On April 20, 2015, the Equal Employment Opportunity Commission (“EEOC”) announced a Notice of Proposed Rulemaking (“NPRM”) concerning amendments to the EEOC’s regulations and guidance on the Americans with Disabilities Act (“ADA”). Most importantly, the NPRM clarifies the EEOC’s position on wellness programs with respect to the ADA by stating that incentives do not automatically render a program involuntary. Specifically, the proposed changes clarify the definition of “voluntary employee health program” under the ADA, limit the extent to which employers may incentivize participation in a wellness program, and add provisions relating to confidentiality.
Employers use wellness programs as a means of promoting healthy behavior among employees and keeping health care costs down. Wellness programs may include providing workout facilities and assistance with healthy eating or quitting smoking, as well as conducting health assessments and identifying risk factors. Wellness programs are often, though not always, offered through employer-provided group health plans. The ADA generally prohibits employers from getting medical information on employees, though it allows for medical examinations and health inquiries that are part of a voluntary employee health program. A wellness program qualifies as an “employee health program” when it meets the following criteria:
- The program is reasonably designed to promote health or prevent disease.
- The program has a reasonable chance of promoting health or preventing disease.
- The program is not overly burdensome, a subterfuge for violating the ADA, or highly suspect in the method chosen to promote health or prevent disease.
- The employer must provide notice to employees that is written and understandable, describes the medical information to be obtained and the specific purposes for which the information will be used, and provides information on disclosure of the information and on protections against improper disclosure.
The NPRM further clarifies what characteristics qualify a program as “voluntary”:
- An employer cannot require employees to participate in the program.
- An employer cannot deny access to health coverage or limit coverage for non-participation.
- An employer cannot take any other adverse action against employees for non-participation or failure to achieve certain health outcomes.
The NPRM also sets a limit on the amount that an employer may incentivize employee participation in a wellness program. The proposed rule would limit incentives – either as a reward for participation or penalty for non-participation – to 30% of the total cost of employee-only coverage. The total cost includes both the employer and employee’s combined cost of coverage. Presumably, the EEOC viewed incentives greater than 30% of the total cost of employee-only coverage as coercive and not voluntary.
Finally, the NPRM adds a subsection to the ADA’s existing confidentiality requirements. The new provisions state that an employer may only receive medical information collected through the wellness program if it is in aggregate form that does not disclose, and is not reasonably likely to disclose, the identity of specific individuals except as necessary to implement the plan or as otherwise permitted under the current regulations.
As of now, the EEOC is welcoming comments from the public on the proposed changes until June 19, 2015. After the close of the comment period, the EEOC may revise the proposed changes before submitting them to the Office of Management and Budget to be published in the Federal Register. Employers may want to review the NRPM as a preview of future formalized changes to the guidelines and regulations. Employers should also keep in mind that a number of other laws affect the implementation of wellness programs and that employers do not have carte blanche to establish incentives or penalties as part of existing wellness programs.
*Patrick J. Hoban, an OSBA Certified Specialist in Labor and Employment Law, practices in all areas of labor and employment law. For more information about the legal implications of wellness programs or the EEOC’s proposed changes to the ADA’s regulations, please contact Patrick J. Hoban | pjh@zrlaw.com | 216.696.4441