Using case problems, this webinar will give attendees real-world examples of workplace wellness situations and help attendees learn from those situations so that they can design and implement a compliant wellness program. Through case problems, attendees will review compliance mistakes concerning HIPAA, ACA, GINA, ADA, FLSA, data privacy and tax laws. Participants will learn how to use those laws to build a better workplace wellness program. Learning Objectives: * Understand how to apply laws to specific factual situations. * Identify red flags in certain common workplace wellness practices. * Learn the basics of HIPAA, ACA, GINA, ADA, FLSA, data privacy and tax laws as those laws relate to workplace wellness programs.

1. SOLVING PROBLEMS IN WORKPLACE
WELLNESS PROGRAMS
HPLive Webinar
By Barbara J. Zabawa, JD, MPH
Center for Health and Wellness Law, LLC
1

2. AGENDA
• Reasonable Design
• Tying Reward to Spouse
• Data Privacy
• Biometric Screening/Flu Shots
• Incentive Maximums
• Voluntariness
• Taxation
• Involving Children
• Wellness Program is Term of Health Plan
2

3. REASONABLY DESIGNED
3

4. CASE SCENARIO #1
• ABC Health Company’s wellness program consists of
an online HA. ABC’s HR department sees the results
and sends those results to ABC’s health insurer.
Employees do not see results.
• Permissible?
4

5. ADA RULES
• Reasonably designed to promote
health/prevent disease
• Must provide follow-up after collecting
medical information
• Should not be about collecting information
only.
• Different from HIPAA/ACA
• Only health contingent need to be “reasonably
designed”
5

6. CASE SCENARIO #2
• ABC Health Company offers a wellness program to its group health plan
participants. Participants can earn points by selecting from a list of
wellness activities. One of the activities participants can choose is to
volunteer in the community for at least one hour each week.
• Is this permissible? How large can the reward be?
6

7. HIPAA/ACA
• To qualify for wellness program exception, must
meet certain conditions:
• Participatory programs must only be offered to “similarly
situated” individuals.
• No limit on financial incentives.
• Health-contingent programs must meet 5 factor test.
7

8. HIPAA/ACA
• Distinction between participatory and “health
contingent” is whether reward is tied to:
HEALTH STATUS
8

9. HIPAA/ACA
• Participatory program examples:
• Fitness center membership reimbursement
• Reward for participating in health
assessment
• Waiver of health plan cost-sharing for
preventive items or services
• Smoking cessation program reimbursement
• Reward for attending health education
seminar
9

10. HIPAA/ACA
• Two types of health-contingent
programs:
• Activity
• May seek verification from physician that health
factor makes it unreasonably difficult or medically
inadvisable to satisfy activity.
• Outcomes-based
• May not seek verification
• Both must meet 5 factor test. 10

11. HIPAA/ACA
•Five factors:
1. Qualify for the reward at least once/year.
2. Total reward may not exceed 30% (50%
for tobacco prevention programs) of
total cost of coverage.
3. Reasonable design to promote health or
prevent disease.
11

12. HIPAA/ACA
•Five factors (cont.)
4. Full reward must be available to all similarly
situated individuals.
• Must provide reasonable alternative standard (or waiver of
standard)
5. Disclosure of reasonable alternative standard (or waiver)
in plan materials describing the wellness program terms.
• SPD
• Communications disclosing individual did not meet initial
outcomes-based standard
12

13. CASE SCENARIO #3
• ABC Health Company has a number of employees whose primary
language is a non-English language. ABC wants to implement a
health contingent wellness program to its health plan participants that
includes written instructions on how to earn points through the
program. One of the activities includes taking a health risk
assessment. The instructions on how to earn points and the health risk
assessment are in English only. No interpreters are available. The
non-English language-speaking employees are left to figure out how
to participate and earn points in the wellness program.
• Is this permissible? Should the ADA notice be in English only?
13

14. ADA RULES
• Programs that collect medical information
must provide employees with notice.
14

15. ADA RULES
• Notice requirement applies even in absence of
incentives
• Notice must contain following:
• Be understandable
• Describe type of medical information obtained
• Describe specific purposes for which information will be
used
• Who will receive information
• Restrictions on disclosure of medical information
• Methods employer will use to prevent improper disclosure
15

16. DATA PRIVACY
16

17. CASE SCENARIO #1
• Wellways is a wellness vendor that contracts with ABC Health System
to provide wellness services to ABC’s employees. The services include
conducting a biometric exam and HRA. The wellness program is
available to all ABC’s employees, regardless of whether the employee
participates in ABC’s group health plan.
• Is the health information collected by Wellways protected by the HIPAA
privacy and security rules?
• What, if any, confidentiality protections must occur for the information
collected?
17

