EEOC Attempts to Clear Up Employer Wellness Programs Compliance Under the ADA

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On April 16, 2015, the Equal Employment Opportunity Commission (EEOC) issued a much-anticipated NOPR (Notice of Proposed Rulemaking) that is aimed at clarifying how employers can comply with federal disability laws while simultaneously incentivizing their employees to participate in wellness programs as a part of their group health plans. The notice triggered the required 60-day public comment period, after which it is hopeful that employers will be able to structure such wellness programs properly (and legally) under the Americans with Disabilities Act (ADA).

If adopted, the regulations will address the conflict between the ADA’s prohibition on disability-related inquiries and medical examinations and the need to conduct such inquiries and examinations as a part of wellness-contingent programs. The ADA prohibits medical exams that are not job related and consistent with business necessity, but also permits voluntary wellness programs. Common wellness programs offerings include health risk assessments which identify risk factors such as high cholesterol or blood pressure, encouraging employees to treat them with appropriate preventative care. The overall goal is healthier employees and reduced health care premiums. Some wellness programs offer financial and other incentives for employees who participate and/or achieve certain health outcomes.

On the other hand, the ADA limits circumstances in with employers may ask employees about their health or require them to undergo medical examinations. Because of this fine line for employers who have incorporated wellness programs into their health care plans, the EEOC has sued multiple employers over the past couple of years for ADA violations in discriminating against employees who refused participation in the wellness programs or who failed to meet the programs’ goals.

The NOPR from the EEOC attempts to clarify the amount of incentive an employer can provide to encourage – but not force – participation in health risk assessments and other wellness program offerings. The proposed regulations make it clear that wellness programs are permissible under the ADA, but that they may not be used to discriminate base on disability. In order to ensure participation is voluntary, the EEOC’s proposed rulemaking puts into place specific mandates which include: employers may not require an employee participate in the program; coverage cannot be denied under any group health plan nor can any particular benefits be denied within the group health plan or limit coverage to any extent; and no adverse action can be taken against employees who refuse to participate or fail to achieve certain health outcomes.

Further, employers must provide a notice of what medical information will be collected, with whom it will be shared, how it will be used, and how it will be kept confidential

Finally, the proposed regulations will create a cap on employer incentives for participation in wellness programs of 30% of the total cost of employee-only coverage. Presumably, any incentive amounts below this ceiling will be in compliance with the ADA, but the EEOC does not specifically lay this out within the rulemaking. Too, there is uncertainty with a whole other set of rules under HIPAA privacy requirements and compliance by employers when these come into play with wellness programs.

We anticipate that there will be much more to come when the final regulations are issued.

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Posted In: Government, Legal