insurance

Wellness programs: What will my boss know?

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With health insurance costs rising, many employers are taking measures to keep a lid on expenses without substantially increasing workers' own contributions toward their coverage. One fast-growing method that employers are using to control health care costs is the corporate wellness program.

These efforts to promote worker well-being can offer financial carrots for employees who participate and sticks for those who say "no thanks."

The penalties can sting, but privacy concerns may be even thornier when employees do decide to participate. Will your bosses learn more about your health than you would like them to know? And might they use that information against you?

A trend among larger companies

Wellness initiatives have been adopted by 51 percent of employers with at least 50 workers, according to data from the nonprofit think tank, the Rand Corp. More companies are expected to get on board, says the Employee Benefit Research Institute, or EBRI.

"Employers would like people to participate in these programs to get them to become aware of what their health status is or potential health risks that they may have," says Paul Fronstin, director of health research and education at EBRI in Washington, D.C.

Participation-based programs reward workers for completing a health assessment or screening that measures a number of factors -- such as body mass index, blood pressure and glucose levels -- to determine medical risks. Other wellness programs provide incentives to employees who reach, or at least attempt to reach, health goals.

The perks and penalties

Incentives can include paycheck credits, health insurance premium discounts or lower deductibles. The penalties for those who opt out may come in the form of higher premiums or even a loss of employer contributions to a health savings account.

The Equal Employment Opportunity Commission says the penalties can effectively make wellness programs involuntary and may violate the Americans with Disabilities Act. The federal agency has sued Honeywell International over its program, which hits nonparticipating employees with a $500 health insurance surcharge and the loss of up to $1,500 in company contributions to the worker's health savings account.

In a news release, Honeywell called the EEOC's lawsuit "frivolous."

Who's handling your health data?

Corporate wellness programs often are administered by third-party organizations; in fact, there are companies that exist primarily for the purpose of facilitating these programs, says Steve Wojcik, vice president of public policy for the National Business Group on Health in Washington, D.C.

"That's usually who employers contract with to run their programs and collect data," he says. "It's very rare that a company would run a wellness program with its own staff."

Worker advocates question whether the third-party outfits maintain a sufficient wall of privacy around employee health data.

"There's definitely concern that information would either be disclosed to the employer or, if the employer runs the program, that the information would not be kept confidential," says Paula Brantner, executive director of Workplace Fairness, a nonprofit advocacy group in Washington, D.C.

What the law says

Federal law offers some protections for workers wary about revealing too much personal health information to employers. Under the Health Insurance Portability and Accountability Act, better known as HIPAA, employers and health insurers are required to follow specific privacy guidelines when implementing a wellness program.

For instance, the health plan can share with the employer only general information about the entire workforce, but not information about individual employees, says Timothy Jost, a professor and health law expert at the Washington and Lee University School of Law in Lexington, Virginia.

"There's supposed to be a firewall between the information that the health plan gets and the information that the employer gets," he says.

No guarantee that your employer won't peek

Wojcik says a question that often pops up is: How will my employer know to credit my paycheck for participating in the wellness program without taking a peek at my health info?

"If there's a financial incentive attached, they wouldn't see the health information in particular, but they might see that somebody did whatever they were supposed to," he says.

Employers also are not allowed to use an employee's health status to determine what to charge for an insurance premium. 

But it's still possible that your health info could end up in your employer's hands, Jost cautions. If your company's wellness program is independent of its health plan, your information likely wouldn't be protected by HIPAA.

"If somebody discloses information to their wellness program, they can't have absolute confidence that it won't get disclosed to the employer," he says.

So, should you participate?

Still, workers probably shouldn't worry too much about bosses snooping around in their health data, says Fronstin.

"I don't think any employer's going to want the bad press associated with it."

Employers should be reassuring their workers that their health information will be kept safe, and employees should recognize that the program is meant to improve their well-being, Wojcik says.

"There are good intentions behind the programs," he says. "The employer has identified a wellness gap or a need for a wellness program, and hopefully the employees would take advantage of it and not be concerned about the privacy or confidentiality of their health information."

Employees who remain uncomfortable about participating can always decide to accept the penalty.

"Right now, employees are kind of in a 'damned if you do, damned if you don't' situation," Brantner says.

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