EEOC Issues Final Wellness Program Rules

“The more I know, the less I understand. All the things I thought I knew, I’m learning again.”  – Don Henley, The Heart of the Matter

Most HR professionals know that asking employees about medical conditions or family medical history is a big no-no. But asking those types of questions in connection with a wellness plan may be okay, provided you comply with the EEOC’s newly issued rules. Needless to say, wellness programs and their new rules are turning HR common knowledge on its head.

Before outlining the new rules, we need to define four key terms: wellness programs, the Americans with Disabilities Act (ADA), the Genetic Information Nondiscrimination Act (GINA) and the Health Insurance Portability and Accountability Act (HIPAA).

  • Wellness Programs – refers to a health promotion and disease prevention program or activity offered to employees as part of an employer-sponsored plan. Some wellness programs are connected to medical plans employers offer to their employees; some are not. Many wellness programs ask employee participants to undergo health risk assessments, biometric screenings or provide information about their medical conditions. Others do not. This distinction is critical under the new rules.
  • ADA –Employees are protected from disability discrimination if they “can perform the essential functions” of their job “with or without reasonable accommodation.” The ADA also restricts employers’ ability to obtain medical information about employees, and the new rules define those restrictions for wellness programs.
  • GINA –Generally speaking, it prohibits employers from discriminating on the basis of genetic information, which includes family medical history. GINA also restricts the collection of genetic information. Like with the ADA, the new rules define those restrictions for wellness programs.
  • HIPAA – sets federal standards for maintaining the confidentiality of protected health information.

The best way to understand the new rules and their application is to divide wellness programs into 3 groups:

  1. Those that ask participants to provide medical information about themselves (such as through health risk assessments, biometric screenings, medical questionnaires, etc.). These wellness programs must comply with the more restrictive ADA rules.
  2. Those that ask spouses and/or dependents to provide medical information about themselves. These programs must comply with the GINA rules.
  3. Those that do neither.

Generally speaking, wellness plans that include a health risk assessment, biometric screening or other health questionnaire all seek medical information, and trigger the most restrictive of the new EEOC rules. Because the rules themselves are very intricate and complex, a complete summary of them would be far too long and complicated for one blog post. The seven guidelines below, however, summarize the most common rules applicable to most wellness programs.

     1.  Must be “reasonably designed to promote health or prevent disease.”

The EEOC will determine this based on the facts and circumstances, but in general wellness programs must be truly concerned with the well-being of its participants. The program must have a reasonable chance of improving health or preventing disease, and cannot simply be a method for collecting health information on participants for budgeting or cost-shifting purposes. This means that if a wellness program collects health information, it must either: (1) provide the results of the risk assessment or biometric screening to the participant with follow-up information or advice, or (2) use the information to tailor the program to improve the health of participants.

     2.  Must be voluntary.

The employer cannot coerce, threaten or harass employees into participating in the wellness program. They cannot take adverse employment action against employees who choose not to participate, and they cannot deny or limit coverage for those who do not participate.

Beginning January 1, 2017, the employer also cannot offer inducements that exceed 30% of the total employee-only cost of coverage. The 30% cap applies to cash and in-kind inducements. The EEOC does not distinguish between incentives and penalties – both are inducements, and both are subject to the 30% cap. Generally speaking, the 30% is calculated from the lowest-cost health plan, unless the employer requires participation in a specific health plan in order to participate. In that case, the cap is calculated from the specified plan. If the employer offers a stand-alone wellness program and no health plan, the cap is calculated from the lowest cost Silver plan available in state marketplace for the employer’s principal place of business.

There are special rules for tobacco surcharges. If a wellness program simply asks if a participant uses tobacco, the cap jumps from 30% to 50% of the cost of self-only coverage. However, if the program tests for the presence of nicotine or tobacco, the 30% cap applies. The distinction is that the test is a medical exam which triggers heightened protection under the ADA, whereas simply asking about tobacco use does not solicit medical information.

     3.  Medical information obtained must be kept confidential.   

This should be a no-brainer. The employer sponsoring the wellness program should insulate itself from receiving personal information of participants. The new rules restrict the employer to receiving only aggregate medical information, except to the extent necessary to administer the health plan.

An employer also cannot condition participation in the wellness program on a waiver of the participant’s ADA rights or the participant’s agreement to the dissemination of his or her medical or genetic information.

The EEOC has indicated that compliance with HIPAA privacy rules would be sufficient to assure compliance with the new wellness rule.

     4.  Beginning in 2017, employees must receive a notice about the wellness program.

The notice must be written in a clear, understandable format and must describe:

  • The type of medical information obtained.
  • How the medical information will be used.
  • Restrictions on the disclosure of the information.
  • Employees or other parties with whom the information will be shared.
  • Methods the employer will use to prevent unauthorized disclosure.

The EEOC has indicated it will prepare and publish a model notice for employers to use. It is not yet available, but when it is it will be a good starting point for employers.

     5.  Participants must consent, in writing, before participating.

The authorization form requirements track the notice requirements described above. Specifically, the authorization must:

  • Be written in a manner likely to be understood by the participant.
  • Describe the type of information that will be obtained.
  • Describe how the information will be used.
  • Describe restrictions on the disclosure of the information.

     6.  Incentives cannot be conditioned upon the provision of genetic information.

If the wellness program asks for genetic information (family medical history), the notice and authorization described above must clearly that that those questions are voluntary. The notice and authorization must also state that any wellness program incentive or bonus can be earned even if the genetic information questions are not completed.

     7.  Employer must provide a reasonable accommodation for employees with a disability.

The ADA requires employers to make reasonable accommodations to allow employees with disabilities to enjoy equal benefits and privileges of employment. That obligation extends to participation in wellness programs. The accommodations must be reasonable and the employer must provide them unless doing so would impose an undue hardship on the employer. Whether any particular accommodation poses and undue hardship is based on the facts and circumstances of the situation, but the burden is on the employer to prove the undue hardship exists.

For example, if attending a nutrition class is part of a wellness program, the employer must provide a sign language interpreter to enable a deaf employee to participate unless the employer can show that doing so would be an undue hardship.

 

Wellness programs can be a fantastic way to engage employees and create a healthy work environment. But prudent employers should consult with a wellness consultant before launching a program to ensure they are complying with the newly-announced rules.

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2 Responses to “EEOC Issues Final Wellness Program Rules”

  1. Elizabeth Says:

    Can the wellness plan notice be housed electronically — or does it have to be mailed or given out to each enrollee?

    Reply

    • Marcus Wilbers Says:

      Hi Elizabeth –

      Unfortunately, the regulations are silent on the method of distribution. However, the EEOC website seems to indicate that electronic distribution is allowed: “To the extent that an employer already clearly provides the information required by this rule, such as in a brochure or email that describes the details of the wellness program, an employer does not have to create a new notice.” (Q&A 10, EEOC’s website)

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