EEOC Offers Rx to Keep Wellness Programs Out of Trouble

By NAPA Net Staff • 4/16/2015 • 0 Comments

In the wake of several EEOC lawsuits regarding employer-based wellness programs, the Obama administration has issued guidance on how to avoid running afoul of nondiscrimination laws.

As advisors know, a growing number of employers that provide health insurance also offer workplace wellness programs intended to encourage healthier lifestyles or prevent disease, programs that sometimes use health risk assessments and biometric screenings to determine an employee's health risk factors, such as body weight and cholesterol, blood glucose, and blood pressure levels. Some of these programs offer financial and other incentives for employees who participate or achieve certain health outcomes. 

While the Americans with Disabilities Act (ADA) limits the circumstances in which employers may ask employees about their health or require them to undergo medical examinations, the EEOC notes that the ADA permits such inquiries and exams if they are voluntary and part of an employee health program. The Notice of Proposed Rulemaking (NPRM) further requires that if an employee health program seeks information about employee health or medical examinations, the program must be reasonably likely to promote health or prevent disease. Employees may not be required to participate in a wellness program, and they may not be denied health coverage or disciplined if they refuse to participate.  

The rule explains that under the ADA, companies may offer incentives of up to 30% of the total cost of employee-only coverage in connection with wellness programs, which can include medical examinations or questions about employees' health (such as questions on a health risk assessment). However, the rule also states that medical information collected as a part of a wellness program may be disclosed to employers only in aggregate form that does not reveal the employee's identity, and must be kept confidential in accordance with ADA requirements.

Additionally, the rule makes clear that employers may not subject employees to interference with their ADA rights, threats, intimidation or coercion for refusing to participate in a wellness program or for failing to achieve certain health outcomes — actions that had given risen to previous lawsuits by the EEOC regarding certain wellness programs. The rule also notes that individuals with disabilities must be provided with reasonable accommodations that allow them to participate in wellness programs and to earn whatever incentive an employer offers.

In addition to setting a limit on incentives, the Notice of Proposed Rulemaking (NPRM), which includes interpretive guidance that will be published along with the final rule, requires that employers provide employees a notice that describes:

  • What medical information will be collected 
  • With whom it will be shared 
  • How it will be used
  • How it will be kept confidential 

The NPRM is available in the Public Inspection portion of the Federal Register, and will be officially published on Monday, April 20, 2015. Members of the public have 60 days from that date (or until Friday, June 19) to submit comments.

See also: Fact Sheet for Small Business; Questions and Answers about EEOC's Notice of Proposed Rulemaking on Employer Wellness Programs.  

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