for second offense.[19]

 

What are the exceptions:

The type of relief available when a workplace wellness program violates the ADA nondiscrimination rules will vary depending on the impact of the discrimination on a particular individual.[20]

 

Who enforces the law:

The Equal Employment Opportunity Commission (EEOC) enforces the ADA laws on employment discrimination.[21]

 

GINA Nondiscrimination

What the law says:

The Genetic Information Nondiscrimination Act (GINA) has two titles that govern workplace wellness programs:

GINA Title I prohibits group health plans from discriminating on the basis of genetic information, either for underwriting purposes or prior to or in connection with enrollment.[22]

GINA Title II prohibits employers from requesting, requiring, or purchasing genetic information with respect to an employee or an employee’s family member.[23] However, employers can collect genetic information as part of a voluntary wellness program, so long as they follow the rules that govern such collection.[24]

The GINA rules prohibit financial inducements to provide genetic information, “but may offer financial inducements for completion of health risk assessments that include questions about family medical history or other genetic information, provided the covered entity makes clear, in language reasonably likely to be understood by those completing the health risk assessment, that the inducement will be made available whether or not the participant answers questions regarding genetic information.”[25]

Employers must follow other rules under GINA, including confidentiality requirements. For instance, employers who obtain genetic information voluntarily must keep it in separate medical files and treat it as confidential medical records.[26]

Like the ACA/HIPAA and ADA rules that limit financial inducements in exchange for voluntary participation, GINA Title II limits financial inducements for wellness programs that collect manifestation of disease or disorder information from employees’ spouses to 30 percent of the cost of self-only health coverage.[27] And like other federal laws that govern wellness programs, GINA Title II includes a plethora of other provisions that employer wellness programs must understand to stay compliant.

 

What happens if you fail to comply:

The same mechanisms used to enforce underlying federal laws are used to enforce amendments under GINA Title I.[28] For instance, GINA Title I made amendments to the Public Health Service (PHS) Act to prohibit discrimination on the basis of genetic information.[29] Violations of the provisions that fall within the PHS Act are subject to the prescribed penalties for violations of the PHS Act, which imposes a maximum penalty of $100 per day.[30]

GINA incorporates enforcement and remedy provisions that were already in existence for other types of discrimination in the employment discrimination area, including the Civil Rights Act of 1964.[31] Remedies can include compensatory damages for “future pecuniary losses, emotional pain, suffering, inconvenience, mental anguish, loss of enjoyment of life, and other nonpecuniary losses.”[32] Punitive damages are capped, based on the number of employees.

Employers are subject to punitive damages of $50,000 to $300,00, depending on the size of the employer, if discrimination is intentional.[33] Remedies also include reasonable attorney’s fees and litigation costs, as well as injunctive relief, including reinstatement or back pay.[34]

 

Who enforces the law:

GINA Title I is enforced by the Departments of Labor, Health and Human Services, and Treasury and enforcement responsibilities are shared because GINA Title I amended different federal laws enforced by different departments or agencies.

GINA Title II is enforced by the EEOC.

 

Conclusion

To avoid these penalties, it is imperative that those who design and implement work place wellness programs should be up to date on the various laws that impact workplace wellness programs.

With the release of Rule the Rules of Workplace Wellness Programs, there is now a resource for workplace wellness professionals, including health educators, health promotion professionals, health coaches, fitness trainers, nutritionists, human resource professionals and even the lawyers who wish to gain a broader perspective of workplace wellness compliance.

Rule the Rules of Workplace Wellness Programs is written by authors who genuinely care about the workplace wellness industry for those who aim to help advance wellness in the workplace and beyond. In addition, the authors plan to offer a training program to accompany the book in the near future.

To learn more, sign up for the Center for Health and Wellness Law’s newsletter at www.wellnesslaw.com. To order the book, click here.

 

FOOTNOTES:

[1] 42 U.S.C. § 300gg-4; 29 C.F.R. § 2590.702(a)(1).

[2] 42 U.S.C. § 300gg-22.

[3] 42 U.S.C. § 300gg-4(b)(2)(C)(iii).

[4] 42 U.S.C. § 300gg-4(a).

[5] 78 Fed. Reg. 33158, 33175 (June 3, 2013).

[6] 42 U.S.C. § 300gg-4(b)(2)(C)(ii).

[7] 42 U.S.C. § 300gg-4(b)(3).

[8] Id.

[9] 29 C.F.R. § 1630.14(d).

[10] 81 Fed. Reg. 31126 (May 17, 2016) (explaining that the ADA’s nondiscrimination rules apply to workplace wellness programs that conduct medical examinations or make disability-related inquiries.).

[11] 81 Fed. Reg. 31136 (May 17, 2016).

[12] 29 C.F.R. § 1630.14(d)(iv).

[13] 81 Fed. Reg. 31136 (May 17, 2016).

[14] 29 C.F.R. s pt. 1630, App., Interpretive Guidance on Title I of the Americans with Disabilities Act.

[15] Id.

[16] Id.

[17] 42 U.S.C. § 1981a.

[18] 42 U.S.C. § 12205.

[19] 42 U.S.C. § 12203; 42. U.S.C. § 12188.

[20] Remedies for Employment Discrimination, EEOC, https://www.eeoc.gov/employees/remedies.cfm (last visited April 8, 2017).

[21] 42 U.S.C. § 12117; 28 C.F.R. § 37.7.

[22] 45 C.F.R. § 146.122(d).

[23] 42 U.S.C. § 2000ff-1.

[24] 75 Fed. Reg. 68912 (Nov. 9, 2010); 29 C.F.R. Part 1635.

[25] 29 C.F.R § 1635.8(b)(2)(ii).

[26] 29 C.F.R § 1635.9.

[27] 29 C.F.R. § 1635.8.

[28] Representative Louise Slaughter, Genetic Information Non-Discrimination Act, 50 Harv. J. on Legis. 41, 56 (2013).

[29] 42 U.S.C. § 300gg et seq.

[30] 42 U.S.C. § 300gg-22.

[31] 42 U.S.C. § 2000ff-6; Heather A. Giambra, A Primer on Title II of the Genetic Information Nondiscrimination Act of 2008 and Its Implementing Regulations, N.Y. St. B.J., November/December 2012, at 26, 33.

[32] 29 C.F.R. § 1635.10.

[33] 42 U.S.C. § 1981a.

[34] Id.

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