Employment Law Daily Final EEOC regs map out ADA, GINA compliance for employer wellness programs
News
Wednesday, May 18, 2016

Final EEOC regs map out ADA, GINA compliance for employer wellness programs

By Pamela Wolf, J.D. and Joy P. Waltemath, J.D. The EEOC has released a pair of final rules that map out the extent to which employers may offer inducements and incentives for participation in wellness programs without running afoul of the ADA and GINA. Scheduled for publication in the Federal Register on May 17, both final rules will be effective 60 days after publication, but would apply beginning on January 1, 2017. The two rules provide guidance to both employers and employees about how workplace wellness programs can comply with the ADA and GINA consistent with provisions governing wellness programs in the Health Insurance Portability and Accountability Act, as amended by the Affordable Care Act. Many employers offer workplace wellness programs intended to encourage healthier lifestyles or prevent disease. These programs sometimes use medical questionnaires or health risk assessments and biometric screenings to determine an employee's health risk factors, such as body weight and cholesterol, blood glucose, and blood pressure levels. Some of these programs offer financial and other incentives for employees to participate or to achieve certain health outcomes. According to the EEOC release accompanying the regulations, both of the new rules permit wellness programs to operate consistent with their stated purpose of improving employee health, while including protections for employees against discrimination. The final ADA rule provides that wellness programs that are part of a group health plan and that ask questions about employees' health or include medical examinations may offer incentives of up to 30 percent of the total cost of self-only coverage. 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, the same incentive allowed for the employee. No incentives are allowed in exchange for the current or past health status information of employees' children or in exchange for specified genetic information (such as family medical history or the results of genetic tests) of an employee, an employee's spouse, and an employee's children. In addition to the regs themselves, the EEOC also published question-and-answer documents on both rules: Q and A for the ADA wellness rule and Q and A for the GINA wellness rule. Also included are two documents for small businesses at https://www.eeoc.gov/laws/regulations/facts-ada-wellness-final-rule.cfm and https://www.eeoc.gov/laws/regulations/facts-gina-wellness-final-rule.cfm. Some of the more notable aspects of both rules are discussed below. ADA final rule. The final rule amending the regulations and interpretive guidance implementing Title I of the ADA provides guidance on the extent to which employers may use incentives to encourage employees to participate in wellness programs that ask them to respond to disability-related inquiries and/or undergo medical examinations. This rule applies to wellness programs considered “employee health programs” under Title I of the ADA. The EEOC noted that a wellness program that is an employee health program may be part of a group health plan or may be offered outside of a group health plan or group health insurance coverage. All of the rule’s provisions apply to all employee health programs that ask employees to respond to disability-related inquiries and/or undergo medical examinations. Conversely, wellness programs that do not include disability-related inquiries or medical examinations (such as those that provide general health and educational information) are not subject to the final rule; however, those programs must be available to all employees and must provide reasonable accommodations to employees with disabilities. Safe harbor provision. As in the proposed rule, under the final rule, the safe harbor provision does not apply to an employer’s decision to offer rewards or impose penalties in relation to wellness programs that include disability-related inquiries or medical examinations. Under the safe harbor provision, “an insurer or any entity that administers benefit plans is not prohibited from ‘establishing, sponsoring, observing or administering the terms of a bona fide benefit plan based on underwriting risks, classifying risks, or administering such risks that are based on or not inconsistent with state law,’” the commission explained. The EEOC specifically noted its disagreement with two court decisions that have applied the safe harbor provision “far more expansively to support employers’ imposition of penalties on employees who do not answer disability-related questions or undergo medical examinations in connection with wellness programs.” In both cases, Seff v. Broward County and EEOC v. Flambeau, Inc., the employers did not use wellness programs in a manner consistent with the application of the safe harbor provision, according to the commission. “In neither Seff nor Flambeau did the employer or its health plan use wellness program data to determine insurability or to calculate insurance rates based on risks associated with certain conditions—the practices the safe harbor provision was intended to permit,” wrote the EEOC. “Moreover, there is no evidence in either Seff or Flambeau that the decision to impose a surcharge or to exclude an employee from coverage under a health plan was based on actual risks that non-participating employees posed.” Incentive cap. Under the final rule, as in the proposed rule, an employer may offer incentives up to a maximum of 30 percent of the total cost of self-only coverage (including the employee’s and employer’s contribution), whether the incentive is a reward or penalty, to promote an employee’s participation in a wellness program that includes disability-related inquiries and/or or medical examinations, so long as participation is voluntary. The 30-percent cap applies to all workplace wellness programs whether offered only to employees enrolled in an employer-sponsored group health plan; offered to all employees whether or not they are enrolled in such a plan; or offered as a benefit of employment where an employer does not sponsor a group health plan or group health insurance coverage. Calculation of incentive. The final rule addresses calculating the permissible incentive cap in four situations: Calculation of incentive. The final rule addresses calculating the permissible incentive cap in four situations:
  1. Where participation in a wellness program depends on enrollment in a particular group health plan, the employer may offer an incentive up to 30 percent of the total cost of self-only coverage (including both employer and employee contributions) under that plan.
  2. Where an employer offers a single group health plan, but participation in a wellness program does not depend on the employee’s enrollment in that plan, an employer may offer an incentive of up to 30 percent of the total cost of self-only coverage under that plan.
  3. Where an employer has more than one group health plan, but participation in a wellness program does not depend on the employee’s enrollment in any plan, the employer may offer an incentive up to 30 percent of the total cost of the lowest cost self-only coverage under a major medical group health plan offered by the employer.
