California employers are becoming aware of an important truth. Company productivity, growth, and employee health are interdependent. That’s why businesses across California are increasingly turning to wellness programs that produce changes that:
- increase productivity
- improve morale
- improve health
- reduce absenteeism
- decrease health care costs
If your company is interested in creating a wellness program, or wants to revise its current wellness program, below is a short overview of the different types of employee wellness programs.
When creating or reviewing a wellness program, the first requirement is that the program must be reasonably designed to promote health or prevent disease. Wellness programs are broken up into two main categories, which are discussed in further detail below: (a) participatory wellness programs, and (b) health-contingent wellness programs.
Participatory Wellness Programs
“Participatory wellness programs” are designed to incentivize employees without requiring them to meet specific health goals. Instead, these programs provide healthy options for employees such as reimbursement for gym memberships, informative diagnostic testing, and reimbursement for smoking cessation programs despite whether the employee actually quits smoking. A participatory wellness program must be made available to all similar situated individuals regardless of health status.
Health-Contingent Wellness Programs
There are two types of “health-contingent wellness programs:" activity-only and outcome-based. Activity-only wellness programs require that an employee perform a health-related activity to obtain a reward, but the employee is not required to reach a specific health outcome. Examples of activity-only wellness programs include walking, diet, or exercise programs. Outcome-based wellness programs require that an individual reach a specific health outcome in order to obtain a reward. For example, incentives are earned when employees quit smoking or achieve certain results on biometric screenings. Outcome-based programs have two tiers -- (1) a measurement, test or screening to establish a standard, and (2) a program that targets individuals who don’t meet the standard. For instance, a reward may be given for employees with certain cholesterol levels, whether they meet such requirements during the initial screening, or after participating in a health improvement plan to achieve the desired result.
Wellness programs must comply with a variety of federal laws and related state laws. It’s important to note that in April 2015 the Equal Employment Opportunity Commission (“EEOC”) proposed regulations, which if enacted, would further regulate wellness programs. Therefore, it’s important to consult legal counsel when drafting or revising your company’s wellness program.
