Competing Wellness Rules Pose Compliance Challenges

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By Katarina E. Klenner

July 19 — New workplace wellness regulations that address participation incentive limits under disability and genetic anti-discrimination laws are inconsistent with overlapping federal laws, so employers must scrutinize their programs closely to ensure compliance.

Agency officials examined the scope of the Equal Employment Opportunity Commission's 2016 regulations under Title I of the Americans with Disabilities Act and Title II of the Genetic Information Nondiscrimination Act during a July 14 webinar sponsored by the American Bar Association.

They also described how those rules interact with 2013 regulations issued by the departments of Health and Human Services, Labor and Treasury that implement the nondiscrimination provisions of the Health Insurance Portability and Accountability Act, as amended by the Affordable Care Act.

Participatory Versus Health-Contingent

HIPAA's nondiscrimination provisions, which generally prohibit group health plans from discriminating against participants based on a health factor, provide a wellness program exception that permits premium discounts, or rebates or modifications to cost sharing, for employees who adhere to health promotion and disease prevention programs.

Those provisions discuss participatory and health-contingent wellness programs but limit incentives only under health-contingent wellness programs, said Joyce Walker-Jones, senior attorney adviser for the EEOC's ADA/GINA Policy Division.

Health-contingent wellness programs require workers to satisfy a standard related to a health factor, such as lowering blood pressure, to earn a reward or avoid a penalty. But participatory wellness programs, such as attending a smoking cessation class, either don't provide a reward or don't include conditions for obtaining a reward for satisfying a standard related to a health factor, she said.

But the new ADA regulations apply to all employer-sponsored wellness programs that include requests for health information, including those offered through a group health plan and those not tied to a group health plan, Walker-Jones said. According to the final rule, limits on incentives prevent economic coercion that could render provision of medical information involuntary.

The new ADA regulations provide that wellness programs including medical exams or disability-related inquiries are voluntary if the employer's incentive doesn't exceed 30 percent of the total cost of employee-only coverage under the relevant health plan, said Kerry Leibig, a senior attorney adviser in EEOC's Office of Legal Counsel.

Incentive Limits Not Uniform

Limits on incentives available to employees under the ADA mirror limits on incentives for employees' spouses under GINA. Under the GINA rule, inducements for spouses' current or past health status information may not exceed 30 percent of the total cost of employee-only coverage, Leibig said, noting that “current or past health status information” means information about spouses' manifestation of diseases or disorders.

But no inducements are permitted in exchange for health status information of employees' children or for the genetic information of spouses or children, she said.

However, under the ACA, employers may offer workers as much as 50 percent off health insurance costs for participating in a health-contingent wellness program if the program is designed to prevent or reduce tobacco use, Walker-Jones said.

According to the panelists, there are five key differences between the ADA/GINA and ACA regulations:

  •  Under the ADA and GINA, all wellness programs that obtain medical information must be reasonably designed to promote health or prevent disease, whereas under HIPAA and the ACA, only health-contingent programs must be reasonably designed to do so.
  •  Incentive limits under the EEOC rules apply to participatory and health-contingent wellness programs, whereas incentive limits under HIPAA and the ACA apply to health-contingent wellness programs but not to participatory programs.
  •  EEOC rules apply to all wellness programs that include requests for health information in the form of questions or medical exams, whether or not they're part of a group health plan.
  •  Notice required under HIPAA for wellness programs may not satisfy the ADA notice requirements.
  •  The GINA rule doesn't allow incentives in exchange for current or past health status information of children.

A wellness program is “reasonably designed to promote health or prevent disease” if it has a reasonable chance of improving health or preventing disease in participants. It also must not be overly burdensome, highly suspect in its chosen method, or a subterfuge to evade the ADA or other EEO laws, Walker-Jones said.

Rule Defines ‘Voluntary.'

