Last month the EEOC issued its Final Rule on Employer Wellness Programs and Title I of the Americans with Disabilities Act (ADA). Title I of the ADA prohibits employers from obtaining medical information from employees unless those inquiries are part of a voluntary employee health program. Under the ADA an employee wellness program must also offer reasonable accommodations to individuals with disabilities so they have equal access to program fringe benefits.
The EEOC’s Final Rule is intended to clarify and provide consistency with HIPAA and the Affordable Care Act (“ACA”) while also ensuring that employer wellness programs remain voluntary. Employer wellness programs subject to the Final Rule include both participatory and health-contingent wellness plans which ask employees to answer disability-related inquiries by completing, for example, a health risk assessment (HRA) or undergo biometric screenings. Examples of such wellness programs may include tobacco cessation and weight-loss programs, onsite exercise facilities, and nutrition classes.
- Ensuring the wellness program is reasonably designed to promote health or prevent disease. To meet this requirement a wellness program may not require an overly burdensome time commitment, involve unreasonably intrusive procedures, be a subterfuge for violating the ADA or other employment discrimination, and it may not shift significant costs to employees. So, under the Final Rule an employee wellness program is not reasonably designed to promote health or prevent disease if it asks employees to provide medical information but does not provide any feedback based on this information or does not use the information to design or assist with specific health conditions.
- Confirming that the wellness program is voluntary. A wellness program may not require employee participation, may not deny employees who refuse to participate access to health coverage or restrict which health plan an employee may choose, and an employer may not take any adverse action, or coerce, intimidate or threaten any employee who does not participate. Employers must provide notice to employees that states what medical information will be obtained, how it will be used, who will receive it, and the restrictions on disclosure.
- Prescribing limitations on the financial incentives a wellness program may offer. To ensure employer wellness programs are not financially coercive — essentially rendering participation involuntary — financial incentives are limited to a maximum of 30% of the total cost of self-only coverage.
The Final Rule differs slightly from HIPAA and the ACA which allow a 50% financial incentive for tobacco cessation programs. Tobacco cessation programs which merely inquire whether employees are tobacco users would not fall within the ADA Final Rule because the program does not involve disability related inquiries, so a 50% incentive may be utilized. If, however, the tobacco cessation program requires biometric screenings or other medical or health information, then it would likely be subject to the ADA and the 30% incentive limitation in the Final Rule.
The EEOC also at the same time issued a Final Rule regarding employee wellness programs and GINA which protects employees from discrimination based on genetic information. Under that GINA Final Rule, employee wellness programs cannot condition financial incentives on the provision of genetic information, but may offer incentives for completing an HRA that makes genetic inquiries. However, the incentive must still be offered even if the employee does not provide genetic information on the HRA. The employee wellness program may also offer an incentive to an employee whose spouse provides genetic information. Like the ADA Final Rule, any financial incentive is limited to 30% of the total cost of self-only coverage.
Those critical of the EEOC’s Final Rule believe that it still allows employers to provide financially coercive incentives in exchange for receiving medical information which can be used in a discriminatory fashion. The AARP, in particular, contends the Final Rule does not do enough to protect older employees who are more likely to have health problems such as diabetes and heart conditions. Consequently, even with the guidance of this Final Rule, employers should exercise extreme caution when evaluating medical information received from a wellness program to avoid becoming subject to an ADA (or an ADEA lawsuit). Employee wellness programs are designed to benefit employers and their employees. But if implemented or managed improperly, they are likely to cause an unpleasant and painful outbreak — of litigation.