EEOC Proposes Long-Awaited Wellness Regulations; Other Agencies Issue Wellness FAQs
EEOC Proposes Long-Awaited Wellness Regulations; Other Agencies Issue Wellness FAQs
Amendments to Regulations Under the Americans With Disabilities Act, 29 CFR Part 1630, 80 Fed. Reg. 21659 (Apr. 20, 2015); Questions and Answers about EEOC’s Notice of Proposed Rulemaking on Employer Wellness Programs; FAQs About Affordable Care Act Implementation (Part XXV) (Apr. 16, 2015); HIPAA Privacy and Security and Workplace Wellness Program FAQs; FAQs on Health Insurance Market Reforms and Wellness Programs (Apr. 16, 2015)
Visit the Health Care Reform Community on Checkpoint to join the discussion on this development (for Checkpoint subscribers to EBIA’s Health Care Reform manual).
The EEOC has proposed long-awaited regulations on how employer wellness programs may comply with the Americans with Disabilities Act (ADA). In addition, other agencies have released FAQ guidance covering related topics such as the design of health-contingent wellness programs, application of HIPAA’s privacy and security rules, and issues relating to insurers’ wellness programs. As background, the ADA permits a wellness program to include disability-related inquiries or medical examinations (e.g., health risk assessments or medical screenings) only if participation is voluntary, information is maintained according to ADA confidentiality requirements, and the information is not used to discriminate against an employee. Here is an overview of these developments.
- Proposed Regulations. Addressing the interplay between ADA requirements and the HIPAA wellness program rules (see our article), the proposed EEOC regulations would expand existing ADA regulations to provide guidance on the extent to which employers may offer incentives for participation in wellness programs with disability-related inquiries or medical examinations. [EBIA Comment: The preamble to the proposed regulations specifically rejects application of the ADA’s “bona fide benefit plan” safe harbor as a basis for permitting wellness incentives, stating that such an interpretation—adopted by the Eleventh Circuit in Seff v. Broward County (see our article)—would render the ADA’s “voluntary” exception superfluous.]— Maximum Incentive. Incentives (whether structured as rewards or penalties) may be offered under wellness programs that are part of a group health plan without making the program involuntary, so long as the total incentive available under all programs—participatory or health-contingent—does not exceed 30% of the total cost of employee-only coverage. [EBIA Comment: The EEOC has requested comments on whether regulations should address incentives under programs that are not part of a group health plan. The 30% limit permitted by the regulations is similar to the HIPAA rules for non-tobacco incentives under health-contingent wellness programs, although under HIPAA, the limit increases to 30% of the cost of family coverage when dependents participate in the program.] The higher tobacco-related incentives permitted under HIPAA are not allowed under the proposed EEOC regulations unless the program does not include a disability-related inquiry or medical examination. (An Appendix to the proposed regulations includes as an example a program in which employees are only asked about tobacco use as opposed to being tested for nicotine.)— Other Requirements for Voluntary Programs. The proposed regulations also specify that an employer may not require participation in a wellness program, deny or limit coverage under any of its group health plans or benefit packages for non-participation, or take any adverse action against employees who do not participate or fail to achieve health outcomes.— Notice Requirements. Where a wellness program is part of a group health plan, the proposed regulations would require that employees receive a notice explaining what medical information will be obtained, how it will be used, the restrictions on its disclosure, and how improper disclosures will be prevented.— Confidentiality Requirements. Medical information may only be provided to employers in aggregate terms that are unlikely to disclose an employee’s identity, with certain exceptions for employers that self-administer wellness programs. The Appendix lists legal requirements and “best practices” to protect confidentiality where a wellness program is not part of a group health plan. The Appendix also notes that when a wellness program is part of a group health plan, individually identifiable health information about wellness program participants will be protected health information (PHI) under HIPAA’s privacy and security rules and further notes that the wellness program likely will comply with the proposed regulations by complying with HIPAA. [EBIA Comment: Generally, HIPAA permits employees of a health plan sponsor to receive PHI only to perform plan administration functions and requires a firewall between employees authorized to access PHI and all other employees. The EEOC also notes that using a third party may reduce the risk that information will be shared inappropriately, with the preamble seeming to suggest that a third party acting as an employer’s agent will be independently responsible for compliance with the confidentiality requirements.]— Reasonable Design. Wellness programs, including any disability-related inquiries or medical examinations that are part of such programs, must be reasonably designed to promote health or prevent disease. (The HIPAA rules include a similar standard for health-contingent wellness programs.) To meet this standard, the program must (1) have a reasonable chance of improving health or preventing disease, (2) not be overly burdensome, (3) not be a subterfuge for violating the ADA or other employment discrimination laws, and (4) not be “highly suspect” in its chosen methods. [EBIA Comment: The Appendix includes examples of programs that will and will not meet this standard. For example, conducting a health risk assessment or biometric screening for the purpose of alerting employees to health risks would meet the standard; collecting medical information without providing follow-up information or advice would not.]— Compliance With Other Laws. Compliance with the proposed regulations will not relieve an ADA-covered entity of its obligation to comply with other federal antidiscrimination laws, such as Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act (ADEA), and Title II of the Genetic Information Nondiscrimination Act (GINA). [EBIA Comment: The preamble notes that future rulemaking will address the extent to which GINA affects an employer’s ability to condition incentives on a family member’s participation in a wellness program.]
