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Polsinelli Polsinelli - Employee Benefits and Executive Compensation
         
 

April 2015

 

Highly Anticipated Proposed EEOC Guidance May Force Design Changes on Existing Wellness Programs

 
 
             
 

For more information about this alert, please contact:

 

Henry Talavera

214.661.5538

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Josephine Stewart Harvey

214.661.5542

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Anne Prenner Schmidt

312.463.6387

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Employee Benefits and Executive Compensation Leaders:

 

W. Andrew Douglass

Practice Area Chair

312.873.2933

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William P. Sweeney

Practice Area Vice Chair

312.873.3664

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On Monday, the Equal Employment Opportunity Commission ("EEOC") published much anticipated proposed regulations amending Americans with Disabilities Act ("ADA") regulations on employer wellness programs. Specifically, the EEOC provides guidance on how employers can legally incentivize employees to participate in wellness programs that include disability-related inquiries and/or medical examinations. Generally, in order to fit into the "voluntary" exception to the ADA's prohibition on medical exams and disability-related inquiries, employees may not be required to participate in a wellness program, and they may not be denied health coverage or otherwise disciplined if they refuse to participate. Employers also may not interfere with their ADA rights, or threaten, intimidate, or coerce their employees for refusing to participate in a wellness program or for failing to achieve certain health outcomes.

This week's EEOC publication clarifies that the ADA does not prohibit employers from providing incentives for employees to participate in wellness programs. Under the proposed EEOC rules, employers may offer incentives up to 30% of the total cost of employee-only coverage in connection with wellness programs. Wellness programs that must now be analyzed for acceptability under the ADA would include only programs requiring either a medical examinations or disability-related inquiry (e.g., a health risk assessment or biometric screening), or both.

Under the EEOC rules interpreting the ADA, a wellness program that includes any disability-related inquiries or medical examinations must be reasonably designed to promote health or prevent disease. This is consistent with the requirements of the wellness program regulations promulgated under the Health Insurance Portability and Accountability Act of 1996 (HIPAA), as amended by the Patient Protection & Affordable Care Act. The HIPAA wellness regulations only apply to certain group health plans.

If the EEOC rules are finalized as proposed, wellness programs should be reviewed in light of the following, among other rules:

  • Participatory programs that include medical examinations or disability related inquiries will be limited to the 30% maximum for incentives under the EEOC rules, even though the HIPAA wellness regulations do not impose a limit on the reward that may be given under a participatory-only program.
  • Tobacco incentives that include a medical examination (e.g., a blood test for the presence of nicotine) will be limited to the 30% maximum for incentives under the EEOC rules, rather than the 50% maximum that is generally allowable under the HIPAA wellness regulations. Tobacco incentives that are based on a simple affidavit of tobacco use will remain subject to the 50% incentive maximum provided under the HIPAA wellness regulations.
  • Although employers are not required to provide reasonable alternatives standards for participatory only programs under the HIPAA wellness regulations, they will be required to provide reasonable accommodations when necessary to allow disabled individuals to take advantage of these programs (e.g., a sign language interpreter to allow a deaf employee to participate in an educational seminar offered as part of a participatory wellness program).
  • Employers will be required to provide a new notice to participants when a wellness program that is part of a group health plan requires a medical examination or is otherwise disability related.
  • According to the preamble to the EEOC rules, the provisions of the EEOC rules (other than the new notice provision discussed above) apply to all wellness programs that include medical examinations or disability related inquiries, regardless of whether the wellness program is part of a group health plan. However, it is uncertain how some of the EEOC rules would be applied in practice; for example, it is unclear how the 30% limit on wellness program incentives would apply to a wellness program that is not a part of a group health plan. It may be that the EEOC will interpret the EEOC rules to prohibit any incentives that are not de minimis in the case of wellness programs not tied to a group health plan.

The EEOC will take public comments on its proposed regulations until June 19, before issuing final regulations. Please contact the authors or Polsinelli's Employee Benefits and Executive Compensation attorneys should you have any concerns regarding the possible impact of the proposed EEOC rules on your wellness program.

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* Law360, March 2014
** The American Lawyer 2013 and 2014 reports

 
 
             
 

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