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Benefits and Compensation

Tracking employee health metrics: Great idea or big mistake?

On-site health fairs, weight loss competitions, smoking cessation classes, questionnaires. These are just a few of the ways an increasing number of businesses are procuring information about employees’ health.

Some experts contend this data may boost a company’s bottom line, and many insurance providers are promising lower health care premiums in exchange for it.

But even though your company has the best of intentions, it’s prudent to weigh carefully the pitfalls and the challenges of tracking health data. If your goals are a healthier workforce, you may want to consider more positive methods that lead you in that direction while avoiding potential problems.

What’s possible?

Since tracking employee health information is a fairly recent phenomenon, there is little legislation governing it. This translates to a fair amount of leeway, but it also means grey areas that inevitably will be tested in the courts.

Information about employee health can be gathered in a number of ways. Some wellness programs ask employees to volunteer information, such as whether they smoke or exercise. Others use blood tests or medical exams to determine information such as blood pressure, body mass index (BMI) or cholesterol levels.

A word of caution: Be careful about implementing wellness programs that require participation, or penalize employees who are unable to participate. If not designed correctly, these wellness programs can violate federal laws such as the Health Insurance Portability and Accountability Act (HIPAA) and the Affordable Care Act (ACA).

Financial benefits

For businesses that sponsor a group health plan, one of the main arguments for collecting employees’ health information centers on lowering insurance costs. Just like car insurance, the more claims employees make, the higher the cost for coverage. If your employees require care less frequently, the cost of coverage declines.

Some theorize that tracking health metrics can improve a company’s bottom line and consequently maximize stock performance. But the verdict isn’t in on this. Your employees won’t be there forever, so what is true today may not be true next year.

However, several studies have shown that a culture of wellness leads to employee engagement and productivity. This in turn may positively affect the bottom line.

Plenty of pitfalls

While information about employees’ health is fairly easy to obtain, does your company want or need it badly enough to pay the potential price? Here are a few things to think about.

1. Having information may set your company up for charges of discrimination

Unfortunately, your company is likely to find negative information about the health of some employees. Often this information has nothing to do with the person’s ability to do their job. What do you do with that knowledge?

U.S. Equal Employment Opportunity laws, including the Americans with Disabilities Act (ADA) and Genetic Information Nondiscrimination Act (GINA), prohibit companies from using health information to make employment decisions and place restrictions on the data that can be collected. And once you have the information, even if you don’t use it, every decision becomes suspect and motivations may be called into question.

2. Collection of medical information must follow strict privacy regulations

HIPAA, as well as similar state privacy laws, could apply to the health information gathered on employees, which may increase your liability as well as the need for extra manpower to handle compliance and documentation.

3. Your company’s culture may be damaged

While many people would like to be healthier, a heavy-handed approach can feel intrusive. But even more subtle methods can be problematic. For instance, distributing step trackers or pedometers may seem benign, but employees may resent the scrutiny. Also, those with health conditions may be stigmatized or even bullied.

 Choose carefully

If you sponsor a group health plan, and your company is considering collecting health information, first seek legal counsel from an attorney well versed in employee benefit law. You’ll need expertise beyond your corporate counsel. Also, speak to your insurance provider to find out exactly what the requirements are to cut your premium and how much you will be able to save.

Are the savings worth the increase in your liability?

Consider alternate approaches

Whether or not you decide to collect data, your company can help employees become healthier.

Here are some constructive ways to create a healthier environment without tracking health metrics.

Be positive. Show employees you care about their health with lunchtime yoga or smoking cessation classes.

Be inclusive. Foster community with voluntary walking or support groups open to all. Contests or incentives may be OK, but be sure people are not being bullied or singled out.

Be cautious. Take small, slow steps, getting employee feedback along the way. Swapping healthy snacks for junk foods in break rooms might be a good place to start.

What’s next?

As evolving medical science makes it easier to harvest and track medical information, more employers will likely attempt it. Expect some lawsuits over the next several years to define the regulations further.

Considering calling on some outside assistance to make HR decisions? Download our free e-book, HR Outsourcing: A Step-by-Step Guide to Professional Employer Organizations (PEOs).

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  • Kelley Zanfardino

    Kelley Zanfardino

    Senior Human Resource Advisor

    Kelley has more than 25 years of HR experience working in a variety of industries and organizations. Her career has been focused primarily on employee relations, leaves of absence, disability and organizational metrics. Kelley holds a SPHR-CA certification, teaches the 12-week PHR/SPHR certification course for SHRM’s San Diego chapter and serves on the board for two nonprofit organizations.

    Other posts by Kelley Zanfardino

    Comments

    Avatar for Kelley Zanfardino
    Mar 25, 2017
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