EEOC Proposes Rule on Interpretation of ADA for Employer Wellness Programs

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April 20, 2015

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The U.S. Equal Employment Opportunity Commission published a Notice of Proposed Rulemaking (NPRM) on April 20, 2015, effecting the application of the landmark Americans with Disabilities Act (ADA) to employer wellness programs.

Workplace wellness programs have become commonplace in the business world for quite some time now. In general, workplace wellness programs aim to promote healthier lifestyles and prevent diseases, with the added benefit of lowering corporate healthcare costs and reducing employee absenteeism. While these benefits have made offering a workplace wellness program attractive to employers, they have also evolved into a source of contention for the EEOC.

Employers frequently offer incentives to employees in exchange for participating or achieving certain results in workplace wellness programs. These incentives have sparked a number of lawsuits initiated by the EEOC, arguing that some employers’ plans penalize employees who do not wish to participate in wellness programs (for example, appending a significant surcharge to an employee’s premiums for failure to participate in biometric testing).

To that end, EEOC’s NPRM seeks to establish several core rules, summarized below:

  1. Wellness programs must be reasonably designed to promote health or prevent disease. Collecting employee health information, without providing feedback to employees or utilizing it to design a specific health program, would violate this principle.
  2. Wellness programs must be voluntary. Employees cannot be coerced into participating, nor disciplined for declining participation in a program. Employers must also provide notice to employees describing what medical information will be collected and how it will be utilized and protected.
  3. Participation incentives must be limited. The amount of incentives may not exceed 30% of the total cost of employee-only coverage.
  4. Medical information must be kept confidential. Biometric or HRA results should be reported in aggregate form that does not disclose individual identities.
  5. Accommodations for disabled employees must be made. Absent undue hardship, employers must make provision for disabled employees to participate and earn whatever incentives the employer offers (for example, offering an alternative to a blood test if the employee has a disability that makes drawing blood dangerous).

While the NPRM’s primary goal is to ensure that workplace wellness programs cannot be used to discriminate or penalize employees, the proposal does diverge from some regulations already in place. For example, where the NPRM’s incentive limit is set for 30% of self-only coverage, HIPAA does not place limits on incentives for participatory wellness programs, nor for percentages based on the whole family coverage, not just the employee.

Under the proposed ruling, employers who wish to offer more than 30% incentives may need to restructure any wellness programs that currently require disability-related inquiries or medical examinations that would trigger the NPRM’s percentage cap rule.

At this time, the EEOC is seeking comments about the proposed revisions from the public up until Friday, June 19. Members of the public may comment on anything in the proposed rule and the interpretive guidance accompanying the rule. The EEOC will then evaluate comments and make further revisions in response before voting on a final rule.

Action Items:

  1. Members of the public can submit a formal comment by going online by 6/19/2015. Click here to proceed to the Federal Register. >>
  2. Some of the NPRM’s guidelines are already set forth in the law. Ensure current wellness programs are voluntary and do not discipline, coerce or retaliate against employees who do not participate.
  3. If you DO NOT HAVE a wellness plan discuss the possible benefit one may have on your group health plan premiums with your broker.
  4. For further guidance, subscribers should call HR On-Call at (888) 378-2456

Disclaimer: This document is designed to provide general information and guidance concerning employment-related issues. It is presented with the understanding that ManagEase is not engaged in rendering any legal opinions. If a legal opinion is needed, please contact the services of your own legal adviser.

© 2015 ManagEase, Incorporated.

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