By David Slaughter, JD
Legislation introduced by a key House Republican would largely negate the U.S. Equal Employment Opportunity Commission’s (EEOC) wellness program rules, which plan sponsors have criticized for adding a duplicative layer of regulation to earlier standards set by other agencies. BLR® Senior Legal Editor David Slaughter, JD, has the facts in today’s Advisor.
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The Preserving Employee Wellness Programs Act (H.R. 1313) was introduced March 2 by Representative Virginia Foxx (R-NC), who chairs the House Committee on Education and the Workforce. It provides that if a wellness program is complying with the relevant requirements of the Public Health Service Act (PHSA), it is also complying with the Americans with Disabilities Act (ADA) and Genetic Information Nondiscrimination Act (GINA).
“Employee wellness programs have long enjoyed bipartisan support because they result in lower health care costs and a healthier workforce,” Foxx said in a statement. “This bill will ensure employers have the legal certainty they need to offer this innovative benefit, which provides working families with greater control over their health care dollars.”
PHSA Section 2705 applies the health plan nondiscrimination provisions of the Health Insurance Portability and Accountability Act (HIPAA), as amended by the Affordable Care Act (ACA), to employer wellness incentives. Implementing regulations were issued most recently in 2013 by the U.S. Departments of Labor, Health and Human Services, and the Treasury. They impose detailed requirements on “health-contingent” wellness programs, and limit incentives to 30% of the cost of coverage (50% for tobacco cessation).
In May 2016, the EEOC issued separate rules under the ADA and GINA for wellness programs that include “examinations or inquiries,” such as a health risk assessment or biometric screening, including many that were largely unaffected by the HIPAA/ACA rules because they did not base incentives on a health outcome or activity. The EEOC regulations reflected some attempt to harmonize with the other rules, but many employers argued that the EEOC had effectively added a whole new layer of regulation.
“Complex and inconsistent regulations” on wellness program design and administration have hampered these programs’ availability and effectiveness, testified Allison Klausner, board chair of the American Benefits Council, at a March 1 hearing of Foxx’s committee. She called the bill “a step toward consistent federal policy.”
“Notwithstanding the important role of wellness programs in promoting the health and productivity of employees and their families, the inconsistent federal regulatory framework under HIPAA, GINA, and the ADA has caused many employers to take a step back or pause in their implementation of innovative wellness programs,” Klausner explained. “This is because the new rules under GINA and the ADA added complexity and inconsistency and have made it significantly more difficult for employers to structure programs that comply with all applicable federal regulatory regimes.”
However, Lydia Mitts, Families USA’s associate director of affordability initiatives, expressed concern that the bill would enable employers to shift costs to sicker workers. “Furthermore, premium surcharges tied to completing invasive health screenings undercut key protections of [the ADA and GINA] that have prohibited employers from compelling their workers to share sensitive medical and genetic information,” she told the committee.
Under H.R. 1313, a wellness program would be considered compliant with the PHSA, the ADA, and GINA if it met PHSA Section 2705(j) and its underlying regulations (the HIPAA/ACA wellness program rules). In a change from an earlier draft, the bill would extend these rules’ 30%/50% incentive limit to wellness programs that are not subject to the limit under the PHSA because they are considered merely “participatory”—for example, an incentive merely to complete a questionnaire with nothing riding on the results.
The bill also states that wellness programs offered in conjunction with an employer-sponsored health plan qualify for the benefits “safe harbor” of the ADA Section 501(c)(2) and may offer more favorable treatment to individuals with adverse health factors.