  4. Where an employer does not offer a group health plan or group health insurance coverage, the rule uses the cost of the second lowest cost Silver Plan available through the state or federal health care Exchange established under the Affordable Care Act (ACA) in the location that the employer identifies as its principal place of business as a benchmark for setting the incentive limit. Therefore, an employer may offer incentives up to a maximum of 30 percent of the cost that would be charged for self-only coverage under such a plan if purchased by a 40-year-old non-smoker.
Type of incentive. Under the final rule, offering limited incentives (whether financial or in-kind) to encourage employees to participate in wellness programs that include disability-related inquiries and/or medical examinations will not render the program involuntary. But, the total permissible incentive available under all programs (participatory and health-contingent programs), whether part of, or outside of, a group health plan, cannot exceed 30 percent of the total cost of self-only coverage, which generally is the maximum permissible incentive available under HIPAA and the ACA for health-contingent wellness programs. The final rule gives employers flexibility to determine the value of in-kind incentives as long as the method is reasonable. The EEOC declined to exclude de minimis incentives. Smoking cessation programs. As in the proposed rule, the final rule retains the distinction between smoking cessation programs that require employees to be tested for nicotine use and those that merely ask employees whether they smoke. Because a smoking cessation program that merely asks employees whether or not they use tobacco—or whether or not they ceased using tobacco upon completion of the program—is not an employee health program that includes disability-related inquiries or medical examinations, the 30 percent incentive limit does not apply. Accordingly, a covered entity may offer incentives as high as 50 percent of the cost of self-only coverage, as permitted by the regulations implementing Section 2705(j) of the Public Health Service Act, for such a program. However, because any biometric screening or other medical procedure that tests for the presence of nicotine or tobacco is a medical examination under the ADA, the 30 percent incentive cap would apply to those screenings or procedures. GINA final rule. The final rule that amends the regulations implementing Title II of the Genetic Information Nondiscrimination Act of 2008 addresses the extent to which an employer may offer an inducement to an employee or the employee’s spouse to provide information about the spouse’s manifestation of disease or disorder as part of a health risk assessment (HRA) administered in connection with an employer-sponsored wellness program. The final rule clarifies that an employer may, in certain circumstances, offer an employee limited inducements for the employee’s spouse to provide information about the spouse’s manifestation of disease or disorder as part of a HRA administered in connection with an employer-sponsored wellness program, provided that GINA’s confidentiality requirements are met and any information obtained is not used to discriminate against an employee. This narrow exception to the general rule that inducements may not be offered in exchange for an employee’s genetic information, however, does not extend to genetic information about a spouse or to information about manifestation of diseases or disorders in, or genetic information about, an employee’s children. Incentive cap. The final rule under GINA, like the final rule under the ADA, limits the maximum share of the inducement attributable to the employee’s participation in an employer-sponsored wellness program (or multiple employer sponsored wellness programs that request such information) to up to 30 percent of the cost of self-only coverage. The maximum total inducement for a spouse to provide information about his or her manifestation of disease or disorder is likewise 30 percent of the total cost of (employee) self-only coverage, so that the combined total inducement will be no more than twice the cost of 30 percent of self-only coverage. Smoking cessation. The final rule, like the proposed rule, provides that an employer-sponsored wellness program does not request genetic information when it asks the spouse of an employee whether he or she uses tobacco, ceased using tobacco upon completion of a wellness program, or when it requires a spouse to take a blood test to determine nicotine levels because these are not requests for information about the spouse’s manifestation of disease or disorder. Program design for both rules. Both rules also 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, the EEOC said. The ADA and GINA rules require wellness programs to be reasonably designed to promote health and prevent disease. Confidentiality. The two rules also make clear that the ADA and GINA provide important protections for safeguarding health information. The ADA and GINA rules state that information from wellness programs may be disclosed to employers only in aggregate terms. The ADA rule requires that employers give participating employees a notice that tells them what information will be collected as part of the wellness program, with whom it will be shared and for what purpose, the limits on disclosure and the way information will be kept confidential. GINA includes statutory notice and consent provisions for health and genetic services provided to employees and their family members. 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 to participate in a wellness program or to receive an incentive. Best practices. The interpretive guidance published along with the final ADA rule and the preamble to the GINA final rule identify some best practices for ensuring confidentiality, such as adopting and communicating clear policies, training employees who handle confidential information, encrypting health information, and providing prompt notification of employees and their family members if breaches occur. Reaction. Senator Lamar Alexander (R-Tenn), chairman of the Senate health and labor committee, quickly released a statement saying that the EEOC final rules “will make it harder for employees to choose healthy lifestyles and to save money.” “Wellness programs are the only part of Obamacare that everyone agreed on—everyone except the EEOC,” said Alexander. “Congress was clear in its support of workplace wellness programs in the health care law—just about the only provision in the law with bipartisan support—and the Departments of Health and Human Services, Labor, and Treasury were clear in their regulations implementing the law. It seems the EEOC is the only one missing the mark.” The Patient Protection and Affordable Care Act allowed employers to offer discounts on health insurance premiums by up to 50 percent if approved by the three federal agencies—and those agencies have used that authority in 2013 to approve a 50 percent discount for smoking cessation. The EEOC rules today say that any discount above 30 percent may be discriminatory. “The EEOC is taking away authority that Congress gave the administration and overruling the actions of the Departments of Health and Human Services, Labor and Treasury,” Alexander said. “Today’s rules contradict the law and continue the confusion the agency has caused, so Congress will need to act to help employees seeking to improve their health, while bringing down their insurance costs.” Alexander said he is considering introducing resolutions of disapproval under the Congressional Review Act to overturn the rules by a majority vote in the Senate and the House of Representatives.

Interested in submitting an article?

Submit your information to us today!

Learn More