Despite a recent attempt to block implementation, the new rule issued by the Equal Employment Opportunity Commission (EEOC) took effect January 1, 2017 and amends the regulations of Title I of the Americans with Disabilities Act (ADA) to clarify how employers can use incentives to encourage participation in voluntary wellness programs without violating the ADA.
Generally, the ADA does not permit employers to require a medical examination or make inquiries of an employee as to whether the employee is an individual with a disability. However, employers may conduct voluntary medical exams, including voluntary medical histories if it is part of an employee health program.
This final rule provides guidance to employers by defining “voluntary” and what constitutes an “employee health program” under the ADA. The rule applies to wellness programs that are considered employee health programs under Title I of the ADA. However, wellness programs that do not include disability-related inquiries or medical exams are not subject to the new rule. For example, smoking cessation programs would not be covered by the new language in this rule.
A wellness program is an employee health program if it is reasonably designed to promote health or prevent disease and must not be overly burdensome, pretext for violating the ADA or other laws prohibiting employment discrimination, or highly suspect in the method chosen to promote health or prevent disease. However, a program is not reasonably designed to promote health or prevent disease if it consists of a measurement, test, screening, or collection of health related information, but does not provide results, follow-up instructions or advice designed to improve the health of the participating employees. A program also is not reasonable if it exists mainly to shift costs from the employer to the targeted employees based on their health or to gain information to estimate future health care costs. Whether or not a program is reasonably designed must be evaluated in light of all the relevant facts and circumstances.
An employee health program is voluntary so long as the employer does not require employee participation, does not deny coverage or limit benefits based on non-participation, and does not take any adverse employment action or retaliate against, interfere with, coerce, intimidate, or threaten employees for non-participation. The employer also must provide employees with a notice that explains what medical information will be obtained and information privacy policies.
The use of incentives in an employee wellness program is allowed so long as the maximum allowable incentive/penalty does not exceed thirty percent of the total cost of self-only coverage of the group health plan in which the employee is enrolled. Alternatively, it is allowed as long as the incentive does not exceed thirty percent of the cost of self-only coverage under the second lowest cost Silver Plan for a 40-year-old non-smoker on the state or federal health care exchange in the employer’s location, but only if the employer does not offer health insurance coverage.
An employer cannot require an employee to agree to the sale or other disclosure of medical information (except to the extent permitted to carry out specific activities related to the wellness program), or to waive any confidentiality protecting as a condition for participating in a wellness program or for earning any incentive the employer offers in connection with such a program.
Finally, compliance with this new rule does not relieve an employer of the obligation to comply with other laws prohibiting employment discrimination.
The second new rule issued by the EEOC concerns the Genetic Information Nondiscrimination Act of 2008 (GINA) with regard to employer-sponsored wellness programs, and more specifically, what information can be required or requested from an employee’s spouse.
Under GINA, employers are generally prohibited from requesting, requiring, or purchasing genetic information from employees. However, an exception exists when “a covered entity offers health or genetic services, including such services offered as part of a voluntary wellness program.”
The new rule adds explanations of when this exception applies. The health or genetic services, including any acquisition of genetic information that is part of those services, must be reasonably designed to promote health and prevent disease.
An employer cannot offer an inducement, whether in the form of a reward or penalty, for individuals to provide genetic information. But, an employer may offer inducements for completion of health risk assessments (HRA) that include questions about family medical history or other genetic information, provided the covered entity makes clear, in language reasonably likely to be understood by those completing the HRA, that the inducement will be made available whether or not the participant answers questions regarding genetic information.
However, an exception allows an employer to offer an inducement to an employee whose spouse provides information about the spouse’s manifestation of disease or disorder as part of a HRA. The HRA can include a medical questionnaire, exam, or both, but the spouse must provide prior, written authorization, and the authorization form must describe the confidentiality protections and restrictions on the disclosure of genetic information. The HRA also must be administered in connection with the spouse’s receipt of health or genetic services offered by the employer. But, an inducement cannot be offered in return for the spouse providing his/her own genetic information, or for information about the manifestation of disease or disorder in an employee’s children or for genetic information about an employee’s children, including adult children.
The use of incentives in an employer-sponsored wellness program is allowed when an employee and spouse are given the opportunity to participate in such a program, as long as the maximum allowable incentive/penalty does not exceed the limits set forth above.
An employer cannot condition participation in an employer-sponsored wellness program or provide any inducement to an employee, or the spouse or other covered dependent, in exchange for an agreement permitting the sale or other disclosure of genetic information. An employer cannot deny access to health insurance or any package of health insurance benefits to an employee, spouse, or other covered dependent, or retaliate against an employee, due to a spouse’s refusal to provide information to a wellness program. Finally, this rule is not violated if an employer receives the information from the employee, spouse, or other covered dependent voluntarily.
There are many regulations with which employers must comply regarding wellness programs and employers should consult with counsel when designing such programs. FHKAD routinely advises employers on these matters. Please contact FHKAD attorney Marc Fishel at mfishel@fishelhass.com with any questions.