July 27, 2015

On April 13, 2015, the Equal Employment Opportunity Commission (EEOC) issued proposed new rules regarding employee wellness plans and how employers may promote employee participation through incentives while remaining compliant under the Americans with Disabilities Act (ADA).  See Amendments to Regulations under the Americans with Disabilities Act, 80 Fed. Reg. 21659 (April 20, 2015).

The ADA allows employers to conduct voluntary medical examinations and inquiries when they are part of employee wellness program that takes place at work.  The proposed rules aim to clarify the term "voluntary," as it pertains to the ADA, the Affordable Care Act (ACA), and the Health Insurance Portability and Accountability Act of 1996 (HIPAA).

Under the proposed rules, an employee wellness program that includes disability-related inquiries or medical examinations is compliant, if it: (1) promotes health; (2) is voluntary; (3) provides notice to the employee detailing what medical information will be obtained; (4) keeps any medical information gathered confidential; (5) limits incentives offered to 30 percent of the total employee cost of employee-only coverage; and (6) provides reasonable accommodations to any disabled employees in order for them participate in the wellness program.

The proposed rules suggest that a program will be considered to promote employee health if it has a reasonable chance of preventing disease or improving employee health, is not overly burdensome, and is not an attempt to circumvent the ADA or other federal employment discrimination laws.  For participation to be "voluntary," the EEOC prohibits arrangements where employees are required to participate, or if employees would have their health coverage denied or limited if they choose not to participate.  Further, employers may not retaliate against the employee or take any other adverse action, including coercion or intimidation, for the employee not participating in the wellness plan.

Employers may, however, offer incentives to encourage participation.  "Incentives" could be either positive incentives (like financial rewards or prizes) or penalties, so long as the total amount of the incentive is less than 30 percent of the total cost to the employee for single health coverage. As an example, if a group health plan had a total annual employee premium contribution of $5,000, and a wellness program offered an opportunity for the employee to receive up to $1,500 for completing a cardiovascular health program, this plan would be compliant with the new rules because the incentives were less than 30 percent of the total cost of coverage.  However, if that wellness program also offered $250 for taking a nutrition class, it would no longer be compliant because the total reward possible for participants would be $1,750; more than 30 percent of the total cost of employee-only coverage.

If the wellness program is offered as part of a group health plan, any individually identifiable information that gets collected must be treated as private health information under HIPAA. The employer is required to provide notice to the employee that explains what information was obtained, how it will be used, who will receive it, and what sorts of restrictions there are on disclosure. Additionally, the information must be kept confidential, per HIPAA regulations.

Please note that these proposed rules would only apply to employee wellness programs that include disability-related inquiries or medical examinations. Programs that do not require or rely on disability-related questions or medical examinations would not be subject to these rules.

Additionally, in order to be compliant with the ADA, regardless of whether the wellness program includes disability-related inquiries or medical examinations, employers should make sure they are providing reasonable accommodations to their disabled employees in order for those employees to be able to participate in any wellness programs and receive any incentives that are being offered. This means, for example, that if the wellness program is offering a nutrition class employees can attend, an employer should provide a sign language interpreter for the class in order to accommodate any deaf employee that requests an interpreter, as long as there is no undue hardship on the employer. In some cases, the Affordable Care Act might require the employee to offer a waiver to some employees - for example, allowing a pregnant employee to collect an incentive even if she cannot participate in a group weight-loss challenge.

The EEOC urges employers to follow the proposal's framework and ensure they are not (a) requiring employees to participate in employee wellness programs, (b) limiting or denying health insurance to those that are not participating; or (c) taking retaliatory and adverse action against employees that are not participating.
Ahlers & Cooney's Labor & Employment Practice Group

About Ahlers & Cooney's Client Alerts

Our Client Alerts are intended to provide occasional general comments on new developments in Federal and State law and regulations which we believe might be of interest to our clients. The Client Alerts should not be considered opinions of Ahlers & Cooney, P.C., and are not intended to provide legal advice as a substitute for seeking professional counsel. Readers should not under any circumstance act upon the information in this publication without seeking specific professional counsel. Ahlers & Cooney will be pleased to provide additional details regarding any article upon request. Additional copies of this Client Alert may be obtained by contacting any attorney in the Firm or by visiting the Firm's website at www.ahlerslaw.com.
©2015 Ahlers & Cooney, P.C. All Rights Reserved.
NOTICE TO THE PUBLIC The determination of the need for legal services and the choice of a lawyer are extremely important decisions and should not be based solely upon advertisements or self-proclaimed expertise. This disclosure is required by rule of the Supreme Court of Iowa. Memberships and offices in legal fraternities and legal societies, technical and professional licenses, and memberships in scientific, technical and professional associations and societies of law or field of practice does not mean that a lawyer is a specialist or expert in a field of law, nor does it mean that such lawyer is necessarily any more expert or competent than any other lawyer. All potential clients are urged to make their own independent investigation and evaluation of any lawyer being considered. This notice is required by rule of the Supreme Court of Iowa.

Beenken, Katherine


« Back