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EEOC Issues Final Rules on Wellness Programs


Background

In 1990, Congress enacted the ADA, which stated that it was permissible for employers to conduct medical inquires and examinations of their employees as part of wellness programs.  The only requirement, for wellness programs at that time, was that employee participation had to be “voluntary.” 

However, there was no definition of “voluntary.” For example, it was not clear whether it was acceptable to offer employees financial inducements for their participation in such programs. The EEOC responded that modest incentives were permitted, but the EEOC failed to prescribe an exact amount.

Subsequently, Congress enacted the Health Insurance Portability and Accountability Act (HIPAA), GINA and the Affordable Care Act (ACA), which all provided more guidance and employee protections in regard to wellness programs. At times, these rules seemed to contradict themselves leading employers to proceed with wellness programs with some caution as the EEOC’s stance remained unknown. These latest rules regulate both the ADA and GINA. They are the EEOC’s attempt at clarifying some of the confusion employers face in trying to comply with both laws while maintaining a wellness program that is also compliant with HIPAA and the ACA.


The ADA
Under these rules, an employer may provide limited financial (or other) incentives to employees in exchange for an employee’s answer of disability related questions or taking medical examinations as part of a wellness program so long as participation is voluntary.  The final rule sets forth several requirements for employee health programs to meet this standard.
  • An employee health program, including any disability-related inquiries or medical examinations, must be reasonably designed to promote health or prevent disease.
  • A wellness program that asks employees to answer questions for the purpose of alerting them to health risks would meet this standard.  However, a program asking employees to provide information without providing them any feedback about risk factors would not.
  • A program is also not reasonably designed if it exists mainly to shift costs from the employer to the targeted employees based on their health or simply to give the employer information to estimate future health care costs. 
  • An employee health program, that includes disability-related inquiries or a medical exam must be voluntary.  In order to be voluntary:
    • Employees must not be required to participate;
    • The employer may not deny coverage under any of its group health plans or particular benefits packages within a group health plan for non-participation, or limit the extent of benefits for employees who do not participate;
    • The employer may not take any adverse employment action or retaliate against employees for not participating; and
    • Employees must be provided with a notice that:
      • Is written so that employees are reasonably likely to understand;
      • Describes the type of medical information that will be obtained and the specific purpose for which it will be used; and
      • Describes the disclosure restrictions on the information, with whom the information will be shared, and the methods the employer will use to ensure that medical information is not improperly disclosed.
      • The EEOC will post a sample notice on its website that satisfies the written notice requirements.
  • The final rule limits the amount of the incentive an employer can offer for an employee to respond to disability-related inquiries or complete medical examinations in connection with a wellness program.
    • The amount of the incentive cannot exceed 30 percent of the total cost (employer plus employee contribution) of self-only coverage.
  • Existing ADA rules prohibit disclosure of an employee's medical information.
  • Under the final rule, medical information or history collected by a wellness program may be disclosed to an employer in aggregate terms that do not disclose and are not reasonably likely to disclose the identity of specific employees.
GINA
This rule generally prohibits the use of genetic information in employment decisions; restricts employers from requesting, requiring or purchasing genetic information; and strictly limits
the disclosure of genetic information. There is an exception that permits an employer to request genetic information from an employee in connection with a wellness program if certain requirements are met. The final rule describes the application of the incentive an employer may offer an employee and his/her spouse for providing genetic information in connection with a wellness program
  • An employer cannot offer an incentive for an individual to provide genetic information. However, limited inducements are permitted when certain conditions are met.
    • "Generic Information" includes family medical history as well as information about the manifestation of a disease or disorder in family members (including the spouse) of an individual.
    • Incentives are never permitted in exchange for genetic information about an employee's children, regardless of age.
  • If an employer offers an incentive for completing a health risk assessment (HRA) that includes questions about genetic information, the HRA must clearly state that the individual will receive the incentive even if he or she does not complete the questions about genetic information.
    • The maximum incentive permitted may not exceed 30 percent of the total cost of self-only coverage for each the spouse and the employee.
    • The total combined inducement can be no more than twice the amount of 30 percent of the total cost of self-only coverage. 
  • The existing notice and authorization requirements under GINA still apply.  The final rule clarifies that when an employee’s spouse provides his/her genetic information as part of a wellness program, he/she must provide prior, knowing, voluntary, and written authorization.
    • The form should be written so the individual from whom authorization is being obtained is reasonably likely to understand it;
    • It should describe the type of information that will be obtained and the general purposes for which it will be used; and
    • It must describe the confidentiality protections and restrictions on disclosure of genetic information. 
GINA prohibits the disclosure of individually identifiable genetic information about employees or their family members participating in health or genetic services.
  • Under the final rule, an employer may not require an employee to agree to the sale, transfer or other disclosure of health information or waive any confidentiality protections as a condition for participating in or receiving an incentive under a wellness program.

Summary

To comply with the final employer-sponsored wellness program rules under the ADA and GINA, wellness programs (whether part of a group health plan or otherwise) must be voluntary and reasonably designed to promote health or prevent disease; as applicable, employees must be given proper notice (ADA) or an authorization must be obtained (GINA); only limited incentives can be offered; and information obtained must be kept confidential.  In addition to the ADA and GINA, employers must also follow the wellness program rules established under HIPAA and the ACA.

The forgoing is an overview of the new rules and is not a comprehensive description of every compliance obligation associated with employer-sponsored wellness programs.  The rules are complex and employers should consult with their own legal counsel before implementing a wellness program. Benecon will continue to review the guidance and issue additional communications
in advance of the effective date. (Source: Compliance Services Division, The Benecon Group, Inc.)

 
 

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