Complying With New EEOC Regulations Governing Employer Wellness Programs

Under the Affordable Care Act, employers received new incentives to offer wellness programs to their employees. Wellness programs, such as reimbursing gym memberships or incentivizing smoking cessation programs, keep employees healthy, reducing medical costs, absenteeism, and health-related productivity losses to the benefit of both employer and employee.  On May 17, 2016, EEOC issued new regulations (“Final Rule”) on how wellness programs must comply with the Americans with Disabilities Act (“ADA”) and Genetic Information Nondiscrimination Act (“GINA).  The Final Rule is effective immediately, but employers have until the first day of an employer’s plan year beginning on or after January 1, 2017 to comply with the amended notice and incentive provisions.

The ADA’s prohibits employers from making disability-related inquiries or requiring medical examinations, exception for employee health programs. The Final Rule clarifies this exception in three ways:

(1) Wellness programs must be “reasonably designed to promote health or prevent disease.” For example, health screenings must provide results, follow-up information or health advice. Participants may not be penalized solely for failing to meet a particular health outcome.

(2) The program must be voluntary. Employers may not mandate participation, deny coverage or access to any health benefits or take an adverse employment action against non-participants; and

(3) Incentives (rewards or penalties) cannot exceed 30% of the total cost of self-only coverage (including both employer and employee contributions). The Final Rule explains how this 30% calculation is to be made.

Furthermore, prior to requiring an employee undergo a medical examination or fill out a medical form, the employer must give notice as to the type of medical information to be obtained, the purpose for such information, restrictions on its disclosure, and methods being used to prevent improper disclosure.

Finally, the Final Rule reiterates existing confidentiality protections, including that except when necessary for program administration, employee medical information or history may be provided to an employer in aggregate form only in a manner that does not disclose, or is not reasonably likely to disclose, the identity of any employee, and that an employer may not compel employees to waive ADA confidentiality protections.

Our next post on this matter will look at the regulations governing wellness programs as they relate to the Genetic Information Nondiscrimination Act (“GINA”).

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