The Equal Employment Opportunity Commission (EEOC) recently issued final rules that clarify the application of Title I of the Americans with Disabilities Act (ADA) and Title II of the Genetic Information Nondiscrimination Act (GINA) to employer sponsored wellness programs. These rules were put in place to define what constitutes a “voluntary” health program, and determine the extent to which employers may offer incentives to employees and spouses participating in these programs. These rules do not countermand the Department of Labor (DOL) and/or Health and Human Services (HHS) regulations regarding Health-Contingent Wellness Incentives (i.e. “reasonable alternative standards” and required annual screening opportunities).
General Considerations: Title I of the ADA prohibits employers from discriminating against individuals on the basis of disability, and restricts employers from routinely obtaining medical information from applicants and employees. However, Title I does allow employers to make inquiries about employees’ health or allow medical examinations that are part of a “voluntary wellness program” (see below). In these cases, the employer cannot have direct access to the individual employee’s personal health information. Title I requires employers to:
• make all wellness programs, even those that do not obtain medical information, available to all employees;
• provide reasonable accommodations to employees with disabilities; and
• keep all medical information confidential.
Title II of GINA states that an employer may offer a limited incentive to an employee whose spouse provides health status information as part of a wellness program. Employers may offer children the opportunity to participate in a wellness program, but may not offer incentives in exchange for current or past health status information about children.
Both laws allow employers to ask health-related questions and conduct medical examinations, such as biometric screenings, if the employer is providing such services as part of a voluntary wellness program.
For a wellness program to be considered “voluntary,” an employer:
• may not require any employee to participate;
• may not deny any employee who does not participate in a wellness program access to health coverage or prohibit any employee from choosing a particular plan; and
• may not take any other adverse action or retaliate against any employee who chooses not to participate in a wellness program or fails to achieve certain health outcomes.
Employers also must provide a notice to all employees that clearly explains what medical information will be obtained, how it will be used, who will receive it, and the restrictions on disclosure.
The final rules also make clear that a maximum incentive limit of 30 percent of the total cost of self-only coverage applies to ANY wellness program that requires employees to answer disability related questions (HRA) or undergo a medical examination. This limit applies whether the program is participation or outcomes based. Please see the attached “Incentive Matrix” for a reference on the incentive amount according to the health plan offered.
Both rules prohibit employers from requiring employees and/or spouses to agree to the sale, transfer, exchange, or other disclosure of their health information in order to participate in the wellness program or to receive an incentive.
This ruling does not apply to wellness programs that simply require employees to engage in certain activities – such as attending a nutrition class or walking a certain amount – in order to earn an incentive.
Additionally, the ruling requires wellness programs to be “reasonably designed to promote health and prevent disease”. A “reasonably designed program” has a realistic chance of improving the health of individuals, does not require an overly burdensome amount of time or unreasonable or intrusive procedures, and may not require employees to incur significant costs for medical examinations. Such programs may not be a subterfuge for violating the ADA or other laws prohibiting employment discrimination.
This ruling also states that information from wellness programs may only be disclosed to employers in aggregate terms that are not likely to disclose the identity of individual employees.
Tobacco Considerations: A wellness program that simply asks employees whether or not they use tobacco (no nicotine test required) is not considered a program that asks disability-related questions. Therefore, an employer can increase a tobacco non-use incentive to 50 percent of the cost of self-only coverage. However, if a biometric screening test for the presence of nicotine or its metabolite (cotinine), the 30 percent incentive limit applies. These rules also apply to spouse’s participation.
These incentives do not include tobacco incentives, which are discussed above.
Incentive amounts available to an employee who answers disability-related questions (HRA) or undergoes medical examinations as part of a wellness program, are generally limited to 30 percent of the cost of self-only coverage. Specific instances noted include:
• Where the employer requires the employee to be enrolled in a particular group health plan in order to participate in the wellness program, the incentive to the employee may not exceed 30 percent of the total cost of the self-only version of the plan in which the employee is enrolled.
• Where the employer offers only one self-only group health plan, and does not require the employee to be enrolled in that health plan in order to participate in the wellness program, the incentive may not exceed 30 percent of the cost of the applicable self-only plan.
• Where the employer offers more than one self-only group health plan, and does not require the employee to be enrolled in a particular health plan in order to participate in the wellness program, the incentive may not exceed 30 percent of the lowest cost major medical self-only plan the employer offers.
These amounts may be doubled if the employee has a spouse on the plan.