León Cosgrove

Final EEOC Rules Issued on Employer Wellness Programs

By: John D. Bosco

healthform-crop-600x338The U.S. Equal Employment Opportunity Commission (EEOC) recently published final rules regarding the collection and use of health information from employees participating in company wellness programs. Amending the original regulations for implementing Title II of GINA and Title I of the ADA, the rules outline the extent to which employer-sponsored wellness programs that offer incentives for participation are legal under the ADA and GINA. The rules also outline non-participation penalties that are illegal under the law because they make wellness program participation “involuntary.”

These final rules apply to all workplace wellness programs that make medical inquiries and conduct medical exams, including those in which employees or their family members may participate without also enrolling in a particular health
plan. The rules go into effect on or after January 1, 2017– the first day of the new plan year.


Genetic Information Nondiscrimination Act (GINA)

The new rules revise the EEOC’s regulations implementing Title II of GINA, which protects workers from certain employment actions based on their genetic information, including the health status of their family. The revised GINA II regulations allow employers offering certain wellness programs to provide some financial and other incentives in exchange for an employee’s spouse providing health information, as long as that information isn’t used to discriminate against an employee.


American with Disabilities Act (ADA)

Likewise, the EEOC’s regulations for implementing Title I of the ADA were revised to allow employers to offer incentives for wellness programs that are part of a group health plan and that ask questions about employees’ health or include medical examinations. “The commission worked to harmonize [the Health Insurance Portability and Accountability Act’s] goal of allowing incentives to encourage participation in wellness programs with ADA and GINA provisions that require that participation in certain types of wellness programs is voluntary,” EEOC Chair Jenny R. Yang said in a statement.  “These rules make clear that the ADA and GINA provide important safeguards to employees to protect against discrimination.”

 

Voluntary

According to the EEOC rules, a health/wellness program that includes medical inquiries and exams is voluntary if it:

• does not require participation;

• does not deny access to health insurance or benefits to an employee for non-participation;

• does not retaliate against, interfere with, coerce, intimidate, or threaten any employee who does not participate or fails to achieve certain health outcomes;

• provides a notice that explains the medical information that will be obtained, how it will be used, who will receive it, and the restrictions on disclosure; and complies with the rules’ incentive limits.

 

Incentives

The rules on incentive limits are:

• 30% of the total cost of the self-only version of the plan in which the employee is enrolled — when the employer requires the employee to be enrolled in a particular health plan in order to participate in the wellness program;

• 30% of the lowest-cost major medical self-only plan the employer offers — when the employer offers more than one self-only health plan and does not require the employee to be enrolled in a particular health plan to participate in the wellness program; and

• 30% of the total cost to a 40-year-old non-smoker purchasing self-only coverage under the second-lowest-cost silver plan available on the state or federal exchange in the location that the employer identifies as its principal place of business — when the employer does not offer a health plan, but offers a wellness program that is open to employees.


Promote Health or Prevent Disease

For a health/wellness program to be reasonably designed to promote health or prevent disease, it must:

• have a reasonable chance of improving the health of, or preventing disease in, participating individuals;

not be overly burdensome, a subterfuge for violating the ADA or other laws prohibiting employment discrimination, or highly suspect in the method chosen to promote health or prevent disease;

not exist merely to shift costs to employees based on their health;

not be used only to predict an employer’s future health costs;

• use the health information collected from participants to provide follow-up information or advice to those participants or design a program that addresses at least some conditions identified; and

not impose unreasonably intrusive procedures, an overly burdensome commitment of time for participation, or significant costs related to medical exams, on employees.

 

Notice & Confidentiality

A new notice requirement has been added that requires employers to provide notice that clearly explains what medical information will be obtained, how it will be used, who will receive it, and the restrictions on disclosure.

The rules require that the all employee health information that employers receive be collected by a wellness program in an aggregate form that does not disclose, and is not reasonably likely to disclose, the identity of specific individuals, except as necessary to administer the plan. Employers may not require an employee to agree to the sale, exchange, transfer, or other disclosure of medical information or to waive confidentiality protections under the ADA in exchange for an incentive or as a condition for participating in a wellness program, except to the extent permitted by the ADA to carry out specific activities related to the wellness program. Interpretive guidance includes the following best practices for ensuring confidentiality: adopting and communicating clear policies; training employees who handle confidential information; encrypting health information; and providing prompt notification to employees and their family members if any breaches occur.

 

JohnBosco_BW_WebJohn Bosco is a partner in the Dallas, Texas, office of León Cosgrove, LLC who focuses his practice on the defense and trial of complex labor and employment and accessibility matters in federal and state courts across the country.