EEOC Proposes Wellness Program Changes

The Equal Employment Opportunity Commission (EEOC) recently issued proposed wellness program rules under the Americans with Disabilities Act (ADA) and Title II of the Genetic Information Nondiscrimination Act (GINA). The proposed rules are in response to the court decision in AARP v. EEOC that vacated part of the EEOC’s 2016 rules describing the incentives employers could offer to employees as part of wellness programs that:

  • Ask for an employee’s medical history, including symptoms, diagnoses, procedures, and outcomes
  • Require the employee to undergo a medical exam like a biometric screening that measures risk factors for certain medical conditions, or
  • Ask the employee’s family member to provide information about the family member’s manifestation of disease or disorder.

The most significant of the proposed ADA rule changes include a de minimis incentive limit for participatory wellness programs and the elimination of the employer notice requirement, although the confidentiality protections contained in the 2016 rules are retained. The proposed GINA rule also limits incentives to a de minimis standard, but allows them in exchange for information about a family member’s manifestation of disease or disorder. The proposed rules are not yet effective, and interested parties will have an opportunity to comment before they are finalized.

Proposed ADA rule for wellness programs

A wellness program offered by an employer that is an ADA-covered entity and that includes disability-related questions (e.g., a health risk assessment) and/or requires a medical exam (e.g., biometric screening) is only permissible if voluntary. Under the proposed rule, a wellness program is voluntary as long as the employer doesn’t:

  • Require participation
  • Use the program as a gatekeeper to a group health plan or benefit package
  • Take adverse employment action against employees for reasons related to the program, and
  • Provide incentives beyond those permitted by the proposed rule.

Prior to the AARP case, the ADA rules permitted wellness programs to have incentives up to 30% of the total cost of self-only coverage in the group health plan. The proposed rule distinguishes between two types of wellness programs in determining the permitted incentives: participatory programs and health-contingent programs (programs that require individuals to satisfy a standard related to a health factor either by completing an activity or achieving a particular health outcome).

The proposed rule prohibits more than a de minimis incentive to encourage employees to participate in a wellness program that includes disability related questions and/or requires a medical exam. The EEOC doesn’t define “de minimis” but gives a water bottle or a “gift card of modest value” as examples, whereas an annual gym membership, airline tickets or a $50 reduction in the employee’s required monthly health insurance premium contribution would not be de minimis.

There is an exception to the de minimis incentive standard for health-contingent wellness programs that are part of, or qualify as, a group health plan, as long as the program complies with the five requirements for health-contingent wellness programs under the 2013 Health Insurance Portability and Accountability Act (HIPAA) final regulations. Those regulations allow incentives up to 30% of the total cost of coverage under the group health plan (or up to 50% if the wellness program is designed to prevent or reduce tobacco use).

In short, under the proposed rules, employers would not be permitted to offer more than de minimis incentives for employees to complete health risk assessments or biometric screenings. But, employers would be able to offer more significant incentives to employees who meet certain health standards (like target BMI or cholesterol level) or complete walking, dieting or exercise goals, as long as the wellness program is part of, or qualifies as, a group health plan and is compliant with HIPAA. 

The proposed rule would also eliminate the confidentiality notice employers must provide to employees participating in any wellness program subject to the ADA, although the medical information collected would still be subject to the confidentiality protections contained in the 2016 rule.

Proposed GINA rule for wellness programs

The EEOC’s proposed changes to the GINA Title II wellness program rules generally address incentives to an employee in exchange for the employee’s spouse and/or children providing information about their own manifested disease or disorder. Title II of GINA bars employment discrimination based on genetic information and restricts the genetic information an employer can seek. Under existing EEOC rules, any medical information about an employee’s family members — including a spouse — is the employee’s genetic information.

EEOC regulations generally prohibit offering employees any inducement to provide genetic information. But, the 2016 rules permitted employer-sponsored wellness programs, subject to certain conditions, to offer an incentive – generally 30% of the cost of self-only coverage – to collect medical information about a spouse’s manifested disease or disorder. In contrast, the proposed rule permits an employer wellness program to offer only a de minimis incentive to an employee or the employee’s family member (i.e., spouse or children) in return for the family member providing information about their manifested disease or disorder. The proposed rule does not apply the de minimis incentive standard to disease management and other programs that promote healthy lifestyles, including programs that require individuals to achieve certain health outcomes. Current regulation allows “financial inducements” to encourage individuals to participate in such wellness programs.

Employers would be prohibited from taking adverse action against an employee if a family member refuses to provide the information or fails to meet a wellness program health goal, but the employee could be denied the applicable incentive.

Knowing, voluntary, and written authorization would still be required before the information from a family member could be obtained. Incentives in exchange for an employee’s family medical history or other genetic information would still be prohibited, as would the use of genetic information in making employment decisions.

Next steps for employers

Employers committed to improving the health and wellbeing of their workforce may want to consider a close review of the proposed rules and how they may affect the employer’s wellness program. The EEOC is requesting comments on a variety of provisions in the proposed rules, including:

  • What types of incentives should and should not be considered de minimis?
  • Should additional examples of de minimis incentives be provided?
  • What factors are useful in determining if a wellness program is part of a group health plan?
  • What kind of information do employers obtain from health risk assessments and biometric screenings and how do they use the aggregate data they collect?
  • What are the possible justifications under GINA Title II for a higher than de minimis incentive?
  • Do employers offer financial incentives in exchange for employee family member information about manifested disease or disorders? If yes, what level of incentives are offered?
  • What impact, if any, would the adoption of a de minimis incentive level under the ADA and Title II of GINA have on employer-provided wellness programs?
  • How burdensome would the changes be to employers?

Once these proposed rules are published in the federal register, interested parties will have 60 days to submit comments. It’s not clear how the incoming Biden administration will receive the proposed rules, or if it will work to slow the development of the final rules. But it’s worth noting that it took the EEOC over a year to finalize the 2016 rules. If these proposed rules are finalized close to their current form, they will likely face court challenges, potentially delaying their effective date.

It’s also important to keep in mind that until finalized, the 2016 EEOC wellness rules are still in effect (excluding of course the incentive provisions vacated by the court). In addition, wellness programs must comply with other relevant provisions of both the ADA and GINA, such as the nondiscrimination standards for health plans under GINA Title I and the ADA’s reasonable accommodation requirements. Additional federal laws may apply as well, such as the wellness program rules under HIPAA, the nondiscrimination requirements under Title VII of the Civil Rights Act of 1964, and other employment laws.

Steven Schinderle
by Steven Schinderle

Principal, Mercer Health

Katharine Marshall
by Katharine Marshall

Principal, Mercer's Law & Policy Group

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