EEOC Issues Proposed Rule Regarding ADA Regulations on Employer Wellness Programs

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By Lisa Nagele-Piazza

April 16 — The Equal Employment Opportunity Commission plans to update its regulations implementing the Americans with Disabilities Act as they relate to employer wellness programs, according to a proposed rule issued April 16 and published in the April 20 Federal Register.

 

The ADA generally prohibits employers from making disability-related inquiries or requiring medical examinations, but it provides an exception that permits voluntary medical examinations as part of an employee health program, the EEOC said.

 

The proposal would provide guidance on the extent to which the ADA's employment provisions permit employers to offer incentives to employees to participate in wellness programs. It also would add language to 29 C.F.R. § 1630.14(d) to address whether employers that comply with regulations implementing the Health Insurance Portability and Accountability Act, as amended by the Affordable Care Act, will also be in compliance with the ADA.

 

“Although it is clear that compliance with the standards in HIPAA is not determinative of compliance with the ADA, the Commission believes that it has a responsibility to interpret the ADA in a manner that reflects both the ADA’s goal of limiting employer access to medical information and HIPAA’s and the Affordable Care Act’s provisions promoting wellness programs,” the EEOC said.

 

Wellness Program Incentives and ADA

The proposed rule would state that an “employee health program, including any disability-related inquiries and medical examinations that are part of such a program, must be reasonably designed to promote health or prevent disease.” For a program to be “voluntary,” an employer may not require an employee to participate in the program and may not deny coverage for non-participation or limit the extent of such coverage.

 

The EEOC proposes that the use of incentives in the form of a reward or penalty won't render the program involuntary if the maximum allowable incentive doesn't exceed 30 percent of the total cost of employee-only coverage.

Employee health programs must comply with the ADA as well as other anti-discrimination laws, the EEOC said. Wellness programs that are part of group health plans must also comply with HIPAA requirements, it added.

 

Although HIPAA generally prohibits discrimination against participants in terms of premiums, benefits, or eligibility based on health factors, it provides an exception that permits financial incentives in connection with health promotion and disease prevention programs.

 

Thus, many employers offer “wellness programs” in order to improve employees’ health and reduce health care costs, the EEOC explained. These programs include nutrition classes, exercise facilities, weight loss programs and smoking cessation programs, it said.

Wellness programs may also include health risk assessments and biometric screenings that measure health risk factors like body weight, cholesterol and blood pressure levels, the EEOC said. Some employers offer incentives to encourage employees to participate in a wellness program, and others offer incentives based on whether employees achieve certain health outcomes.

 

Under the ADA, employers are only permitted to make health-related inquires or require employees to undergo medical examinations in limited situations, such as when they are voluntary and part of an employee health program.

In 2014, the EEOC filed ADA lawsuits challenging two Wisconsin companies' employee wellness programs. In EEOC v. Orion Energy Systems Inc., E.D. Wis., No. 14-1019, the agency argued that a company violated the ADA by financially penalizing and then firing an employee because she declined to participate in a company wellness program . In EEOC v. Flambeau, Inc., W.D. Wis., No. 3:14-cv-00638, the agency claimed a company violated the act by forcing a worker to pay for his medical insurance coverage because he did not participate in a wellness program.

Also in 2014, the EEOC unsuccessfully sought a preliminary injunction against Honeywell International Inc. while it investigated ADA charges against it.

 

The agency was criticized by employers and the congressional GOP for challenging companies' wellness programs before it issued ADA guidance addressing such programs.

The proposed rule offers guidance to both employers and employees about how wellness programs permitted under HIPAA can comply with the ADA. It states that wellness programs are permitted under the ADA, but they may not be used to discriminate based on disability.

 

The proposed rule explains what an employee health program is, what incentives employers may offer and what requirements apply regarding notice and confidentiality of medical information that is obtained as part of a voluntary wellness program.

 

Comments are due 60 days from the date of publication. They may be sent to http://www.regulations.gov, by fax to (202) 663-4114, or by mail to Bernadette B. Wilson, Acting Executive Officer, Executive Secretariat, U.S. Equal Employment Opportunity Commission, 131 M Street, NE, Washington, DC 20507.

 

By Lisa Nagele-Piazza

To contact the reporter on this story: Lisa Nagele-Piazza in Washington at lnagele@bna.com

To contact the editor responsible for this story: Susan J. McGolrick at smcgolrick@bna.com

Text of the EEOC's proposed rule is available at http://op.bna.com/dlrcases.nsf/r?Open=lnae-9vmnu7.