This post by Kelly Ann Bird, Lindsay J. Jarusiewicz and Cathy Kenworthy was originally published in Gibbons Employment Law Alert here. Kelly Ann Bird is a Director in the Gibbons Employment & Labor Law Department. Lindsay J. Jarusiewicz is an Associate in the Gibbons Employment & Labor Law Department, and Cathy Kenworthy is President and CEO of Interactive Health.
After much anticipation (and confusion) regarding legally permissible parameters for certain employer-sponsored wellness programs, on May 16, 2016, the Equal Employment Opportunity Commission (“EEOC”) issued two final rules concerning wellness programs that offer incentives in exchange for health information from employees and their spouses. Specifically, the rules describe how wellness programs can comply with Title I of the Americans with Disabilities Act (“ADA”) and Title II of the Genetic Information Nondisclosure Act (“GINA”). According to the EEOC’s press release, the rules provide guidance under the ADA and GINA consistent with the relevant provisions of the Health Insurance Portability and Accountability Act (“HIPAA”), as amended by the Affordable Care Act (“ACA”). The EEOC’s proposed regulations were discussed in a previous post following our presentation entitled “Wellness Programs for a Healthy Workplace” at the Fifth Annual Gibbons Employment & Labor Law Conference. Then, in June, the EEOC issued a sample notice for employer-sponsored wellness programs. Here, we parse the rules into bright-line takeaways for employers.
The ADA Final Rule
The ADA final rule provides guidance to employers who wish to use incentives to encourage employee participation in wellness programs that involve disability-related inquiries and/or medical examinations. Thus, employers whose wellness programs screen for health-related factors such as high blood pressure or cholesterol and who use incentives to encourage employees to participate in these screenings must be aware of the final rule. The final rule applies to all wellness programs that include disability-related inquiries and/or medical examinations (not just those wellness programs that are part of a group health plan). What should employers know to comply?
A. Wellness programs that include disability-related inquiries and/or medical examinations (including the disability related inquiries or medical examinations themselves) must be “reasonably designed to promote health or prevent disease.”
B. Employee participation in a wellness program that includes disability-related inquiries and/or medical examinations must be voluntary. To be clear, in order for a wellness program to be “voluntary,” employers:
- Cannot require employee participation;
- Cannot deny benefits or access to coverage to employees for non-participation;
- Cannot take adverse action, retaliate against or coerce employees who choose not to participate; and
- Must provide notice to employees that clearly explains what medical information will be obtained, how it will be used, who will receive it, the restrictions on its disclosure, and the methods the covered entity uses to prevent improper disclosure.
C. Employers may offer incentives (rewards or penalties) for participation in a wellness program that includes disability-related inquiries and/or medical examinations up to a maximum of 30% of the total cost of self-only coverage. The incentives may be financial or in-kind (i.e., use of a prime parking spot or a relaxed dress code) as long as the total value of the incentive does not exceed 30% of the total cost of self-only coverage (including both employee and employer contributions).
D. Except as necessary to administer a health plan, medical information collected through employee health programs may be provided only in aggregate terms to employers so that the specific identities of employees are protected from disclosure. Additionally, employers cannot condition participation in the health plan on a requirement that employees disclose medical information or waive confidentiality protections under the ADA.
E. The ADA’s safe harbor provision does not apply to wellness programs, including wellness programs that are part of an employer’s health plan. In fact, in its commentary to the final rule, the EEOC explicitly noted its disagreement with the district court decisions in Seff v. Broward County and EEOC v. Flambeau, Inc., and remarked that the courts applied the safe harbor provision too expansively “to support employers’ imposition of penalties on employees who do not answer disability-related questions or undergo medical examinations in connection with wellness programs.”
F. Employers must continue to comply with other employment discrimination laws. Further, compliance with the ADA does not equal compliance with HIPAA’s non-discrimination provisions.
The GINA Final Rule
Similarly, the final GINA rule addresses the extent to which an employer can offer incentives to an employee for the employee’s spouse to provide genetic information as part of a health risk assessment in connection with a wellness program. Title II of GINA prohibits employers from using genetic information to make employment decisions and restricts employers from obtaining employees’ genetic information, with limited exceptions. One such exception permits employers offering health or genetic services to request genetic information as part of a wellness program provided certain requirements are met. Since, as a practical matter, many employees include their spouses in their employer-provided insurance coverage, offering wellness programs and incentives to those spouses is a logical extension of programs offered to employees. But until the final GINA rule, the question of what information could be gleaned from the employees’ spouses was unresolved, i.e details about the individual disability insurance definition, or personal details about their condition. The final GINA rule, which applies to all wellness programs and is closely aligned with the ADA final rule with respect to confidentiality requirements and restrictions on incentives, provides some clarity:
A. Employers may offer an employee limited incentives in exchange for the employee’s spouse’s genetic information provided as part of a health risk assessment administered through a wellness program if GINA’s confidentiality requirements are upheld and the information is not used to discriminate against the employee.
B. The incentive amount for an employee’s spouse under GINA cannot be more than the amount offered to an employee under the ADA for participation in a wellness program that includes disability-related questions or a medical examination. Under the GINA final rule, the incentive to each employee and to the employee’s spouse may not be more than 30% of the total cost of self-only coverage under the employee’s group plan.
C. No inducements are permitted for genetic information of the employee’s children (whether adopted or biological, adult or minor).
D. Employers are prohibited from denying benefits or access to health insurance, or otherwise retaliating, against any employee based on a spouse’s refusal to provide information about his or her manifestation of disease or disorder to an employer-sponsored wellness program.
The Sample Notice
Within weeks of issuing the final rules, the EEOC also issued a sample notice for employers to use in advising employees as required by the ADA final rule. The EEOC also published a question-and-answer document discussing the notice requirement and the sample notice.
Next Steps for Employers
The provisions under the ADA final rule regarding notice and incentives and the provisions under the GINA final rule regarding incentives apply prospectively to employer wellness programs as of the first day of the first plan year that begin on or after January 1, 2017, for the health plan used to determine the level of incentive permitted under this regulation. In the meantime, employers should consider the following:
- For employers with a comprehensive and well-designed program that is evidence-based, respects privacy, and is construed as voluntary by employees and regulators alike, the regulatory framework set forth in the EEOC’s final rules should provide reassurance and in all likelihood confirmation that the program is compliant with the rules.
- For employers with a program, but uncertain that it matches up with the guidelines, now is the time to get a fresh perspective. A wellness program is a strategic and important undertaking and should not be implemented without giving serious consideration to the issues addressed in these regulations. Review your program (including your notices), seek advice, and revamp as needed to assure compliance with the final rules.
- For employers that don’t have a program, or at least not a comprehensive program, now is an opportunity to get started the right way.
- Ensure your company has adequate policies and practices concerning confidential employee information, including that derived from wellness programs.
In reviewing or designing any program, the substantive and important goal is to have a credible line of sight to improving health and preventing disease. A healthy workforce is smart business for employers, and now an even more achievable goal.