On May 16, 2016, the U.S. Equal Employment Opportunity Commission (EEOC) finalized two rules that describe how Title I of the Americans with Disabilities Act (ADA) and Title II of the Genetic Information Nondiscrimination Act (GINA) apply to wellness programs offered by employers. The rules provide guidance on the extent to which employers may offer incentives to employees to participate in wellness programs that ask them to answer disability-related questions and/or undergo medical examinations. Until recently, employers had been primarily focused on the HIPAA and Affordable Care Act (ACA) rules related to wellness programs while they anxiously awaited the EEOC’s final rules and guidance on the ADA and GINA considerations. There are important differences between the HIPAA/ACA rules and the ADA/GINA rules, which employers should review very carefully.

ADA final rule

Title I of the ADA prohibits employers from discriminating against individuals on the basis of a disability. It also generally restricts employers from obtaining medical information from applicants and employees; however, it does allow employers to make inquiries about employees’ health or conduct medical examinations that are part of a “voluntary” employee health program.

To comply with the ADA final rule, employers offering wellness programs that ask employees to respond to disability-related inquiries and/or undergo medical examinations should ensure their wellness programs meet the following requirements:

1. Accommodate Disabled Individuals: Under the ADA, employer wellness programs are required to provide reasonable accommodations to enable individuals with disabilities equal access to fringe benefits.
2. Voluntary Program: The final rule provides that in order for participation to be considered voluntary, an employer may not:
   • Require an employee to participate;
   • Deny any employee who does not participate in a wellness program access to health insurance or benefits;
   • Retaliate against, interfere with, coerce, intimidate, or threaten any employee who does not participate in a wellness program or fails to achieve certain health outcomes.
3. Limitation on Incentives: The final rule reaffirms the position in the proposed rule that an employer may offer incentives up at a maximum of 30 percent, but the final rule clarifies how the limitation must be calculated. The limitation is based on the cost of self-only coverage (including employee and employer contributions) and applies to all workplace wellness programs whether they are (1) offered only to employees enrolled in an employer-sponsored group health plan; (2) offered to all employees whether or not they are enrolled in such plan; or (3) a benefit of employment where an employer does not sponsor a group health plan or group health insurance coverage.
   Note: The final rule retains a distinction from the proposed rule between smoking cessation programs that require employees to be tested for nicotine use (subject to the ADA and the 30 percent limitation) and those that merely ask employees whether they smoke without requiring a medical test (the ADA and the 30 percent limitation would not apply; thus, employers may offer incentives as high as 50 percent under HIPPA for wellness programs designed to prevent or reduce tobacco use).
4. Reasonably Designed: The ADA final rule also requires that an employee health program that includes disability-related inquiries or a medical examination be reasonably designed to promote health or prevent disease. A wellness program meets this standard if it (1) has a reasonable chance of improving the health of or preventing disease in participating individuals, and (2) is not overly burdensome; a subterfuge for violating the ADA, GINA, or other laws prohibiting employment discrimination; or highly suspect in the method chosen to promote health or prevent disease. A wellness program is not reasonably designed to promote health or prevent disease if it exists merely to shift costs from the employer to the employee based on their health; is used by the employer only to predict its future health costs; or if it imposes unreasonably intrusive procedures, requires an overly burdensome amount of time for participation, or requires employees to incur significant costs for medical exams.
5. Notice Requirements: The new guidance requires employers to notify employees of what medical information is being collected, how the medical information will be used, who will receive the medical information, the restrictions on its disclosure, and the method the employer will use to prevent improper disclosure of medical information.
6. Confidentiality: The final rule reiterates the ADA’s confidentiality protections for medical records. Employers offering wellness programs may only receive information collected as part of an employee health program in aggregate form that does not disclose, and is not reasonably likely to disclose, the identity of specific individuals except as is necessary to administer the plan. The ADA’s confidentiality protections also prohibit employers from requiring an employee to waive the ADA’s confidentiality protections, or agree to the sale, transfer or other disclosure of their medical information as a condition for participating in the wellness program or receiving an incentive for participation.

GINA final rule

Title II of GINA prohibits employers from using genetic information in making decisions about employment. It also restricts employers from obtaining and disclosing genetic information about applicants or employees; however, it does allow employers to acquire genetic information about employees or their family members as part of voluntary health or genetic services, including wellness programs.

To comply with the GINA final rule, employers offering wellness programs that request genetic information in connection with the employee and/or spouse’s completion of a health risk assessment should ensure their wellness programs meet the following requirements:

1. Notification Obligation: Employers must advise participants that they are not obligated to answer questions about genetic information, and the wellness program must make inducements available regardless of whether questions about genetic information are answered.
2. Limitation on Incentives: Under the GINA final rule, the level of inducements that can be offered to an employee mirror those set forth under the ADA final rule, and the same limits apply to an employee’s spouse. Accordingly, when an employee and spouse are given the opportunity to participate in an employer’s wellness program, the maximum inducement to each may not exceed 30 percent of the total cost of self-only coverage (including employee and employer contributions).
3. Reasonably Designed: Under the GINA final rule, any health or genetic service offered by an employer must be reasonably designed to promote health or prevent disease. The criteria for satisfying the reasonably designed requirement under GINA are identical to the criteria set out in the ADA final rule.
4. Children’s Genetic Information Prohibited: Employer wellness programs are prohibited from providing inducements in return for genetic information about the employee’s children.

Applicability date

The new rules apply prospectively to wellness programs as of the first day of the first plan year that begins on or after January 1, 2017. Employers should review their current wellness programs to ensure compliance with the new rules and to make sure their programs remain consistent with HIPAA and the ACA.