- Joint FAQs on Wellness Programs. The IRS, DOL, and HHS have jointly issued two FAQs on wellness program issues (Affordable Care Act Implementation FAQs Part XXV). The first addresses the “reasonable design” requirement for health-contingent programs under the HIPAA rules, providing examples that are similar to those in the EEOC Appendix. The second explains that compliance with the HIPAA rules is not determinative of a wellness program’s compliance with other state or federal laws.
- HHS FAQs on Wellness and HIPAA. HHS has also issued two FAQs on how the HIPAA privacy, security, and breach notification rules apply to wellness programs. The FAQs explain that these rules will apply when the program is part of a group health plan and describe how HIPAA restricts the circumstances under which an employer may have access to information about program participants without their written authorization. In separate FAQs, HHS addresses insurers’ wellness programs under health care reform, including application of the guaranteed-availability rules and rating limitations.
EBIA Comment: The proposed regulations—recommended reading for anyone who works with wellness programs—provide much-needed guidance on how wellness programs can comply with the ADA. Although the EEOC has indicated its intent to provide as much consistency as possible with the HIPAA rules, there are some key differences. For example, the proposed regulations’ notice, maximum incentive, and reasonable design requirements apply to both participatory and health-contingent wellness programs, whereas participatory programs are exempt from comparable requirements under HIPAA. (Participatory programs are those in which the conditions for receiving a reward are not based on satisfaction of a health standard.) As explained in EEOC Q&As, employers are not required to comply with the proposed regulations, but it is unlikely that the EEOC or a court would conclude that an employer violated the ADA if it complied with the rules before final regulations are issued. The Q&As also note that some provisions of the regulations are already required under the ADA—for example, employers must provide reasonable accommodations that allow employees with disabilities to participate in wellness programs. Meanwhile, the EEOC has requested comments on several issues, such as whether employees should be able to provide a medical professional’s certification instead of disclosing medical information, whether employees should have to provide written confirmation that their participation is voluntary, and whether to prohibit incentives that cause coverage to be unaffordable under health care reform. For more information, see EBIA’s Group Health Plan Mandates manual at Section XX.F.1.c (“ADA Considerations Regarding Wellness and Disease-Management Programs”) and EBIA’s Consumer-Driven Health Care manual at Section VI (“Wellness and Disease-Management Programs”). See also EBIA’s Health Care Reform manual at Sections XIII.C (“Health Status Nondiscrimination and Wellness Programs”) and XIV.E (“Fair Health Insurance Premium Requirement (Rating Limitations)—Applicable Only in the Individual and Small Group Markets”); EBIA’s HIPAA Portability, Privacy & Security manual at Sections XI.I (“Wellness Programs Must Meet Specific Requirements”), XVIII.B (“Guaranteed-Availability Rules”), and XXIII.C (“Sharing PHI and Electronic PHI With Plan Sponsors”); and EBIA’s Self-Insured Health Plans manual at Section XIII.D.2 (“Health Status Nondiscrimination and Wellness Programs”). You may also be interested in our May 28, 2015 web seminar on wellness programs and the implication of these proposed rules, “New EEOC Guidance for Wellness Program Incentives: Design and Administrative Impacts for Employers and Administrators.”
Contributing Editors: EBIA Staff.