Financial wellness incentives of up to 30 percent of coverage costs would be allowed under the Americans with Disabilities Act, based on rules proposed by the U.S. Equal Employment Opportunity Commission.
This long-awaited guidance generally defers to HIPAA’s nondiscrimination rules, as amended by health care reform, in determining whether a wellness program is permitted by the ADA as “voluntary.” However, the notice of proposed rulemaking, published April 20 (80 Fed. Reg. 21659), would add some restrictions to those imposed by the 2013 HIPAA rules.
The EEOC was trying to “harmonize the ADA’s requirement that medical inquiries and exams that are part of an employee health program must be voluntary,” with HIPAA’s goal of allowing incentives to encourage participation in wellness programs.
The lack of EEOC guidance on how the ADA, especially its restrictions on medical inquiries, applies to wellness programs has been a longstanding concern of employers and other plan sponsors — and the subject of growing congressional pressure on the commission. Although the ADA limits the circumstances in which employers may ask employees about their health or require them to undergo medical examinations, it allows such inquiries and exams if they are voluntary and part of an employee health program.
EEOC’s proposed rules are a step in the right direction, according to the ERISA Industry Committee. “We hope the publication of the proposed rules marks the end of the assault on mainstream wellness programs launched against companies with forward-looking wellness programs, such as the attack on Honeywell last fall,” ERIC President Annette Guarisco said in a statement. “ERIC looks forward to working with the EEOC to further refine these rules.”
“The EEOC proposed rule is welcome news for employers, who can now breathe a sigh of relief,” agreed Brian Marcotte, president of the National Business Group on Health. “The EEOC has lifted a cloud of uncertainty that has been hovering over employer-sponsored wellness programs since the EEOC’s legal actions last year,” he said. “We applaud the EEOC for issuing the proposed rules that signal a unified government policy in support of wellness programs.”
Last fall, the EEOC unsuccessfully sued to stop Honeywell’s wellness program despite its apparent compliance with the HIPAA/Affordable Care Act rules, alleging that the company’s biometric screening incentives violated the ADA by rendering the program “involuntary.”
Details of Proposal
The proposed rules apply to employee wellness programs that are part of group health plans and include questions about employees’ health (such as health risk assessments) or medical examinations, such as screening for high cholesterol, high blood pressure or blood glucose levels.
A reward or penalty of up to 30 percent of the cost of employee-only coverage would be allowed “to promote an employee’s participation in a wellness program that includes disability-related inquiries or medical examinations,” the EEOC explained in the preamble to the proposed rules. Employees still could not be required to participate in a wellness program, and those who refuse could not be disciplined, denied health coverage or given reduced health benefits for doing so.
This percentage threshold is the same as that spelled out in the HIPAA/ACA rules by DOL, HHS and Treasury, but now would apply to health risk assessments and biometric screenings as well as the “health-contingent” programs targeted by the three HIPAA agencies.
The proposed rules also would incorporate the HIPAA/ACA requirement that the wellness program be reasonably likely to promote health or prevent disease. “A program that collects information on [an HRA] to provide feedback to employees about their health risks, or that uses aggregate information from [HRAs] to design programs aimed at particular medical conditions is reasonably designed,” the EEOC explained in an accompanying fact sheet. “A program that collects information without providing feedback to employees or without using the information to design specific health programs is not.”
The proposed rules do not address the Genetic Information Nondiscrimination Act, which the EEOC has also cited in the past as a restriction on wellness incentives, especially for spousal HRAs.
Confidentiality
Medical information obtained as part of wellness program would have to be kept confidential, and disclosed to the employer only in aggregate form that does not reveal the employee’s identity. For wellness programs that are part of a group health plan, complying with HIPAA’s privacy rules generally would satisfy these requirements, the EEOC noted.
The proposed rules include a new notice requirement. Employers would have to explain to employees what medical information will be collected, with whom it will be shared, how it will be used and how it will be kept confidential.
The ADA’s general requirements such as reasonable accommodation still apply. For example, if an employer offers an incentive to attend a nutrition class, a sign-language interpreter must be provided for a deaf employee who needs one.
The EEOC is accepting comments on the proposed rules until June 19. The commission also asked for feedback on specific questions regarding possible additional requirements.
Wellness program regulations are discussed in the Employer’s Guide to HIPAA.