The U.S. Equal Employment Opportunity Commission recently issued proposed regulations addressing how the Americans with Disabilities Act applies to corporate wellness programs. These proposed regulations are intended to provide employers with guidance on how to encourage workers to participate in wellness programs without violating federal law. Employers with wellness programs, or those who are thinking about instituting wellness programs, should become familiar with the proposed regulations if they wish to avoid litigation.

The ADA generally restricts employers from obtaining medical information from employees but allows medical examinations of employees and inquiries about their health if they are part of a “voluntary” employee health program. Previously, the EEOC had not said whether employers may offer incentives to encourage employees to participate in such programs or whether offering incentives would make participation involuntary. However, the proposed regulations would clarify that the ADA allows employers to offer incentives up to 30 percent of the cost of employee-only coverage to employees who participate in a wellness program and/or for achieving health outcomes. The proposed regulations also describe employer practices that are wellness programs and those that are not, define what it means for an employee health program to be “voluntary,” and explain how ADA rules requiring employers to keep medical information confidential apply to medical information obtained as part of voluntary employee health programs.

Under the proposed regulations, a wellness program is considered an employee health program when it is reasonably designed to promote health or prevent disease. The program must 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. For example, asking employees to complete a biometric screening for the purpose of alerting them to health risks (such as having high cholesterol or elevated blood pressure) is reasonably designed to promote health or prevent disease. However, asking employees to provide medical information without providing any feedback about risk factors would not be reasonably designed to promote health.

The proposed regulations also clarify that a “voluntary” wellness program is one where the employer (1) does not require employees to participate; (2) does not deny access to health coverage or generally limit coverage under its health plans for non-participation; and (3) does not take any other adverse action or retaliate against, interfere with, coerce, intimidate, or threaten employees (such as by threatening to discipline an employee who does not participate or who fails to achieve certain health outcomes). Additionally, if a health program is considered a wellness program that is part of a group health plan, an employer must provide a notice clearly explaining what medical information will be obtained, how it will be used, who will receive it, and the restrictions on disclosure.

Finally, the proposed regulations provide that a covered entity may only receive information collected by a wellness program in aggregate form that does not disclose, and is not reasonably likely to disclose, the identity of specific individuals except as is necessary to administer the plan.

The EEOC’s proposed regulations are likely to become final in the near future. However, the EEOC has already begun filing ADA lawsuits challenging employer-sponsored wellness programs. While these lawsuits have not met with much success thus far, it is clear the EEOC intends to aggressively enforce the guidelines. Employers are strongly encouraged to examine their wellness programs to ensure compliance with all applicable laws.