EEOC Issues Proposed Rules to Clarify Applicability of the Americans
with Disabilities Act (ADA) to Workplace Wellness Programs
By Barbara J. Zabawa,
JD, MPH
President of the
Center for Health Law Equity, LLC
April 17, 2015
On April 16, 2015, the EEOC issued much-anticipated proposed rules
regarding how the ADA applies to workplace wellness programs. Though the rules are not in final form and
therefore employers are not required to comply just yet, in a Questions
and Answers document the EEOC states that employers are free to comply with
the proposed rules to reduce risk until the final rules are issued (which may
be later this year). Here are the
highlights of the proposed rules and some important insights:
1.
Alignment
with the Affordable Care Act (ACA) incentive rules. The ADA would permit financial incentives
for wellness programs that are part of a group health plan as long as the value
of that incentive does not exceed 30% of the total cost of employee-only
coverage.
a.
A few things to note about this proposed
provision.
i. First,
the 30% guidance only applies to wellness programs that are part of group
health plans. The EEOC did not provide
any guidance for those programs that fall outside group health plans (and
invites comments about that).
ii. Second,
unlike the ACA incentive rules which do not apply to “participatory” wellness
programs, this 30% maximum applies to both participatory programs that
involve health risk assessments or biometric screens, as well as
health-contingent wellness programs that require participants to satisfy a
health factor standard. The ADA
incentive rules would not apply to wellness programs that do not involve
disability-related inquiries or medical examinations in order to earn the
incentive (such as health assessments or biometric screens) or activity-only
wellness programs (as defined by the ACA nondiscrimination rules at 45 CFR §
146.121(f)) without the health assessment or biometric screen. Examples include
attending nutrition, weight loss or smoking cessation classes. However, to the extent the wellness program
qualifies as a “health contingent” program as defined by the ACA, such program
would need to comply with the ACA incentive requirements.
iii. Third,
the EEOC specifies that the 30% financial incentive maximum applies to both
financial and in-kind incentives, such as time-off awards, prizes or other
items of value.
iv. Fourth,
tobacco cessation programs have some special treatment. The EEOC does not consider tobacco cessation
programs that merely ask employees whether they use tobacco and whether they
ceased using tobacco upon completion of the program as “disability-related
inquiries or medical examinations.”
Therefore, the ACA incentive maximum of 50% of the total cost of
employee coverage could apply to those programs. However, if the tobacco cessation program
includes a biometric screen or other medical exam that tests for the presence
of nicotine or tobacco, such program would qualify as a medical examination
subject to the ADA 30% maximum financial incentive.
2.
Employers
may not deny or limit coverage for nonparticipants in an employee wellness
program. This appears to be a
reaction to the programs that triggered the recent EEOC lawsuits, which I
described in an article published by the American
Bar Association Health Lawyer magazine.
Two of the three pending EEOC
cases required nonparticipant employees to pay 100% of their health insurance
premium. The third case imposed what the
EEOC called “substantial” penalties worth around $2,000 for nonparticipation.
3.
Group
health plan wellness programs that collect medical information must provide
employees with a notice. This
notice must:
a.
Be written in a manner that is understandable to
the employee;
b.
Describe the type of medical information that
will be obtained and the specific purposes for which the medical information
will be used; and
c.
Describe the restrictions on the disclosure of
the medical information and the methods the employer will use to prevent
improper disclosure of the medical information.
4.
Employers
and vendors must protect the confidentiality of the health information
collected through the wellness program.
The EEOC expects both employers and wellness program vendors to ensure
compliance with confidentiality rules, such as set forth in the HIPAA privacy,
security and breach notification rules (HIPAA) for group health plans, as well
as the rules proposed by the EEOC. Thus,
employee wellness programs that are part of a group health plan must abide by
HIPAA rules. These rules include the
requirement for employers who administer wellness programs and who wish to
receive from the plan individually-identifiable health information to certify
to the group health plan, as provided by 45 CFR § 164.504(f)(2)(ii), that it
will not use or disclose the information for purposes not permitted by its
group health plan documents and the HIPAA privacy rule. Those employers that do not administer any
part of the employee wellness program could only receive from the group health
plan aggregate information that has been de-identified. To the extent that an employer administers
the wellness program, the EEOC strongly suggests as a best practice that the
individuals who handle medical information as part of the program should not be
responsible for making employment-related decisions. The EEOC states that use of a third-party
vendor may reduce the risk of disclosure of medical information for improper
purposes. Small employers who administer
their own wellness programs should not use the information to discriminate on
the basis of disability.
5.
The
EEOC expects employers and vendors to have clear privacy policies and
procedures related to the collection, storage and disclosure of medical
information. Such policies and
procedures should include proper training of the individuals who handle medical
information. Policies and procedures
should address how to handle breaches of confidentiality. To ensure compliance with these
confidentiality provisions, I strongly suggest employers and vendors conduct an
internal assessment of its wellness program and applicable privacy and security
requirements.
