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Here are the questions EEOC wants your comments about in proposed ADA/wellness program regs

By Joy P. Waltemath, J.D.

Emphasizing confidentiality and allowing employer incentives, the EEOC has published its Notice of Proposed Rulemaking (NPRM) describing how the ADA applies to employer wellness programs that are part of group health plans. Notably, the proposed rule does not address the extent to which Title II of GINA affects an employer’s ability to condition incentives on a family member’s participation in a wellness program, which the agency said it will address later. Although the proposed rule will be officially published Monday, April 20, it was made available in the public inspection portion of the Federal Register on April 16th. Public comments can be submitted for 60 days from that date (until Friday, June 19).

The agency has also published a Fact Sheet for Small Businesses and a Question and Answer document for the general public, both of which are posted on the agency’s website.

Waiting on the agency to act. The EEOC’s press release says its proposed rule would provide “much needed guidance to both employers and employees” about how wellness programs offered as part of an employer’s group health plan can comply with the ADA consistent with provisions governing wellness programs in the Health Insurance Portability and Accountability Act (HIPAA), as amended by the Affordable Care Act.

Of course, the EEOC has been talking about the nexus between wellness programs and other federal laws since at least May 2013, and back in November 2014 it said it hoped to release the regulations by February of this year.

Unhappy about the wait, just last month Republicans introduced legislation in both the House and Senate that would “eliminate the confusion caused by the EEOC for employers who provide financial rewards to employees for healthy lifestyle choices.” Introduced on Monday, March 2 by Lamar Alexander (R-Tenn.) in the Senate and Jon Kline (R-Minn.) in the House, the Preserving Employee Wellness Programs Act (S. 620/H.R. 1189) would reaffirm the right of employers under the law to offer wellness programs that are tied to a financial reward. Specifically, the legislation would “clarify rules relating to nondiscriminatory employer wellness programs as such programs relate to premium discounts, rebates, or modifications to otherwise applicable cost sharing under group health plans.”

Kline, chairman of the House Education and the Workforce Committee, said at the time that “Congress must take action to rein in this agency and provide the certainty necessary for more Americans to enjoy the benefits of these innovative health programs.”

Components of wellness programs. Many employers that provide health insurance also offer workplace wellness programs, the agency said, noting that these programs sometimes use health risk assessments and biometric screenings to determine an employee’s health risk factors, such as body weight and cholesterol, blood glucose, and blood pressure levels. Some programs offer financial and other incentives for employees who participate or achieve certain health outcomes.

Although the ADA limits the circumstances in which employers may ask employees about their health or require them to undergo medical examinations, it allows such inquiries and exams if they are voluntary and part of an employee health program.

As explained in the NPRM preamble, a wellness program may be part of a group health plan or may be offered outside of a group health plan. The references in the proposed rule regarding the requirement to provide a notice and the use of incentives, and changes to the corresponding section of the interpretive guidance, apply only to wellness programs that are part of or provided by a group health plan or by a health insurance issuer offering group health insurance in connection with a group health plan. The term “group health plan” includes both insured and self-insured group health plans and is used interchangeably with the term “health plan” in the NPRM.

Participation cannot be required. Under the NPRM, if an employee health program seeks information about employee health or medical examinations, the program must be “reasonably likely to promote health or prevent disease.” Employees may not be required to participate in a wellness program, and they may not be denied health coverage or disciplined if they refuse to participate, the agency stressed.

Permitted incentives. Wellness programs are permitted under the ADA, but they may not be used to discriminate based on disability. The rule explains that under the ADA, companies may offer incentives of up to 30 percent of the total cost of employee-only coverage in connection with wellness programs. These programs can include medical examinations or questions about employees’ health (such as questions on a health risk assessment).

Confidentiality of medical information. This limit is generally consistent with limits that HIPAA imposes on wellness programs. The rule also makes clear however, that the ADA provides important safeguards to employees to protect against discrimination based on disability. Accordingly, medical information collected as a part of a wellness program may be disclosed to employers only in aggregate form that does not reveal the employee’s identity, and must be kept confidential in accordance with ADA requirements.

“The EEOC worked closely with the Departments of Labor, Health and Human Services, and Treasury in developing this NPRM to harmonize the ADA’s requirement that medical inquiries and exams that are part of an employee health program must be voluntary, and HIPAA’s goal of allowing incentives to encourage participation in wellness programs,” said EEOC Chair Jenny R. Yang.

Employers also may not subject employees to interference with their ADA rights, threats, intimidation, or coercion for refusing to participate in a wellness program or for failing to achieve certain health outcomes. Finally, individuals with disabilities must be provided with reasonable accommodations that allow them to participate in wellness programs and to earn whatever incentive an employer offers.

Required notice. In addition to setting a limit on incentives, the NPRM, which includes interpretive guidance that will be published along with the final rule, requires that employers provide employees a notice that describes what medical information will be collected, with whom it will be shared, how it will be used, and how it will be kept confidential. The interpretive guidance also includes an extensive discussion of both legal requirements and best practices that ensure confidentiality of employee medical information.

Employers will welcome clarity. Speaking with Employment Law Daily this afternoon, Debra S. Friedman, a member of Cozen O’Connor who practices in the Philadelphia office’s Labor & Employment Practice Group, commented that employers generally will welcome the clarity provided by the proposed rule when they are designing and implementing wellness programs as a part of group health plans.

