Fitness Challenge Blog

HIPAA and ADA Nondiscrimination Rules for Employee Fitness Challenges

June 24, 2015 by Joseph
Forward: I have been wanting to write this article for a long time and always demurred once the legalese involved got the best of me. Through many hours of research and the help of attorney Thomas Harper of The Gilliland Law Firm I was finally able to finish.

Wellness Programs and HIPAA

Since fitness challenges are generally operated as part of a company’s wellness program, it is important to determine whether the wellness program is subject to HIPAA. This is generally true if the wellness program is part of a covered group health plan or qualifies under circumstances such as:
  • Offering health risk assessments with counseling
  • Offering immunizations such as a yearly flu shot
  • Offering biometric screening such as blood pressure, cholesterol, or BMI measurements

“Generally speaking, if the fitness challenge is connected to an employer’s group health plan, it is subject to the HIPAA Nondiscrimination rules. If it is stand alone, but the employer has a group health plan, it may still be subject to the HIPAA Nondiscrimination rules (there are complex rules for stand-alone wellness programs that want to avoid the HIPAA Nondiscrimination rules). Even if the stand alone wellness program isn’t subject to HIPAA Nondiscrimination rules, an employer would still be subject to other nondiscrimination laws, which would also affect its wellness program.”

– Thomas Harper

Nondiscrimination and the Employee Fitness Challenge

You may have already determined that your wellness program and related fitness challenges are subject to HIPAA, are certain that your program is not subject to HIPAA, or are unsure and would prefer to be safe than sorry. In any case, it may be wise to follow the nondiscrimination rules simply from a fairness perspective even if not required by law. So, with respect to an employee fitness challenge, how would you comply with HIPAA rules?

Participatory vs. Outcome-Based Programs

A participatory program is, by nature, HIPAA compliant since it rewards the employee if they participate regardless of outcome. However, the “challenge” aspect of the fitness challenge implies that a particular outcome is desired and rewarded. Therefore, a fitness challenge is inherently an outcome-based program.

An outcome-based program, by contrast, requires that participants meet a specific health factor goal to receive an award such as: most steps walked, most weight lost or reaching a qualifying BMI. In order to comply with HIPAA, an outcome-based program must conform to the following five requirements:

  1. The challenge must be available to employees at least once per year
  2. The reward must not exceed 30% of the total cost of employee-only coverage
  3. The challenge must be designed to reasonably promote health or reduce disease
  4. The challenge must be available to all employees or an alternate must be made available
  5. The alternate standard must be publicized in all program materials

The alternate mentioned in the fourth and fifth requirements was further defined in the final HIPAA regulations effective January 2014. This clarification provided separate requirements for outcome-based and activity-based programs.

Outcome-based programs require that participants meet or maintain a specific health-related goal in order to receive a reward. An example of this would be reaching or maintaining a specific BMI or blood pressure range. For outcome-based programs, the alternate standard must be available to anyone who requests it.

While it is certainly possible to construct a fitness challenge that is outcome-based, most will be activity-based. An activity-based program requires that participants perform an activity without a specific goal in mind. An example of this would be an employee walking challenge or a weight-loss challenge. In this case, the alternative challenge is only required when both an employee requests it and can prove that it would be medically unwise to participate in the original challenge.

Americans with Disabilities Act

It is worth noting that just because a program complies with HIPAA regulations, it does not necessarily comply with the Americans with Disabilities Act (ADA). Without delving too deep, the ADA also deals with nondiscrimination and the remedies are similar to those mentioned above. Namely:

  • Design the fitness challenge to have an alternate standard for participants with documented disabilities. This could be as easy as allowing “activity minutes” for those who cannot participate in a walking challenge.
  • The ADA considers a program “voluntary” if it does not require participation and does not impose penalties for non-performance. Under the law, there is little difference between a reward and penalty. Therefore, the reward for winning the challenge should not be considered so large that it, in-effect, penalizes those who do not participate. As stated by Mr. Harper: “The EEOC requires wellness programs to be voluntary, and the greater the reward, the greater the risk that denying the reward would constitute a penalty.”

As an added note about rewards, I truly believe in numerous smaller rewards for 1st, 2nd, 3rd, etc. place as opposed to only a few large rewards for the winner and runner up. Besides making the prize fit within HIPAA and ADA guidelines, smaller, numerous awards encourages those who are not the top performers to continue after the first few weeks. As an added bonus, smaller awards disincentivizes cheating.


Coming up with examples that satisfy both HIPAA and ADA nondiscrimination laws is not difficult. Two examples are as follows:

  • An annual walking challenge for a valued but not overly generous reward with an alternative activity such as minutes of physical activity for those who are deemed physically incapable of the walking challenge.
  • A semi-annual weight loss challenge with a PTO reward and an alternative activity such as logging nutrition, water consumption and attending a weight management seminar for those who are deemed physically incapable of participating in the weight-loss challenge.


The intention of this article is to shine light on some possible regulatory considerations of your employee fitness challenge. In the process, it summarizes and, in some cases, probably over-simplifies some very complicated regulations.

“Regulations can be complex, both in their definitions and in their application. Employers should not assume that regulations follow common usage or that the employer can apply a common understanding or common experience. When in doubt, employers should consult with a knowledgeable and reliable attorney.”

– Thomas Harper

However, as far as nondiscrimination laws are concerned, it may be in your best interest to simply design your fitness challenge to comply with these regulations whether you are required to or not. After all, the very point of anti-discrimination laws is to promote fairness and an employee fitness challenge should be seen as fair or it will inevitably have a deleterious effect in the workplace. Simply put, in most cases meeting the nondiscrimination standards will create a better overall challenge for your participants.

<< Prev Next >>