On May 17, 2016, the U.S. Equal Employment Opportunity Commission (EEOC) issued two rules specifying how employer-sponsored wellness plans can comply with the Genetic Information Nondiscrimination Act (GINA) and the Americans with Disabilities Act (ADA). The new rules, which take effect in 2017, address the extent to which employers may offer inducements to employees in exchange for providing certain information in connection with employer-sponsored wellness plans. The final rules address how employers can design wellness programs to remain “voluntary,” as required under the laws, but still include common features such as offering an incentive (e.g., sweatshirts, reduced health plan premiums or gift cards) for:
- An employee or dependent to submit to a medical examination (e.g., biometric screening) or respond to a disability-related inquiry (ADA), and
- An employee’s spouse to participate in a program that requires disclosure of the spouse’s manifestation of disease or disorder (GINA).
The two rules provide guidance to both employers and employees about how workplace wellness programs can comply with the ADA and GINA consistent with provisions governing wellness programs in the Health Insurance Portability and Accountability Act (HIPAA), as amended by the Affordable Care Act (ACA).
So what can be wrong with exchanging a little bit of personal health information for a bigger discount on my health insurance?
Based on results from a survey conducted in April 2016 by the National Business Group on Health and Fidelity Investments, 78 percent of employers offer biometric screenings, while 76 percent offer a health risk assessment program, in 2016. Approximately 72 percent use incentives to engage employees in wellness programs. Many employers are eager to offer incentives because they have faith that wellness programs improve employee health, increase attendance and help reduce soaring healthcare costs.
TWO NEW RULES
The ADA Final Rule: The first rule amends the regulations implementing Title I of ADA, which generally prohibits discrimination against individuals on the basis of disability with regard to compensation and other terms of employment. The new rule allows an employer to provide limited incentives in exchange for an employee answering disability-related questions or undergoing a medical examination as part of a wellness program.
Title I of the ADA prohibits employers from discriminating against individuals on the basis of disability, and it generally restricts employers from obtaining medical information from applicants and employees. However, Title I does allow employers to make inquiries about employees’ health or do medical examinations that are part of a voluntary employee health program.
With the ADA Final Rule, the EEOC has described the requirements that must be satisfied for a wellness program to comply with the voluntary employee health program exceptions.
- Wellness Programs Subject to the ADA Final Rule: In the Final Rule, the EEOC has clarified the type of wellness programs that the ADA directly applies to, specifically those that require employees to answer disability-related questions or to undergo medical examinations to participate in the program to earn a reward or avoid a penalty.
- Maximum Incentive: Like the ACA/HIPAA regulations, the ADA Final Rule limits incentives that may be offered as part of a wellness program at 30 percent of the cost of self-only coverage. Unlike the ACA/HIPAA regulations, the ADA Final Rule does not provide an increased incentive limit for wellness programs designed to reduce or eliminate tobacco use. Therefore, a wellness program subject to the ADA Final Rule can only offer incentives up to the 30 percent limit.
- Notice: The ADA Final Rule requires employers to provide participating employees with a notice that clearly explains what medical information will be obtained from the employee and how the medical information will be used and disclosed by the employer.
The GINA Final Rule: The second rule amends the regulations implementing Title II of the Genetic Information Nondiscrimination Act (GINA), which generally: prohibits the use of genetic information in employment decisions; restricts employers from requesting, requiring or purchasing genetic information; and strictly limits the further disclosure of genetic information. And unless one of six narrow exceptions applies, GINA prohibits covered employers from acquiring employees’ genetic information. “Genetic information,” under the statute, is defined to include family medical history, or the manifestation of a disease or disorder in family members of the individual. It is interesting to note that an employee’s spouse’s medical history is considered the employee’s family medical history. The EEOC’s new rule provides that an employer may offer a limited inducement to an employee whose spouse provides information about the spouse’s manifestation of a disease or disorder as part of a health risk assessment administered in connection with an employer-sponsored wellness program. The rule also prohibits employers from offering inducements in exchange for current or past health status information about children, as well as inducements in exchange for genetic information about spouses and children.
