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The Risks Of Using Workplace Wellness Programs To Foster A Culture Of Health Madison, Kristin M . Madison, Kristin M.

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ABSTRACT (ENGLISH) In many respects, employers are well positioned to take a leading role in helping create a culture of health. Employers have access to many programs that could be beneficial to their employees' health. The potential for financial gains related to health improvement may motivate employers to offer these programs, and if the gains are realized, they may help finance the programs. At the same time, employers' involvement in such programs may create substantial risks. Enthusiasm about the financial and health gains that wellness programs might yield coexists with concerns about health costs shouldered by employees, the possibility of employment discrimination, and the potential for employers' invasion of employees' privacy. A fragmented regulatory regime, including a recently issued final rule under the Americans with Disabilities Act, has been created to address these concerns. Whether the regime strikes the right balance between wellness program benefits and risks remains to be determined. FULL TEXT

Headnote

ABSTRACT In many respects, employers are well positioned to take a leading role in helping create a culture of health.

Employers have access to many programs that could be beneficial to their employees' health. The potential for financial

gains related to health improvement may motivate employers to offer these programs, and if the gains are realized, they

may help finance the programs. At the same time, employers' involvement in such programs may create substantial risks.

Enthusiasm about the financial and health gains that wellness programs might yield coexists with concerns about health

costs shouldered by employees, the possibility of employment discrimination, and the potential for employers' invasion of

employees' privacy. A fragmented regulatory regime, including a recently issued final rule under the Americans with

Disabilities Act, has been created to address these concerns. Whether the regime strikes the right balance between wellness

program benefits and risks remains to be determined.

Employers have both incentives and opportunities to contribute to a culture of health. Workplace wellness programs have

been touted as ways to enhance morale, boost productivity, reduce turnover, and lower health care costs, in addition to

improving health. Opportunities exist for employers to alter physical workspaces; influence how employees spend their

time; facilitate employees' interactions; share information with employees; finance health insurance; and motivate

employees through a variety of mechanisms, including financial incentives. Employers can build central stairwells or

exercise rooms to increase employees' physical activity; sponsor weight loss competitions and alter cafeteria selections to

encourage healthier eating; and create educational offerings, benefit structures, or reward programs designed to promote

health.

The potential for workplace wellness programs to improve employees' health while also benefiting corporate bottom lines

has generated enthusiasm among both employers and policy makers for more than thirty years.1 Wellness programs have

become widespread. A 2014 survey found that of firms offering health benefits, 64 percent of large firms (those with 200 or

more workers) and 26 percent of small firms (those with 3-199 workers) offered gym discounts or on-site exercise facilities.2

https://www.proquest.com/scholarly-journals/risks-using-workplace-wellness-programs-foster/docview/1844316176/se-2?accountid=3783

And a 2015 survey found that among firms offering health benefits, 71 percent of large firms and 41 percent of small firms

offered smoking cessation programs.3 The Centers for Disease Control and Prevention offers information, training

programs, and other forms of support for employers seeking to promote health through a variety of strategies.4

As enthusiasm for wellness programs has grown, however, so have skepticism and concerns about them. The very

incentives and opportunities that position employers so well to contribute to a culture of health may also create risks for

employees. Positive financial returns may provide both means and motive for wellness initiatives, but employers focused

on the bottom line might adopt initiatives that produce financial gains without improving health. In addition, employers'

payment formulas and benefit programs might promote some employees' engagement in wellness initiatives but also

impose heavy financial burdens on other employees. And the collection of personal health information might facilitate the

tailoring of wellness initiatives but might also invade employees' privacy, foster stigma, and facilitate employment

discrimination.

For more than two decades, federal policy makers have sought to navigate between the promise and perils of employer

involvement in employee health programs. They have done so not through an integrated regulatory regime that targets

workplace wellness programs, but through a series of exceptions for the programs embedded in statutes that target

broader policy concerns, such as discrimination against individuals with disabilities.5 Taken together, regulations under the

Health Insurance Portability and Accountability Act (HIPAA) of 1996 and the Genetic Information Nondiscrimination Act

(GINA) of 2008, along with recently released final regulations under the Americans with Disabilities Act (ADA) of 1990,

constitute a fragmented regulatory regime that highlights the challenges of maintaining a federal commitment to

workplace wellness programs while addressing the diverse concerns the programs raise (Exhibit 1).

