EEOC Releases Employer Wellness Programs Final Rules
Author: Marta Moakley, XpertHR Legal Editor
May 25, 2016
The Equal Employment Opportunity Commission (EEOC) issued final rules on employer wellness programs. The final rules address employee protections under the Americans With Disabilities Act (ADA) and the Genetic Information Nondiscrimination Act (GINA). The EEOC worked closely with the Departments of Labor, Treasury and Health and Human Services to ensure consistency with existing privacy protections under the Health Insurance Portability and Accountability Act (HIPAA), as amended by the Affordable Care Act (ACA).
The rules apply to all workplace wellness programs, whether or not employees or their family members may participate without also enrolling in a particular health plan. In addition, incentives cover not only financial incentives, but also in-kind incentives, such as:
- Reductions in insurance premiums;
- Time-off awards;
- Prizes; and
- Other items of value, such as gifts.
The rules confirm that wellness programs must be reasonably designed to promote wellness and health or to prevent disease. The rules prohibit an employer from implementing a program that is unreasonably intrusive or burdensome to employees, to shift costs to employees based on their health or to predict future costs.
EEOC Chair Jenny R. Yang stated in a press release that the Commission "worked to harmonize HIPAA's goals of allowing incentives to encourage participation in wellness programs with ADA and GINA provisions that require that participation in certain types of wellness programs is voluntary. These rules make clear that the ADA and GINA provide important safeguards to employees to protect against discrimination."
ADA Final Rule
The ADA Final Rule provides guidance to employers on providing incentives to employees to participate in wellness programs that ask them to respond to disability-related inquiries and/or undergo medical examinations. The ADA rule also includes employee notice requirements.
The ADA rule (along with the GINA rule) prohibits an employer from requiring employees or their family members to agree to the sale, exchange, transfer or other disclosure of health information in order to:
- Participate in the wellness program; or
- Receive an incentive.
GINA Final Rule
The GINA Final Rule addresses the extent to which an employer may offer an incentive to employees for the employee's spouse to provide information about the spouse's manifestation of a disease or disorder as part of a voluntary wellness program.
The final rules clarify that an employer may, under certain circumstances, offer an employee limited inducement for the employee's spouse to provide information about the spouse's current or past health status as part of a health risk assessment (HRA) administered in connection with an employer-sponsored wellness program, provided that:
- GINA's confidentiality requirements are observed; and
- Any information obtained is not used for discriminatory purposes.
The exception is a narrow one, and does not extend to:
- Genetic information about a spouse; or
- Information about manifestation of diseases or disorders in, or genetic information about, an employee's children.
With respect to smoking cessation programs, the EEOC reaffirmed that the inducement rules do not apply to requests regarding whether an employee's spouse uses tobacco or ceases using tobacco upon completion of a wellness program or when a spouse is required to take a blood test to determine nicotine levels. These requests are allowed under GINA because they are not requests for information about the spouse's manifestation of a disease or disorder.
Employee Communications and Best Practices
Although the implementing rules include various confidentiality protections for employees, such as disclosing information only in aggregate terms, breaches may result.
Under the final rules, an employer must provide a notice to employees containing the following information in order to ensure that an employee's participation is voluntary:
- What information will be obtained;
- How it will be used;
- Who will receive it; and
- Restrictions on the disclosure of information.
If an employer's current notice does not include this information, then the employer should revise existing communications or create a new notice that is in compliance with the rules.
Best practices dictate that an employer engage in the following activities:
- Adopt and communicate clear policies;
- Train employees who handle confidential information;
- Encrypt health information; and
- Provide prompt notification of employees and their family members if a breach occurs.
The provisions of the final rules will apply prospectively to employer-sponsored wellness programs as of the first day of the first plan year that begins on or after January 1, 2017.