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New EEOC Ruling Affects Workplace Wellness Programs

Apr 27, 2015

April 16, 2015

The proposed rules on use of financial incentives within workplace wellness programs were published by the Equal Employment Opportunity Commission (EEOC) on April 16, 2015. These rules align the wellness provisions of the Affordable Care Act (ACA) and the Health Insurance Portability and Accountability Act (HIPAA) with the nondiscrimination rules in the Americans with Disabilities Act (ADA). 

The proposed rules amend the ADA regulations to provide guidance on the extent to which employers may use incentives to encourage employees to participate in wellness programs that include disability-related inquiries and/or medical examinations.

The ADA restricts employers from obtaining medical information from employees by generally prohibiting them from making disability-related inquiries or requiring medical examinations.  The statute, however, provides an exception to this rule by stating that a “covered entity may conduct voluntary medical examinations, including voluntary medical histories, which are part of an employee health program available to employees at that work site.” 

Employee health programs include workplace wellness programs. While compliance with the standards in HIPAA does not determine compliance with ADA, the EEOC believes that it has a responsibility to interpret the ADA in a manner that reflects both the ADA goal of limiting employer access to medical information and HIPAA and the ACA provisions promoting wellness programs.

Earlier health reform regulations had increased the money employers are able to use for rewards or penalties within wellness programs that encourage actions that may produce better health outcomes.

Financial incentives (or penalties) may be used for either participatory or health-contingent wellness programs. Incentives, both rewards or penalties, are limited to:

Programs that allow incentives to encourage participation in wellness programs are also allowed.  However, health status information and health exams that are part of an employee health program must be voluntary.

Wellness programs will be treated as compliant with ADA regulations as long as participation in the program is voluntary.  For example:

To ensure that participation in a wellness program that includes disability-related inquiries and/or medical examinations is truly voluntary, an employer must provide a notice that clearly explains what medical information will be obtained, who will receive the medical information, how the medical information will be used, the restrictions on its disclosure, and the methods the covered entity will employ to prevent improper disclosure of the medical information. 

A comment period is open for the public to comment on the proposed rules. Comments are due on the proposed rules 60 days after publication in the Federal Register on April 20.  Then, the EEOC will review comments and make changes if needed prior to issuing the final rule. 

The guidance also provides that where a wellness program is part of a group health plan and required to comply with HIPAA, its obligation to comply with the requirement relative to disclosure of medical information or history of an individual, generally may be satisfied by adhering to the HIPAA Privacy Rule. 

Additional information including a summary, press release, fact sheet and FAQ from EEOC are on the EEOC website.

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