EEOC Issues Proposed ADA Regulations Regarding Employee Wellness Programs

Late last week, the EEOC issued new proposed rules for U.S. employers seeking to implement wellness programs with incentives for their employees. View the EEOC’s proposed regulations. These new proposed rules seek to reconcile two conflicting provisions in the law. The EEOC is seeking public comment on the proposed rules until June 19th. Wellness programs have been around for a long time. These programs are generally either participatory programs that encourage participation but do not offer rewards, or health contingency plans that offer some kind of reward for participation or achieving certain health goals. The Affordable Care Act (“ACA”) and the Health Insurance Portability and Accountability Act (“HIPAA”) allow for awards that do “not exceed 30 percent cost of the coverage in which an employee or individual or any dependents are enrolled.” However, the EEOC, through the U.S. Department of Justice, has filed lawsuits against employers, alleging that their plans were in violation of the Americans with Disabilities Act (“ADA”) and the Genetic Information Non-Discrimination Act (“GINA”) because they sought employees’ medical information and used that information to provide rewards and incentives for participants in the programs, or, in some cases, what the EEOC considered “penalties.” Of course, this caused much confusion, not to mention litigation. To address this inconsistency, Congress held hearings in January, 2015 and introduced a bipartisan bill in March, 2015, called “The Preserving Employee Wellness Programs Act.” This proposed law provides, in part, that if an employer is offering a wellness program that is in compliance with the ACA, it is not in violation of the ADA or GINA merely “because such program provides any amount or type of reward.” Employers would still have to provide an alternative for disabled employees who cannot qualify for the program. Importantly, if this law passes, it will apply retroactively as of March 23, 2010. The new EEOC proposed rules for wellness programs permit wellness plans that ask medical questions, as long as the plans “ha[ve] a reasonable chance of improving health of, or preventing disease in, participating employees, and [are] not overly burdensome” and aren’t a means of getting around the ADA, HIPAA or GINA. However, they do not allow employers to obtain information regarding individual employees and require that certain notices be issued regarding the content and use of information that is gathered for the wellness program. The proposed regulations do allow for incentives as long as the ADA, HIPAA and GINA are followed, but also continue to require compliance with all anti-discrimination laws. It is important to note that while the EEOC proposed rules resolve some inconsistencies in the law, they do not answer all questions relating to the regulation of wellness plans. For example, the Treasury Dept., Health and Human Services Dept. and Labor Dept. have all issued their own guidelines, which are different from the EEOC’s proposed rules with regard to certain incentives, such as tobacco-related programs. Therefore, until further notice, prudent employers should be very careful and work with good lawyers when designing and implementing wellness programs to ensure compliance with all applicable, and sometimes conflicting, laws. If you have any questions or need assistance with this or any other legal issue, please do not hesitate to call the ScottHulse Labor & Employment team. This Information is provided as a courtesy – not as legal advice. Please know that we are writing you and raising the above issues as a courtesy and for informational purposes only. It is not intended as a substitute for legal advice concerning a particular situation that may be affecting your business.