In this article I review key provisions of this regulatory regime, discuss the tensions embodied in it, and emphasize the need

for ongoing evaluation of wellness programs. Whether the current body of federal statutes and regulations ensures that

employers play an appropriate role in fostering a culture of health will undoubtedly be a matter of continued debate, given

the breadth of wellness programs' potential impacts, the paucity of information available about these impacts, and

ongoing concerns about privacy and related matters.

Wellness Programs And Insurance Affordability

One explanation for the regulatory fragmentation is that workplace wellness programs take many different forms. Some

wellness initiatives, such as the prominent display of healthy food in a cafeteria, may be subject to few regulatory

constraints. Other initiatives are subject to much more extensive bodies of regulation.

For example, offering health insurance discounts to nonsmokers or to people meeting a body mass index (BMI) target could

run afoul of HIPAA, which precludes discrimination based on health status in the premiums that employees pay for their

group health plans. Congress carved out an exception in HIPAA, however, for incentives offered "in return for adherence to

programs of health promotion and disease prevention"-thus accommodating employers' efforts to tie premium

adjustments to healthrelated targets.

While the HIPAA exception reflects congressional support for wellness programs, subsequent regulations implementing this

exception reflect regulators' concerns about the programs' impact. One of these concerns is that premium adjustments

might motivate some employees to improve their health but could raise insurance premiums for others. For example,

employees struggling with high cholesterol or a high BMI might miss a target and find insurance unaffordable as a result.

Another concern is that in some cases, it might be medically inadvisable for such employees to even attempt to meet a

target.

Initially defined by the final HIPAA regulations in 2006 and subsequently defined by similar provisions in the Affordable Care

Act (ACA), requirements for health plan-based wellness programs are designed to address these concerns. By placing a

ceiling on the magnitude of planbased, health-contingent incentives, the statutory and regulatory provisions arguably help

"avoid a reward or penalty being so large as to have the effect of denying coverage or creating too heavy a financial

penalty."6 The regulations also require employers to make alternative standards available in certain circumstances, such as

when an employer-sponsored health plan ties a reward to a health outcome.7 For example, if a plan offers employees

premium discounts for meeting a BMI target, an employee who fails to meet the target might nonetheless qualify for the

discount by following his or her physician's recommendations. In short, federal law permits health plan-based wellness

incentives but seeks to limit the risks and burdens that wellness programs might impose.

Wellness Programs, Disability, And Coercion

Federal policy makers used a similar approach to reduce the likelihood that wellness programs might lead to discrimination

based on disability. In 1990 Congress passed the ADA, which sought to combat discrimination against employees with

disabilities in part by prohibiting employers from requiring medical examinations or making disability-related inquiries-

unless they were "job-related and consistent with business necessity." By limiting employers' access to informa- tion that

might reveal disabilities, the ADA reduces the potential for employment discrimination and disability-related stigma.

As was the case with HIPAA, however, Congress also created an exception in the ADA to accommodate wellness programs:

Employers are permitted to "conduct voluntary medical examinations, including voluntary medical histories, which are part

of an employee health program." Many firms conduct health risk assessments that would fit this description. The

assessments' questionnaires may ask employees about a wide range of health-related issues, including seat belt use, fruit

and vegetable consumption, physical activity, stress, alcohol use, and current and past health conditions.

In 2015 about half of large firms with health benefits offered health risk assessments, and 62 percent of the firms that

offered them also offered employees incentives to complete them.3 A similar number of firms offered biometric

examinations, which could include measurements of BMI, blood pressure, or cholesterol levels, with a majority of the firms

offering an incentive for completing the exam.

