From the September 2009 issue of Treasury & Risk magazine

Risky Health Assessments

Most major corporations use health risk assessments in their wellness programs. These questionnaires, which ask employees for information ranging from their health habits to medical conditions and weight, are often part of an overall strategy to help individuals manage their own health or steer them to the best treatment. Many companies use them in their efforts to pinpoint employees likely to benefit from particular programs--helping smokers to quit, for example, or diabetics to eat the right foods.

The trouble is, companies that aren't careful about how they use these assessments run the risk of violating a number of federal laws. "You have to be very aware of the regulatory environment you're working in," says Michael Thompson, a partner at PricewaterhouseCoopers. "And you need to make sure you don't step over the line."

Most important are the following hazards:

Americans with Disabilities Act (ADA). The ADA allows employers to ask employees disability-related questions or give them a medical exam if the information is job-related. In a recent letter, the Equal Employment Opportunity Commission said employees can fill out a questionnaire before participating in a voluntary wellness program but indicated companies can't make eligibility for health insurance contingent on completing an assessment.

Health Insurance Portability and Accountability Act (HIPAA). Almost two-thirds of employers offer incentives, such as gift certificates or reductions in premiums, to employees who fill out health risk assessments, according to a PricewaterhouseCoopers study. But such incentives can violate HIPAA rules unless they are offered to all "similarly situated individuals" and the reward isn't predicated on meeting a particular health standard--say, having a specific cholesterol level. Plus, the incentive can't exceed 20% of the total premium cost for providing group health coverage, Thompson says.

Genetic Information Nondiscrimination Act (GINA). Enacted in 2008, GINA protects against misuse of genetic information. It prohibits insurers from using an individual's family health history to make underwriting decisions. That suggests employers may not be allowed to include questions about employees' family medical background if they're offering financial incentives for filling out an assessment, because it could be construed as a form of underwriting, says Rich Stover, a principal with Buck Consultants. One option is to let employees choose from two forms, one with and one without such questions. But for now, says Stover, "Most employers are taking a wait-and-see attitude and just continuing what they've done before."

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