What's Wellness Got To Do With It?
Miller & Martin PLLC Alerts | May 24, 2016
The EEOC Issues Two Final Rules Regarding Requirements for Employer Wellness Programs under the ADA and the GINA
The EEOC has issued two final rules that clarify when participation in an employer's wellness program is "voluntary" within the meaning of the Americans with Disabilities Act ("ADA") and the Genetic Information Nondiscrimination Act ("GINA").
The ADA Rule
Under the ADA, an employer is prohibited from discriminating against individuals on the basis of disability. As a result, there has been concern that employer wellness programs may conflict with the ADA if they require employees to answer disability-related questions or undergo a medical examination in order to earn a reward or avoid a penalty. To resolve this conflict, the ADA contains an exception permitting employers to make inquiries about an employee's health or perform medical examinations as part of a voluntary wellness program. So, the question resolved by the new EEOC final rule is what types of wellness programs will be considered "voluntary" under this exception?
Under the new EEOC final rule, a wellness program is considered "voluntary" if:
- The employer does not require any employee to participate;
- The employer does not deny any employee who does not participate in a wellness program access to health coverage or prohibit any employee from choosing a particular plan; and
- The employer does not take any other adverse action or retaliate against, interfere with, coerce, intimidate, or threaten any employee who chooses not to participate in a wellness program or fails to achieve certain health outcomes.
In addition, the employer must provide a notice that clearly explains what medical information will be obtained as part of the employee’s participation in the program, how it will be used, who will receive it, and the restrictions on further disclosure. While the EEOC has stated it will provide a sample notice on its website soon, the notice and confidentiality requirements in this rule are generally intended to be consistent with the HIPAA requirements already in place for wellness programs that are part of group health insurance plans.
Finally, the rule clarifies that in order for a program to be considered “voluntary,” financial incentives offered by employers for participation in the program must fall within certain limits. Specifically, the maximum incentives that can be offered to encourage participation in a wellness program are as follows:
- If only one group health insurance plan is offered, 30 percent of the total cost for self-only coverage in the plan;
- If more than one group health insurance plan is offered, 30 percent of the lowest cost major medical self-only plan; and
- If the employer does not offer any group health insurance plan, 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 for the location that the employer identifies as its principal place of business.
The GINA Rule
Under the GINA, an employer is prohibited from discriminating against individuals on the basis of genetic information, and is thus generally restricted from obtaining genetic information about potential or current employees or their family members. As a result, there has been a concern that employer wellness programs may conflict with the GINA when they ask an employee's spouse to provide information about the spouse's current or past health status as part of a voluntary wellness program. Although the GINA already contains an exception that permits an employer to acquire such information where the employer offers voluntary health or genetic services to the employee or his/her family members, the new rule clarifies that an employer may offer a limited incentive for the employee’s spouse to provide genetic information as part of a voluntary wellness program as well.
Under the new EEOC final rule, a voluntary wellness program can ask an employee’s spouse to provide genetic information without violating the GINA if:
- The employer does not require an employee or his/her spouse to agree to the sale, exchange, transfer, or other distribution of health information in exchange for an inducement or as a condition for participating in a wellness program;
- The employer does not deny access to health insurance or any package of benefits to any employee whose spouse refuses to provide information about his or her current or past health status to a wellness program administrator; and
- The employer does not retaliate against any employee whose spouse refuses to provide information about his or her current or past health status to a wellness program administrator.
As with the ADA final rule, a wellness program will only be considered "voluntary" with regard to the GINA if the financial inducement offered in exchange for participation does not rise above certain levels. The maximum inducements that can be offered to an employee's spouse in exchange for participation in a wellness program that requires the disclosure of genetic information are the same as the maximum incentives that can be offered to an employee under the ADA final rule.
This new rule does not change the existing prohibition on employers offering financial incentives or other inducements to an employee's children, whether adult or minor, in exchange for information about their current health status or their genetic information. The requirement that genetic information gathered as part of a voluntary wellness program be disclosed to employers only in aggregate terms has likewise not been changed by the new rule.
The provisions of both the ADA and the GINA final rules related to notice requirements and the limits on incentives for wellness programs go into effect on the first day of the first plan year that begins on or after January 1, 2017.
For more information on how these new rules may affect the lawful administration of your wellness program, please contact Stacie Caraway or any other member of our Labor & Employment Law Practice Group.