A Second Proposal: EEOC Issues New Guidance on Nondiscrimination for Wellness Programs

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Summary

The Equal Employment Opportunity Commission (EEOC) announced it will issue much-anticipated guidance that revises its nondiscrimination rules for wellness programs under the Americans with Disabilities Act (ADA) and Genetic Information Nondiscrimination Act (GINA).

The Upshot

  • The two sets of proposed regulations replace rules the EEOC withdrew in 2018 after a federal district court invalidated key provisions on incentive limits on the grounds that the EEOC had not appropriately justified the limits it set.
  • The proposed ADA regulations govern programs of health promotion and disease prevention that include making inquiries into an individual’s health or providing for medical examinations. The GINA regulations apply where a wellness program collects genetic information, including information about a spouse’s medical condition.
  • After the proposed rules are published in the Federal Register, there will be a 60-day comment period.

The Bottom Line

Employers should consider whether their wellness programs—and particularly the incentives— under those programs will comply with the new rules. For example, if finalized, the new rules will prohibit participatory wellness programs (programs that provide no incentive that is based on a health outcome or activity that someone may not be able to perform for health reasons) from offering more than a de minimis incentive.


FULL ALERT

The Equal Employment Opportunity Commission (EEOC) has announced that it will issue much anticipated guidance that revises its nondiscrimination rules for wellness programs under the Americans with Disabilities Act (ADA) and Genetic Information Nondiscrimination Act (GINA). The two sets of proposed regulations replace rules that the EEOC withdrew in 2018 after a federal district court invalidated key provisions on incentive limits on the grounds that the EEOC had not appropriately justified the limits that it set.

ADA Rules

The new ADA proposed regulations govern programs of health promotion and disease prevention that include making inquiries into an individual’s health or providing for medical examinations. They retain various rules from the prior regulations. For example, coverage under an employer’s health plan may not be conditioned on participation in the wellness program. However, there are a few significant differences: 

  • The notice requirement from the earlier regulations has been eliminated. 
  • The incentive limits for providing information which had been similar to limits under HIPAA’s nondiscrimination rules for wellness programs have been replaced by a requirement to provide no more than a de minimis incentive. The new rules consider a de minimis incentive to be on the order of a water bottle or small gift card. The rule contains one exception. A health-contingent wellness program that is, or is part, of a group health plan will be subject to the requirements under HIPAA’s nondiscrimination rules. Those rules set an incentive limit that is generally 30% of the applicable cost of coverage. To be health-contingent, a wellness program must make an incentive available that is based on either a health outcome (such as a healthy blood pressure reading) or the performance of an activity that depends on the participant’s health status (such as walking a mile at least three times per week). 
  • An appendix to the regulations includes a provision relevant to the privacy of information gathered as part of a wellness program. It provides that employers who engage a third-party vendor to manage a wellness program should inquire about that vendor’s confidentiality and security measures. Employers that administer the program themselves should erect appropriate firewalls to prevent inappropriate disclosure.

GINA Rules

The GINA regulations apply where a wellness program collects genetic information. GINA defines genetic information to include family medical history and regards an employee’s spouse as part of the employee’s family for these purposes. Recognizing that an employee and spouse will have no particular genetic link, the EEOC carved out an exception in its earlier regulations, allowing a wellness program to provide an incentive up to 30% of the cost of single employee coverage to encourage a spouse to provide his or her own health information. No incentive was permitted for participation by an employee’s children, who do have a genetic link.

The new proposed rules change course. They do not provide an exception for a spouse’s participation, allowing only de minimis incentives for participation by spouses and children. The new rules also retain a number of provisions from the earlier regulations, including the requirement to obtain appropriate authorization from the spouse before the spouse provides information.

Employer Considerations

Employers should consider whether their wellness programs (and particularly the incentives) under those programs will comply with the new rules. For example, if finalized, the new rules will prohibit participatory wellness programs (programs that provide no incentive that is based on a health outcome or activity that someone may not be able to perform for health reasons) from offering more than a de minimis incentive. A comment period of 60 days will follow publication of the proposed rules in the Federal Register.  

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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