She noted in particular that the proposed rule makes clear that incentives of up to 30 percent of the total cost of employee-only coverage may be offered in connection with wellness programs without risking a finding that the incentives render a program involuntary. Moreover, the NPRM makes it clear that lawful incentives include both rewards employers may offer for employee participation and penalties for non-participation.

Employers also will likely welcome the fact that the proposed rule is largely consistent with regulatory guidance from the departments of Labor, Health and Human Services, and Treasury issued in connective with the Affordable Care Act and HIPAA, Friedman emphasized.

Questions for commenters. In the preamble, the Commission has asked a number of specific questions on which it seeks comment before finalizing the rule; Commissioner Chai Feldblum reiterated in a tweet the morning the regs were released that commenters should focus on questions in the preamble, since answers to those questions will shape the final rule. We’ve set out those specific questions below:

(1) [Voluntariness] Whether the way in which the Commission reconciles the ADA’s “voluntary” requirement with the wellness program provisions in the Affordable Care Act is appropriate given the intent behind both provisions. Specifically, the Commission seeks comment on:

(a) Whether to be “voluntary” under the ADA, entities that offer incentives to encourage employees to disclose medical information must also offer similar incentives to persons who choose not to disclose such information, but who instead provide certification from a medical professional stating that the employee is under the care of a physician and that any medical risks identified by that physician are under active treatment.

(b) Whether to be considered “voluntary” under the ADA, the incentives provided in a wellness program that asks employees to respond to disability-related inquiries and/or undergo medical examinations may not be so large as to render health insurance coverage unaffordable under the Affordable Care Act and therefore in effect coercive for an employee. Specifically, the Commission seeks input on whether it would be appropriate for the Commission to provide that the incentives employers offer to employees to promote participation in wellness programs must not render the cost of health insurance unaffordable to employees within the meaning of 26 U.S.C. 36B (c)(2)(C) as implemented by 26 CFR 54.4980H-5(e). Generally, the cost of health insurance is affordable within the meaning of 26 U.S.C. 36B(c)(2)(C) if the portion an employee would have to pay for employee-only coverage would not exceed a specified percent of household income (9.56 percent in 2015). Where such incentives would render a plan unaffordable for an individual, it would be deemed coercive and involuntary to require that individual to answer disability-related inquiries and/or submit to medical examinations connected with the wellness program at issue.

(c) Whether there are any methods other than those mentioned in the proposed regulation and the questions above by which the Commission can effectuate the intent of both the “voluntary” requirement in the ADA and the provisions in the Affordable Care Act intended to encourage workplace health promotion and disease prevention.

(2) [Notice requirements/authorization] Should the proposed notice requirements of this rule, at section 1630.14(d)(2)(iv), also include a requirement that employees participating in wellness programs that include disability-related inquiries and/or medical examinations, and that are part of a group health plan, provide prior, written, and knowing confirmation that their participation is voluntary? If so, what form should such an authorization take? Are principles of informed consent in the medical context helpful in fashioning an appropriate authorization? Are there existing forms that could provide adequate protections, such as forms developed under HIPAA, forms employers already use in connection with wellness programs, or forms employers use to comply with Title II of GINA? What costs would be associated with developing an appropriate authorization form and/or collecting and maintaining authorization forms for employees who decide to participate in wellness programs?

(3) [Notice requirements/de minimus incentives] Should the proposed notice requirement apply only to wellness programs that offer more than de minimis rewards or penalties to employees who participate (or decline to participate) in wellness programs that ask them to respond to disability-related inquiries and/or undergo medical examinations? If so, how should the Commission define “de minimis”?

(4) [Cost-shifting] Which best practices ensure that wellness programs are designed to promote health and do not operate to shift costs to employees with health impairments or stigmatized conditions?

(5) [Wellness programs outside of group health plans] Whether employers offer (or are likely to offer in the future) wellness programs outside of a group health plan or group health insurance coverage that use incentives to promote participation in such programs or to encourage employees to achieve certain health outcomes and the extent to which the ADA regulations should limit incentives provided as part of such programs.

(6) [Incentive limits/impact] What will be the practical effect of adopting the specific incentive limit set forth in the proposed rule (rather than expressly referencing and incorporating the wellness program incentive limits as they are defined by the Secretaries of Labor, Treasury, and Health and Human Services pursuant to the Affordable Care Act)? Specifically, what, if any, will be the impact of the proposed rule’s 30-percent limit on incentives offered with respect to wellness programs intended to prevent or reduce tobacco use where such programs ask employees to respond to disability-related inquiries and/or undergo medical examinations?

Comments. Comments, identified by RIN number 3046-AB01, may be submitted by any one of the following methods:

  • Federal eRulemaking Portal: http://www.regulations.gov. Follow the instructions for submitting comments;
  • Fax: Six or fewer pages only. Fax: (202) 663-4114. (There is no toll free FAX number).
  • Mail: Bernadette B. Wilson, Acting Executive Officer, Executive Secretariat, Equal Employment Opportunity Commission, U.S. Equal Employment Opportunity Commission, 131 M Street, NE, Washington, DC 20507.
  • Hand Delivery/Courier: Bernadette Wilson, Acting Executive Officer, Executive Secretariat, Equal Employment Opportunity Commission, U.S. Equal Employment Opportunity Commission, 131 M Street, NE, Washington, DC 20507.

All comments received will be posted without change to http://www.regulations.gov, including any personal information provided.