Questions about cancer or other topics likely to elicit information about disabilities pose risks for employees, regardless of

the context in which the questions are asked. The fact that the questions are incorporated into a health risk assessment

does not itself eliminate risk. However, the ADA's language and recently enacted final regulations impose restrictions that

help shield employees from wellness programs for which the risks may outweigh the benefits. The ADA's final regulations,

borrowing language from the ACA, require employee health programs to be "reasonably designed to promote health or

prevent disease," a standard intended to prevent programs from being "overly burdensome" or "exist[ing] mainly to shift

costs from the covered entity to targeted employees based on their health."8

The regulations prohibit employers from taking adverse employment actions or denying benefit packages in response to

employees' failure to participate in a health program. They also cap the magnitude of program incentives at 30 percent of

the total cost of self-only insurance coverage. Program incentives subject to this cap include both those related to health

risk assessments and those tied to biometric outcomes, regardless of whether or not they are offered through health plans.

A 2015 employer survey suggested that the average cost for a health insurance policy covering a single individual was more

than $6,000 per year,3 which means that the ceiling for health program incentives is typically about $1,800.

Policy makers' approach to combating genetic discrimination closely resembles their approach to combating disability

discrimination. GINA is designed to block genetic discrimination in a number of settings, including employment. The statute

prohibits employers from requesting genetic information about their employees or employees' family members, thus

minimizing the potential for discrimination based on genetic characteristics. At the same time, however, it creates an

exception for "genetic services ...offered by the employer, including such services offered as part of a wellness program" if

"the employee provides prior, knowing, voluntary, and written authorization" and certain other requirements are met.

In contrast to the approach regulators took in the disability context, regulators chose to prohibit employers from tying

incentives to health risk assessment questions concerning genetic information.9 In this respect, the law's tolerance for

genetic discrimination risks is lower than its tolerance for disability discrimination risks.

Wellness Programs, Privacy, And Confidentiality

In addition to addressing health-related discrimination in health plans, HIPAA has long been an important source of federal

protection for the confidentiality of health-related data. Health plans are covered entities under HIPAA, so wellness

programs that are part of employersponsored health plans are subject to HIPAA's restrictions on the use or disclosure of

individually identifiable health information. For example, HIPAA regulations restrict covered entities' ability to sell

protected health information.10 They also restrict plan sponsors' access to health plan data and call for separation

between the group health plan and the plan's sponsor.11 And they require that group health plan documents prohibit the

use or disclosure of protected health information for employment-related actions.12

The ADA imposes a separate set of restrictions on data collected under its voluntary health program exception. The statute

requires that information collected be maintained in separate medical files and treated as confidential medical records.

ADA regulations specify that to be voluntary, health programs that include disability- related inquiries or medical

examinations must be accompanied by a notice to employees that describes the information to be obtained, the purposes

for which it will be used, and restrictions on the sharing of this information.13 Information collected can be used for

administrative purposes, but it "may only be provided to an ADA covered entity in aggregate terms that do not disclose, or

are not reasonably likely to disclose, the identity of any employee."14 Furthermore, employers cannot require employees to

sign a confidentiality waiver or agree to the sale of data as a condition of participating in a wellness program.15

GINA regulations impose similar restrictions on data collected in conjunction with its exception for genetic services offered

as part of a voluntary wellness program. Individuals must provide "prior knowing, voluntary, and written authorization" on

a form that describes disclosure restrictions.16 The genetic information "is provided only to the individual...and the

licensed health care professionals or board certified genetic counselors involved in providing such services, and is not

accessible to managers, supervisors, or others who make employment decisions, or to anyone else in the workplace."16 In

addition, information may not be disclosed to the covered entity except in aggregate terms.

HIPAA's protections for health plan data, the ADA's protections for data collected through voluntary health program

examinations and disability-related inquiries, and GINA's protections for genetic data collected through its voluntary

wellness program exception all facilitate the operation of wellness programs but attempt to address the risks of breach of

confidentiality and invasion of privacy. The protections have some common features but nevertheless use different

language and have different focuses.

Discussion

To play a major role in building a culture of health, workplace wellness programs will need to promote health across broad

worker populations while also benefiting corporate bottom lines. Accomplishing both goals is not easy.Wellness initiatives

might fail to change behavior, or behavioral changes might not translate into better health. The programs might help some

employees but not others, and they could harm morale or create or exacerbate a sense of exclusion among employees not

able to take full advantage of program offerings. Program costs might exceed financial gains. And even if programs

succeeded in improving both employees' health and employers' bottom lines, they might have problematic implications

outside of the health sphere, such as for privacy.

