EEOC Issues Final Regulations on Employer Wellness Programs
The Equal Employment Opportunity Commission ("EEOC") has issued two sets of final regulations that provide guidance on how employer-sponsored wellness programs that require employees to answer disability-related questions or undergo medical examinations can comply with the Americans with Disabilities Act ("ADA") and the Genetic Information Nondiscrimination Act of 2008 ("GINA").
Background. "Wellness program" generally refers to health promotion and disease prevention programs and activities offered to employees as part of an employer-sponsored group health plan or separately as a benefit of employment.
Title I of the ADA prohibits employers from discriminating against individuals on the basis of disability. While Title I generally restricts employers from obtaining medical information from job applicants and employees, it allows for inquiries about employees' health and authorizes medical examinations that are part of a voluntary employee health program, including workplace wellness programs. Title I also requires employers to make all wellness programs available to all employees, to provide reasonable accommodations for employees with disabilities, and to keep confidential all medical information obtained in connection with its wellness programs.
In general, GINA protects job applicants, and current and former employees from discrimination in employment matters on the basis of genetic information. Specifically, GINA restricts employers from requesting, requiring, or purchasing genetic information to use in making decisions on employment matters unless one or more of the six narrow exceptions exists. Moreover, GINA strictly limits when covered employers may disclose genetic information.
Both the ADA and GINA contain exceptions that allow employers to ask health-related questions and conduct certain medical examinations (e.g., biometric screenings) to determine risk factors as part of a voluntary wellness program that is reasonably designed to promote health or prevent disease. To meet this standard, a wellness program cannot require an overly-burdensome amount of time for participation, involve unreasonably intrusive procedures, be a subterfuge for violating laws prohibiting employment discrimination or require employees to incur significant costs for medical examinations.
Final Regulations. Highlights from the ADA and GINA final regulations are as follows:
Limits on financial incentives. If a wellness program is open only to employees enrolled in a particular health plan, the maximum allowable incentive that an employer can offer is 30% of the total cost of the plan's self-only coverage. When 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 particular plan, the employer may offer a maximum incentive of 30% of the lowest-cost self-only coverage option it offers.
Regarding tobacco-cessation programs, the final regulations clarify that merely asking employees whether or not they use tobacco is not a wellness program that asks disability-related questions. Therefore, in these situations an employer can offer an incentive equal to 50% of the cost for self-only coverage. However, where a tobacco-cessation program requires employees to undergo a biometric screening or other medical procedure to test for nicotine use, the 30% incentive limit described above applies.
Reasonable Accommodations. Generally speaking, all wellness programs, including those that do not obtain medical information, must be made available to all employees. Accordingly, employers must provide reasonable accommodations to disabled employees to enable them to earn whatever financial incentive is offered through the wellness program.
Confidentiality Requirements. An employer may only receive information gleaned from a wellness program in aggregate form that does not disclose, and is not reasonably likely to disclose, the identity of specific individuals, except as necessary to administer the plan. Moreover, an employer may not require an employee to agree to the sale, transfer, exchange or other disclosure of medical information in exchange for an incentive or as a condition for participating in a wellness program, except to the extent authorized under the ADA to carry out the purpose of the wellness program.
Notice Requirements. Employers must provide a notice to participating employees that describes the details of the wellness program, including: what information will be collected; how it will be used; who will receive it; restrictions on the disclosure of such information; and how the information will be kept confidential.
Prohibition on Retaliation. Employers are prohibited from denying access to health insurance or any package of benefits to, or retaliating against, any employee whose spouse refuses to provide information about his or her current or past health status to an employer wellness program.
Takeaway for Employers. The provisions of the final regulations related to the wellness program inducements limits and notice requirements will apply only prospectively to employer-sponsored wellness programs as of the first day of the first plan year that begins on or after January 1, 2017. With respect to meeting the final regulations' confidentiality requirements, employers are advised to take the following action steps:
- Adopt and communicate clear confidentiality policies.
- Train employees who handle confidential information.
- Encrypt health information.
- Provide prompt notification to employees (and family members) if a breach occurs.
The ADA final regulations are available at: https://www.gpo.gov/fdsys/pkg/FR-2016-05-17/pdf/2016-11558.pdf
The GINA final regulations are available at: https://www.gpo.gov/fdsys/pkg/FR-2016-05-17/pdf/2016-11557.pdf