EEOC Issues Proposed Regulations Regarding Wellness Program Incentives

The Equal Employment Opportunity Commission (EEOC) has issued proposed regulations under Title II of the Genetic Information Nondiscrimination Act (GINA) regarding employer wellness programs that are part of group health plans. The proposed rule provides that employers may provide limited financial and other incentives in exchange for an employee’s spouse providing information about his or her current or past health status information.

Background

Title II of GINA prohibits employers covered by the law from using genetic information in making decisions about employment. It restricts employers and other entities covered by GINA from requesting, requiring, or purchasing genetic information, unless one or more of six narrow exceptions applies. In addition, it strictly limits entities covered by GINA from disclosing genetic information. EEOC’s current regulations implementing GINA prohibit employers from offering incentives in return for genetic information. This requirement has come in conflict with the Affordable Care Act (ACA) provisions that encourage employers to use wellness programs, including significant incentives. The proposed regulations should make it easier to comply with GINA while taking advantage of the wellness incentives permitted under the ACA.

  • One of the narrow exceptions to GINA’s prohibition on requesting, requiring, or purchasing genetic information applies when an employee voluntarily accepts health or genetic services offered by an employer, including such services offered as part of a wellness program.
  • The statute and EEOC’s GINA regulations say that “genetic information” includes, among other things, information about the “manifestation of a disease or disorder in family members of an individual.” The term “family members” includes spouses.
  • Because information about the current or past health status of spouses and other family members is genetic information about an employee, EEOC’s current GINA regulations could be read as prohibiting employers from offering incentives in return for a spouse providing his or her current or past health information. The proposed rule explains how employers may lawfully offer incentives for such information under GINA.

The Proposed Rules

The proposed rule would permit employers to offer limited incentives for the employee’s spouse to provide current or past health status information as part of a wellness program, as follows:

    • An employer may offer, as part of its health plan, a limited incentive (in the form of a reward or penalty) to an employee whose spouse (1) is covered under the employee’s health plan; (2) receives health or genetic services offered by the employer, including as part of a wellness program; and (3) provides information about his or her current or past health status. Information about current or past health status usually is provided as part of a health risk assessment (HRA), which may include a questionnaire or medical examination, such as a blood pressure test or blood test to detect high cholesterol or high glucose levels.
    • The total incentive may not exceed 30 percent of the total cost of the plan in which the employee and any dependents are enrolled. The incentive may be financial or in-kind (e.g., time-off awards, prizes, and other items of value).
    • For example, if an employee and his or her spouse are enrolled in self and family coverage that costs $14,000, the maximum incentive the employer may offer the employee and spouse to provide information on current or past health status as part of a wellness program is $4,200 (30 percent of $14,000).
    • The maximum portion of an incentive that may be offered to an employee alone may not exceed 30 percent of the total cost of self only coverage. So, if the employer in the example above offers self-only coverage at a total cost of $6,000, the maximum portion of the $4,200 incentive that may be offered for the employee’s participation is $1,800 (30 percent of $6,000). The rest of the incentive ($2,400 in the example above) may be offered for the spouse’s participation or for the employee, spouse, and/or employee’s other dependents who are covered by the health plan participating in activities designed to promote health or prevent disease. These could include programs that reward participants for walking a certain amount each week or for attending nutrition or weight loss classes.

The proposed rule also provides that any health or genetic services an employer offers must be reasonably designed to promote health or prevent disease. This means that the service must have a reasonable chance of improving the health of, or preventing disease in, participating individuals. It also means that an employer-sponsored wellness program must not be overly burdensome, a subterfuge for violating Title II of GINA or other laws prohibiting employment discrimination, or highly suspect in the method chosen to promote health or prevent disease.

The proposed rule adds a new provision stating that employers may not require employees (or employees’ spouses or dependents covered by the employee’s health plan) to agree to the sale, or waive the confidentiality, of their genetic information as a condition for receiving an incentive or participating in a wellness program.

Proposed Rules

EEOC Q&As

EEOC Proposes Amendments to ADA Regulations regarding Employer Wellness Programs

On April 20, 2015 the EEOC released proposed amendments to regulations under the Americans with Disabilities Act (ADA) related to employer wellness programs. The proposed rule provides guidance on the extent to which employers may use incentives to encourage employees to participate in wellness programs that are part of their group health plans, and that include disability-related inquiries and/or medical examinations.  The proposed rules explain how a wellness program that includes incentives for participation can satisfy the “voluntary medical examination” exception to the ADA’s prohibition on “making disability-related inquiries or requiring medical examinations”.  The exception allows “voluntary medical examinations, including voluntary medical histories, which are part of an employee health program available to employees at that work site.”

This is the latest action in an ongoing turf battle between the EEOC (which administers the ADA) and the Departments of Labor, Treasury, and HHS (which administer the HIPAA nondiscrimination rules).  HHS has taken a liberal approach, allowing wellness programs to impose a 30% penalty for failure to participate in wellness programs (and up to 50% in the case of tobacco prevention or reduction programs), in accordance with the Affordable Care Act’s policy of encouraging wellness programs.  The EEOC has traditionally taken a more conservative view, holding such a large incentive would violate the ADA because it would render the program not voluntary.

The proposed rules permit incentives as high as 30% to encourage participation in a wellness program that includes disability-related inquiries or medical examinations, as long as participation is voluntary.  Voluntary means that the employer:

(1) does not require employees to participate;

(2) does not deny coverage under any of its group health plans or particular benefits packages within a group health plan for non-participation or limit the extent of such coverage (except pursuant to allowed incentives); and

(3) does not take any adverse employment action or retaliate against, interfere with, coerce, intimidate, or threaten employees who do not participate.

In addition, an employer must provide a notice that clearly explains what medical information will be obtained, who will receive the medical information, how the medical information will be used, the restrictions on its disclosure, and the methods the covered entity will employ to prevent improper disclosure of the medical information. Finally, the proposed rule allows the disclosure of medical information obtained by wellness programs to employers only in aggregate form, except as needed to administer the health plan.

icon   The Proposed Rules

icon   EEOC Q&As on the Proposed Rules