EMPLOYEE WELLNESS PROGRAMS
ARE YOU EFFECTIVELY MANAGING THE RISKS INVOLVED?
Wellness programs are undeniably beneficial. Encouraging employees to take control of their physical, mental and financial health improves employee recruitment, retention, and productivity, and boosts the employer’s brand and bottom line. They also have been shown to reduce the cost of health care. This is why wellness programs, including the nontraditional benefits that typically go along with them (e.g., wearable devices, mobile apps, employee assistance programs (EAPs) and telehealth), are playing a key role in today’s focus on improving social capital, that is, a company’s relationship with its employees, customers, and communities.
WHAT ARE THE RISKS?
Improving shareholder value is no longer the only rodeo in town. More and more companies are starting to assume an integral role in the management of an employee’s health through employee-driven programs, benefits, policies, and incentives.
Wellness programs, however, are not free of risk. Indeed, the more effective a wellness program is in engaging with and enhancing the physical, mental and financial health of employees, the more it may expose its sponsoring company to the prospect of a lawsuit. Wellness programs depend on various sensitive activities for their success, including the collecting, reporting and analyzing of personal medical information, one-on-one counseling and incentivizing employees to participate using monetary measures (e.g., charging a fee or premium if an employee chooses not to participate). The more people that sign up, the greater the likelihood that someone in the company feels wronged or mistreated.
Issues may also arise if the individuals implementing the wellness initiatives (internal employees, EAP counselors, third-party vendors, etc.) are not securely handling sensitive and personal employee information in their possession.
Being prepared to defend your company against a claim concerning its wellness program is always well advised. However, avoiding a claim altogether could be more advantageous. A small adjustment might avoid a costly dispute or claim, or at least ensure that the matter is resolved as quickly as possible so as not to undermine the program and the significant benefits generated.
Consider how the following recent court decisions might inform the manner in which you structure and/or administer your company’s own wellness program.
QUESTIONS TO ASK YOURSELF
COMPANIES PENALIZING AN EMPLOYEE FOR CHOOSING NOT TO PARTICIPATE IN A WELLNESS PROGRAM.
IS THIS REALLY WHAT YOU WANT TO DO?
Employee sues employer and its third-party wellness program administrator over a $500 tobacco surcharge assessed against the
employee for his refusal to participate in, and complete an online health questionnaire in connection with, the company’s wellness program. (Dittman)
EEOC sues employer for its alleged violation of the ADA “by requiring employees who elect to enroll in [the employer]’s self-insured health insurance plan to either complete a health risk assessment (HRA) or pay 100 percent of their monthly premium amount.” (Orion)
EEOC sues an employer in connection with its cancellation of an employee’s health insurance after the employee failed to attend a mandatory health screening provided under the employer’s wellness program, a program that “pushed employees to participate . . . by requiring participation as a condition of the employer’s contributions to an employee’s health insurance premiums.” (Flambeau)
Employee sues employer for its alleged violation of state wage and hour laws in deducting $20 monthly from her paycheck for her husband’s refusal to take part in the employer’s wellness program. (Gallina)
WHAT IS YOUR COMPANY’S PROCEDURE WHEN AN EMPLOYEE REFUSES WELLNESS SERVICES?
FAILING TO UNDERGO A MEDICAL EXAMINATION IN CONNECTION WITH A WELLNESS PROGRAM
Employee sues employer for its alleged violation of ADA’s anti-retaliation clause when it terminated the employee after she refused to complete a health risk assessment and abide by the employer’s instructions not to discuss her concerns about the legality of the company’s wellness program with her co-workers. (Orion)
Firefighter sues the city for terminating him for his refusal to provide a full medical history and/or take a stress test as required under the city’s wellness program for uniformed employees. (Ortiz)
“Over-40” firefighter/paramedic sues employer and union over his termination for refusing to undergo a full medical examination pursuant to the city’s wellness program. (Lee)
AFTER HE OR SHE CHOOSES OR IS DIRECTED TO USE THE COUNSELING SERVICES PROVIDED THROUGH AN EAP
Employee sues employer for terminating him after he requested to use the employer’s EAP counseling services for anxiety and depression, and the employer then required him to obtain a medical release before being permitted to return to work. (Gulf Logistics)
Employee sues employer for its termination of and refusal to rehire the employee after he tested positive for alcohol and underwent treatment via the employer’s EAP. (Alexander)
Middle school teacher sues school district for terminating him after he used its EAP counseling services for post-traumatic stress disorder. (Geer)
Employee sues employer for terminating him after he failed a random drug test for marijuana use and then underwent a substance abuse evaluation through the employer’s EAP, at the employer’s direction. (Parrotta)
HAVE YOU REVIEWED YOUR PROCEDURES FOR NOTIFYING MEMBERS ABOUT THE RESULTS OF THEIR MEDICAL EXAMINATIONS AND BLOOD TESTS?
ARE YOU AT RISK FOR FAILING TO NOTIFY A MEMBER OF THE SERIOUSNESS OF A CONDITION DISCLOSED?
Employee sues employer and the third-party administrator of its wellness program for failing to advise her husband of the seriousness of his low hemoglobin levels, which were detected during an annual, mini-physical provided through the wellness program but not acted upon immediately by the husband, who then died within months of later-diagnosed stage D colon cancer. (Huffman)
ARE YOUR EMPLOYEES ENCOURAGED TO WORK OUT DURING LUNCH HOUR?
Spouse of deceased employee sues employer over its denial of death benefits after the employee was killed when a truck hit him while riding a bike during lunch, allegedly in furtherance of the “eat well and stay fit” initiative of the employer’s wellness program. (Gonzales)
ARE YOU TRAINING AND MANAGING YOUR EAP COUNSELORS AND PROGRAM ADMINISTRATORS PROPERLY?
“Facebook content moderation firm forced onsite therapists to disclose counseling details with employees, according to the report,” The Business Insider, August 17, 2019.
EAP counselor sues an employer in connection with her termination for her purported mishandling of a gay employee and subsequent refusal to be coached on how to appropriately advise gay or homosexual employees. (Walden)
Employee sues employer and certain individuals involved in the administration of its wellness program/EAP, for discrimination, retaliation and defamation in connection with the employee’s termination and rehiring after he tested positive for Adderall and used the EAP services for his Attention Deficit Hyperactivity Disorder (ADHD); the defamation claim stemmed from certain statements allegedly made by the individual defendants during the termination process. (McFadden)
Although these cases may be alarming, the benefits of providing your employees and their family members with the ability to take control of their health and finances may outweigh any associated risks. Work closely with your insurance broker and attorney to ensure that your company’s wellness program (and any EAP or third party vendor associated with it) is structured and administered as optimally as possible to avoid the pitfalls inherent in running it. The key is to understand what might go wrong, in the context of the legal framework within which your plan operates, and to make the appropriate adjustments so that the risks involved are managed as effectively as possible. You may also consider doing a review of your property and casualty insurance coverage, with a specific focus on managing wellness program risks. There may be insurance coverages available that will help with some specific risks associated with wellness programs.
Here at IMA, our brokers are some of the best in the industry, with the experience and knowhow to help you structure and administer a wellness program that reflects your company’s commitment to and support of its employees.
IMA has an in-house wellness expert available to consult with our clients.
If you are considering incorporating a wellness program into your health benefits plan or you simply wish to walk through an existing program, contact IMA.