The EEOC issued final rules under the Americans with Disabilities Act (ADA) regarding employer-sponsored wellness programs which require disability-related information or medical exams, as well as final rules under the Genetic Information Nondiscrimination Act (GINA), regarding all employer-sponsored wellness programs.  Employers should review the final rules, as the EEOC makes apparent that compliance with The Health Insurance Portability and Accountability Act (HIPAA) nondiscrimination rules does not necessarily place an employer in compliance under the ADA or GINA.

The final rules, which are effective January 1, 2017, provide as follows:

Participation in wellness programs must be voluntary.  To be considered voluntary, employees cannot be required to participate, and lack of participation cannot result in denial of, or limitations on, any group health coverage offered.  Further, there can be no other adverse action taken against an employee who does not participate in the employer’s wellness program.

Notice requirements.  For a wellness plan to be considered voluntary, written notice to employees must be provided that clearly describes the type of medical information that will obtained and its purpose, the restrictions on disclosure of the employee’s medical information, and includes the parties who will have access and the methods used to prevent improper disclosure as required under HIPAA.  An EEOC sample written notice can be found here and questions and answers provided by the EEOC regarding the notice can be found here.

Must be reasonably designed to promote good health and prevent illness. Wellness programs must address treatment of conditions that are identified.  The program’s main purpose cannot be to shift costs to employees or provide the employer with information used to estimate costs.

Financial incentive limitations.  Participation incentives can’t exceed 30% of the total cost of employee-only coverage, including employee and employer contributions, but the ACA permits up to 30% of the cost of whatever coverage the employee has obtained, including family coverage.  Interestingly, in the case of smoking cessation programs that do not involve nicotine testing, the EEOC rules permit incentives of up to 50% of the cost of employee-only coverage; if medical testing is involved, incentives may not exceed 30% of the cost of employee-only coverage.  The testing limits placed under EEOC rules are inconsistent with ACA rules, which permit incentives of up to 50% for tobacco cessation programs and are justified, according to the EEOC, because testing means that the program is disability-related, and therefore subject to different restrictions.  Under GINA rules, if a wellness program is open only to employees and family members in a particular group plan, the maximum incentive for the employee’s spouse to provide information about current or past health status is 30% of the total cost of employee-only coverage.  If the employer offers more than one health plan, the maximum inducement permitted is 30% of the lowest cost major medical self-only plan offered.  Other limits apply if the employer does not offer group health.

Genetic information limitations.  Employers may provide limited incentives of up to 30% of the cost of self-only coverage to an employee whose spouse provides certain health information as part of a wellness program.  Employers may not request, require or purchase genetic information, except for certain narrow exceptions.  No incentives can be offered for providing genetic information regarding employees’ children, including adult children.  Employers may not deny group health or other health benefits to an employee or the employee’s family on the basis that a spouse refuses to provide information regarding diseases or disorders.

Confidentiality of medical records must be ensured.  Unless needed to administer the health plan, information gathered under wellness plans can only be given to the employer in the aggregate without disclosing employee identities

This alert is intended to note current legal trends in commercial lending and risk management issues. No alert should be construed as representing advice on specific, individual legal matters, but rather as an overview of the subject discussed. Your questions and comments are always welcome. Please do not hesitate to contact me at kscott@ecjlaw.com  to further discuss this alert or to answer any questions.