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On April 20, 2015, the Equal Employment Opportunity Commission (EEOC) published its Notice of Proposed Rule Making (NPRM) describing how the ADA applies to employer wellness programs that are part of a group health plan.   How Title II of the Genetic Information Nondiscrimination Act (GINA) impacts an employer’s ability to condition incentives on a family member’s participation in a wellness program is not addressed in the proposed rule and will be addressed at a later date.  Public comments can be submitted until Friday, June 19th.  The EEOC has also published a fact sheet for small businesses and a question and answer document for the general public, both posted on the EEOC’s website. To view the EEOC's proposed rule, please click here.

Workplace wellness programs sometimes use health risk assessments and biometric screenings to determine employees’ health risk factors, such as body weight and cholesterol, blood glucose, and blood pressure levels.  These programs often offer financial and other incentives for employees who participate or achieve certain health outcomes.  Such inquires and exams are allowable under the ADA if they are voluntary and part of an employee health program.

The NPRM requirement to provide notice, and limitations on the use of incentives 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. 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.

Wellness programs may not be used to discriminate based on disability.  The NPRM explains that under the ADA, companies may offer incentives of up to 30% of the total cost of employee-only coverage in connection with wellness programs.  These programs can include medical examinations or questions about employees’ health.  Medical information collected as part of a wellness program may be disclosed to employers only in aggregate form that does not reveal the employee’s identity; it must be kept confidential in accordance with ADA requirements. Employer’s 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.  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.

The NPRM requires the employer to provide employees a notice that describes what medical information will be collected, with whom it would be shared, how it would be used and how it would be kept confidential. The NPRM includes interpretive guidance that will be published along with the final rule.

Employers should find the proposed rule beneficial in designing and implementing wellness programs as part of a group health plan. The proposed rule makes clear that incentives of up to 30% 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. The NPRM also makes it clear that lawful incentives include both rewards employers may offer for employee participation and penalties for non-participation.

Congressional republicans have 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 March 2nd by Lamar Alexander (R-Ten) in the Senate and Jon Kline (R-Min) in the House, it would reaffirm the right of employers under the law to offer wellness programs that are tied to a financial reward.  The legislation would reaffirm existing law and clarify that an employee’s spouse may participate in the program as well.  It also provides employees up to 180 days to request and complete an alternative wellness program if it is medically inadvisable or unreasonably difficult for an employee to participate in the original employee wellness program.

In November of 2014, a federal judge in Minnesota refused the EEOC’s request for a temporary restraining order against Honeywell International, Inc. which the EEOC accused of unlawfully penalizing employees who declined to undergo biometric testing. This high profile case has already garnered much media attention as employers are struggling to figure out exactly what are the lawful contours of employee wellness programs that include incentives. The EEOC proposed rule assists employers in this struggle.

The Minnesota District Court case, the proposed federal legislation, the EEOC’s final rule on wellness programs, and the accompanying interpretive guidelines will have to be monitored to ensure employer compliance with this evolving area of the law.