Regulatory Guidance

EEOC Seeks to Clarify Wellness Programs, ADA

A proposed rule from the EEOC is intended to help clear up questions surrounding wellness programs and potential conflicts with the ADA.
By: | May 21, 2015

Employers seeking guidance on implementing workplace wellness programs without violating the law may get some help. The Equal Employment Opportunity Commission has issued a proposed rule on how Title I of the Americans with Disabilities Act applies to wellness programs that are part of group health plans. The agency is accepting public comments through June 19.

“The EEOC’s proposed rule makes clear that wellness programs are permitted under the ADA, but that they may not be used to discriminate based on disability,” according to a statement on the EEOC’s website. “The rule explains that under the ADA, companies may offer incentives of up to 30 percent of the total cost of employee-only coverage in connection with wellness programs. These programs can include medical examinations or questions about employees’ health (such as questions on a health risk assessment).”

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The rule says the programs must be voluntary and employers cannot deny health insurance, reduce health benefits, or discipline those who do not participate. Employers cannot interfere with the ADA rights of those who do not participate, and they must provide reasonable accommodation to disabled employees that allow them to participate in wellness programs and earn the incentives the employer is offering.

The programs “must have a reasonable chance of improving health or preventing disease in participating employees,” the EEOC said. “A program that collects information on a health risk assessment to provide feedback to employees about their health risks, or that uses aggregate information from health risk assessments to design programs aimed at particular medical conditions is reasonably designed. A program that collects information without providing feedback to employees or without using the information to design specific health programs is not.”

Finally, employers are only entitled to medical information collected for the wellness program in aggregate form. The employee’s identity must be kept confidential.

“I absolutely think this guidance is needed because employers were left in legal limbo with what to do,” said Ilyse Schuman, shareholder with Littler and cochair of the Workplace Policy Institute. “On one hand, the Affordable Care Act provisions are designed to promote [wellness programs]; at the same time, the EEOC had taken some recent enforcement action challenging the use of incentives in connection with wellness under the EEOC and the Genetic Information Nondiscrimination Act.”

In one case, the agency said an employer violated federal law by requiring an employee to “submit to medical exams and inquiries that were not job-related and consistent with business necessity as part of a so-called ‘wellness program,’ which was not voluntary, and then by firing the employee when she objected to the program,” according to court documents. It said the company’s wellness program “required medical examinations and made disability-related inquiries.”  When an employee declined to participate, the company “shifted responsibility for payment of the entire premium for her employee health benefits” to the worker and shortly thereafter fired her.

In a separate case, the agency said an employer threatened to penalize employees if they or their spouses did not submit to biometric tests. Employees said the testing was an unlawful medical exam and violated the ADA and GINA.

A bill recently introduced in Congress seeks to eliminate confusion for employers who offer rewards for participation in wellness programs.

“This is yet another example of the EEOC being out of step with employers and employees,” said Sen. Tim Walberg, R-Mich., chairman of the House Subcommittee on Workforce Protections before the proposed rule was issued. “Innovative approaches that empower employees to take more control of their personal health care decisions should be encouraged, not stymied by greater government overreach.”

Conflicting Messages

The proposed rule defines the incentives employers may use to encourage employee participation in wellness programs that include disability-related inquiries or medical exams. It says incentives are allowable as long as other parameters are met.

“As employers have increasingly turned to wellness programs to improve costs and health, they are faced with a quandary as to how to do that without running afoul of the ADA or GINA,” Schuman explained. “The conflicting messages coming from the administration on the one hand with respect to the ACA and its implementations and regulations, and the EEOC on the other, left employers in the crosshairs. I think [the rule] was a welcome development.”

Wellness programs. The EEOC defines wellness programs as those that “may include, for example: nutrition classes, onsite exercise facilities, weight loss and smoking cessation programs, and/or coaching to help employees meet health goals,” the agency said. “Wellness programs also may incorporate health risk assessments and biometric screenings that measure an employee’s health risk factors, such as body weight and cholesterol, blood glucose, and blood pressure levels.”

Incentives offered by employers typically are in the form of either rewards or penalties, such as prizes or cash, a reduction or increase in health care premiums, or cost sharing. Most employers that offer them use incentives totaling less than $500 per year, according to the EEOC.

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Remaining questions. The rule is only a proposal, Schuman noted. She is unsure about such things as the allowable incentives.

“There are questions about how that is determined because the proposed regulations refer to 30 percent of employee-only coverage,” she said, “but often times employees sign up for family coverage. So it doesn’t seem to make sense.”

There is also the matter of GINA. “It doesn’t address GINA at all. That’s still out there,” Schuman said. “Employers are still left with the uncertainty with respect to how wellness programs offering incentives for a spouse to complete a health risk assessment are treated under GINA. This is not the end of the story for direction from the EEOC.”

Nancy Grover is the president of NMG Consulting and the Editor of Workers' Compensation Report, a publication of our parent company, LRP Publications. She can be reached at [email protected]

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The R&I Editorial Team can be reached at [email protected]