EEOC Issues Wellness Program Final Rules Under ADA and GINA
On May 16, 2016, the U.S. Equal Employment Opportunity Commission (EEOC) released final wellness regulations under Title I of the Americans with Disabilities Act (ADA) and Title II of the Genetic Information Nondiscrimination Act (GINA). These final rules provide guidance for employer wellness programs. The EEOC also provided a news release, Q&A for ADA rules, and Q&A for GINA rules.
Wellness Compliance Alphabet Soup
As employers develop and administer wellness programs, they generally do so with many regulations in mind, including the Health Information Portability and Accountability Act (HIPAA), Affordable Care Act (ACA), ADA, and GINA, among others.
• HIPAA defines wellness programs as either participatory or health-contingent (which may be activity-only or outcome-based). Final rules released in 2013 require that health-contingent programs must comply with the following requirements relating to:
1. Frequency of the opportunity to qualify,
2. The size of the reward,
3. Uniform availability and reasonable alternative standards,
4. Reasonable design, and
5. Notice of other means to qualify.
• As employers are well aware, the ACA governs many aspects of health plans. Among these requirements include specific provisions that impact wellness programs, incentives, and plan features embedded within medical coverage.
• The ADA generally limits the circumstances under which an employer may require physical exams (such as biometric screenings) or answers to questions about employee medical conditions (such as health risk assessments).
• GINA addresses the extent to which an employer may offer an incentive to an employee for the employee’s spouse to provide information about the spouse’s health status on a health risk assessment.
In addition, employers who sponsor wellness plans must consider the impact of ERISA, COBRA and the federal tax code to determine whether their plans properly comply with law.
The regulations provide guidance as to how employer wellness programs must comply with the ADA and GINA. Employers should note there are some areas where the rules still do not align with HIPAA wellness plan rules. New notice requirements and incentive limits apply to plan years (in which participants earn the incentive) starting January 1, 2017.
ADA Final Regulations
Key items that the final rules explain include the following:
• Applicability. The rules apply to all employer-sponsored incentive-based wellness programs that include disability-related inquiries (such as health risk assessments) or medical examinations (such as biometric screenings), regardless of whether they are offered as part of a group health plan or whether the employee is enrolled in an employer-sponsored group health plan. However, wellness programs without these components (screenings and HRAs) are generally not subject to the ADA.
• Reasonable program design. The ADA requires that applicable wellness programs be reasonably designed. This is similar to the HIPAA regulations; however, the ADA requires reasonable design of all wellness programs – whether they are participatory or health-contingent.
• Voluntary nature. The “voluntary” status of a wellness plan is an area that the EEOC has focused on over the years. The rules make it clear that participation in a wellness program may not be used as a pre-requisite to enroll in a health plan – nor as a requirement to enroll in a more robust health plan. Employers may not retaliate or discriminate against employees who choose not to participate.
• Incentives. The EEOC confirmed that wellness programs cannot offer incentives in excess of 30% of the total cost (employer and employee contributions) for the lowest-cost health plan for self-only coverage. When spouses are enrolled and participate, the limit is calculated as two times the total cost for the lowest-cost plan with self-only coverage.
For employers without group health plan coverage, the reward cannot exceed 30% of the cost of self-only coverage under the second lowest cost Silver Plan for a 40-year old non-smoker on the state or federal exchange.
- Employers should note the nuance between HIPAA and ADA regulations. First, the calculation of the maximum incentive under the ADA is not the same as under the HIPAA/ADA when dealing with participation of spouses (as the measurement for the maximum under the HIPAA rules when other family members may participate is based on family coverage). Second, the calculation of the maximum related to tobacco incentives is a bit different. HIPAA allows programs to offer up to a 50% incentive tied to tobacco use. The ADA allows a 50% level, but only if tobacco use is proven through a questionnaire (since in this event, the ADA incentive rule would not apply). Blood or saliva tests for the presence of nicotine are considered a medical exam, and therefore subject to the 30% ADA incentive limit.
• Notice and confidentiality requirements. The final rules require employers provide employees a notice regarding the wellness program. The EEOC stated that it will provide a model notice on its website within 30 days of issuance of the final rules.
Also of note, in the Preamble of the regulations, the EEOC specifically stated its disapproval of the decisions in the Seff v. Broward County, and EEOC v. Flambeau cases. In short, those cases were decided based on the ADA bona fide plan safe harbor. Under these safe harbors, employers, insurers, and plan administrators are permitted to establish a health insurance plan (or a self-insured plan) that is "bona fide" based on underwriting risks, classifying risks, and administration that is not used as a "subterfuge" to evade the purposes of the ADA. The EEOC has previously rejected this position as it relates to wellness plans and again states this in this guidance.
GINA Final Regulations
The final GINA regulations that were issued along with the final ADA rules clarify that employers may provide incentives to an employee whose spouse provides current or past health status information as part of a wellness program, with limits on incentives for inducement. Key provisions include:
• Applicability. The final rules apply to employer-sponsored wellness programs, regardless of whether they are related to a group health plan.
• Reasonable design. The final rules state that employers who request genetic information (such as through a health risk assessment) must design programs that promote health or prevent disease – for example, by providing results and follow-up information to participants.
• Incentive limits. GINA limits mirror those imposed by the ADA final regulations, and clarify that “de minimus” incentives must be included in the calculation.
• Voluntary nature. The final rules state that if employees choose not to participate in the wellness program, employers may not deny access to health insurance for the employee or covered dependents, nor may they retaliate.
• Child participation. GINA will not allow employers to offer incentives for participation of employees’ children – whether biological or adopted.
• Clarification that tobacco usage status is not genetic information. The rules clarify that employers do not violate GINA when asking whether a spouse uses tobacco, nor when they have a spouse complete a physical test (blood/saliva) to detect the use of tobacco.
• Notice and authorization. No change to existing rules.
Employers must keep in mind all the legal compliance areas when designing wellness programs. It’s a good idea to review incentive levels and participation requirements to ensure compliance with the final GINA and ADA regulations.