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Legal considerations for employer worksite clinics

Published Date
Author Leona Rajaee

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Employees who access the healthcare services at an employer’s on-site or near-site clinic may be concerned about the privacy and security of their medical information. They may also have questions about what happens to their medical benefits under COBRA, if they were to leave the company. For the employer, there are a number of other legal considerations for their worksite clinics.

Employees can be assured that their medical records detailing visits for preventative and primary care at an employer worksite clinic are protected under HIPAA regulations. When the clinic uses electronic health records (EHRs), employees’ data is considered to be electronic protected health information (ePHI) covered under those same HIPAA restrictions.

COBRA provides an option for employees to continue with their group health plan coverage after they leave the company. Worksite clinics are considered group coverage, under COBRA, if they do not provide:

  • Primarily first aid for injury or illness that is a result of a workplace incident
  • Healthcare only to current employees
  • Treatment free of charge to employees

For the employer offering a worksite clinic to employees, legal considerations include:

  • Employee Retirement Income Security Act of 1974 (‘‘ERISA’’) – a report in Bloomberg BNA describes the worksite clinic’s responsibilities under ERISA, “if the on-site clinic is providing more robust services, such as preventive care services, primary care services, screenings, diagnostic services and wellness exams,” as “fiduciary and reporting and disclosure requirements.”
  • Affordable Care Act (ACA) – although in flux, there are certain regulations and requirements that may apply to a worksite clinic if it is “deemed to be an employer group health plan for purposes of ERISA.” W-2 reporting and the Cadillac tax are two important considerations for the employer under ACA.
  • State laws – some states regulate whether a corporation can hire or “control” a physician. There may also be state laws pertaining to the physical site, requiring a separate entrance or specific signage for the worksite clinic.