Monday, April 27, 2015

EEOC Issues Proposed Rules on Wellness Programs

Many employers offer employee wellness programs because the current thinking is that successful participation in such program raises employees’ awareness about their health which will ultimately translate into fewer claims which will mean lower premium costs for employers. It all sounds good until somebody files a discrimination claim. 

In the last few years, the EEOC has focused attention on possible discriminatory actions of employers via administration of their wellness programs. The Agency has filed suit on behalf of workers in a handful of instances claiming violation of the ADA resulting from adverse employment actions following compulsory disclosure by employees of previously  undisclosed disabilities.

Now the EEOC has issued proposed rules to regulate wellness programs. While the rules are not final yet, and may ultimately be revised, employers should be aware of the position of the EEOC on this popular subject.

The proposed rules focus mainly on the issues of confidentiality and discrimination as follows:

  1. The program must be “reasonably designed to promote health or prevent disease.” In other words, the wellness program has to offer benefit to the employee and not just collect information;
  2. The program must be truly voluntary. That is, an employer cannot force employees to participate by denying access to insurance coverage or other forms of punishment for non-participation. 
  3. Incentives are limited to the value of 30% of the cost of employee only coverage.
  4. All HIPAA confidentiality rules apply to information gathered from wellness screenings.
  5. The wellness program itself must comply with the ADA, so that it must offer reasonable accommodation to disabled employees in order that they ca participate.

The proposed rules are just that – proposed – so that employers are not required to comply with them at this time. Nonetheless, employers should be mindful of them not only for the future, but if an employer’s wellness program does not currently comply with these rules, it may already be in violation of the ADA. Special attention should be given to the voluntariness component of the proposed rules.  The EEOC is closely watching programs that punish employees for failure to participate in a wellness program. For instance, a disabled employee who cannot fully participate in a program but suffers negative consequences for that inability, may have a claim under the ADA. Similarly, employers should avoid actually receiving health information about their employees if at all possible because of the likelihood that it may inadvertently learn of previously undisclosed disabilities which may ultimately lead to an ADA  or GINA claim. If possible, wellness screening information should be directed to the insurer or a third party administrator if possible to avoid those situations.

Wellness programs are not only becoming more common in the health insurance industry, but they are emerging as a new point of discrimination with the EEOC. Stay a step ahead and review your plan to determine compliance with current laws and future rules.