Benefit News
EEOC Finalizes Wellness Rules Under ADA and GINA; Publishes Sample Notice for Employers to Comply with ADA
June 20, 2016
On May 17, 2016, the Equal Employment Opportunity Commission (EEOC) issued final rules that describe how the Americans with Disabilities Act (ADA) and the Genetic Information Nondiscrimination Act (GINA) apply to employer-sponsored wellness programs. In addition, this past week, the EEOC also published a sample Notice to assist employers to comply with the ADA. The Notice is a requirement for employers that sponsor wellness programs subject to the ADA.
The final rules provide long-awaited guidance on how to structure wellness programs without violating the ADA or GINA, and are intended to be consistent with HIPAA's rules for wellness programs.
Summary of the Final Rules
Final ADA Rule
The final ADA rule provides guidance on the extent to which employers may offer incentives to employees to participate in wellness programs that ask them to answer disability-related questions or to undergo medical examinations.
IMPORTANT: The final ADA rule does not apply to wellness programs that do not obtain medical information but simply require employees to engage in an activity (such as walking a certain amount every week) in order to earn an incentive. However, employers must provide reasonable accommodations to allow employees with disabilities to earn the incentive.
Final GINA Rule
The final GINA rule clarifies that an employer may offer a limited incentive to an employee whose spouse provides information about his or her current or past health status as part of the employer's wellness program.
Overview of Legal Requirements for Wellness Programs
Employee wellness programs must be carefully designed to comply with the ADA, GINA and other federal laws that prohibit discrimination based on race, color, sex (including pregnancy), national origin, religion, compensation or age. Additionally, wellness programs that are part of group health plans must be designed to comply with HIPAA's nondiscrimination requirements, as amended by the Affordable Care Act (ACA). Under HIPAA, health-contingent wellness programs are required to follow certain standards related to nondiscrimination, including a standard that limits the amount of incentives that can be offered. The maximum reward under HIPAA for health-contingent wellness programs is 30 percent of the cost of health coverage (or 50 percent for programs designed to prevent or reduce tobacco use).
ADA Requirements
The ADA prohibits employers with 15 or more employees from discriminating against individuals with disabilities. Under the ADA, an employer may make disability-related inquiries and require medical examinations after employment begins only if they are job-related and consistent with business necessity. However, these inquiries and exams are permitted if they are part of a voluntary wellness program.
Additionally, the ADA requires employers to make all wellness programs, even those that do not obtain medical information, available to all employees, to provide reasonable accommodations (adjustments or modifications) to employees with disabilities, and to keep all medical information confidential.
GINA's Requirements
GINA prohibits employers with 15 or more employees from using genetic information when making decisions about employment, and it restricts covered employers from disclosing genetic information. It also restricts employers from requesting, requiring or purchasing genetic information, unless one or more of six narrow exceptions applies. One of those narrow exceptions applies when an employee voluntarily accepts health or genetic services offered by an employer, including services offered as part of a wellness program.
Final Rules
Incentive Limitations
The final ADA rule provides that incentives offered to an employee who answers disability-related questions or undergoes medical examinations as part of a wellness program are limited to the following:
- When the wellness program is available only to employees who are enrolled in a specific group health plan, the incentive may not exceed 30 percent of the total cost for self-only coverage of the health plan in which the employee is enrolled.
- When an employer offers only one group health plan, and does not require employees to be enrolled in the health plan in order to participate in the wellness program, the incentive may not exceed 30 percent of the total cost for self-only coverage under the health plan.
- When an employer offers more than one group health plan, and does not require employees to be enrolled in a health plan in order to participate in the wellness program, the incentive may not exceed 30 percent of the total cost of the lowest cost self-only coverage under a major medical group health plan offered by the employer.
- When an employer does not offer a group health plan, and offers a wellness program that is open to employees, the incentive may not exceed 30 percent of the total cost to a 40-year-old nonsmoker purchasing self-only coverage under the second lowest cost Silver Plan available on the state or federal Exchange in the location that the employer identifies as its principal place of business.
In addition, the final GINA rule provides that the value of the maximum incentive attributable to a spouse's participation may not exceed 30 percent of the total cost of self-only coverage, which is the same incentive allowed for the employee. Employers may offer children the opportunity to participate in wellness programs, but may not offer inducements in exchange for current or past health status information about children. Inducements in exchange for genetic information about spouses and children (such as a spouse's or child's family medical history) are also prohibited.
Program Participation must be Voluntary
In order for participation to be considered voluntary under the ADA, an employer:
- May not require participation;
- May not deny access to health insurance or benefits to an employee who does not participate;
- May not retaliate against, interfere with, coerce, intimidate or threaten any employee who does not participate or who fails to achieve certain health outcomes;
- Must provide a notice that explains the medical information that will be obtained, how it will be used, who will receive it and the restrictions on disclosure. The EEOC has recently released a sample notice for employers to use, a link to which is provided at the end of this publication; and
- Must comply with the incentive limits described in the final rule.
Program Must be Reasonably Designed to Promote Health and Prevent Disease
The ADA and GINA rules seek to ensure that wellness programs actually promote good health and are not just used to collect or sell sensitive medical information about employees and family members or to impermissibly shift health insurance costs to them. Both rules require wellness programs to be reasonably designed to promote health and prevent disease.
Notice and Confidentiality Requirements
Both rules state that information from wellness programs may be disclosed to employers only in aggregate terms.
- The ADA rule requires that employers give participating employees a notice that tells them what information will be collected as part of the wellness program, with whom it will be shared and for what purpose, the limits on disclosure and the way information will be kept confidential. A sample notice prepared by the EEOC is available by accessing the link at the end of this publication.
- GINA includes statutory notice and consent provisions for health and genetic services provided to employees and their family members.
Regarding the notice requirements in the final ADA rule, recent Questions and Answers published by the EEOC stipulate that to the extent all the information is already provided to employees with respect to the wellness program (e.g., via the HIPAA Notice of Privacy Practices), employers may not have to provide a separate notice to comply with the ADA. However, the EEOC cautions that the existing notice must include all the ADA required information and must be written in a language that is reasonably likely to be understood by employees.
Also, both rules prohibit employers from requiring employees or their family members to agree to the sale, exchange, transfer, or other disclosure of their health information in order to participate in a wellness program or to receive an incentive.
Action Items
Employers that sponsor wellness programs should work with their advisors to determine what changes, if any, should be made to their wellness programs' design to comply with the EEOC's final rules.
Effective Date
The provisions of the final rules related to the incentive limits and the ADA notice requirement will apply only prospectively to employer-sponsored wellness programs as of the first day of the first plan year that begins on or after January 1, 2017, for the health plan used to determine the level of inducement. According to the EEOC, other wellness program provisions (such as the reasonable design and confidentiality requirements) are clarifications of existing obligations.
More Information
The EEOC sample notice is available at https://www1.eeoc.gov/laws/regulations/ada-wellness-notice.cfm?renderforprint=1.
Questions and Answers regarding the sample notice are available at https://www1.eeoc.gov/laws/regulations/qanda-ada-wellness-notice.cfm?renderforprint=1.
The final rules are available at https://www.gpo.gov/fdsys/pkg/FR-2016-05-17/pdf/2016-11558.pdf.
For additional information, please contact your Burnham Benefits Consultant or Burnham Benefits at 949-833-2983 or inquiries@burnhambenefits.com.
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