Today the Equal Employment Opportunity Commission (EEOC) published long-awaited proposed regulations on wellness programs (Proposed Regs) that are intended to harmonize certain provisions of the Americans with Disabilities Act (ADA) with long-standing rules concerning wellness programs applicable to group health plans under the Health Insurance Portability and Accountability Act (HIPAA), and more recently, the Affordable Care Act (ACA). To be clear, these regulations are proposed at this point, and they can be influenced by comments the EEOC receives from stakeholders over the next 60 days. So, employers, wellness program administrators and other stakeholders, you’ll need to move quickly and submit comments if you would like to see some changes and clarifications to these proposed rules before they become final.
By and large, the proposed regulations provide some relatively good news for employers maintaining certain wellness programs. There certainly would be increased harmony between the ADA and the HIPAA/ACA rules. However, nothing is easy, and that is the case here as the EEOC did not propose a wholesale adoption of the HIPAA/ACA rules. Employers and others need to review these rules carefully to understand their effects on all wellness programs, including those that are operated as part of a group health plan. Here are some important issues to consider:
- For covered wellness programs that are part of a group health plan, the Proposed Regs would cap the allowable incentive at 30% of the cost of employee-only coverage (remember that under the ACA and HIPAA this means the employer and employee portion of the premium), even though the ACA allows incentives for certain tobacco cessation programs to go as high as 50%.
- The Proposed Regs appear to reference only employee-only coverage as the basis for calculating the 30% cap. But, the HIPAA/ACA rules apply the 30% cap to other tiers of coverages, such as family coverage, which increases substantially the amount of incentives available for use.
- The Proposed Regs say the ADA’s safe harbor does not apply to wellness programs. They claim it renders the Title I ADA provisions on voluntary wellness programs “superfluous.” This is contrary to court decisions (including the federal Court of Appeals for the Eleventh Circuit) and is most certain to be controversial.
- The Proposed Regs would require that wellness programs that obtain medical information (either by inquiry or medical examinations/biometric testing) be reasonably designed to promote health. The Proposed Regs suggest this means, in part, that a program with a simple health risk assessment will need to have some follow-up mechanism (such as providing feedback about risk factors) that is reasonably designed to improve employee’s health.
- For covered wellness programs that are part of a group health plan, employers must notify employees of the following:
- what medical information is being obtained,
- the purposes for which it is being obtained,
- who gets the medical information,
- the restrictions on how it will be disclosed, and
- safeguards in place to prevent unauthorized disclosure.
- The Proposed Regs do not address the application of the Genetic Information Nondiscrimination Act (GINA) to wellness programs, but expressly mention guidance on GINA will be forthcoming. Also, the Proposed Regs only address the ADA’s application to certain wellness programs regarding disability-related inquiries and medical examinations, thus, concerns such as those under Title VII and the ADEA linger.
If adopted, compliance with the “reasonable design” and “notice” requirements may prove more challenging than one initially thinks. At a minimum, it would require employers to think through the goals and administration of wellness programs covered by the Proposed Regs, and whether those programs are part of a group health plan under ERISA. Employer should be reviewing their programs now to consider what effects the proposed rules would have on their programs, and perhaps whether to submit comments to help share the rules to address their concerns.