Employer wellness programs are generally designed as a way to improve employee health and to reduce health care costs to employers. Some wellness programs ask employees to engage in healthier behavior (for example, by becoming more active, not smoking or eating better), while others obtain employees' medical information to complete a health risk assessment. 

New Mexico employers who offer employee wellness programs should be aware of proposed rules that have been recently issued by the EEOC. Although the rules are still under final evaluation, the EEOC advises that employers "may certainly" comply with them until they are finalized, noting that it is "unlikely" that a court or the EEOC would find that an employer violated the ADA if the employer complied with the proposed rules prior to their finalization.  

The Americans with Disabilities Act (ADA) generally restricts employers from obtaining medical information about their employees, with the exception of information gathered through the employees' voluntary participation in an employer wellness program. The Health Information Portability and

Accountability Act (HIPAA), as amended by the Affordable Care Act allows employer wellness programs to offer incentives in the form of rewards to participating employees who achieve certain health outcomes or penalties if participating employees fail to achieve certain health outcomes.

The EEOC recently issued a notice of proposed rulemaking which seeks to clarify the relationship of the ADA with HIPAA, as amended by the Affordable Care Act with regard to employer wellness programs.  Under the EEOC's proposed Rules, employer wellness programs that involve disability-related or medical inquiries must be:

  • reasonably calculated to promote health or prevent disease, and
  • voluntary

Reasonably Calculated:  Under the EEOC's proposed Rules, a wellness program which collects information on a health risk assessment and provides feedback to employees about their health risks or that uses employee health information to design programs aimed at particular medical conditions is reasonably designed. A program that collects employee health information without providing feedback or designing specific programs is not reasonably designed.

Voluntary:  Employees may not be required to participate in a wellness program, and they may not be denied health insurance or be given reduced health benefits if they do not participate. They also cannot be disciplined for not participating in an employer's wellness program. Also, employers may not coerce, intimidate, or threaten employees to get them to participate or achieve certain health outcomes.  

The proposed Rules also condone limited incentives to encourage participation in employer wellness programs, but such incentives may not amount to more than 30% of the cost of the employee-only health coverage. In other words, the EEOC's proposed regulation provides that an incentive to participate in an employer's wellness program is not coersive if it does not amount to more than 30% of the cost of the health coverage. For example, if the total cost of coverage paid by both the employer and employee for self-only coverage is $5,000, then the maximum incentive for the employee to participate in the wellness program cannot exceed $1,500.

Other Highlights:  The proposed regulation further specifies that an employer must provide notice of inter alia, what medical information will be obtained and how it will be used, restrictions on the disclosure of such information, who will have access to such information, and methods the employer will use to prevent disclosure of the information. Any information collected is protected by HIPAA. Also, employers must provide reasonable accommodations that enable employees with disabilities to participate and to earn whatever incentives the employer offers.

The comment period for these proposed rules is closed, and finalization of the rules is anticipated in the near future.