Workplace Wellness Incentive Guidelines Update

APPLIES TO

All Employers

EFFECTIVE

January 1, 2017

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(888) 378-2456

Implementing a company wellness program can reduce overall health-related costs, such as reducing the amount of employee absences or lack of productivity due to illness.  It can also help retain and attract talent in a competitive market.  Given the positive impact on a company’s well-being, many employers are implementing wellness programs for employees.

On May 16, 2016, the U.S. Equal Employment Opportunity Commission (“EEOC”) published two Final Rules (“Rule(s)”) clarifying under what conditions employers can offer incentives for employee participation in workplace wellness programs, while also protecting employees from discrimination.  The two Rules apply to the Americans with Disabilities Act (“ADA”) and the Genetic Information Non-Discrimination Act (“GINA”).

 

ADA and GINA

In general, the ADA and GINA prohibit employers from inquiring into/using information about the health conditions of an employee or their family members.  However, employers are permitted to ask health-related questions and conduct medical examinations if the employer provides health/genetic services as part of a voluntary wellness program.

Previously, the term “voluntary” was not well-defined.  The new Rules establish a stronger definition of “voluntary” and are intended to reconcile ADA/GINA with HIPAA’s goal of allowing employer incentives in order to encourage wellness program participation.  The following are key points from the rules:

 

New Incentive Maximum
ADA

Employers may now offer incentives of up to 30% of the total cost of self-only coverage. This maximum incentive only applies to wellness programs that require employees to answer disability-related questions or to undergo medical examinations in order to earn the incentive.  If the employer offers multiple or no plans, the 30% value is based upon a specified plan; see ADA fact sheet linked below.

GINA

Similarly, the new regulation of GINA applies to incentives offered to an employee’s spouse answering disability-related questions or undergoing a medical examination.  The maximum incentive attributable to spousal participation is likewise limited to 30% of the total cost of self-only coverage.

New Confidentiality Requirements
ADA

Employers may collect information only in aggregate form that does not disclose the individual identity of the participating employees, except as necessary to administer the plan.  Employers cannot require employees to disclose their medical information or waive their ADA-protected confidentiality rights as a requirement to participate in the wellness program and/or receive an incentive.

GINA

Employers cannot require employees or spouses to waive their GINA-protected privacy rights or disclose their health information to participate in a wellness program or receive an incentive.

Notice Requirements
ADA

Employers are required to provide participating employees with a notice identifying what information will be collected as part of the wellness program, the purpose of such collection, with whom the information will be shared, and how the information’s confidentiality will be protected.

GINA

Employers cannot require employees or spouses to waive their GINA-protected privacy rights or disclose their health information to participate in a wellness program or receive an incentive.

Applicability Date
ADA

The new incentive provision and notice requirement applies prospectively to wellness programs as of the first day of the first plan year beginning on or after January 1, 2017.

GINA

The new incentive provision applies prospectively to wellness programs as of the first day of the first plan year beginning on or after January 1, 2017.

Action Items:

  1. Read the text of the Final Rules here and here; the EEOC’s fact sheets on implementing the rules can be found here and here.
  2. Ensure that the value of provided incentives meet the requirements detailed above; adjust the total value of incentives, if needed.
  3. Contact ManagEase at (888) 230-3231 for assistance in adjusting written workplace wellness programs.

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.

© 2016 ManagEase, Incorporated.

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