This week the Equal Employment Opportunity Commission (EEOC) issued final rules providing guidance on the application of the Americans with Disabilities Act (ADA) and the Genetic Information Nondiscrimination Act of 2008 (GINA) to employer-sponsored wellness programs. As we discussed in prior alerts, in 2015 the EEOC issued proposed rules for employer-sponsored wellness programs under the ADA and GINA. The final rules are largely similar to the proposed rules, but do include some important modifications based on public comments the EEOC received. Below are the most significant requirements of the final rules.
Final ADA Rule on Wellness Programs
The final ADA rule on wellness programs applies to any program that asks employees to respond to disability-related inquiries and/or undergo medical examinations. This includes programs that are not offered in connection with a group health plan.
The rule imposes limits on the value of any incentive provided in connection with a wellness program. The limit on the incentive is generally 30% of the total cost of self-only health coverage (including both employer and employee contributions). If an employer offers one group health plan option, but employees who do not participate in the health plan can participate in the wellness program, then the limit is 30% of the total cost of self-only coverage under that plan. If the employer has more than one group health plan option, but employees who do not participate in the health plan can participate in the wellness program, then the limit is 30% of the total cost of the lowest cost self-only coverage available under the employer’s plans. If an employer does not offer any group health plan, the limit is 30% of the cost that would be charged to a 40-year-old, non-smoker in the second lowest cost Silver Plan available through the state or federal exchange established under the Affordable Care Act in the location of the employer’s principal place of business. In-kind and de minimis incentives must be included when calculating the 30% limit.
Under the final rule, wellness programs must also be “voluntary.” A program is voluntary so long as: (i) employees are not required to participate, (ii) coverage under a group health plan or particular benefit packages are not contingent on participation in the wellness program; (iii) non-participating employees are not subjected to adverse employment action, retaliation, coercion, intimidation, or threats, and (iv) notice is provided to employees regarding the program. The notice must (A) be written in a manner reasonably likely to be understood by the employee, (B) describe the type of medical information that will be obtained and the specific purposes for which the information will be used; and (C) describe restrictions on the disclosure of the employee’s medical information, who the information will be shared with, and the methods that the employer will use to ensure that the medical information is not improperly disclosed. The EEOC will publish an example of a compliant notice within 30 days of the publication of the final rule.
Reasonable accommodations must be made available to employees with disabilities to earn any incentive offered under a wellness program. Additionally, wellness programs must be reasonably designed to promote health or prevent disease. In particular, a program must not be subterfuge for discrimination and must not be highly suspect in the method chosen to promote health or prevent disease. A program that includes measurements, tests, screenings, or collection of health-related information without providing results, follow-up, or advice designed to improve health is not reasonably designed to promote health or prevent disease. Medical information gathered under a wellness program must generally be disclosed to the employer in aggregate terms that do not identify the employee.
The final rules under ADA are generally effective immediately, but the notice and incentive provisions will only apply as of the first day of the first plan year beginning on or after January 1, 2017.
Final GINA Rule on Wellness Programs
The final GINA rule applies to any employer-sponsored wellness program that requests genetic information. By way of background, GINA generally prohibits employers from using genetic information to make any employment decisions. In the past, the EEOC took the position that providing a financial incentive to an employee in return for medical information about an employee’s spouse violates GINA. The EEOC’s final rule clarifies that an employer may, subject to certain restrictions, offer incentives for an employee’s spouse to provide information about the spouse’s medical history as part of a health risk assessment administered under a wellness program. Incentives may not be provided for genetic information about a spouse or information about an employee’s children.
The final GINA rule includes a provision almost identical to the ADA rule that requires wellness programs to be reasonably designed to promote health or prevent disease. A program may not impose a penalty or disadvantage an employee because a spouse’s disease or disorder prevents or inhibits the spouse from participating or achieving a specific health outcome.
Spouses who participate in a wellness program must provide prior, knowing, voluntary, and written authorization regarding disclosure of their information. The authorization form must describe the confidentiality protections and restrictions on the disclosure of genetic information. The health risk assessment must be provided in connection with the spouse’s receipt of health or genetic services offered by the employer, such as services through the wellness program.
Like the ADA rule, the GINA rule imposes a limit on the value of any incentive provided. The limit is 30% of the total cost of self-only coverage under the group health plan in which the employee is enrolled, if enrollment in the health plan is required for participation in the wellness program. If participation in the wellness program does not depend on the employee’s or spouse’s enrollment in the health plan, the limit is 30% of the total cost of self-only coverage where the employer offers only one group health plan. If the employer offers more than one group health plan but enrollment in a particular plan is not a condition for participation in the wellness program, the limit is 30% of the total cost of the lowest cost self-only coverage under the employer’s major medical group health plan. If the employer does not offer any group health plan, the limit is 30% of the cost of self-only coverage available to an individual who is a 40-year-old, non-smoker in the second lowest cost Silver Plan available through an exchange in the location of the employer’s principal place of business.
Employers may not deny access to health insurance or any particular plan to an employee, spouse, or covered dependent based on the spouse’s refusal to provide information requested as part of a health risk assessment.
The provisions of the GINA rule regarding incentives will apply as of the first day of the first plan year that begins on or after January 1, 2017. Other provisions of the rule are effective immediately.
Coordination with ACA/HIPAA Rules
The rules above apply in addition to prior regulations issued under the ACA and HIPAA. Employers should be aware that compliance with the ACA/HIPAA regulations does not ensure compliance with the ADA and GINA regulations. In particular, the incentive limitations under the ADA and GINA regulations are not identical to the incentive limits under the ACA/HIPAA regulations. Any employer that offers a wellness program with incentives (or penalties) should review their program to ensure compliance with all of the various regulations.