The GINA Final Rule provides a number of requirements that must be satisfied if an employer wishes to offer an incentive in connection with a wellness program that asks for genetic information about an employee or an employee’s family members.
- Wellness Programs Subject to the GINA Final Rule: The GINA Final Rule only applies to wellness programs that offer an inducement to an employee or employee’s family member to answer questions about the individual’s current or past health status, or to take a medical examination.
- Eligibility for Wellness Programs Subject to the GINA Final Rule: The GINA Final Rule provides that an employee’s spouse may participate in and earn an incentive up to 30 percent of the cost of employee-only coverage. However, it bars children from participating in, or earning incentives through, a wellness program that would otherwise be subject to the GINA Final Rule.
- Wellness Programs Subject to the GINA Final Rule Must Be Reasonably Designed: Like the ACA/HIPAA regulations, the GINA Final Rule requires wellness programs to be reasonably designed to promote health. However, the GINA Final Rule provides more stringent criteria than the ACA/HIPAA regulations for determining whether this requirement is satisfied. For example, requiring wellness programs which consist of a measurement, test, screening or collection of health-related information must be able to provide documented results, follow-up information or advice to individual participants.
Notice and Authorization Requirements
ADA Notice Requirement – The ADA rule requires that employers give participating employees a notice that tells them what information will be collected as part of the wellness program, with whom it will be shared and for what purpose, the limits on disclosure and the way information will be kept confidential.
GINA Notice/Authorization Requirement – GINA includes statutory notice and consent provisions for health and genetic services provided to employees and their family members. The GINA Final Rule does not impose new notice or authorization requirements when an employer offers employees an incentive for an employee’s spouse to provide information about the spouse’s manifestation of disease or disorder as part of a health risk assessment (HRA). Rather, the GINA Final Rule affirms that the notice and authorization requirements in the existing regulations implementing Title II of GINA, which apply to an employee’s provision of genetic information as part of a wellness program, also apply when a spouse provides information about the spouse’s manifestation of disease or disorder. Specifically, the spouse must provide “prior, knowing, voluntary and written authorization,” using an authorization form that:
1. Is written so that the individual from whom authorization is being obtained is reasonably likely to understand it.
2. Describes the type of information that will be obtained and the general purposes for which it will be used.
3. Describes the confidentiality protections and restrictions on disclosure of genetic information.
Limits on Incentives
HIPAA and the ACA allow wellness programs that are part of an employer-sponsored group health plan to offer incentives for “health-contingent” programs, which offer rewards to employees who perform activities or impose penalties if they don’t perform an activity or fail to achieve a particular outcome. The regulations implementing HIPAA don’t impose any incentive limits on “participatory” programs (such as programs that only ask employees to attend a smoking cessation class) as long as they are available to all similarly-situated individuals, and incentives are made available regardless of a health factor. Unlike HIPAA and the ACA, the ADA places limits on disability-related inquiries and medical examinations related to wellness programs, regardless of how the information obtained is ultimately used. Therefore, EEOC’s final rule makes clear that the limit on incentives applies to any wellness program that requires employees to answer disability-related questions or undergo medical examinations (whether it is participatory or health contingent).
The ADA Final Rule limits the amount of the incentive that an employer can offer for an employee to respond to disability-related inquiries or complete medical examinations in connection with a wellness program, without causing the wellness program to be “involuntary” and therefore violate the ADA nondiscrimination requirements. Similarly, the GINA Final Rule limits the amount of the incentive that an employer can offer for an employee’s spouse to answer questions about his or her manifestation of disease or disorder, without causing the wellness program to violate the GINA nondiscrimination requirements.
Under both the ADA Final Rule and the GINA Final Rule, the amount of the incentive cannot exceed 30 percent of the total cost of self-only coverage. “Total cost” means the employee contribution plus the employer contribution for coverage, and the 30 percent limit, are applied as follows:
- If participation in a wellness program is limited to employees enrolled in a group health plan, 30 percent of the total cost of self-only coverage for the group health plan option in which the employee is enrolled.
