Why it matters

The wait is over: the Equal Employment Opportunity Commission (EEOC) has released a notice of proposed rulemaking (NPRM) for regulations under the Genetic Information Nondiscrimination Act (GINA) that would permit employers to offer incentives under a wellness program. The long-awaited rule would create a narrow exception permitting employers to entice workers' spouses with money or paid time off for sharing information without running afoul of GINA, the Affordable Care Act (ACA), or the agency's regulations on the Americans with Disabilities Act (ADA) and wellness programs. "Our goal in developing this proposed rule is to provide clarity for employees and employers," Chair of the EEOC Jenny R. Yang said in a statement, adding that "the agency has interpreted the exception as narrowly as possible" by capping the total inducement at 30 percent and now allowing inducements for the participation of children. While employers may be less than thrilled about the limited exception, the regulations at least have the benefit of providing some clarity to the uncertainty surrounding wellness programs, particularly in the wake of multiple lawsuits filed by the EEOC over the last few years challenging the legality of employer programs. The NPRM is open for comment until December 29.

Detailed discussion

The Genetic Information Nondiscrimination Act (GINA) prohibits employers from requesting, requiring, or purchasing genetic information about an applicant or employee. However, the statute does include six exceptions to this general rule, including allowing employers to request information as part of a voluntary wellness program.

In regulations implementing GINA, the Equal Employment Opportunity Commission (EEOC) prohibited the use of inducements to provide genetic information. Employers were uncertain on how to reconcile the statute with the regulations, particularly after the EEOC filed suit against multiple employers alleging their wellness programs violated GINA.

In the hope of providing some clarity, the EEOC released proposed regulations for public comment. The notice of proposed rulemaking (NPRM) explains that employers may request, require, or purchase genetic information as part of a health or genetic service only when the service is "reasonably designed to promote health or prevent disease." The agency defined this standard as a program that has "a reasonable chance of improving the health of, or preventing disease in, participating individuals, and must not be overly burdensome, a subterfuge for violating Title II of GINA or other laws prohibiting employment discrimination, or highly suspect in the method chosen to promote health or prevent disease."

Examples of programs that would not meet this standard include the collection of information on a health questionnaire without providing follow-up advice or information as well as programs that create "an overly burdensome amount of time for participation, requires unreasonably intrusive procedures, or places significant costs related to medical examinations on employees."

In addition to employees, the NPRM would permit employers to offer an inducement to the spouse of an employee if certain conditions are met, including if the spouse is covered under the applicable health plan, receives health or genetic services offered by the employer (including the wellness program), and provides information about his or her current or past health status as part of a health risk assessment (HRA). All other requirements for employee HRAs would apply to spouse HRAs, the EEOC said, such as the need to obtain prior, knowing, voluntary, and written authorization.

Pursuant to the proposed rules, the total inducement to the employee and his or her spouse would be limited to 30 percent of the total annual cost of coverage for the plan in which they are enrolled. This cap parallels the limits found in the Affordable Care Act (ACA), the agency said, making compliance with both statutes easier for employers.

The NPRM also clarified that an inducement can be more than just monetary, removing the term "financial" as a modifier. Instead, an "inducement" under the regulations includes financial and in-kind inducements such as time off, prizes, or other things of value, either in the form of rewards or penalties.

To read the EEOC's proposed rule, click here.