Today’s blog entry continues my string of weeks where I have not been dissecting cases. I had a case all lined up for this week and was excited about getting back to my dissection. However, yesterday, the EEOC decided to issue final rules detailing how wellness programs relate to the ADA. Those rules can be found here. Therefore, this blog entry will jump on that. Please note, I am committed to getting back to my dissection of cases. I have some good ones lined up.

 

Back to this blog entry. Here are the salient points:

  1. The rule goes into effect 60 days from May 17, 2016.
  2. The rule applies to wellness programs considered “employee health program,” under title I of the ADA. It does not apply to programs provided by entities other than those subject to title I, such as social service agency covered under title II of the ADA, or places of public accommodation subject to title III of the ADA that may be providing similar programs to individuals who are considered volunteers.
  3. All of the provisions in the rule, including the requirement to provide notice and limitations on incentives, are applicable to all employee health programs that ask employees to respond to disability related inquiries and/or undergo medical examinations.
  4. A participatory wellness program either does not provide a reward or does not include any condition for obtaining a reward that is based on the individual satisfying a standard related to a health factor. A health contingent wellness program is a program that may be either activity-only or outcome-based and requires individuals to satisfy a standard related to a health factor to obtain a reward.
  5. The rule will with respect to allowable incentives applies prospectively to employer wellness programs as of the first day of the first plan year that begins on or after January 1, 2017.
  6. The safe harbor for insurance plans does not, according to the EEOC’s view, apply to wellness programs where rewards or penalties are offered for participation in those programs. That view is specifically stated in the final rule itself. The EEOC view is that they disagree and feel that case law to the contrary, here and here, is just wrong for several reasons, which they elaborate on in the comments discussing the final rule. As to another approach as to why those cases might be wrong, check out this blog entry of mine.
  7. The 30% limit for incentives against the silver plan, if you are talking about insurance exchanges, and against the cost of self-coverage if you are talking about insurance through the employer applies to both participatory wellness programs as well as contingent wellness programs.
  8. All provisions in the final rule, including the requirement to provide a notice and the limitations on incentives, are applicable to all wellness programs that includes disability -related inquiries and/or medical examinations. That means the rule applies to the following kinds of wellness programs: those offered only to employees enrolled in an employer-sponsored group health plan; those offered to all employees regardless of whether they are enrolled in such a plan; or those offered as a benefit of employment by employers that do not sponsor a group health plan or group health insurance.
  9. For the incentives to pass muster, the program must be reasonably designed. That is the program must have a reasonable chance of improving the health of, or preventing disease in, participating employees and must not be overly burdensome, a subterfuge for violating the ADA or other laws prohibiting employment discrimination, or highly suspect in the method chosen to promote health or prevent disease. Program consisting of a measurement, test, screening, or collection of health-related information without providing results, follow-up information, or advice designed to improve the health of participating employees would not be reasonably designed to promote health or prevent disease, unless the collected information actually is used to design a program addressing at least a subset of conditions identified.
  10. The EEOC specifically rejected the suggestion that merely offering employees the choice whether or not to participate would render a program’s participation voluntary. The 30% maximum of the total cost of self only coverage/silver plan for insurance exchange does not without more render a wellness program coercive.
  11. When an employer denies access to a health plan because the employee does not answer disability related inquiries or undergo medical examinations, that is discrimination against the employee in violation of the ADA as it requires employees to answer questions or undergo medical examination that are not job-related and consistent with business necessity and therefore, cannot be considered voluntary.
  12. An employer may not retaliate against, interfere with, coerce, intimidate, or threaten employees by coercing an employee to participate in an employee health program or by threatening to discipline an employee who does not participate.
  13. The notice requirement applies to all wellness programs that ask employees to respond to disability related inquiries and/or undergo medical examinations. That notice must be in a language reasonably likely to be understood by the employee from whom medical information is being obtained. It also must clearly explain what medical information will be obtained, how the medical information will be used, who will receive the medical information, the restrictions on the disclosure, and the method the covered entity uses to prevent improper disclosure of medical information.
  14. A similar set of rules was published by the EEOC at the same time with respect to the extent to which employers may offer incentive for spouses and other family members to provide health-related information as part of a wellness program without violating Genetic Information Nondiscrimination Act.
  15. The final rule retains a distinction in consequences between smoking cessation program that require employees to be tested for nicotine use and programs that merely ask employees whether they smoke. While whether someone smokes is not information about a disability, the ADA’s provision limiting disability-related inquiries and medical examinations apply to all applicants and employees regardless of whether they have a disability. Further, it is the EEOC view that whatever benefit smoking cessation programs that are a part of wellness program may have, the EEOC cannot discern any reason for treating medical examination to detect the use of nicotine differently from any other medical examinations when the ADA makes no such distinctions.
  16. The final rule adds some additional requirements to further protect employees’ personal health information, including, for example, a provision that a covered entity may not require an employee to agree to the sale, exchange, sharing, transfer, or other disclosure of medical information (except to the extent permitted by the regulations to carry out specific activities related to the wellness program), or to waive confidentiality protections available under the ADA as a condition for participating in a wellness program or receiving a wellness program incentive.
  17. A covered entity can only receive information collected as part of an employee health program in aggregate form that does not disclose, and is not reasonably likely to disclose, the identity of specific individuals except as is necessary to administer the plan or as permitted by the regulations.
  18. In the interpretive guidance, the EEOC make the sensible point that individuals handling medical information part of an employee health program should not be responsible for making decisions related to employment, such as hiring, termination, or discipline. Employers administering their own wellness program need adequate firewalls in place to prevent unintended disclosure. If individuals who handle medical information obtained through a wellness program to act as decision-makers, they may not use the information to discriminate on the basis of disability in violation of the ADA.

Takeaways:

  1. The hardest part of the regulations is probably going to be the 30% rule, which applies to both health contingent and participatory wellness programs.
  2. If an employee’s native language is not English, a foreign language or ASL, you want to be sure that the notice is somehow communicated effectively to the employee.
  3. The EEOC has made it clear that they are going to fight all the way to the end for their view that Seff and Flambeau, referenced above, are not good law.
  4. Conditioning participation in an employee health plan based upon participation in a wellness program is coercive.
  5. Understanding the ADA scheme dealing with medical exams and disability related inquiries is still very important. See this blog entry for example for discussion of that scheme.
  6. While beyond the scope of this blog entry, the corresponding rules for the Genetic Information Nondiscrimination Act, mentioned above, are quite similar, but you will want to look at that as well (for example, kids are always out and spouses are in subject to the same 30% rule).