- If the employer offers only one group health plan option and participation in the wellness program is open to all employees (regardless of whether an employee enrolls in the group health plan), 30 percent of the total cost of self-only coverage for the single group health plan option.
- If the employer offers more than one group health plan option and participation in the wellness program is open to all employees (regardless of whether an employee enrolls in the group health plan), 30 percent of the total cost of self-only coverage for the lowest cost group health plan option offered by the employer.
- If the employer does not offer a group health plan, 30 percent of the total cost of self-only coverage for the second lowest cost Silver Plan for a 40-year-old non-smoker on the state or federal health care exchange in the location that the employer identifies as its principal place of business.
The ADA Final Rule applies the 30 percent incentive limit to wellness programs that require employees to complete a medical examination to test for the presence of nicotine or tobacco. However, the ADA Final Rule reaffirms that a tobacco cessation wellness program that does not involve a medical examination (e.g., merely asking an employee if he or she uses tobacco) is not subject to the 30 percent incentive limit. In that case, the higher 50 percent limit under the HIPAA wellness program nondiscrimination rules applies.
Some Important Points About GINA
- The GINA Final Rule reaffirms that asking an employee’s spouse if he or she uses tobacco or requiring a spouse to submit to a blood test to measure nicotine levels are not requests about the spouse’s manifestation of disease or disorder. GINA would not apply to such inquiries.
- The GINA Final Rule prohibits an employer from offering incentives for an employee’s spouse to provide the spouse’s own genetic information (including results of the spouse’s genetic tests) and against offering incentives for information about the manifestation of disease or disorder of the employee’s children, or for genetic information about an employee’s children, including adult children.
Confidentiality Protections
Both rules also make clear that the ADA and GINA provide important protections for safeguarding health information. The ADA and GINA rules state that information from wellness programs may be disclosed to employers only in aggregate terms. Existing rules under the ADA and GINA prohibit the disclosure of an employee’s medical information (ADA) and individually identifiable genetic information about employees or their family members participating in health or genetic services (GINA). The final rules include a few additional requirements related to confidentiality:
- ADA Final Rule: Medical information or history collected by a wellness program may be disclosed to an employer only in aggregate terms that do not disclose and are not reasonably likely to disclose the identity of specific employees (except as necessary to administer the plan).
- ADA Final Rule; GINA Final Rule: An employer may not require an employee to agree to the sale, exchange, transfer or other disclosure of health information or waive any confidentiality protections as a condition for participating in or receiving an incentive under the wellness program.
Some Recommendations and Final Thoughts
As more and more employers implement wellness programs in an effort to control their healthcare costs, the EEOC has raised concerns that such programs are not truly voluntary and may negatively impact employee protections under the ADA and GINA. According to the EEOC, the final rules issued May 17, 2016 “seek to ensure that wellness programs actually promote good health and are not just used to collect or sell sensitive medical information about employees and family members or to impermissibly shift health insurance costs to them.”
The EEOC urges employers to adopt best practices to protect confidentiality of medical information and genetic information. The EEOC suggests that such practices include:
- The adoption and communication of strong privacy policies.
- The training for all individuals who handle confidential medical information.
- Strong encryption of all electronic files that contain private health information.
- Effective policies that require prompt notification of employees whose information has been compromised if data breaches occur.
This is a good time for employers to also review their HIPAA privacy and security compliance policies and procedures for their group health plans (including wellness programs) generally.
And we may not have heard the end of this yet. Two House Democrats on the Education and Workforce Committee — Robert C. “Bobby” Short of Virginia and Frederica S. Wilson of Florida — are pushing back against the EEOC rules. In a joint statement, they said, “We remain steadfast in our belief that the EEOC must ensure employees provide their private health information to these programs voluntarily, and employers must put adequate safeguards in place to protect the private health information of workers who participate. While today’s final rule contains small improvements from the proposed rules, we believe that these changes fall short of achieving these goals.” So, there is an outside possibility we may actually see some congressional action on wellness plans.
Article written by Stephen Burt, BS, MFA
Jul 2016