6.
Like
the ACA rules, the ADA would require wellness programs to be reasonably
designed to promote health or prevent disease. A key point the EEOC makes about this
provision is that collecting medical information on a health questionnaire
without providing employees follow-up information or advice, such as providing
feedback about risk factors or using aggregate information to design programs
or treat any specific conditions, would not be reasonably designed to
promote health. This supports the pairing
of health assessments or biometric screens with wellness coaching efforts. Further support comes from an FAQ
released the same day as the proposed rules the Departments of Labor, Health
and Treasury. The Departments note that
a “program that collects a substantial level of sensitive personal health
information without assisting individuals to make behavioral changes such as
stopping smoking, managing diabetes, or losing weight, may fail to meet the
requirement that the wellness program must have a reasonable chance of
improving the health of, or preventing disease in, participating
individuals.”
7.
Employers
must provide reasonable accommodations.
Regardless of whether a wellness program includes disability-related
inquiries or medical examinations, the employer must provide reasonable
accommodations, absent undue hardship, to enable employees with disabilities to
earn whatever financial incentive an employer offers. These reasonable accommodations would apply
to both participatory and health-contingent wellness programs, as those
terms are defined by the ACA. See 45 CFR
§ 146.121(f). The EEOC provides some
helpful examples in the interpretive guidance to the proposed rules:
a.
Employers who offer a financial incentive to
attend a nutrition class would have to provide a sign language interpreter so
an employee who is deaf and who needs an interpreter to understand the
information communicated in the class could earn the incentive;
b.
Programs that require reading written materials
should provide those materials in large print or on a computer disk for someone
with a vision impairment;
c.
Employers that offer rewards for completing a
biometric screen that includes a blood draw should provide an alternative test
(or certification requirement) so that an employee with a disability that makes
drawing blood dangerous can participate and earn the incentive.
8.
Compliance
with the proposed ADA rules does not mean compliance with other laws. The proposed rule mentions specifically that
ADA compliance does not translate to compliance with Title VVII, the Equal Pay
Act, the Age Discrimination in Employment Act (ADEA), Title II of the Genetic
Information and Nondiscrimination Act (GINA) or other sections of Title I of
the ADA. It should be noted that the
EEOC had also promised
as part of its 2015 rulemaking initiatives to propose rules to align GINA with
the ACA. Those proposed rules have not
yet been released.
Because the ADA rules discussed above are in proposed form,
the EEOC welcomes comments by Friday, June 19, 2015, particularly with regard
to the following issues:
1.
With regard
to the financial incentive maximum of 30% of the total cost of employee-only
coverage, should the EEOC look at offering additional protections for
low-income employees?
2.
Whether to be a “voluntary” wellness program
under the ADA, employers should offer similar incentives to persons who choose
not to disclose medical information but instead provide certification from a
medical professional stating that the employee is under the care of a physician
and that any medical risks identified by that physician are under active
treatment.
3.
Should the EEOC have the ADA prohibit incentives
that render the cost of health insurance unaffordable to employees (using the
ACA’s “unaffordability” test of 9.56% or more of an employee’s household income
as an example)?
4.
Should the proposed notice requirements also
include a requirement that employees participating in wellness programs that
include disability-related inquiries and/or medical examinations, and that are
part of a group health plan, provide prior, written and knowing confirmation
that their participation is voluntary?
If so, what form should such an authorization take?
5.
Should the proposed notice requirement apply
only to wellness programs that offer more than de minimis rewards or penalties
to employees who participate (or decline to participate) in disability-related
inquiries or medical exams? If so, how
should the EEOC define “de minimis?”
6.
Which best practices ensure that wellness
programs are designed to promote health and do not operate to shift costs to
employees with health impairments or stigmatized conditions?
7.
Whether employers offer (or are likely to offer
in the future) wellness programs outside of a group health plan that use
incentives to promote participation or achieve certain health outcomes and the
extent to which the ADA regulations should limit incentives provided as part of
such programs.
8.
What will be the practical effect of adopting
specific incentive limits (i.e., the 30% maximum) rather than cross referencing
and incorporating the ACA wellness incentive limits?
If you have comments to these or other issues raised by the
proposed rule, please submit them directly to the Federal eRulemaking Portal at
http://www.regulations.gov. Follow the instructions for submitting
comments. Recall that comments are due
by June 19, 2015. Alternatively, please
feel free to email comments to bzabawa@cfhle.com
and we will incorporate them into the Center for Health Law Equity, LLC’s
comments.
As always, the Center for Health Law Equity, LLC aims to be
the premier legal resource for the wellness industry. If you have any questions or concerns about
the proposed rules or any other wellness law matter, please do not hesitate to contact us.
