EEOC Rules on Wellness Programs Further Limit Employer Design Options

04/17/2015

Attorneys:
Jennifer A. Kraft, Benjamin J. Conley

Yesterday the EEOC released proposed regulations under the Americans with Disabilities Act (ADA) addressing wellness programs offered as part of a group health plan.  As described in greater detail below, the proposed regulations impose much greater restrictions on wellness program designs than existed under the previously issued HIPAA rules.  The proposed rules do not address the EEOCfs perspective on compliance of wellness programs under the Genetic Information Nondiscrimination Act (GINA), although the rules note that those regulations are forthcoming. 

Background - Prior Law Imposed Various Limits on Wellness Programs

Prior to yesterdayfs guidance from the EEOC, there were already various rules impacting wellness programs under ERISA, the Affordable Care Act (ACA), HIPAA (Privacy and Portability), GINA, and, where applicable, state insurance regulations.  While most of those rules are well established through various formal and informal regulatory pronouncements, many plan sponsors were proceeding with caution in the wellness arena due to (a) a lack of guidance on wellness programs from the EEOC under the ADA, and (b) various recent enforcement actions from the EEOC alleging violations of the ADA and GINA for what were often otherwise compliant wellness program designs.  (For a detailed description of EEOC enforcement efforts, see our blog posts here and here.) 

The EEOCfs most recent action involved a high-profile request for a temporary restraining order against Honeywell International, Inc.  The request was denied, but the resulting fallout included Congressional inquiries into the EEOCfs enforcement efforts and left many in the business community clamoring for clearer guidelines from the EEOC regarding wellness programs and the ADA.  The EEOC finally announced its intent to issue rules, sparking intense lobbying efforts to further shape the requirements for wellness programs, including a proposal introduced in Congress that would treat HIPAA-compliant wellness programs as compliant with the ADA as well.  That proposal was not passed, however, and as described below, the EEOC did not adopt this approach. 

EEOC Rejects ADA Safe Harbor for Wellness Programs as Part of a Bona Fide Benefit Plan

Most notably, the EEOCfs proposed rules rejected the clear safe harbor contained in the ADA for wellness programs established as a part of a bona fide benefit plan.  Despite the significance of this shift, the EEOC limits its discussion of the ADA benefit plan safe harbor to a footnote.  It simply says that wellness programs are gmedical examinationsh and thus must be gvoluntary.h  The EEOC, by so doing, appears to disregard the benefit plan safe harbor under the ADA.

The courts so far disagree with the position the EEOC is trying to take here (including a Florida District Court and the Eleventh Circuit in Seff v. Broward County), and the EEOCfs proposed rules, if they become effective, could be challenged in court as being inconsistent with the ADA benefit plan safe harbor. 

EEOC Establishes Restrictions for Wellness Programs that are Similar to, But Broader than Those Imposed by HIPAA

The EEOC guidance clarifies that the ADA rules relating to wellness programs are limited to those programs involving disability-related inquiries or medical examinations.  To comply with the ADA, the new rules would require wellness programs that are offered as part of a group health plan to adhere to the following requirements:

  1. Does not require employees to participate;
  2. Does not deny coverage under any group health plan (or a particular benefit package within a group health plan) for employees who do not participate;
  3. Does not take any adverse employment action or retaliate against, interfere with, coerce, intimidate, or threaten employees who do not participate; and
  4. Provides employees with a notice containing certain information relating to the program. 

What must be included in the wellness program notice?

Under proposed EEOC rules, the wellness program sponsor must provide a notice to participants that clearly explains:

  • What medical information will be obtained;
  • How the medical information will be used;
  • Restrictions on its disclosures;
  • How the program will prevent improper disclosure of the information (including whether the program complies with HIPAA Privacy requirements).

Request for Comments and Next Steps

The proposed EEOC regulations request comments no later than June 19, 2015.  Specifically, the EEOC requests comments on:

In light of the major shift these proposed EEOC regulations would make from the current requirements, employers should determine whether these proposed rules would impact their wellness plans and consider submitting comments to the EEOC. 

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