Employer Wellness Plans May Raise Data Collection Issues

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By Lisa Nagele-Piazza

March 21 — Employers that offer wellness programs and use “wearable technology” to collect employee health data must navigate through a variety of federal statutes, employment attorneys said in a conference session March 18.

Navigating through potential legal issues with wellness plans can be a tremendous challenge, J. Timothy McDonald said during a panel discussion. There may be implications under the Americans with Disabilities Act, the Genetic Information Nondiscrimination Act, the Health Insurance Portability and Accountability Act and the Employee Retirement Income Security Act, McDonald, a management attorney with Thompson Hine LLP in Atlanta, said.

The use of wearable technology, such as a Fitbit physical activity tracker, also raises privacy issues about what information is being collected and who is receiving that information, attorneys said.

Employers seem to like wellness programs because of their potential to provide cost savings for health insurance, but they raise some concerns for employees, Ellen Doyle, an attorney with employee-side firm Feinstein Doyle Payne & Kravec LLC in Pittsburgh, said.

One problem for workers who participate in wellness programs is the potential for “shaming,” Doyle said. The idea that an employer can point to a person and say “we need to get that fat one working out” is a very troubling aspect of these programs, she said.

Doyle said employees who have multiple health problems aren't happy about these programs. Some health conditions are more prevalent in certain age, racial or ethnic groups, she said.

Wearable Technology Collects Employee Data

Wearable technology includes smart watches, smart clothing, Fitbits and other devices that collect health data and connect to the Internet, said Danielle Van Lier, senior counsel for intellectual property and contracts at the Screen Actors Guild-American Federation of Television and Radio Artists (SAG-AFTRA). She said wearables can measure movements, heart rate, temperature and perspiration.

The devices also will ask users to enter information manually about height, weight and age to measure calories burned and other performance factors, she said.

“There is a company in Sweden that is experimenting with implanting microchips in employees, voluntarily of course,” Van Lier said. Instead of using an employee card to get into the building, workers will be able to tap their arm to get in. That’s a little troubling from a surveillance perspective, but it's the next wave of technology, she said.

EEOC Challenges Participation Requirements Under ADA

Under the ADA, a wellness program must be voluntary, McDonald said. But there has been a lot of talk about what “voluntary” means and whether the ADA’s safe harbor for a bona fide benefit plan permits employers to require employees to provide certain information, he said.

Under the ADA, an employer can generally only make a medical inquiry regarding a current employee if the inquiry is job-related or a business necessity, said Camille A. Monahan, a senior trial attorney with the Equal Employment Opportunity Commission in Milwaukee.

But now there is a carve-out for wellness programs to allow employers to ask about medical information, Monahan said. The challenge for the EEOC is going to be determining the permissible scope of those requests, because they were otherwise prohibited inquiries, she said.

In April 2015, the EEOC released a proposed rule under the ADA that addressed the extent to which employers may use incentives to encourage employee participation in wellness programs that include disability-related inquiries or require medical exams .

The agency also issued a proposed rule under GINA in October 2015 that would allow employers that offer wellness programs to provide limited incentives for an employee's covered spouse to disclose his or her personal health information . This would be in addition to GINA's exception permitting employers to obtain genetic information from employees when they provide prior, knowing, voluntary and written authorization.

But the EEOC recently lost an ADA challenge to an employer's requirement that employees participate in a wellness program in order to receive group health benefits. In December, the U.S. District Court for the Western District of Wisconsin held that the safe harbor provision shielded the employer from liability under the ADA (EEOC v. Flambeau, Inc., 32 AD Cases 834 (W.D. Wis. 2015)).

The EEOC has appealed the decision to the U.S. Court of Appeals for the Seventh Circuit .

The district court in Flambeau followed the approach in Seff v. Broward County Florida, 691 F.3d 1221, 26 AD Cases 1153 (11th Cir. 2012). In Seff, the U.S. Court of Appeals for the Eleventh Circuit held that a county wellness program that sought employees' personal medical information as part of its group health coverage and charged nonparticipants $20 per pay period fit within the ADA's safe harbor for insurance plans.

The Eleventh Circuit was the first federal appeals court to rule on the issue.

Employee Access to Vendor Privacy Policies

The data being collected for wellness programs include questions about job satisfaction, alcohol consumption and smoking status, said Brian D. Hall, a management attorney with Porter Wright Morris & Arthur LLP. Employees may see these questions as intrusive, and they may have concerns about who is going to see this information, he said.

Information generally goes to a wellness vendor and is sent in an anonymized form to the employer, Hall said. The only information generally shared with the employer is the premium rate or discount available to the employee, he said.

But Van Lier of SAG-AFTRA said there are a lot of data collected by wellness devices that employees may not want the vendor to know. Information collected may include GPS location, ad clicks and friends lists on social media if the employee links the wellness account to social media accounts, she said.

If the information is anonymized and aggregated, the ability to piece together employee-specific information may depend on the number of workers at the company, Van Lier said. Employee-specific information becomes apparent when employers have competitive programs and post the results. She said a companywide “biggest loser” weight loss contest would be an example of a competitive program.

Hall said employers should be aware of their vendors’ privacy policies and should make that information available to employees.

The panel discussion was part of the midwinter meeting of the American Bar Association Section of Labor and Employment Law's Employment Rights and Responsibilities Committee. The meeting was held in New Orleans.

To contact the reporter on this story: Lisa Nagele-Piazza in New Orleans at lnagele@bna.com

To contact the editor responsible for this story: Susan J. McGolrick at smcgolrick@bna.com