On Monday, May 16, the U.S. Equal Employment Opportunity Commission (EEOC) issued two final rules related to employer wellness programs.
The two rules explain how the Americans with Disabilities Act (ADA) and the Genetic Information Nondiscrimination Act (GINA) apply to employer-sponsored wellness programs that collect health information from employees and spouses. These rules take effect in January 2017 and address important issues related to program incentives, design, and confidentiality.
Limits on Program Incentives
Under ADA and GINA, employers are generally restricted from requesting or using health information from employees and their spouses, but employers can ask health-related questions and conduct health examinations when done as part of a voluntary wellness program.
In order to be considered voluntary, the final rules limit financial incentives to no more than 30% of the total cost of self-only coverage – either the coverage the employee is enrolled in or, if not enrolled, the lowest cost medical coverage offered by the employer. The 30% cap applies to incentives offered to both employees and to spouses. The one exception to the 30% cap is where the wellness program merely asks employees whether or not they use tobacco, in which case the employer can offer an incentive of up to 50% of the cost of self-only coverage.
Importantly, this cap applies to incentives offered for both program participation and for outcome-based achievements. No incentives are allowed to obtain health status information of children.
The two rules stress the requirement that wellness programs, along with any related health inquiries or medical examinations, be reasonably designed to promote health and prevent disease. Employers cannot sponsor a wellness program with the intent to shift costs to employees based on their health or to use collected information to predict the employer’s future health costs, nor can the program be unreasonably intrusive or burdensome to employees.
Through the final rules, the EEOC also makes clear that the ADA requires employers to make all wellness programs (even those that do not use employee medical information) available to each employee, and to provide reasonable accommodations or modifications to employees with disabilities. Employees with disabilities must be able to earn whatever incentive the employer offers.
Finally, the two rules provide that both ADA and GINA establish important protections for safeguarding health information. Specially, an employer may only receive information collected by a wellness program in aggregate form that does not disclose the identity of specific individuals, and an employer cannot require an employee (or a family member) agree to the sale or disclosure of their health information to participate in the program or receive incentives. The EEOC also identifies some best practices for employers to follow in order to ensure confidentiality.
Wellness programs can be highly effective at encouraging healthy lifestyles among employees, and the release of the final rules provides much-awaited guidance on program compliance. However, there remains considerable complexity facing employers who sponsor – or who wish to sponsor – such a program. If you’re interested in assessing your program’s state of compliance, or if you’d like to implement a wellness program for the first time, contact the experts at Filice Insurance.