The Equal Employment Opportunity Commission (EEOC) has published a proposed rule governing wellness programs established by entities subject to the Americans with Disabilities Act (ADA).1 The proposed rule would eliminate some of the prior uncertainties surrounding the legitimacy of wellness programs and provide boundaries for designing these programs. The new rules also set standards that in some respects are stricter than those set by the Departments of Labor, Treasury, and Health and Human Services (HHS) — collectively, the “Departments” — in their wellness program rules implementing the Health Insurance Portability and Accountability Act (HIPAA).2 When the EEOC’s final wellness rule is published, employers that offer covered wellness programs will need to comply with it in addition to the HIPAA rules.
The proposed rule would provide clear guidance on many wellness programs, including programs that are intended to encourage behavior to improve employee health in general, as well as wellness programs that impose penalties for nonparticipation in wellness programs. The EEOC is accepting comments on the proposed rule until June 19, 2015. This Update describes highlights of the EEOC proposal and recommends a course of action for employers with wellness programs.
The EEOC proposed rules will affect employers with a variety of health and wellness programs. Employers that use any or all of the approaches noted in the box below, as well as other similar health promotion programs, should review the existing HIPAA rules in addition to the EEOC’s proposed rule to determine whether their health programs would be affected.
Wellness programs vary considerably, and some offer financial or other incentives to encourage participation. Common designs include the following:
Generally, the proposed rule would require wellness programs to be reasonably designed, provide a reasonable accommodation to individuals with a disability, and keep medical information confidential. Details about each of these requirements follow:
Under the EEOC proposal, any wellness program that includes disability-related inquiries or medical examinations, including questions or exams that are part of a health risk assessment, must be voluntary. This means that the employer or plan sponsor:
The proposed standards would appear to prohibit strategies that prevent employees/participants from enrolling in specific benefit packages if they do not participate in the wellness program (sometimes known as “gateway plans”).
Employers may want to consider submitting comments to the EEOC on the proposed rule. Comments are due by June 19, 2015.
In information accompanying the proposed rule, the EEOC states that employers and other covered entities are not required to comply with the proposed rule, but may do so.5 The statement points out that some of the provisions in the proposed rule already are required by existing ADA regulations. These include not requiring employees to participate in wellness programs and not denying health coverage or taking any adverse action against employees who do not participate. The EEOC has previously filed lawsuits against employers based on whether the program is “voluntary.” Consequently, in light of the risk of litigation, employers may want to review with legal counsel whether to make any changes in their wellness program while this rulemaking is underway.
1 The proposed rule was published in the April 20, 2015 Federal Register.
2 See Sibson's July 11, 2013 Capital Checkup, "New Rules for Wellness Programs".
3 These same standards apply under the HIPAA wellness program rules, as the Departments noted in Answers to Frequently Asked Questions (FAQs) that were released on the same day as the EEOC proposal and available on the DOL website.
4 Privacy issues were also emphasized in answers to FAQs issued by the HHS Office for Civil Rights, the agency responsible for enforcing the HIPAA privacy and security rules and available on the HHS website.
5 This document, Questions and Answers about EEOC’s Notice of Proposed Rulemaking on Employer Wellness Programs, is available on the EEOC website.
Update is Sibson Consulting’s electronic newsletter summarizing compliance news. Update is for informational purposes only and should not be construed as legal advice. It is not intended to provide guidance on current laws or pending legislation. On all issues involving the interpretation or application of laws and regulations, plan sponsors should rely on their attorneys for legal advice.
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