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Employer Wellness Programs

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Ellen DoyleMay 17, 2016.  The EEOC issued final rules on the administration of employer wellness programs.  The rules address the relationship between the Genetic Information Nondiscrimination Act (GINA) and the obtaining and use of genetic information in employer wellness programs.  The final rules are effective July 18, 2016, but will only be applicable to employee benefits plans on January 1, 2017.

Questions and Answers regarding the new final rules were published by the EEOC:

Employer wellness programs are health promotion and disease prevention programs and activities offered to employees as an employment benefit — either as part of an employer health plan or as separate benefits. Wellness programs commonly ask employees to fill out questionnaires about their health and risk factors.  These questionnaires are often called “health risk assessments” or “HRAs.”

Wellness programs also often include biometric screening for health risk factors, including blood testing for diabetes or high cholesterol, and blood pressure tests for high blood pressure.  Other employer wellness programs may be educational, such as to provide information about healthy nutrition and eating habits; or may be designed to change unhealthy behaviors such as tobacco use.  They may also be inspirational to develop a healthier-at-work environment.

Employee advocates were concerned that the proposed employer wellness program rules would allow employers to discriminate against disabled employees. The final rules answer a number of questions regarding the relationship between the Americans with Disabilities Act (ADA), the Health Insurance Portability and Accountability Act (HIPAA) and the Affordable Care Act (ACA):

  1. The ADA’s “safe harbor” provision, which allows health insurers and plan sponsors (including employers) to collect health information related to risk, does not apply to employer wellness programs.  Employers may not seek information related to insurance premiums and insurance rate-making as part of their offering of wellness programs.
  2. Employers and those administering a wellness program may ask employees about their disabilities and ask other medical questions as long as the programs are “reasonably designed to promote health or prevent disease.”  This means that wellness programs may use HRAs and biometric screenings as long as the results of the information gathered is only used to help design programs to promote health or to prevent disease.  The information collected may not be used against individuals.
  3. The good news is that an employee’s participation in a wellness program must be “voluntary.”  This means the employer may not require any employee to participate in the program.  An employer may also not deny health coverage to an employee who refuses to participate in a wellness program.  The employer also may not take any other adverse action against the employee for not participating, however, that does not mean that there cannot be significant financial consequences to employees who refuse to participate in wellness programs.
  4. The bad news is that the EEOC’s final rule allows employers to use “incentives” of up to 30% of the total premium related to an employee’s individual health coverage without the premium assessment being considered as making participation in the wellness program not voluntary.  The “incentives” for tobacco cessation programs may be as high as 50%.  This means that an employee who refuses to participate in a wellness program may end up paying as much as 30% of the total premium charged for the employee’s health coverage and an employee using tobacco may end up paying as much as 50% of the total premium.  These “incentives” may be used not only for employer sponsored coverage but also for coverage under the ACA (“Obamacare”).
  5. The Wellness ADA Rule adds two new requirements designed to protect employee privacy.  First, the employer or wellness program may receive information collected by a wellness program, but only in a combined form. This means that this information may be considered for the group without giving the identity of specific individuals “except as is necessary to administer a health plan.”  Second, an employer may not require an employee to waive confidentiality or agree that the employee’s information may be used or shared as a condition of participating in the wellness program.  This second requirement addresses any concern that wellness programs may collect data about individual employees and then sell this private health information without the employee’s consent.

The Wellness/GINA rule uses the same definition of a wellness program, and the same requirements for a wellness program to be “reasonably designed to promote health or prevent disease.”  This final rule allows an employer to ask for current or past health status information about an employee’s spouse as long as there is an inducement to participate.  Inducements to spouses may be offered in all welfare plans.  The inducements may be up to 30% of the cost of the plan. Refusal to participate in a wellness program by a spouse may not be used to deny access to health insurance or benefits if the spouse refused to provide health status information.

The new rules should reduce concerns employees may have had regarding wellness programs.  They will still have a significant effect on employees’ and spouses’ participation in wellness programs.  If the result of not participating is that the employee or the spouse has to pay up to 30% of the costs of health coverage, many employees and their spouses will not be able to afford to not participate in the programs.

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