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As employers search for ways to reduce rising healthcare costs and improve employee productivity, more companies are implementing wellness programs in an attempt to improve employees' health and reduce their own insurance costs. There are a number of different options employers may consider when deciding to institute a wellness program, including offering smoking cessation and weight loss programs, fitness classes, and in some cases, penalizing certain behavior. Employers must be careful, however, to ensure that these programs do not violate certain federal and state laws as they carry certain inherent legal risks.
Some states have laws prohibiting employers from taking action against employees for lawful conduct occurring during nonworking hours away from the employer's premises. A discrimination claim may arise under these laws, for example, if a wellness program prohibits smoking during nonworking hours and an employee, who chooses not to participate in the wellness program, suffers an adverse employment action. Thus, wellness programs that infringe on employees time away from work may be impermissible in certain circumstances.
Under the Americans with Disabilities Act (ADA), an employer cannot discriminate against an individual with a disability in the terms and conditions of employment. A wellness program, like other benefits offered to employees, is a term and condition of employment. Therefore, the benefits of a wellness program must be made available to all employees regardless of any disability. If an employee, because of his or her known disability, is unable to participate in the wellness program, the ADA requires that the employer provide a reasonable accommodation. In addition, the ADA prohibits an employer from making medical inquiries or requiring medical examinations of a current employee unless they are job-related and consistent with business necessity. The ADA provides an exception to this prohibition for voluntary medical examinations, including voluntary medical histories, if the records are kept confidential and are not used for the purposes of limiting health insurance eligibility or preventing advancement in the workplace. As a result, any medical examinations or medical inquiries under a wellness program must be conducted on a voluntary basis. According to the Equal Employment Opportunity Commission's Enforcement Guidance, to be considered voluntary, an employer cannot require participation and cannot penalize an employee for not participating. At this time, the law is still relatively unclear as to what will be considered a voluntary examination under the ADA.
Certain federal and state laws also protect the confidentiality of employees' medical information. These laws most likely place limitations on the disclosure of medical information generated by a wellness program.
This column is written for informational purposes only and should not be construed as legal advice.
Barry Senterfitt is a partner in the insurance industry practice of Akin Gump Strauss Hauer & Feld LLP in the firm's Austin, Texas, office.
Janet Farrer is an associate in the Austin office of Akin Gump Strauss Hauer & Feld.