With wellness programs becoming increasing popular employer offerings, the Equal Employment Opportunity Commission (EEOC) issued two final rules on wellness programs May 16 to align them with existing anti-discrimination laws, including the Americans with Disabilities Act (ADA) and the Genetic Information Nondiscrimination Act (GINA).

EEOC wellness program rules

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Those laws prohibit employers from asking questions related to health or disability, unless that information is collected under a voluntary wellness program. The EEOC’s concern has been that overly generous incentives to participate would eliminate the voluntary aspect of the programs.

The new rules label programs voluntary as long as employer incentives do not exceed 30 percent of the cost of an employer’s lowest-cost self-only health coverage plan, or up to 50 percent for tobacco-cessation programs that don’t test for the presence of tobacco or nicotine. The 30 percent rule applies if the program requires a test for tobacco or nicotine.

If the employer does not provide health coverage, incentives must not exceed 30 percent of the cost of self-only coverage under the second lowest-cost silver plan offered for a 40-year-old nonsmoker in the health insurance exchange where the employer’s principal place of business is located.

The new rules also allow information to be collected from covered spouses who want to participate in a voluntary program. So an employee and spouse could receive 60 percent of the cost of self-only coverage if they both participate.

The final rules take effect in 2017 and apply to all workplace wellness programs, whether or not they are tied to an employer’s health insurance program. In the meantime, we advise employers to review their current wellness programs and identify changes needed to ensure compliance with the EEOC rulings.

Critics include the (AARP), Senate Health, Education, Labor and Pensions Committee Chairman Lamar Alexander (R-Tenn.), and the National Partnership for Women and Families.

Lamar said he will push for passage of the Preserving Employee Wellness Programs Act (H.R. 1189, S. 620) to reaffirm existing law – which allows a 50 percent discount on premiums.

Both the AARP and National Partnership for Women and Families issued statements saying that the rules force employees to either share private medical information with employers or pay appreciably more for health insurance.

Additional limitations on employers:

  • Employers can receive medical information only in aggregate form, so it doesn’t identify specific individuals unless that is necessary to administer the program.
  • Employers can’t require an employees to agree to a transfer or disclosure of medical information or to waive confidentiality protections under the ADA.

Employer responsibilities:

  • If an employee wellness program asks employees to respond to disability-related inquiries and/or undergo medical examinations, the employer must provide written notice to employees explaining what medical information will be obtained, how it will be used, who will receive it, and restrictions on disclosure.
  • Employers who don’t already provide this information may have to revise existing communications or create a new notice to comply. In addition, any medical information collected must be used to advise a worker how to improve health or to design a wellness program.

For counsel on this and other employment laws, contact Johnson Employment Law at (949) 238-8044.