EEOC Wellness Rules Update

EEOC Wellness Rules Update

EEOC_1024x341Today, the EEOC released its final rule with regard to employer wellness programs and the ADA (and a final rule with regard to those same programs and GINA).

These final rules go into effect on the first day of the first plan year beginning on or after January 1, 2017, and apply to all Employer-Sponsored wellness programs.  This includes wellness programs that are not affiliated with, tied to, or associated with the employer’s sponsored health insurance/coverage programs and plans.

The White House Office of Management and Budget on Thursday, May 12, 2016 completed its review of the EEOC’s regulations clarifying the application of federal anti-discrimination laws to workplace wellness programs.  These regulations are (or were) intended to better streamline the Americans with Disabilities Act and the Genetic Information Nondiscrimination Act with the PPACA (aka the Affordable Care Act). Under PPACA, the incentive (or penalty) for participating (or not participating) in a wellness program typically may not exceed 30% of a group health plan.

The EEOC proposed the regulations after it came under fire from the business community in 2014 for suing three companies, alleging their wellness programs violated the ADA because financial incentives were too high and forced employees to provide medical information. (Please see our prior webinars/blog detailing those cases, under the Links, below).  Under federal law, companies may not ask employees for their medical information, unless that information is job-related and consistent with business necessity. However, there is an exception for voluntary wellness programs. In response to the lawsuits, the business community asked the EEOC to clarify when a wellness program is considered “voluntary.”

In April 2015, the EEOC proposed a rule that said a wellness program is ADA-compliant as long as companies do not offer incentives that exceed 30% of the cost of employee-only coverage. In October 2015, the EEOC proposed another rule that said a wellness program is GINA-compliant if financial incentives for an employee and his or her spouse to participate do not exceed “30% of the total annual cost of coverage for the plan.”

So, what has changed under the new rules released today?

Compliant Employer-Sponsored Programs must clearly tell employee-plan-participants (in a clear and concise notice):  (a) what medical information the employer/Plan will obtain, (b) how that information will be used, and (c) what restrictions exist regarding the disclosures exist.  Many employers/Plan Sponsors with robust wellness offerings already comply with these requirements, and will therefore already comply with the ADA (and GINA since many, if not all, plans already stripped out questions designed to elicit genetic information from tools like Health Risk Assessments, whenever there was a financial incentive or penalty attached to its completion).

Confidentiality Requirements

The final rules include two (2) additional ADA-Confidentiality requirements.  They are:

  1.  [Employers] may only receive information collected by a wellness program in aggregate form that does not disclose, and is not reasonably likely to disclose, the identity of specific individuals except as necessary to administer the plan; and
  2. [Employers] may not require an employee to agree to the sale, exchange, transfer, or other disclosure of medical information or to waive confidentiality protections under the ADA in exchange for an incentive or as a condition for participating in a wellness program, except to the extent permitted by the ADA to carry out specific activities related to the wellness program.

For additional assistance with your Wellness Plans, please contact your Account Executive or Account Manager.