Recently, the U.S. District Court for the District of Columbia ruled that the EEOC’s 2016 ADA and GINA wellness regulations were subjective, leaving employers uncertain to what extent they can use wellness incentives. Read on to learn more.
Employers designing 2019 wellness programs must decide what approach to take on program incentives without Equal Employment Opportunity Commission (EEOC) guidance on the Americans with Disabilities Act (ADA) and the Genetic Information Nondiscrimination Act (GINA).
The commission has a Notice of Proposed Rulemaking tentatively slated for January 2019. Last year, the U.S. District Court for the District of Columbia decided the commission’s 2016 ADA and GINA wellness regulations were arbitrary and vacated them, effective Jan. 1, 2019.
Employers again are “in the uncomfortable position of not knowing with certainty whether and to what extent they can use incentives as part of a wellness program that involves medical examinations, disability-related inquiries and/or genetic information,” wrote Lynne Wakefield and Emily Zimmer, attorneys with K&L Gates in Charlotte, N.C., in a joint statement.
The Society for Human Resource Management (SHRM) “has long advocated for proposals that will ensure consistency between the wellness rules that the EEOC has jurisdiction over, the ADA and GINA, with those provided under the ACA [Affordable Care Act],” said Nancy Hammer, SHRM vice president, regulatory affairs and judicial counsel. “While EEOC’s 2016 rulemaking effort adopted the ACA’s 30 percent incentive, it added new requirements that would have discouraged employers from providing wellness options for employees. We are hopeful that the EEOC is able to revisit the rules to ensure both consistency with existing rules and flexibility to encourage employers to adopt innovative programs to improve employee health and reduce costs.”
ADA and GINA Requirements
Employers have long sought guidance over whether and when wellness program incentives—rewards or penalties for participating in biometric screenings and health risk assessments connected with the programs—comply with the ADA and GINA.
The ADA prohibits employers from conducting medical examinations and collecting employee medical history as part of an employee health program unless the employee’s participation is voluntary, noted Ann Caresani, an attorney with Tucker Ellis in Cleveland and Columbus, Ohio.
GINA prohibits employers from requesting, requiring or purchasing genetic information from employees or their family members, unless the information is provided voluntarily.
The EEOC in 2000 asserted that for a wellness program to be voluntary, employers could not condition the receipt of incentives on the employee’s disclosure of ADA- or GINA-protected information.
However, in 2016, the commission issued regulations providing that the use of a penalty or incentive of up to 30 percent of the cost of self-only coverage would not render involuntary a wellness program that seeks the disclosure of ADA-protected information. The regulations also permitted employers to offer incentives of up to 30 percent of the cost of self-only coverage for disclosure of information, in accordance with a wellness program, about the manifestation of a spouse’s diseases or disorder, Caresani said.
Wakefield and Zimmer noted that the EEOC’s 2016 wellness regulations applied to wellness programs that provided incentives tied to:
- Biometric screenings for employees and spouses.
- Disability-related inquiries directed at employees, which might include some questions on health risk assessments.
- Family medical history questions, such as risk-assessment questions that ask about the manifestation of disease or disorder in an employee’s family member and/or such questions about the disease or disorder of an employee’s spouse.
- Any other factors that involve genetic information.
Court Actions
The AARP challenged the 2016 rule, arguing that the 30 percent incentives were inconsistent with the voluntary requirements of the ADA and GINA. Employees who cannot afford to pay a 30 percent increase in premiums would be forced to disclose their protected information when they otherwise would choose not to do so, Caresani explained.
While the 30 percent cap was consistent with the Health Insurance Portability and Accountability Act (HIPAA) as amended by the ACA, the AARP said this was inappropriate, as HIPAA and the ADA have different purposes, noted Erin Sweeney, an attorney with Miller & Chevalier in Washington, D.C..
In addition, the change from prohibiting any penalty to permitting one of 30 percent was not supported by any data, according to the AARP.
In the summer of 2017, the U.S. District Court for the District of Columbia held that the EEOC’s rule was arbitrary. The court sent the regulations back to the EEOC for further revisions.
In December 2017, the court vacated the 2016 rule after the EEOC initially said that the new rule would not be ready until 2021.
Conservative to Aggressive Approaches
Wakefield and Zimmer observed that employers may take several different approaches as they design wellness programs for next year:
- No incentives (most conservative approach). These types of wellness programs can still include biometric screening and health risk assessments that employees and spouses are encouraged to complete, but no rewards or penalties would be provided in connection with their completion.
- Modest incentives (middle-ground approach). A modest incentive is likely significantly less than 30 percent of the cost of self-only coverage, given the court’s finding that the EEOC did not provide adequate justification for an incentive level up to 30 percent.
- Up to 30 percent incentives (more aggressive approach). Although the court did not rule that a 30 percent incentive level would definitely cause a wellness program to be considered involuntary, incentives at this level after 2018 likely will expose employers to lawsuits, they wrote.
Multiple-Point Program
One good way to demonstrate compliance, they noted, is a multiple-point program in which participants engage in different activities and earn an incentive by participating in enough activities apart from biometric screenings, risk assessments or providing their spouse’s health information.
For example, an employer could let employees take health care literacy quizzes or offer a program that measures a worker’s activity as opposed to fitness, Caresani noted. She said, “Programs that are participatory are probably less effective than outcome-based programs, but they are more popular with employees and are less likely to pose litigation risks.”
SOURCE: Smith, A. (1 August 2018) “Employers Assess Risk Tolerance with Wellness Program Incentives” (Web Blog Post). Retrieved from https://www.shrm.org/resourcesandtools/legal-and-compliance/employment-law/pages/risk-tolerance-wellness-program-incentives.aspx