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EEOC Finalizes Wellness Rules Under ADA and GINA

Overview

On May 16, 2016, the Equal Employment Opportunity Commission (EEOC) issued final rules that describe how the Americans with Disabilities Act (ADA) and the Genetic Information Nondiscrimination Act (GINA) apply to employer-sponsored wellness programs.

Action Steps

The final rules provide long-awaited guidance on how to structure wellness programs without violating the ADA or GINA. Employers that sponsor wellness programs should work with their advisers to determine what changes, if any, should be made to their wellness programs’ design to comply with the EEOC’s final rules.

Highlights and Important Dates

WELLNESS PROGRAMS

Design Options

Many employers offer workplace wellness programs as a way to help control health care costs, encourage healthier lifestyles and prevent disease. Wellness programs can be offered to employees as part of an employer-sponsored health plan or separately as a benefit of employment.

Many of these programs ask employees to answer questions on a health risk assessment (HRA) or to undergo biometric screenings for risk factors (such as high blood pressure or cholesterol). Other wellness programs provide educational health-related information or programs that may include nutrition classes, weight loss and smoking cessation programs, on-site exercise facilities or coaching to help employees meet health goals.

Wellness program incentives can be framed as rewards or penalties and often take the form of prizes, cash, or a reduction or increase in health care premiums or cost-sharing.

Legal Concerns

Employee wellness programs must be carefully designed to comply with the ADA, GINA and other federal laws that prohibit discrimination based on race, color, sex (including pregnancy), national origin, religion, compensation or age.

Additionally, wellness programs that are part of group health plans must be designed to comply with HIPAA’s nondiscrimination requirements, as amended by the Affordable Care Act (ACA). Under HIPAA, health-contingent wellness programs are required to follow certain standards related to nondiscrimination, including a standard that limits the amount of incentives that can be offered. The maximum reward under HIPAA for health-contingent wellness programs is 30 percent of the cost of health coverage (or 50 percent for programs designed to prevent or reduce tobacco use).

FINAL RULES

The final rules provide much-needed guidance for employers on how to structure employee wellness programs without violating the ADA and GINA. Most importantly, the final ADA rule provides guidance on the extent to which employers may offer incentives to employees to participate in wellness programs that ask them to answer disability-related questions or undergo medical examinations.

The final ADA rule does not apply to wellness programs that do not obtain medical information but simply require employees to engage in an activity (such as walking a certain amount every week) in order to earn an incentive. However, employers must provide reasonable accommodations to allow employees with disabilities to earn the incentive.

Also, the final GINA rule clarifies that an employer may offer a limited incentive for an employee’s spouse to provide information about the spouse’s current or past health status as part of a voluntary wellness program.

Incentives

The final ADA rule provides that incentives offered to an employee who answers disability-related questions or undergoes medical examinations as part of a wellness program are limited to the following:

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. Employers may offer children the opportunity to participate in wellness programs, but may not offer inducements in exchange for current or past health status information about children. Inducements in exchange for genetic information about spouses and children (such as a spouse’s or child’s family medical history) are also prohibited.

Voluntary Programs

In order for participation to be considered voluntary under the ADA, an employer:

Program Design

The ADA and GINA rules seek to ensure that wellness programs actually promote good health and are not just used to collect or sell sensitive medical information about employees and family members or to impermissibly shift health insurance costs to them. Both rules require wellness programs to be reasonably designed to promote health and prevent disease.

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

Applicability Date

The provisions of the final rules related to the incentive limits and the ADA notice requirement 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, 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.