Wellness and the ADA – More Guidance Issued (article)
Last year, the Equal Employment Opportunity Commission (EEOC) released proposed rules relating to wellness programs (see EEOC Wellness Programs: EEOC Proposed Rules and Tri-Agency Guidance, Benefit Beat, 5/12/15). Then on May 17, 2016, the EEOC released two sets of final rules. One set clarifies the rules under the Americans with Disabilities Act (ADA) relating to incentives used to encourage participation in wellness programs wherein individuals are required to respond to disability-related inquiries and/or undergo medical examinations. The second set of EEOC rules clarifies the rules under the Genetic Information Nondiscrimination Act of 2008 (GINA) to address permissible incentives relating to spouses of employees who participate in employer-sponsored wellness programs.
Two important takeaways from these final EEOC rules are that the ADA and GINA rules apply without regard to whether a wellness program is part of health plan; and secondly, the rules create differences in the offering of wellness incentives. Following are highlights of the final rules:
- Voluntary participation. A wellness program that includes disability-related inquiries or medical examinations (including inquiries or examinations that are part of a health risk assessment) is deemed to be voluntary as long as employees are not required to participate. For employees who elect not to participate in the program, then:
- Any group health plan coverage or particular benefit packages cannot be denied or limited to the non-participating employees; and
- The employer cannot take any adverse employment action or retaliate against the non-participating employees
- Use of Incentives. The use of incentives (financial or in-kind such as time-off awards, prizes, or other items of value) in a wellness program, whether in the form of a reward or penalty, is permissible. If the wellness program is a participatory program or a health-contingent program, or some combination of the two, the maximum allowable incentive available under the program is 30% of the cost of single coverage. Note, this differs slightly from the inducement allowed by HIPAA and the Affordable Care Act.
- Spouse participation in wellness programs. The final rules clarify that an employer may offer up to a 30% of the total cost of single coverage as an incentive or disincentive to the spouse of an employee who participates in a wellness program and who is required to provide information relating to his/her past health status or undergo a medical exam.
- Reasonable accommodation. Regardless of whether a wellness program includes a disability-related inquiry or medical examination, reasonable accommodations, as long as not unduly burdensome to the employer, must be provided to enable employees with disabilities to participate.
- Equal Access to Benefits. Wellness programs cannot deny access to a plan, or a component plan, simply because an individual does not participate in the program.
- Confidentiality and protection of health information. The final rules underscore the importance that medical information be maintained in a confidential way. If a wellness program is part of the health plan, then 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.
- Notice obligation. In accordance with the ADA rules, employers sponsoring wellness programs are required to provide written notification to employees that describes the type of medical information that will be collected, the specific purposes for which the medical information will be used, who receives the information and the manner in which the information will be kept confidential. To this end, the EEOC released a sample wellness program notice, together with a set of Questions and Answers, specific to the notice requirement. Employees must receive the notice prior to the collection of any health information in order to determine whether to participate in the wellness program.
For a more in-depth summary of these regulations, ask your CBIZ consultant for the May 25, 2016 edition of the At Issue, as well as the June 22, 2016 supplement At Issue that discusses the notice obligations.
Effective date. The EEOC rules relating to incentives and the employee notification requirement explaining how medical information will be used become applicable for plan years beginning on or after January 1, 2017.
In summary, wellness programs are governed by many laws including the ADA, the Health Insurance Portability and Accountability Act of 1996 (HIPAA), GINA, the Affordable Care Act (ACA), the Age Discrimination in Employment Act (ADEA), as well as many state employment discrimination laws. 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 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.