May 12, 2015

Wellness Programs: EEOC Proposed Rules and Tri-Agency Guidance (article)

Wellness Programs:  EEOC Proposed Rules and Tri-Agency Guidance

Wellness programs have been under the microscope for some time.  They were first sanctioned by HIPAA, and later augmented by the Affordable Care Act (ACA).  With the advent of wellness programs has come a question about how they can be squared with Americans with Disabilities Act (ADA), as well as other laws such as the Genetic Information Nondiscrimination Act (GINA).  


The ADA requires that any collection of medical information be “voluntary” unless the collection is used in conjunction with a bona fide medical plan.  Over the past several years, the Equal Employment Opportunity Commission (EEOC) has challenged employer-sponsored wellness programs, specifically relating to programs that offer financial incentives to encourage participation.  The EEOC is looking at whether the practice of incenting individuals to participate in wellness programs violates the “voluntary” aspect of the collection of medical information in compliance with the ADA. 


To this end, the EEOC recently released proposed regulations, together with a Fact Sheet and FAQs, which are intended to ensure that a wellness program that is compliant with HIPAA and the ACA can likewise be compliant with the ADA.  It is very important to remember that all laws applicable to a particular situation must be coordinated.  Compliance with one law does not mean compliance with other relevant laws. 


The EEOC’s proposed regulations would generally follow the regulations issued thus far pursuant to HIPAA and the ACA, but would add some additional requirements.  Of particular note, the regulations intend to ensure that individuals with disabilities are not discriminated against.  They are also intended to ensure that sensitive medical information is carefully guarded. 


  • Use of Financial Incentives.  The regulations would allow a financial incentive or disincentive of up to 30% to be imposed, similar to that which is allowed under HIPAA and the ACA.  However, under HIPAA and the ACA, a contingent wellness program, including both outcome-based and activity-only programs, are subject to this limit.  These regulations propose to include, in this cap, any reward for a participation-only program that involves a medical exam, disability-related inquires, or the collection of medical information.  What this means is that a health risk assessment or a biometric screening, or even nicotine testing, even if not contingent upon results, would count toward that maximum.  Important to note that the proposed regulations only address this percentage as it relates to individual coverage.  It is unclear how this will be applied if the wellness program is offered to other individuals such as spouse or family. 

As a reminder, under the ACA rules, up to a 50% incentive can be offered for participation in a tobacco wellness program, such as a smoking cessation program.  For ADA purposes, however, these rules would limit the incentive to 30% if a biometric screening or other test used to determine the presence of nicotine, would result in the collection of health information.


  • Equal access to benefits.  These regulations would prohibit any wellness program that denies access to a plan, or a component plan, simply because the individual does not participate in the wellness program.
  •  Confidentiality and protection of health information.  The regulations underscore the importance that medical information be maintained in a confidential way.  If a wellness program is part of the health plan, the HIPAA privacy rules apply.  If the wellness program is independent of the health plan, and in any event to the extent that the ADA applies, all medical information must be maintained in accordance with the ADA’s confidentiality rules.  These proposed regulations would impose HIPAA privacy-type standards for this purpose.

As an aside, the enforcement arm of the HIPAA privacy and security rules recently issued sub-regulatory guidance relating to the applicability of these rules on wellness programs.  According to these FAQs, the collection of individual identifiable information in connection with a wellness program offered through an employer-sponsored group health plan is protected under the HIPAA rules.  If the program is solely sponsored by an employer and not part of a health plan, then such collection of information may not be protected under HIPAA but other federal or state privacy laws could apply.

  • Notification.  The EEOC regulations would require that if a wellness program is part of a health plan, individuals must be given a notice specifically describing the types of information that will be collected for wellness plan participation purposes, how the information will be used, the restrictions on disclosure of the information, and how the information will be protected.   

The comment period on these regulations closes on June 19, 2015.  At this point, the EEOC regulations are in proposed form only; though, it is likely that they will be finalized in a substantially similar form.  The general thought is, compliance now, while not required, would be looked at favorably.

Tri-Agency Implementation FAQs on Wellness Programs

In another regulatory pronouncement, the Departments of Labor, Treasury and Health and Human Services released implementation FAQs relating to wellness programs and the ACA.  Of particular note, the FAQs suggest that if substantial medical information is collected from participants, and if that information is not used to improve their health, or used as a means to prevent disease or target particular health needs, then the collection of such information will be scrutinized by the Departments and subject to enforcement.  In other words, it will be important for wellness programs to be designed in such a way as to make certain that all information is used for the intended purpose of improving health.  In no way can information be used for other employment purposes.  Further, wellness programs that require an inordinate amount of time and/or travel to accomplish the goal may be considered overly burdensome.


Background Resources


Wellness Programs – ACA - CBIZ Health Reform Bulletins:

 Wellness Programs – EEOC Challenges– Benefit Beat articles:

The information contained in this article is provided as general guidance and may be affected by changes in law or regulation. This article is not intended to replace or substitute for accounting or other professional advice. Please consult a CBIZ professional. This information is provided as-is with no warranties of any kind. CBIZ shall not be liable for any damages whatsoever in connection with its use and assumes no obligation to inform the reader of any changes in laws or other factors that could affect the information contained herein.


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