Despite the difficult economic climate, wellness programs are thriving. According to a recent survey by Watson Wyatt and the National Business Group on Health, the number of companies adding wellness and health management programs continues to grow. And according to the survey, “… even moderate incentives can help engage employees in healthy behaviors. Financial incentives between $51 and $100 can boost participation in smoking cessation and weight management programs and encourage workers to get biometric screenings. Higher participation in health risk appraisals is associated with incentives greater than $100.”
So incentives work. But sometimes they can run headlong into the law of unintended consequence. Take the case of Frank P. Torre v. Logic Technology, in which which a New York appeals court awarded workers comp benefits to an employee for an injury sustained in the gym. Usually, injuries that happen during extracurricular activities aren’t covered by workers comp, but there are exceptions, such as when injuries occur during “mandatory attendance” events or while an employee is on business travel (see: Mandatory fun: when recreational activities are compensable and When play becomes work, or the case of the traveling employee).
In this case, the employee was on his own time at the gym – the injury did not appear “to arise out of and in the course of employment,” the usual test for compensability under workers comp. But in this case, the court determined that gym participation was furthering the employer’s business interest due to the networking potential. When it is determined that an employer has derived significant business benefit from an activity – such as interacting with clients and prospects – then an activity may be compensable.
The courts also noted that the employer encouraged and sponsored this activity. In this case, the sponsorship entailed reimbursement for gym membership fees. One has to wonder what kind of chilling effect a ruling like this could have on wellness programs. Employers frequently incent employees by paying for or supplementing gym membership, exercise programs, and weight loss or smoking cessation programs, and as noted in the above survey, some companies also offer financial incentives for participating in wellness programs, or impose disincentives such as increased cost for insurance premiums for not participating.
Wellness programs are beneficial for workers comp
Comorbidities like obesity and diabetes have been shown to have an impact on claim frequency and severity so it would appear that wellness programs would have a positive net effect on workers comp costs. It would seem there should be a more symbiotic relationship between wellness and workers comp, but to date, that hasn’t seemed to be the case. We’ll have to keep an eye on court decisions to see if this NY case will prove the exception rather than the rule.
Meanwhile, employers should proceed with caution because endorsement and sponsorship can be tricky when it comes to workers comp. In days gone by, sponsorship generally referred to softball or bowling teams and employers could take some steps top mitigate risks. But as employers become more aggressive about wellness programs in an effort to control health care costs and these wellness programs become more ingrained in the corporate culture, does the compensability exposure increase? Some of the variables that have come into play in determining compensability are the location and time of the activity – is the gym on the employer’s premises? Does the activity take place during work hours? Another factor is how strongly the company encourages participation and whether participation is purely voluntary. If a corporate culture is such that it so strongly endorses an activity, the issue of whether participation is truly voluntary could be up for debate.


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