These problems are not unique to workplace wellness programs. Any efforts to build a culture of health could fail to achieve

intended goals, prove financially unsustainable or unjustified, or help some people more than others; and some initiatives

could be criticized as threatening nonhealth values such as liberty or autonomy. Employers' mixed motives, however, mean

that policy makers and legislators will need to be especially vigilant if they hope to ensure that workplace wellness

programs achieve broad health goals. Employers seeking economic returns might be content with wellness incentive

designs that shift costs from employer health plans to individual employees by imposing surcharges. Wellness programs

could generate economic gains for employers by attracting healthier employees who are enthusiastic about wellness, while

accelerating the exit of less engaged employees. Employers might also benefit from programs that aid some employees

while leaving many others behind. If the goal of creating a culture of health is to benefit everyone,17 such programs would

clearly fall short.

While HIPAA, the ACA, and the ADA have some structural similarities, they differ in their objectives-and so do their

accompanying regulations. It is not clear whether collectively these regulations will achieve the same result that would be

achieved by an agency charged with establishing a single, integrated regulatory regime forwellness programs. The ACA's

incentive ceiling differs from the ADA's, and an agency tasked with simultaneously considering an incentive program's

monetary benefits, its health benefits, insurance affordability concerns, and employment discrimination concerns might

settle on a ceiling somewhere in the middle. A policy maker focused solely on achieving broad health gains might select the

same ceiling or an entirely different one. The only way to address such issues-indeed, the only way to judge whether the

ACA or the ADA has established the right ceiling-is to undertake a careful, comprehensive analysis of the likely effects of

wellness programs.

Continuing Questions About Wellness Programs' Impacts

A comprehensive analysis of wellness programs should involve an examination of many different issues, even if the focus

were limited to the incentive-based programs at the heart of much of the federal regulatory regime (Exhibit 1). Evaluators

could seek to determine whether the programs have any benefits, including improved health, increased productivity, or

reduced health care costs. If employers appear to benefit from increased productivity or reduced health care costs,

evaluators could try to determine whether those gains stem from health improvement or other factors. They could also

devote special attention to employees likely to be disproportionately affected by wellness programs, such as people with

disabilities or low incomes.

The evidence about wellness programs that has been accumulated thus far is both limited and mixed. Some studies of

individual corporate wellness programs highlight their economic success,1819 and at least one widely cited academic

meta-analysis found program savings in the form of reduced medical costs.20 One recent study failed to detect economic

gains,21 however, and another frequently cited academic study concluded that "evidence suggests that savings to

employers may come from cost shifting."22

A RAND study sponsored by the Departments of Labor and Health and Human Services found that employers "expressed

confidence that workplace wellness programs reduce medical cost, absenteeism, and health-related productivity losses,"

but only about half of these employers reported formally evaluating program impacts.23 There is a need for more

systematic, formal analyses of a wider cross-section of wellness programs.

It is also important to identify the effects of the different components of these programs, particularly because each

component may present a different risk-benefit profile for employers and employees. For example, a finding that

appropriately structured employee incentives are key to the programs' generating significant economic gains for employers

could have quite different policy implications than a finding that walking clubs and smoking cessation programs make all of

the difference. If economic factors contribute to policymakers' support for wellness programs, but a premium discount

does not ultimately lead to economic gains, then there is less reason to permit this form of incentive, given the risks it

poses. Greater public funding for researchers may accelerate the acquisition of information about these issues.

Evidence of the health impacts of wellness programs is also mixed. The RAND researchers conducted an empirical analysis

of wellness programs that found "improvements in exercise frequency, smoking behavior, and weight control, but not

cholesterol control," but they acknowledged that there may have been "unobservable differences between program

participants and nonparticipants."23 A recent randomized controlled study found that premium-based financial incentives

did not improve weight loss.24 There is evidence that incentives improve participation rates in wellness programs,25 but

participation does not necessarily result in health improvement. Thus, there is also a need for high-quality studies that

focus on the components of wellness programs that might make a significant difference in employees' health status.

