Earlier this year the Equal Employment Opportunity Commission (EEOC) published an official Final Rule to amend the Regulations and the accompanying Interpretive Guidance implementing Title I of the Americans with Disabilities Act (ADA). This Final Rule affects all wellness programs that include disability-related inquiries and/or medical examinations and requires that all health programs must be “reasonably designed to promote health or prevent disease.”

Under the Final Rule, employers cannot require that employees participate in “wellness programs” nor can they deny employees health coverage on the basis of non-participation. Employers must be cautious when encouraging employees to take advantage of wellness programs as coercing or threatening employees into participation will cause the wellness program to be deemed not voluntary and therefore unlawful.

Employers must provide notice of the data that will be collected, how it will be used, who will have access to it, and how unauthorized disclosure will be prevented so that employees can make informed decisions about participation.

Employers may provide incentives to employees who answer disability-related questions or take medical examinations as part of a wellness program, subject to certain limitations. The maximum value of incentives must be:

  • No more than 30 percent of the total cost for self-only coverage in the plan tied to the wellness plan,
  • 30 percent of the lowest cost major medical self-only plan the employer offers if the coverage is not tied to a wellness plan, or
  • 30 percent of the cost that a 40-year-old non-smoker would pay for self-only coverage under the second lowest cost Silver Plan on the “Covered California” health care exchange if the employer offers no health care plans.

The EEOC added these same limits on incentives to programs that collect information related to an employee’s spouse’s current or past health status or require the spouse to take a medical examination. No incentives are permitted regarding obtaining information related to an employee’s children’s current or past health status. These clarifications were in a separate Final Rule relating to Title II of the Genetic Information Nondiscrimination Act (GINA).

Under both of these Final Rules, wellness plans are permitted to encourage employees or their spouses to perform certain actions, such as walk or attend smoking cessation classes so long as employees are not required to provide medical data or submit to a medical examination.

The legal interpretations of existing law set forth in the Final Rule took effect immediately, but the new wellness program incentive limits and notice requirement will take effect on January 1, 2017. In anticipation of the January 1, 2017 effective date, public educational entities should analyze their wellness plans to determine whether they comply with the Final Rule, and to adapt, if needed, to these requirements. Our firm is available to answer questions that may arise or to assist with the review of wellness plans.