EEOC Issues Highly Anticipated Wellness Program Guidance
Apr 22 2015
On April 16, 2015, the Equal Employment Opportunity Commission (“EEOC”) issued highly-anticipated proposed regulations describing how the Americans with Disabilities Act (“ADA”) applies to employer-sponsored wellness programs. The proposed regulations also address the interaction of the HIPAA wellness program rules, as amended by the Affordable Care Act (“ACA”) and the ADA.
Title I of the ADA generally restricts employers from obtaining medical information from employees (e.g., health risk assessments or biometric screenings) but allows medical examinations of employees and inquiries about their health if they are part of a “voluntary” wellness program. Under EEOC enforcement guidance, a wellness program is considered “voluntary” if the employer neither requires participation nor penalizes employees who do not participate. While it was possible for employers to design a wellness program that complied with the HIPAA wellness program rules under the ACA, it was unclear whether an employer could offer rewards for (or assess penalties for not) completing a health risk assessment or undergoing biometric screening under the employer’s group health plan. In recent months, the EEOC has sued three employers, including Honeywell International Inc., for offering wellness program incentives that were, in the EEOC’s view, in violation of the ADA. The major concerns to employers with these lawsuits by the EEOC were that (i) the wellness programs being offered complied with the HIPAA wellness program rules under the ACA, and (ii) the EEOC had not provided any significant guidance for employers to follows as to what qualified as a voluntary wellness program under the ADA.
The proposed regulations clarify that an employer may offer limited incentives of up to a maximum of 30 percent of the total cost of employer-only coverage, whether in the form of a reward or a penalty, to promote an employee’s participation in a wellness program that includes disability-related inquiries or biometric screenings, as long as participation is voluntary.
Under the proposed regulations, a wellness program is “voluntary” as long as the employer does not:
To ensure that participation in a wellness program that includes disability-related inquiries or medical examinations is truly voluntary, an employer must provide an employee with a notice indicating:
The proposed regulations also include special rules for smoking cessation programs. A smoking cessation program that only asks employees if they use tobacco (e.g., on the honor system) would not be subject to the EEOC incentive limitation. However, a biometric screening or other medical examination that tests for the presence of nicotine or tobacco is a medical examination and the financial incentive limitation rules (e.g., maximum of 30 percent of employee-only coverage) would apply.
While the proposed regulations address several issues, there are still several questions which remain unanswered including
The EEOC has asked for public comments on the proposed regulations by June 19, 2015. Employers who are impacted by the proposed regulations should consider submitting comments to the EEOC.
While employers do not have to comply with the proposed regulations, there is good reason to do so. It is unlikely that a court or the EEOC would find that an employer violated the ADA if the employer complied with the proposed regulations until final regulations are issued. Moreover, many of the requirements explicitly set forth in the proposed regulations are already requirements under the law. For example, employers should make sure that they:
Additionally, employers must provide reasonable accommodations that allow employees with disabilities to participate in wellness programs and obtain any incentives offered. For example, if attending a nutrition class is part of a wellness program, an employer must provide a sign language interpreter, absent undue hardship, to enable an employee who is deaf to participate in the class. Employers also must ensure that they maintain any medical information they obtain from employees in a confidential manner.
We have a lot of experience in reviewing and designing wellness programs. If there is anything that we can do to help you make sure your wellness programs comply with the HIPAA wellness program rules under the ACA or the EEOC's proposed regulations under the ADA, we will be happy to do so. Please contact Patrick Allen, for further information.
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