18. HIPAA
The HIPAA Privacy Regulations protect
“Protected Health Information” or “PHI.”
18

19. PHI is “Individually Identifiable Health
Information” that is transmitted or
maintained in any form or medium.
• PHI excludes:
- education records
- student medical records
- employment records
HIPAA
19

20. HIPAA
Applies to
Covered Entities
20

21. HIPAA
Covered Entities:
• - Health Plans
• - Providers who conduct one or more of the
HIPAA-defined transactions electronically
• KEY: HIPAA does not apply to entities that
don’t engage in covered electronic
transactions
• - Clearinghouses
21

22. CASE SCENARIO #2
• Same facts as Scenario #1, except ABC offers the wellness program to
its group health plan participants only.
• Is the information collected subject to HIPAA privacy and security rules?
• Can Wellways disclose individually identifiable health information to ABC as
the plan sponsor?
22

23. HIPAA
Many parts also apply to:
Business Associates
23

24. HIPAA
What is a “Business Associate?”
• Not a member of the CE’s workforce who, with respect to a
CE:
1. Performs a function or activity using individually
identifiable health information involving:
• Claims processing or administration
• Data analysis, processing or administration
• Utilization review
• QA
• Billing
• Benefit management
• Practice management
• Repricing
24

25. HIPAA
2. Performs any other function or activity regulated by HIPAA; or
3. Provides any of the following services to or for the CE (and which
involves the disclosure of individually identifiable health information):
• Legal
• Actuarial
• Accounting
• Consulting
• Data aggregation
• Management
• Administrative
• Accreditation
• Financial
25

26. HIPAA
BA also includes:
• Companies that “maintain” PHI on behalf of a CE
• Data storage company
• Patient safety organizations
• Companies that transmit PHI to a CE
26

27. HIPAA
More BA examples:
• PHR vendors
• Subcontractors to BAs that create, receive, maintain or transmit
PHI on behalf of the BA.
27

28. CASE SCENARIO #3
• ABC company decides to start a wellness program that includes an
employee HRA. Employees are asked to fill out an HRA in fall 2016.
Employees who do so are eligible to earn a 10% premium discount off
their 2017 plan rates that take effect on January 1, 2017.
• When should ABC company issue the notice required by the ADA rules?
28

29. CASE SCENARIO #4
• WellWays is a wellness vendor with an online portal. Employees who
participate in their employer wellness program can log onto WellWays’
portal to take a health risk assessment and access other wellness
educational resources. Before a participant can access the HRA or other
resources, he or she must “click” to agree to WellWays’ privacy policy.
The privacy policy does not appear anywhere else or at any other time
on WellWays’ website.
• Is this privacy notice practice sufficient?
29

30. CASE SCENARIO #5
• Terry, employee of ABC Company agrees to provide health
status information to earn an incentive through the employer
wellness program. Terry logs onto an online portal sponsored
by a wellness vendor to provide the information. The portal
contains the following privacy statement:
• We will not share your PHI with any third party, including your
employer. We have strict security controls in place to ensure that the
information you provide is kept private and secure.
• Is this privacy statement sufficient under the ADA or GINA?
30

31. REWARDING SPOUSES
31

32. CASE SCENARIO #1
• Employee can earn reward (the value of which is no more than 30% of
the total cost of self-only coverage) if both the employee and spouse
meet a certain cholesterol level. If either employee or spouse fails to
meet the cholesterol target, the employee does not earn the reward.
• Permissible?
32

33. GINA
• Like ADA Final Rule, collection of spousal
information must be part of wellness program
reasonably designed to promote health or prevent
disease.
• Not reasonably designed if:
• Impose a penalty on individual because of spouse’s disorder
prevents spouse from participating in program or achieving
certain outcome;
• Collection of information does not include follow-up
information or advice or not used to design a program that33

34. GINA
• Employers May Not Deny Access to Health
Coverage Based on Spouse’s Refusal to Provide
Information.
• Employers May Not Retaliate Against Employee
Based on Spouse’s Refusal to Provide Information.
34

35. CASE SCENARIO #2
• Employee earns a reward equal to 15% of the total cost of employee-only coverage
and another 15% of that cost if both the employee and spouse do the following:
• Complete an HRA
• Attend a biometric screen (results are irrelevant for purposes of reward)
• Attend four seminars
• Provide evidence of a physical exam by their primary care physician
• If either the spouse or employee fail to complete all four activities (which all four are
presumed to qualify as “participatory” programs under the HIPAA/ACA rules), the
employee’s reward is $0. That is, both employee and spouse must complete all four
activities to earn the full 30% reward.
• Is this permissible?
35

