By: Scott Gilbert
On April 20, 2015, the EEOC issued a notice of proposed rulemaking (“Proposed Rule”) designed to clarify how employer wellness programs that are part of a group health plan interact with Title I of the Americans with Disabilities Act (“ADA”). The Proposed Rule provides clarity to an area that had created a lot of confusion for employers. Under the Health Insurance Portability and Accountability Act (“HIPAA”) and the Affordable Care Act, employers can provide “wellness programs” that vary benefits and/or premiums based on a health factor. Under the ADA, however, an employer cannot require medical examinations that are not job related and consistent with a business necessity – in other words, to comply with the ADA, a wellness program needed to be voluntary. The difficult question for employers was whether a wellness program became involuntary if the employer offered an incentive for participation.
Under the EEOC’s Proposed Rule, this issue is clarified…a bit. Specifically, an employer may offer incentives up to 30% of the cost of employee-only coverage under the employer’s health plan to employees who participate in a wellness program and/or for achieving health outcomes. The guidance makes clear that the 30% cap is based on the total cost for coverage, not just the employee’s individual cost, and is an attempt to establish consistency between ADA and HIPAA regulations related to wellness program incentives. It is unclear, however, how this cap will be applied with respect to individuals with family coverage.
The Proposed Rule also provides detail as to what factors render a wellness program “voluntary”. Specifically, (1) participation cannot be required; (2) access to health coverage cannot be denied or generally limited due to non-participation; and (3) there can be no adverse action against an employee resulting from non-participation. It also provides a notice obligation on behalf of employers regarding the use of any medical information obtained in relation to the wellness program, and makes clear that such programs cannot be used as a subterfuge for discriminating under the ADA.
However, some questions remain under the Proposed Rule. Specifically, how does it interact with the Genetic Information Nondiscrimination Act of 2008 (“GINA”)? As a general matter, GINA prohibits employers from discriminating based on, or collecting genetic information, which includes family health histories. This type of information is routinely gathered in connection with wellness programs, and compliance with the ADA does not ensure compliance with GINA, or any other statutory obligation.
The Proposed Rule is open for public comment until June 19, 2015, after which time some version of the new regulations will likely go into effect.