02 Apr 2016

How to Collect Health and Wellness Data Without Scaring Your Employees

Posted in Featured By Sarmad Gardezi On April 2, 2016

How to Collect Health and Wellness Data Without Scaring Your Employees

Now that the human resources (HR) department has the hang of crunching numbers to make better people management decisions, it’s raising questions about employee privacy. That’s clear from recent reports detailing how employers, and the health care analytics firms and insurers with which they work are using—or misusing, depending on who’s talking—employee health and wellness data.

While some HR management software provides wellness data based on benefits administration, more and more companies are hiring third-party analytics firms to mine data aggregated from health insurance claims, employer-sponsored wellness plans, and other sources. They’re using the information to identify segments of their workforce that might benefit from information on specific health or medical conditions.

Sounds innocuous. But analytics consultancy Castlight Health can tell which employees might be at risk for diabetes, who’s pregnant, or even who might need back surgery, a company manager recently told Fortune. The company’s data set off alarm bells with privacy groups. The organizations claim employers—especially at smaller businesses—could make educated guesses as to which employee’s data is included in aggregated results. Armed with that kind of information, they argue, less-than-ethical employers could fire employees who are pregnant or whose heavy health care use could drive up overall benefits costs.

Federal law, namely the Health Information Portability and Accountability Act of 1996 (HIPAA), bars businesses from sharing an individual’s confidential health care information. Health care analytics firms maintain they don’t violate HIPAA regulations because they only share employee health and wellness data in aggregated form, so nothing can be traced back to a single person. But, even if companies don’t use an outside analytics firm, HR departments should take this as a wake-up call to re-examine practices for collecting, using, and safeguarding employee health and wellness data.

“We can’t underestimate the sensitivity around health information—especially in areas such as pregnancy where women are already hyper-aware of potential bias and discrimination from their employer,” wroteJennifer Benz, CEO of employee benefits communications consultancy Benz Communications.

To Gain Trust, Be Transparent

There are right and wrong ways to collect health and wellness data, according to HR executives, consultants, and employment law experts. To gain employees’ trust, be completely transparent about what you’re doing and why. When Bob Merberg, Employee Wellness Program Manager at Paychex, rolled out a ramped-up wellness program with biometric screening and health risk assessments, the payroll provider’s 12,000+ employees were skeptical. To counteract that, Paychex was upfront about how assessment and other data would be used—and didn’t hide the details in service agreement or waivers.

Paychex uses a third party to collect employee health data, and “we direct them to hold it sacred,” said Merberg. “We really seek to collect it and have it transmitted as little as possible.”

Today, Paychex doesn’t encounter resistance from employees regarding privacy, Merberg said. “We’ve proven what we’re trying to do is respect privacy. But the key thing has to be the pattern of transparency over time.”

Allow Employees to Opt In

When you’re setting up a wellness program, employee opt-in is essential. Programs or plans that are opt-out by default—in which employees are automatically enrolled unless they explicitly ask to be removed—aren’t great for morale or for getting full employee commitment to the program.

Because so much data today is stored in the cloud and personal information is constantly at risk, employees should have the choice to opt in. This is to ensure they understand a program’s intention, but also to be clear on what participating in the program means, according to Mark Stelzner, Founder and Managing Principal at consulting firmInflexion Advisors HR (IA HR), which helps companies with HR tech implementations.

Once you tell employees what data you’re collecting, don’t deviate from that. It might be tempting to gather new information or use the data you’re collecting in a different way. However, changing parameters means employees aren’t fully informed, and that could open you up to invasion of privacy claims, according to Karla Grossenbacher, a Partner at Seyfarth Shaw LLC and Chair of the law firm’s Labor and Employment practice.

“When you start using it for another purpose, people can say they didn’t consent to it, and cry foul,” said Grossenbacher. “It’s really important to make employees feel comfortable.”

Employee data privacy is one of the big issues surrounding core HR management systems, according to HR tech research firm Sierra-Cedar. It’s only going to get bigger as HR teams gain experience using predictive analytics in more aspects of people management, including making educated guesses about employees’ future behavior.

As an employer, it’s critical to make sure you’re keeping employees informed about what you’re collecting, how you’re using it, and what options they have to opt out if they so choose.