January 13, 2020
On January 7, 2021, the Equal Employment Opportunity Commission (EEOC) issued two proposed rules on wellness programs under the Americans with Disabilities Act (ADA) (available here) and the Genetic Information Nondiscrimination Act (GINA) (available here). These proposed rules were issued in response to a federal court decision that vacated a portion of EEOC regulations describing the incentives that an employer could offer:
Please note: These rules are proposed only, and thus, subject to change. The public has 60 days to review the proposed rule and provide comments to the EEOC. Upon completion of the review period, the EEOC then has an additional 30 days to take the comments into consideration and finalize the rule. In addition, when the Biden Administration takes office next week, all current guidance in the pipeline that hasn’t been finalized, will in effect be frozen pending further review by the new administration. It remains to be seen whether it will support the proposed regulations as currently written.
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. In 2016, the EEOC issued a final rule that established a 30 percent limit on the permissible incentives a wellness program could offer for participation while still qualifying for the ADA exception for voluntary wellness programs.
GINA's restrictions apply to a wellness program when it requests genetic information (for example, family health history). In 2016, the EEOC issued a separate final rule that allowed an employer to offer limited incentives for an employee's spouse to provide current or past health status information as part of a wellness program. Under the final rule, the maximum incentive attributable to a spouse's participation could not exceed 30 percent of the total cost of self-only coverage, which was the same as the incentive allowed for the employee under the final ADA rule.
In 2017, the AARP challenged these limits and sued the EEOC, arguing that the 30 percent limit was arbitrary and inconsistent with the voluntary requirements of the ADA and GINA, and the U.S. District Court for the District of Columbia agreed. In response to the court’s decision, the EEOC amended the ADA and GINA regulations to remove the incentive limit provisions, effective January 1, 2019.
The proposed rule responds to the courts finding that the 30 percent incentive limit is not an appropriate measure for voluntariness, so it defines what is meant to be “voluntary” and in lieu of the 30 percent limit, imposes a de minimis standard for most wellness programs that include disability-related inquiries and/ or medical examinations. Specifically, the proposed rule would amend two sections of the ADA regulations related to (1) medical examinations and inquiries specifically permitted; and (2) health insurance, life insurance and other benefit plans.
For purposes of the proposed rule, a wellness program is any program of health promotion or disease prevention that includes disability-related inquiries or medical examinations. There are two types: (1) participatory, and (2) health-contingent. Furthermore, wellness programs that do not include disability-related inquiries or medical examinations are not subject to the proposed rule.
Under the proposed rule, the ADA safe harbor would apply only to health-contingent wellness programs that are part of, or qualify as, group health plans. There are four factors that the EEOC believes are helpful in determining when a wellness program is part of a group health plan for purposes of the ADA:
A wellness program is considered “voluntary” as long as it doesn’t:
The proposed rule retains the confidentially protections that exist in the 2016 final rule, including the exceptions for disclosure. Medical information collected through a wellness program may be provided to a [HIPAA] covered entity only in aggregate terms that do not disclose, or are not reasonably likely to disclose, the identity of specific individuals. EEOC anticipates that a program that is part of a [HIPAA] covered entity likely will be able to comply with its confidentiality obligations under the proposed rule by complying with the HIPAA Privacy, Security and Breach Notification Rules.
However, unlike the 2016 final rule, the new proposed rule no longer requires employers to issue a unique ADA notice that describes, among other things, the type of medical information that will be obtained and the purposes for which the information will be used. The proposed rule also provides that, regardless of whether notice is given, employers may not condition participation in a wellness program on an employee allowing information to be disclosed to a third party.
The proposed GINA rule addresses the extent to which an employer may offer incentives to an employee in exchange for the employee’s spouse (or other family member) providing information about that family member’s manifestation of disease or disorder and/or for that family member to achieve health outcomes as part of an employer-sponsored wellness program. Information about a family member’s manifestation of disease or disorder is one type of genetic information about the employee (also known as “family medical history”) but is not genetic information about the family member for purposes of Title II of GINA. The general prohibition on providing incentives in return for genetic information would remain. However, the rule describes certain situations in which incentives (financial or in-kind) could be provided without violating Title II of GINA, subject to an individual voluntarily providing written authorization designed in a way so as to be reasonably understood by such individual.
For additional information, please contact your Burnham Consultant or Burnham, A Baldwin Risk Partner at 949‐833‐2983 or email@example.com.
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