Evidence on the potential drawbacks of wellness programs-such as financial burden, employment discrimination, coercion,

and invasion of privacy-is in even shorter supply than evidence on the programs' health and financial impacts. Some of

these drawbacks are hard to define with precision, and while employers have reason to trumpet their programs' financial

and health successes, few would have an interest in disclosing problematic program impacts. Policy makers therefore may

always find it difficult to assess whether they have found the right balance in shaping employers' role in the development of

a culture of health. Requiring reporting on selected wellness program metrics, such as the magnitude of incentives offered

and earned, changes in targeted health metrics, and the frequency of use of alternative standards, may be one way to begin

to address this issue.26

Conclusion

To build a successful culture of health will require a clear understanding of what that culture entails, and which tools used

by employers can help achieve it. The recently established fragmented regulatory regime for wellness programs maybe a

step in the right direction, but it is built on incomplete information. As additional evidence accumulates, further tailoring of

the regulatory regime may be required to establish the optimal balance between program benefits and risks for both

employers and employees. *

Sidebar

Policy makers and legislators will need to be vigilant if they hope to ensure that workplace wellness programs achieve

broad health goals.

Each wellness program component may present a different risk-benefit profile for employers and employees.

Evidence on the potential drawbacks of wellness programs is in even shorter supply than evidence on the programs' health

and financial impacts.

Footnote

NOTES

1 Roberts M, Harris TG. Wellness at work. Psychol Today. 1989;23(5): 54-8.

2 Henry J. Kaiser Family Foundation, Health Research and Educational Trust. Employer health benefits: 2014 annual survey

[Internet]. Menlo Park (CA): KFF; 2014 [cited 2016 Sep 13]. Available from: http:// files.kff.org/attachment/2014employer-

health-benefits-surveyfull-report

3 Kaiser Family Foundation, Health Research and Educational Trust. Employer health benefits: 2015 annual survey

[Internet]. Menlo Park (CA): KFF; 2015 [cited 2016 Sep 13]. Available from: http://files.kff.org/ attachment/report-2015-

employerhealth-benefits-survey

4 Centers for Disease Control and Prevention. Workplace health promotion [Internet]. Atlanta (GA): CDC; [last updated 2016

May 13; cited 2016 Sep 13]. Available from: http://www.cdc.gov/workplace healthpromotion/

5 Madison KM. Employer wellness incentives, the ACA, and the ADA: reconciling policy objectives. Willamette Law Review.

2015; 51:407-57.

6 Department of the Treasury, Department of Labor, Department of Health and Human Services. Nondiscrimination and

wellness programs in health coverage in the group market; final rules. Federal Register [serial on the Internet]. 2006 Dec 13

[cited 2016 Sep 12]. Available from: https://www.gpo .gov/fdsys/pkg/FR-2006-12-13/pdf/ 06-9557.pdf

7 Department of the Treasury, Department of Labor, Department of Health and Human Services. Incentives for

nondiscriminatory wellness programs in group health plans. Federal Register [serial on the Internet]. 2013 Jun 3 [cited 2016

Sep 12]. Available from: https:// www.gpo.gov/fdsys/pkg/FR-201306-03/pdf/2013-12916.pdf

8 Equal Employment Opportunity Commission. Regulations under the Americans with Disabilities Act; Genetic Information

Nondiscrimination Act. Federal Register [serial on the Internet]. 2016 May 17 [cited 2016 Sep 12]. Available from:

https://www.gpo.gov/fdsys/pkg/ FR-2016-05-17/pdf/2016-11558.pdf

9 29 CFR, sec. 1635.8(b)(2)(ii).

10 45 CFR, sec. 164.502 (a)(5)(ii).

11 45 CFR, sec. 164.504(f)(2).

12 45 CFR, sec. 164.504(f)(2)(ii)(C).

13 29 CFR, sec. 1630.14(d)(2)(iv).

14 29 CFR, sec. 1630.14(d)(4)(iii).

15 29 CFR, sec. 1630.14(d)(4)(iv).

16 29 CFR, sec. 1635.8(b)(2)(i).

