Workplace wellness programs have been a complex and controversial topic in recent years with Equal Employment Opportunity Commission (EEOC) lawsuits, proposed rules, and now final rules. On May 17, 2016, the EEOC issued a final rule (the “Rule”) to amend the regulations and guidance implementing Title I of the Americans with Disabilities Act (ADA) as they relate to employer wellness programs.
EEOC Final Rule Requires Wellness Plans to be “Voluntary”
Wellness programs commonly gather health information through voluntary health risk assessments or biometric screenings that include medical examinations. In order to comply with the ADA, according to the Rule, any workplace wellness program that asks employees to respond to disability-related inquiries or to undergo medical examination or questioning must ensure that:
- the program is reasonably designed to promote health and prevent disease;
- the program is voluntary;
- employee medical information is kept confidential; and that
- financial incentives, whether in the form or a reward or penalty, are limited.
These requirements apply whenever employee health information is collected, without regard for whether the wellness program stands alone or is linked to an employer group health plan.
Voluntary Status Requires Employee Notice – Sample Notice Now Available
Under the Rule, a wellness program will not be deemed “voluntary” (and therefore compliant with the ADA), unless employees receive a notice describing the health information to be collected, how it will be used, who will receive it, and how it will be kept confidential. On June 16, 2016, the EEOC issued a sample notice that may be used for this purpose. The sample notice can be found at https://www.eeoc.gov/laws/regulations/ada-wellness-notice.cfm.
Employers are not required to use the precise language of the sample, and employers who choose to use the sample notice will need to tailor it to their specific programs. Any employer considering adopting the EEOC sample notice should be aware that the sample notice contains obligations beyond the notice requirements. For example, the notice states that “all medical information obtained through the wellness program will be maintained separate from your personnel records, information stored electronically will be encrypted,” “[a]ppropriate precautions” will be taken to avoid a data breach, and employees will be notified immediately in the event of a data breach.
The notice requirement takes effect as of the first day of the plan year beginning on or after January 1, 2017 for the health plan the employer uses to calculate any incentives it offers as part of the wellness program. While the Rule does not require that employees receive the notice at a specific time, they must receive it before they provide any health information and with enough time to decide whether to participate in the program.
The notice can be provided in any format that will effectively reach the employees such as hard copy or email, and it should include a clear subject line identifying the information (e.g., “Notice Concerning Employee Wellness Program”). Employers may have their wellness program providers transmit the notice; however, employers are still responsible for ensuring that their employees receive it.
Employers that are already providing a notice under the Health Insurance Portability and Accountability Act (HIPAA) that meets the above requirements may not have to provide a separate notice under the ADA. However, employers should carefully review their notice to ensure compliance.
Misalignment of Rule with the Wellness Program Rules of Other Agencies
Members of Congress and several employer trade groups have been critical of the Rule, voicing concern that it is inconsistent in several aspects with final wellness program rules issued jointly by three other federal agencies in connection with the Affordable Care Act (ACA).
For example, while the ACA wellness rules generally limit financial incentives to 30% of cost of coverage in which an employee is enrolled (family or single), the EEOC final rule limits the incentive amount to 30% of the cost of self-only coverage.
The EEOC Rule also fails to align the treatment of tobacco cessation programs with those under the ACA wellness program rules, which allow incentives of up to 50% for any tobacco cessation programs. The Rule permits a 50% incentive (with respect to the cost of self-only coverage) if a wellness program merely asks employees whether they use tobacco (without regard to whether an employee ceases using tobacco by the end of the program). If an employer requires any biometric screening or other medical procedure that tests for the physical presence of nicotine or tobacco, however, the Rule’s 30% incentive limit applies.
Review Existing Wellness Programs for ADA Compliance
At this time, employers should review current wellness program offerings to determine what changes may need to be made to ensure compliance with the EEOC Rule, including the new notice requirement.
Davis & Kuelthau attorneys are available to assist you in reviewing your workplace wellness program to evaluate compliance with the ADA, ACA, and other laws, and to provide insight into any potential risks of liability that specific workplace wellness practices may have. If you have any questions regarding this article, please contact your Davis & Kuelthau attorney.