Onsite health clinics are a healthcare benefit that employers are offering in ever-increasing rates in order to compete for and retain top talent, optimize their healthcare spending, and improve employees’ overall well-being as an important part of job satisfaction.

While these clinics can provide preventative medicine and help to improve the health of some employees, employers should be aware of the legal risk they take on in providing their employees direct access to medical services.

The Issue

With the rising cost of healthcare in the U.S. and the consequential rising cost of employer-sponsored health plans (healthcare costs rise about 3-5% annually which outpaces inflation), employers across the board are shifting the burden of healthcare costs to their employees. Each year, employees are faced with higher deductibles and even higher insurance premiums. In addition to rising costs, the aging population, chronic conditions, an inefficient and inconvenient healthcare system, and a focus on reactive treatment (versus preventative measures) further complicate providing healthcare to an employer’s workforce.

Onsite Clinics as Creative Employer Solutions

Onsite clinics are not a new concept, but they are gaining increasing popularity with employers of all sizes. Because these clinics provide primary care and preventative care, onsite clinics are a multifaceted solution used by employers to decrease costs, increase access to care, improve health outcomes for their employees, and create a more productive and satisfied workforce.

In fact, more than 40 companies on Fortune’s list of the “100 Best Companies to Work For” offer an onsite health clinic for their employees. Additionally, according to the National Survey of Onsite Clinic Operations and Policies Report published in December of 2014, 66% of onsite health center programs demonstrated its ROI in all or some areas.

Services Offered at Onsite Clinics

Onsite clinics offer a variety of services provided by a range of service professionals focusing on both curative/primary care and preventative care. Many onsite clinics are staffed by mid-level practitioners (nurse practitioners or physician assistants), and on occasion, full-time or part-time physicians or specialty providers (physical therapists, chiropractors, and nutritionists).

Some offer pharmacy services, healthy cooking classes, and/or fitness centers. Onsite clinics usually offer, at minimum, urgent care, flu shots, and even X-rays. By way of example, a large international airline carrier, which has clinics for its employees at airports in Chicago, Houston, and Newark, has doctors and physical therapists at each, in addition to nurse practitioners and physician assistants.

A focus on preventative care (e.g., encouraging exercise and a healthy diet) helps keep employees healthier, which reduces absenteeism and directly decreases the employer’s benefit costs over time. Providing such a benefit to future employees also helps recruitment and retention efforts of top talent, especially from the millennial workforce who are increasingly demanding nontraditional healthcare benefits from their employers, like mental health benefits, healthcare savings benefits, and expanded family benefits.

Legal Risks with Onsite Clinics

While the benefits of onsite clinics are apparent, there are certain legal issues that an employer should consider when opting to provide healthcare services to their employees. These issues include state medical practice laws, state and federal regulations, privacy and security issues, licensing and certification issues, and medical record retention.

The scope of services and scope of practice of an onsite medical clinic are subject to state medical practice laws. For example, in Texas, a non-professional entity may not employ a medical professional. Additionally, a nurse practitioner must have a supervising physician in order to provide certain medical services.

The employer should also keep in mind that the qualifications and credentials of the onsite clinic’s professional staff affect quality of care and present potential liability issues. Professional liability insurance is a large part of this issue. The actual facility of the onsite clinic must go through licensing and certification with relevant authorities, depending on the state where the clinic is located. There are initial and ongoing costs and issues associated with the licensing and certification processes.

Today’s technology presents increasing privacy and security concerns in all areas, but such concerns are heightened in the medical arena. Privacy and security of patient health information is important even if HIPAA does not apply. Additionally, there are certain rules and regulations surrounding medical record maintenance and custody.

In short, onsite clinics are a creative way to add value to a company’s employee benefits while also reducing costs for the employer. While there are legal issues to keep in mind, this solution is only growing in popularity as employers combat rising healthcare costs and compete for top recruits.