May 18, 2016
EEOC Issues Final Rules on Employer Wellness Programs
The Equal Employment Opportunity Commission (EEOC) has issued final rules clarifying how Title I of the Americans with Disabilities Act (ADA) and Title II of the Genetic Information Nondiscrimination Act (GINA) apply to employer wellness programs.
The final rules remain fairly consistent with the 2015 proposed rules however they provide much needed clarification and additional guidance necessary to ensure employers structure their wellness programs without violating the ADA or GINA.
Final Wellness Program Requirements under ADA and GINA
Must be Voluntary – If an employer’s wellness program includes disability-related inquiries or a medical examination, the program must be voluntary. To be considered voluntary the employer:
- May not require participation;
- May not deny access to health insurance or benefits to an employee who does not participate;
- May not retaliate against, interfere with, coerce, intimidate, or threaten any employee who does not participate or fails to achieve certain health outcomes;
- Must provide a notice that explains the medical information that will be obtained, how it will be used, who will receive it, and the restrictions on disclosure (The EEOC will provide a sample notice on its website that satisfies the necessary requirements); and
- Must comply with the incentive limits described in the final rules.
Must be Reasonably Designed – Any employee health program which includes disability-related inquiries or medical examinations must be reasonably designed to promote health or prevent disease. A wellness program meets this standard if it:
- has a reasonable chance of improving the health of, or preventing disease in, participating individuals;
- is not overly burdensome, a subterfuge for violating the ADA or other laws prohibiting employment discrimination, or highly suspect in the method chosen to promote health or prevent disease.
Must Maintain Confidentiality – Both rules state that information from wellness programs may be disclosed to employers only in aggregate terms. Both rules prohibit employers from requiring employees or their family members to agree to the sale, exchange, transfer, or other disclosure of their health information in order to participate in a wellness program or to receive an incentive. In addition:
- The ADA rule requires that employers give participating employees a notice that tells them what information will be collected as part of the wellness program, with whom it will be shared and for what purpose, the limits on disclosure and the way information will be kept confidential.
- GINA includes statutory notice and consent provisions for health and genetic services provided to employees and their family members.
Must Limit Incentives – Incentives to an employee who answers disability-related questions or undergoes medical examinations as part of a wellness program in order to earn a reward or avoid a penalty, are limited to the following:
- If a wellness program is offered only to employees enrolled in a particular health plan of the employer, the maximum allowable incentive an employer may offer is 30 percent of the total cost for self-only coverage of the plan in which the employee is enrolled. This would also apply if the employer offered only one group health plan but allowed any employee to participate in the wellness program regardless of whether he or she is enrolled in the health plan.
- If an employer offers more than one group health plan but participation in a wellness program is open to all employees regardless of whether they are enrolled in a plan, the employer may offer a maximum incentive of 30 percent of the lowest cost major medical self-only plan it offers.
- If an employer does not offer a group health plan but offers a wellness program that is open to all employees, the maximum incentive the employer can offer may not exceed 30 percent of the cost that a 40-year-old non-smoker would pay for self-only coverage under the second lowest cost Silver Plan on the state or federal health care Exchange in the location that the employer identifies as its principal place of business.
- In addition, the final GINA rule provides that the value of the maximum incentive attributable to a spouse’s participation may not exceed 30 percent of the total cost of self-only coverage, which is the same incentive allowed for the employee.
A wellness program that merely asks employees whether or not they use tobacco (or whether they ceased using tobacco by the end of the program) is not a wellness program that asks disability-related questions. Therefore, the rule’s 30 percent incentive limit does not apply and, an employer can offer an incentive up to 50 percent of the cost of self-only coverage, consistent with the HIPAA regulations. However, where an employer requires any biometric screening or other medical procedure that tests for the presence of nicotine or tobacco, the rule’s 30 percent incentive limit applies.
Applicability Date – The new provisions of these final rules requiring providing a notice that clearly explains to employees what medical information will be obtained and how it will be used and limiting incentives apply only prospectively to wellness programs as of the first day of the first plan year that begins on or after January 1, 2017, for the health plan used to determine the level of inducement. According to the EEOC, other wellness program provisions (such as the reasonable design and confidentiality requirements) are clarifications of existing obligations.
Additional information on these final rules can be found at the following links:
Source: Equal Employment Opportunity Commission
Please contact your AssuredPartners NL Benefits Team if you have questions or need assistance with these or other compliance matters
Information contained herein is for educational and/or informational purposes only. The information provided may change over time as the laws and regulations change. This information is not, nor is it intended to be, legal advice and each employer or client should seek their own legal counsel for guidance regarding individual situations.