Many employers offer wellness programs to employees—such as providing rewards to employees for participating in health and wellness programs (e.g., weight loss, smoking cessation) and achieving particular results, or penalizing employees for declining to participate in such programs in the form of higher insurance premiums—as a way to encourage healthier, more productive workforces while reining in health care costs. The Patient Protection and Affordable Care Act (ACA) allows employers significant latitude in designing wellness programs. In fact, in 2013, the Department of Labor (DOL) issued a joint rule along with other federal agencies stating that the ACA creates new incentives for, and encourages, employer-sponsored wellness programs.
The EEOC, however, was not one of those federal agencies. To the contrary, the EEOC has shown a decided lack of enthusiasm for employer wellness programs, and, in fact, has suggested that such programs may violate the Americans with Disabilities Act (ADA) and the Genetic Information Nondiscrimination Act (GINA). Under the ADA, employers are prohibited from requesting employee medical information unless the information is either “job-related and consistent with business necessity” or requested in connection with avoluntary wellness program. In the fall of 2014, the EEOC filed three lawsuits alleging that certain employer-sponsored wellness plans, which imposed financial penalties on employees for non-participation in health risk assessments and medical exams (such as requiring them to pay the full amount of their health care premiums), rendered the plans involuntary and thus violated the ADA.
The apparent conflict between the DOL’s interpretation of the ACA and the EEOC’s interpretation of the ADA and GINA has led to consternation among employers in deciding whether, and how, to implement wellness plans. Perhaps signaling that greater clarity is forthcoming, this week the EEOC voted to send a Notice of Proposed Rulemaking on the interplay of the ADA, GINA, and the ACA with respect to wellness programs to the White House Office of Management and Budget (OMB). This step begins the regulatory progress toward adoption of amended ADA regulations intended to clarify the interaction between the ADA and financial incentives as part of ACA-compliant wellness programs offered through group health insurance plans. After the OMB approves the proposed rule, it will be published in the Federal Register for a 60-day public notice and comment period. Until then, however, the proposed rule will not be made public. We will continue to monitor developments and share the proposed rule once it is published in the Federal Register.