In addition to setting limits on inducements, the new ADA rule explains that a program that seeks health information is “voluntary” when it provides written notice clearly informing employees what medical information will be obtained, how it will be used, who will receive it and how it will be kept confidential. A sample notice the EEOC issued June 16 is available on the agency's website, Walker-Jones said.

In addition to providing notice, an employer must not require employees to participate; deny access to, or limit, health coverage for nonparticipation; or take adverse employment action or retaliate against, interfere with, coerce, intimidate or threaten employees, she said.

ADA Safe Harbor: ‘Most Controversial.'

Some consider the ADA's insurance “safe harbor” provision (42 U.S.C. § 12201(c)) to be the “most controversial,” and the EEOC's final rule clarifies that the safe harbor provision doesn't apply to wellness programs, Walker-Jones said.

The EEOC has appealed a district court ruling that the safe harbor provision shields a Wisconsin plastics manufacturer from liability in a lawsuit alleging the employer's wellness plan violated the ADA by making employee participation a condition for receiving group health benefits ( EEOC v. Flambeau, Inc., 7th Cir., No. 16-1402, appeal filed 2/25/16 ).

The safe harbor provision provides an exemption for administering the terms of a bona fide benefit plan “that are based on underwriting risks, classifying risks, or administering such risks” and that aren't inconsistent with state law.

“If the Seventh Circuit affirms, it would mean that our final rule would not apply to group health plans in that circuit,” Walker-Jones said. But even in the Seventh Circuit, the ADA rule would “continue to apply to wellness programs that are offered outside of a group health plan that include disability-related inquiries and/or medical examinations.”

“We'll have to see whether or not the Supreme Court takes up this issue,” she said.

Common Questions Addressed

Panelists highlighted a few questions that have been raised about the EEOC rules.

One common query is whether employers have to offer wellness programs to all employees, Walker-Jones said.

“One of our Q&As had initially suggested that, and we have revised the Q&A to say no, an employer does not have to offer wellness programs to all employees, as long as they're not denying access or not offering certain employees wellness programs on a prohibited basis,” such as race, sex or national origin, she said. “If they only offer a wellness program to employees who are enrolled in health plans, they don't have to offer the wellness program to employees who are not enrolled in a health plan.”

Another question pertains to raffles and how employers should value the prize to be earned, such as points or entry in a pool for a prize. The short answer is the employer “has to value what the maximum incentive a person can earn if that incentive is based on answering disability-related questions or submitting to a medical exam,” Walker-Jones said.

“We've been asked questions about wellness programs that offer a variety of components,” Walker-Jones said. For example, if an employee chooses four of seven components that don't ask disability-related questions or involve medical exams, the program doesn't have to comply with the ADA rule.

However, if incentives for components are “uneven and stilted” such that an individual gets a higher incentive for responding to disability-related questions or for submitting to a medical exam, then “we're going to look at those kinds of programs more closely to see if they're just trying to get around the rule,” she said.

Leibig said the main question she has received specific to GINA has to do with employers that want to offer adult children smoking-cessation programs.

“The GINA rule only regulates programs that ask for genetic information, and asking a family member whether they smoke is not asking them about the manifestation of disease or disorder, and, therefore, it's not genetic information,” she said. “So the limits on inducements under GINA do not apply to smoking-cessation programs, even if they're offered to both spouses and children.”

“It's possible that down the road we may be offering more technical assistance to answer some of these questions,” Walker-Jones said.

Where to Begin

On how to approach complications of complying with competing legal regimes, Karin Feldman, benefits and social insurance policy specialist at the AFL-CIO, said that “as people create wellness programs, look at the existing programs. Weaving your way through the various rules will be more of a challenge, and, obviously, depending on the nature of the inquiry and the design of the program, you're going to have different requirements, some overlapping, some not. I haven't even been able to create a clear path. But I think that's the challenge for all of us as we're trying to deal with these brand new rules.”

To contact the reporter on this story: Katarina E. Klenner in Washington at

To contact the editor responsible for this story: Heather Bodell at

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