Workplace Wellness Programs – Compliance Guide

From: Staffing

Workplace Wellness Programs – Compliance Guide


Workplace wellness programs are initiatives to encourage employees to make voluntary behavior changes that reduce their health risks and enhance their individual productivity. Wellness programs can vary widely in design, but in general, they offer opportunities for employees to enhance their health and wellness, such as by improving fitness, losing weight, managing chronic health conditions  or quitting smoking. A well-designed wellness program can help an employer by lowering healthcare costs, increasing productivity, decreasing absenteeism, and raising employee morale. Because employees spend many of their waking hours at work, the workplace is often an effective setting to address health and wellness issues.  

Often crucial elements in workplace wellness programs, incentives are rewards that can increase employee engagement and produce changes in behavior. Some commonly incentivized behaviors are the completion of health risk assessments or biometric screenings, participation in wellness program activities (e.g., classes on healthy eating), and achievement of specific lifestyle changes (e.g., quitting smoking). Popular wellness rewards include cash and gift cards, paid time off, fitness gear, nutrition classes or gym memberships, and health plan premium discounts.  

There are several compliance issues that are involved with designing workplace wellness plans. For instance, wellness program incentives are subject to federal tax withholding unless a specific tax exemption applies. Wellness plans must be carefully structured to comply with both state and federal laws. The three main federal laws that impact the design of wellness plans are: 

  • The Health Insurance Portability and Accountability Act (HIPAA) 
  • The Americans with Disabilities Act (ADA) 
  • The Genetic Information Nondiscrimination Act (GINA) 

These laws each have their own set of legal rules for acceptable wellness program design, which are not always consistent with one another.  

In addition to these three main federal laws, there are other compliance considerations for workplace wellness programs. For example, wellness programs that provide medical care (e.g., biometric health screenings) are subject to federal laws for group health plans, such as the Employee Retirement Income Security Act (ERISA), the Consolidated Omnibus Budget Reconciliation Act (COBRA),  the Affordable Care Act (ACA), and HIPAA’s privacy and security rules.  

This guide summarizes key compliance concerns for workplace wellness programs. Employers who implement wellness programs should review their compliance with these legal requirements to avoid potential penalties and lawsuits. Download the Article: Workplace Wellness Programs Compliance Guide