36. GINA
• Appeared in May 17, 2016 Federal Register
(alongside final ADA rule)
• Allows wellness programs to offer incentives for
employee’s spouse to provide certain information
• Information limited to spouse’s own manifestation of
disease or disorder;
• Must be part of a health assessment or medical
examination or both.
36

37. GINA
• Applies to All Wellness Programs
• Unlike proposed GINA rule, incentive rule applies
regardless if spouse or employee enrolled in employer
health plan.
37

38. GINA
• Incentive Limit Calculation:
• Employees enrolled in Employer Plan
• 30% total cost of self-only coverage (includes both employee and employer
contribution)
• All Employees Regardless of Plan Enrollment
• 30% total cost of self-only coverage under employer’s plan
• All Employees when Multiple Plans Offered
• 30% total cost of lowest cost self-only plan available
• All Employees when No Plan Available
• 30% cost of self-only coverage under 2nd lowest cost Silver Plan for 40
yo/nonsmoker on Exchange
• 30% Incentive Applies to Spouse and Employee
Separately
38

39. GINA
•Calculation Example:
•Cost of family coverage is $14,000. Self-
only cost is $6,000. Incentive can be up to
$1,800 for employee and $1,800 for
spouse (30% of $6,000).
39

40. CASE SCENARIO #3
• Same facts as Scenario #2, except the reward
is equal to 30% for the employee’s
participation and 30% for the spouse’s
participation.
• Would this be permissible?
40

41. CASE SCENARIO #4
• Employee can earn a reward of up to 60% of
the total cost of employee-only coverage if
both the employee and spouse join a fitness
club, attend at least three health education
classes (from a list of over a dozen options),
and volunteer in the community.
• Is this permissible?
41

42. ADA
• Incentive Limit Applies to
• Participatory and
• Health Contingent Programs:
• Only applies to programs with HRAs/Biometric
Screens
42

43. CASE SCENARIO #5
• Terry, spouse of employee of ABC Company agrees to
provide health status information to help employee earn
an incentive through the employer wellness program.
Terry logs onto an online portal sponsored by a wellness
vendor to provide the information. The portal contains a
privacy statement but nothing else. It is up to Terry to
decide whether to read the privacy statement. Terry can
just skip the statement and proceed right to the portal to
provide his/her information.
• Is this privacy statement sufficient?
43

44. GINA
• In addition to Employee, Spouse must provide prior, knowing,
voluntary and written authorization.
• Authorization must contain several elements, such as:
• Be easy to understand;
• Description type of genetic information to be obtained and
purpose for which it will be used;
• Describe restrictions on disclosure of genetic information;
• Genetic information is collected for purposes of providing
health or genetic services;
• Information only provided to individual and licensed health
care professionals involved in providing genetic services and
not disclosed to employer except in aggregate terms. 44

45. BIOMETRIC SCREENING/FLU SHOTS
45

46. CASE SCENARIO #1
• WellWays, a wellness vendor, contracts with employers to
conduct A1c fingerstick tests to screen for diabetes in
employees. WellWays has a Certificate of Waiver under the
Clinical Laboratory Improvement Amendments Act (CLIA) to
perform the fingerstick test. The manufacturer’s instructions
for the fingerstick test state that the intended use of the test is
to monitor patients who have already been diagnosed with
diabetes.
• Can Wellways screen employees for diabetes with the
fingerstick test? 46

47. CLIA
• CLIA governs ”laboratories.”
• “Laboratories” = facilities that perform certain testing on human
specimens to obtain information that can be used for diagnosis,
prevention, or treatment of any disease or impairment of a
human being; or the assessment of the health of a human being;
or procedures to determine, measure or otherwise describe the
presence or absence of various substances or organisms in a
human body.
47

48. CLIA
• Facilities that meet definition of laboratory must obtain
appropriate CLIA certificate before conducting patient testing.
• Three categories of certificates:
• Waived
• Moderate Complexity
• High Complexity
48

49. CLIA
• Most on-site, point-of-care biometric screens in workplace
wellness programs fall within the ”Waived” category.
• Waived tests face fewer regulatory requirements than the other
categories.
• Laboratories with a Certificate of Waiver must:
• Follow the manufacturers’ instructions for performing the test;
and
• Meet other certificate of waiver requirements under 42 CFR s.
493.35-39.
49

50. CASE SCENARIO #2
• Wellways, a wellness vendor, wants to administer flu
shots to employees at their place of work. Wellways
employs licensed practical nurses to administer the
flu shots. Wellways does not employ any physicians.
ABC company, a California-based employer, hires
Wellways to give all of its employees a flu shot.
• Can Wellways’ LPNs perform the flu shot?
50

