Home > Employee Benefits > Wellness plan compliance: Test your knowledge

Wellness plan compliance: Test your knowledge

wellness_quizWhether it’s a free gym membership or free healthy lunches, corporate wellness programs continue to expand as employers focus on reducing employees’ health risks by improving their lifestyle and behavior. An increasing amount of employers are opting for incentive-driven plans offering financial rewards or better health plan options to employees who participate in program activities, such as weight-loss challenges and healthy eating seminars. Rather than creating programs that are strictly educational, incentive-based wellness programs tend to help increase employee motivation to participate in activities and make changes to their behavior. According to Optum Inc.’s 2014 Wellness in the Workplace Survey, over 40% of various sized employers said they now offer financial incentives that are tied to measurable improvements in employees’ health outcomes, (i.e. weight loss, reduced cholesterol, quitting smoking). In addition, nearly 50% have incorporated non-participation penalties into their programs.

However, incentive and penalty-focused health plans carry with them a host of federal and state laws that regulate the extent to which employers can impose wellness programs on employees. Both the Health Insurance Portability and Accountability Act (HIPAA) and the Americans with Disabilities Act (ADA) include laws that limit employers’ ability to use incentives and penalties. For example, HIPAA mandates that employers who offer wellness programs that include activity or outcomes-based financial incentives to their employees must also offer alternative standards to employees who are not able to meet the initial program goals. Take the quiz below to test your knowledge about several other workplace wellness regulations, and whether your organization is in compliance.

1. While employers may limit health benefit options for employees who smoke, many states prohibit employers from banning off-duty tobacco use. How many do so?

  • 10
  • 8
  • 18
  • 30

2. Under HIPAA, incentives and/or penalties are limited to what percentage of  total health care premium?

  1. 15%
  2. 25%
  3. 10%
  4. 30%

3. True or false: Companies must offer more than one reasonable alternative standard to employees who are unable to meet the initial program goals.

4. True or False: HIPAA restricts employer-mandated medical examinations for employees.



1: C, 19 states currently prohibit employers from banning off-duty tobacco use. Click here to learn more.

2: D, HIPAA limits incentives or penalties to 30% of total health care premium, or 50% for smoking-cessation incentives.

3: True, Under HIPAA, regulations mandate that if the first alternative is deemed medically inappropriate or unattainable by an employee’s personal physician, the employer must offer a second alternative that aligns with the physician’s recommendation.

4: False. The Americans with Disabilities Act restricts employer-mandated medical examinations for employees.

Employers must be conscious about the methods used to communicate and implement wellness program initiatives. Those that push too hard will end up dampening engagement rates, especially if employees feel forced or threatened. It’s important to present a program which allow employees to feel empowered and in control of their health management decisions, and demonstrates the company’s support toward their efforts.

WGA’s own Engage in Health Advocacy Team works with clients using proven methods to understand their current situation by reviewing claims, discussing their culture, understanding any barriers that may exist, and being mindful that each client’s strategy is unique to them. Click here to learn more about how WGA can help you leverage your wellness goals and manage compliance issues.

About the Author

Kerry Hands is a Senior Vice President at William Gallagher Associates in the Employee Benefits Practice, with an expertise in healthcare and healthcare reform targeting high technology companies in the small/midsize market space.

617.646.0387 | KHands@wgains.com | Connect with Kerry on LinkedIn


  1. No comments yet.
  1. No trackbacks yet.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s