Actually, the Affordable Care Act (e.g., “Obama care”) creates new incentives for employers and builds on existing wellness program policies to promote employer wellness programs.  Plus, under federal law, an employer can even vary your health insurance premium based on a “health factor” up to 30%, a factor potentially based on its wellness program.  However, a number of statutes at the federal level, including the HIPAA Privacy Rule, the Americans with Disabilities Act (ADA), the Age Discrimination in Employment Act (ADEA), and Genetic Information Nondiscrimination Act (GINA) may directly influence an employer’s ability to “legally” operate a wellness plan.

An employer that structures a wellness program around incentives for participation rather than achievement of a particular goal is generally considered nondiscriminatory under HIPAA because the program requires no compelled disclosure of protected and confidential health information.  Such programs include reimbursement for the cost of membership in a fitness center or providing a reward (i.e., free lunch) to employees for attending a monthly, no-cost health education seminar.

On the other hand, an employer who offers employees discounts based on outcomes that rely on confidential health information, however slight, may nonetheless come within the scope of the HIPAA Privacy Rule.  Examples of such confidential health information factors include the measurement of cholesterol levels, blood pressure levels, measurement of body mass-index (BMI), and monitoring participation in “risk behaviors” such as smoking or alcohol consumption.  While programs that utilize confidential health information are not impermissible, in order to withstand legal scrutiny, it is recommended that programs reward employees for participation as opposed to penalizing employees for failing to meet set objectives.

Recently, the Equal Employment Opportunity Commission (EEOC) began challenging the legality of corporate wellness programs.  In one of its challenges, the EEOC alleged that Honeywell’s wellness program violated the Americans with Disabilities Act and the Genetic Information Nondiscrimination Act.  See EEOC v. Honeywell International, 14-CV-4517, U.S. District Court, District of Minnesota.  Under its wellness program, Honeywell required its employees and insured spouses to have a blood draw to test cholesterol levels and measurements of body mass index.  Holdouts were assessed a $500 insurance surcharge and could potentially lose as much as $1,500 in company contributions to health savings accounts.  The EEOC did not prevail on its attempt to get a court injunction to stop Honeywell, but the case for alleged violations of the ADA and GINA is ongoing.  

Additionally, employers wishing to institute a wellness program must ensure that penalties for noncompliance, if any, do not discriminate on the basis of age.  For example, employers who set unrealistic goals for individuals who may be physically unable to meet them as a result of their age could be subject to liability under the ADEA.

In sum, there is no such thing as a “model wellness program.”  Each employer should determine the needs of his or her workforce in order to develop a program that meets the health objectives of its employees, while at the same time traversing any legal considerations that may arise from its implementation.


Here are some important considerations for corporate wellness plans:

  • Incentives, not penalties
  • No collection of confidential health information from an employee
  • Do not require achievement of any specific health standards
  • Be aware of how the program may impact older employees