17 Robert Wood Johnson Foundation. Building a culture of health [Internet]. Princeton (NJ): RWJF [cited 2016 Sep 13].

Available from: http:// www.rwjf.org/en/how-we-work/ building-a-culture-of-health.html

18 Henke RM, Goetzel RZ, McHugh J, Isaac F. Recent experience in health promotion at Johnson & Johnson: lower health

spending, strong return on investment. Health Aff (Millwood). 2011;30(3):490-9.

19 Musich S, McCalister T, Wang S, Hawkins K. An evaluation ofthe Well at Dell health management program: health risk

change and financial return on investment. Am J Health Promot. 2015;29(3):147-57.

20 Baicker K, Cutler D, Song Z. Workplace wellness programs can generate savings. Health Aff (Millwood). 2010;29(2):304-11.

21 Gowrisankaran G, Norberg K, Kymes S, Chernew ME, Stwalley D, Kemper L, et al. A hospital system's wellness program

linked to health plan enrollment cut hospitalizations but not overall costs. Health Aff (Millwood). 2013;32(3):477-85.

22 Horwitz JR, Kelly BD, DiNardo JE. Wellness incentives in the workplace: cost savings through cost shifting to unhealthy

workers. Health Aff (Millwood). 2013; 32(3):468.

23 Mattke S, Liu H, Caloyeras JP, Huang CY, Van Busum KR, Khodyakov D, et al. Workplace wellness programs study: final

report [Internet]. Santa Monica (CA): RAND; c 2013 [cited 2016 Sep 13]. (Research Report). Available from:

http://www.rand.org/content/dam/ rand/pubs/research_reports/ RR200/RR254/RAND_RR254.pdf

24 Patel MS, Asch DA, Troxel AB, Fletcher M, Osman-Koss R, Brady J, et al. Premium-based financial incentives did not

promote workplace weight loss in a 2013-15 study. Health Aff (Millwood). 2016;35(1): 71-9.

25 Batorsky B, Taylor E, Huang C, Liu H, Mattke S. Understanding the relationship between incentive design and

participation in U.S. workplace wellness programs. Am J Health Promot. 2016;30(3):198-203.

26 Madison K, Schmidt H, Volpp KG. Using reporting requirements to improve employer wellness incentives and their

regulation. J Health Polit Policy Law. 2014;39(5): 1013-34.

AuthorAffiliation

Kristin M. Madison ([email protected]) is a professor at the School of Law and at the Bouvé College of Health Sciences,

both at Northeastern University, in Boston, Massachusetts.

DETAILS

Sustainability pillar: Social

Subject: Participation; Privacy; Employers; Access; Workplaces; Strikes; Employment discrimination; Health; Disabilities; Occupational health; Genetic Information Nondiscrimination Act 2008- US; Health Insurance Portability & Accountability Act 1996-US; Health care policy; Wellness programs; Insurance coverage; Incentives; Costs; Employees; Insurance premiums; Health care expenditures; Health insurance; Exercise; Physical fitness; Body mass index; Biometrics; Personal health; Disease prevention; Disability; Health risks; Health risk assessment; Americans with Disabilities Act 1990-US; Workers with disabilities; Health promotion; Culture; Regulation; Risk

Business indexing term: Subject: Genetic Information Nondiscrimination Act 2008-US Health Insurance Portability & Accountability Act 1996-US Employers Wellness programs Insurance coverage Incentives Costs Employees Employment discrimination Insurance premiums Health insurance Americans with Disabilities Act 1990-US Workers with disabilities

Company / organization: Name: Federal Register; NAICS: 513120; Name: Department of the Treasury; NAICS: 921130; Name: Department of Health & Human Services; NAICS: 923120

Identifier / keyword: Wellness; Workplace wellness; Workplace

Publication title: Health Affairs; Chevy Chase

Volume: 35

Issue: 11

Pages: 2068-2074

Number of pages: 7

Publication date: Nov 2016

Section: INVESTMENTS IN A CULTURE OF HEALTH

Publisher: The People to People Health Foundation, Inc., Project HOPE

Place of publication: Chevy Chase

Country of publication: United States

Publication subject: Insurance, Public Health And Safety