51. INCENTIVES
51

52. CASE SCENARIO #1
• ABC Company, a for-profit Wisconsin-based company, decides
to host a raffle as the incentive to increase wellness program
participation. All employees who complete an HRA and
biometric screen are entered into a drawing to win a Disney
vacation for a family of four (which amounts to approximately
$5,000). ABC has 300 employees, so each employee has a 1 in
300 chance of winning the Grand Prize, assuming all 300
employees participate. Thus, each chance to win is worth about
$17 (1/300*$5000).
• Is this raffle permissible?
52

53. ADA
• Incentive Limit Applies to
• Financial
• In-Kind Incentives
• Time off
• Prizes
53

54. STATE ANTI-GAMBLING LAWS
• Wis. Stat. s. 563.907:
• Any local religious, charitable, service, fraternal or veterans organization or
any organization to which contributions are deductible for federal income
tax purposes or state income or franchise tax purposes, which has been in
existence for one year immediately preceding its application for a license
or which is chartered by a state or national organization which has been in
existence for at least 3 years, may conduct a raffle upon receiving a
license for the raffle from the department. No other person may
conduct a raffle in this state.
54

55. CASE SCENARIO #2
• ABC Company wants to educate its workforce on how to live well. It
decides to institute a point-based incentive system: the more activities
you participate in, the more points you earn. Employees earn points by
attending classes in nutrition, fitness, the mind-body connection, as
well as getting their flu shot, purchasing fresh fruit and vegetables from
a local market, and purchasing a park pass. An employee who earns
the maximum amount of points could earn up to $5,000 in prizes.
• Is this permissible?
55

56. ADA
• Guidance to the ADA final rule:
• “Not all wellness programs require disability-related inquiries or
medical examinations in order to earn an incentive. Examples may
include attending nutrition, weight loss, or smoking cessation classes.
These types of programs are not subject to the ADA incentive rules
discussed here, although programs that qualify as health-contingent
programs (such as an activity-based program that requires employees
to exercise or walk) and that are part of a group health plan are
subject to HIPAA incentive limits.” 81 Fed. Reg. at 31141 (May 17,
2016).
56

57. VOLUNTARINESS
57

58. CASE SCENARIO
• ABC Company administers an online HRA.
Participation has been lagging. To help increase
participation, the wellness vendor is asked to disclose
the names of the nonparticipants to ABC’s managers
and supervisors, who can then encourage those
employees to participate.
• Permissible?
58

59. ADA
• Carves out exception to general
prohibition on taking employee “medical
exams” for “voluntary” medical exams
part of employee wellness program.
59

60. ADA
• In order to be considered “voluntary,” an employer may not
retaliate against, interfere with, coerce, intimidate, or threaten
employees in violation of Section 503 of the ADA, codified at
42 USC 12203. 81 Fed. Reg. at 31133 (May 17, 2016).
• That is, you cannot coerce an employee to participate in an
employee health program or threaten to discipline an
employee who does not participate. Id.
60

61. TAXATION
61

62. CASE SCENARIO #1
• ABC Company offers free noon-time Insanity
workout classes to all employees. Employees
who attend 80% of the eight-week session
receive a $50 gift card to IHOP. ABC does not
withhold any taxes on the $50 amount or
report it on the employees’ W-2 as income.
• Is this permissible?
62

63. INTERNAL REVENUE CODE
• Excludes from gross income amounts received
for “medical care”
• Expenses beneficial to general health or wellbeing
not “medical care” expenses
• E.g. Gym memberships usually taxable
• On-site athletic facilities not taxable
• De minimus benefits excludable
• Cash or cash equivalent incentives not excludable
from gross income
63

64. CASE SCENARIO #2
• ABC Company implements a wellness program for employees
who participate in ABC’s group health plan. The wellness
program consists of outcomes-based components, such as
achieving a certain amount of weight loss or lowering one’s
cholesterol. ABC reimburses employees who achieve one or
more of these goals 20% of the premium amount paid by the
employees.
• Is the premium reimbursement taxable?
64

65. INTERNAL REVENUE CODE
• IRS Memorandum from April 14, 2016 provides guidance on issue.
• Section 106(a) allows an employee to exclude from income the cost of
health insurance premiums paid through an employer plan.
• According to Revenue Ruling 2002-3, employer reimbursements to
employees for amounts the employee pays for health insurance
premiums are not excludable from the employee’s gross income under
106(a).
• Therefore the reimbursement amounts are wages subject to employment
taxes.
65

