EEOC Final Ruling on Employer Wellness Programs
The EEOC has released long-awaited rulings regarding financial incentives tied to employee participation in workplace wellness programs. The rulings provide direction for employers and employees to ensure that the design and participation in wellness programs are conducted in compliance with the American with Disabilities Act (ADA) and the Genetic Information Nondiscrimination Act (GINA), while providing protection for employees against discrimination.
The rules apply to programs that require employees to answer health related questions, take a medical exam, or submit to a screening to be eligible for an incentive, or to avoid a penalty. The rulings do not apply to wellness programs that simply provide an incentive for engaging in specific activates.
History of Wellness Programs
The 1996 Health Insurance Portability and Accountability Act (HIPAA) was the impetus that birthed the modern wellness program. Legislation allowed for group health plan incentives for employee participation in qualifying employer designed wellness programs while still prohibiting health underwriting in group plans. It also allowed for penalties to be assessed against non-participating employees. The Affordable Care Act (ACA) increased the incentives and penalties that are associated with wellness programs. In 2013, the Department of Labor further defined the conditions under which the plans can be offered.
How they Work
- Employees who sign up to participate in a qualifying employer-sponsored wellness program will agree to provide medical information, undergo biometric screenings, or submit health risk assessments in order to qualify for a credit on their health insurance (or to avoid a penalty).
- Employers are prohibiting from requiring participation, denying employees access to a group medical plan, or taking adverse action against an employee who does not participate in any wellness programs.
- The employer must provide written notice that the participation is voluntary and advise what type of medical information will be obtained, how it will be used, and who will use it.
More Employer Responsibilities
While these rulings don’t apply to plans that don’t require medical information disclosure or testing, employers may incur additional costs as they will now have to offer additional services to help employees meet certain program requirements if the incentives are tied to specific health benchmarks.
Examples: If employers offer an incentive to employees who attend a weight loss class, deaf employees must be given access to sign language interpreters. If an incentive is offered to employees using a step-tracking device, an alternative program needs to be offered to wheelchair-confined employees who want to participate in the program.
When do the rulings go into effect? The rules go into effect in 2017 and apply regardless of your health plan.
What is the maximum Incentive? Incentives are allowed, up to 30% of the total cost of self-only coverage – this applies to the lowest cost plan available. Provisions are available for employers to offer employees an incentive, even if the employer does not offer a health plan option.
Are incentives allowed for spouses? Incentives are allowed for up to 30% of a spouses total cost of self-only coverage –this applies to the lowest cost plan available. Provisions are available for employers to offer employees an incentive, even if the employer does not offer a health plan option.
Are incentives allowed for an employee’s children? Incentives are not allowed for the past or current health status information of employee’s children.
Are incentives allowed for providing genetic Information? Incentives are prohibited in exchange for receipt of genetic information of an employee, their spouse, or their children. This includes family medical history or genetic test results.
Since employers are normally prohibited from obtaining or using an employee’s personal health information, the rulings have addressed the ambiguity in both ADA and GINA as they pertain to wellness programs. The rulings will enable employers to structure their wellness plan incentives accordingly.
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