66. INVOLVING DEPENDENTS
66

67. CASE SCENARIO
• ABC Company implements a wellness program that includes an HRA. ABC
wants all employees and their families to participate, so it offers a 10%
premium discount to employees who participate, another 5% discount for
spousal participation and another 5% discount if any of the employee’s
children participate.
• Is this permissible?
• What if ABC removed the discount for the children and just offered the
HRA to the children who want to participate? Would that be permissible
67

68. GINA
• GINA final rule Preamble:
• “No inducements are permitted in return for information about the
manifestation of disease or disorder of an employee’s children” (whether adult
or minor children).
• This does not mean employers are prohibited from offering health or genetic
services (including participation in an employer’s wellness program) to an
employee’s children on a voluntary basis. “They may do so, but may not
offer any inducement in exchange for information about the
manifestation of any disease or disorder in the child.” (Emphasis added.)
• 81 Fed. Reg. at 31147 (May 17, 2016); 29 CFR s. 1635.8(b)(2)(A)(iii).
68

69. GROUP HEALTH PLAN ISSUES
69

70. CASE SCENARIO #1
• ABC Company offers a wellness program to its group health plan
participants only. The wellness program is clearly a term of the
group health plan, as it is described in the Summary Plan
Description. The SPD states that employees who attend a fitness
class are eligible for a 10% lower deductible in their health plan.
Are employees who leave ABC Company and take COBRA
coverage eligible for the lower deductible if they too attend the
fitness class?
70

71. COBRA
• Employer can require plan beneficiary to pay 102% of the cost of
coverage under COBRA. 26 CFR s. 54.4980B-8. So, reduced
premium reward would not apply to COBRA beneficiaries.
• COBRA coverage must be identical to coverage provided to non-
COBRA participants. ERISA s. 602(1).
• Arguably, a lower deductible for attending a fitness class would
need to be offered to COBRA participants.
71

72. CASE SCENARIO #2
• ABC Company wants to implement a wellness program for all of
its employees. However, it also hopes to reduce its overall
spending on health care over time. So, it would like to offer
financial incentives to employees who participate in ABC’s group
health plan, but allow all employees to participate in the
program.
• Can ABC limit financial incentives to group health plan
participants only?
72

73. CASE SCENARIO #3
• It is 2018 and ABC Company has established a
workplace wellness committee to design a wellness
program. The committee decides it wants all group
health plan employees to participate in an HRA.
Employees who do not participate must pay 100% of
their health insurance premium.
• Permissible?
73

74. ADA SAFE HARBOR
• Safe harbor for administering terms of bona fide benefit
plan
• Based on underwriting risks, classifying risks or administering
such risks.
• Applies whether exam/inquiry is voluntary or not.
• Seff v. Broward County, 691 F.3d 1221 (11th Cir. 2012) and EEOC
v. Flambeau, Inc., Case No. 14-CV-638 (Dec. 31, 2015); but see
EEOC v. Orion Energy Systems, Case No. 14-CV-1019 (E.D. Wis.
Sept. 19, 2016).
74

75. FLAMBEAU
• Court Applied ADA insurance safe harbor provision
• Allows employer to establish/administer terms of bona fide
benefit plan based on:
• Underwriting risks
• Classifying risks
• Administering such risks.
• Wellness program requirement was a “term” of its
benefit plan
• No matter that Flambeau did not specify the
requirement in its SPD or collective bargaining
agreement. 75

76. EEOC TAKE ON ADA SAFE HARBOR
• Language in final rule:
• “The ‘safe harbor’ provisions in s. 1630.16(f) of this
part applicable to health insurance, life insurance,
and other benefit plans do not apply to wellness
programs, even if such plans are part of a covered
entity’s health plan.”
76

77. ORION ENERGY SYSTEMS
• Very similar facts to Flambeau case
• Court rejected safe harbor
• Agreed with EEOC’s reasoning in the Final ADA Rule
• Generally wellness programs unrelated to basic underwriting and risk classification
• Implementation of wellness program usually occurs after premium established
• Orion adopted its wellness program separately from health plan and wellness
program not included in Orion’s SPD.
• EEOC did not overstep its authority in issuing ADA regulations about the safe harbor.
• Final ADA rules are reasonable.
77

78. WHAT DOES THIS MEAN FOR
WELLNESS PROGRAMS?
• Time for a compliance audit!
78

79. QUESTIONS?
• For more information, contact:
Barbara J. Zabawa, JD, MPH
The Center for Health and Wellness Law, LLC
Phone: 608-579-1267
Email: bzabawa@wellnesslaw.com
79