On Jan. 7, the EEOC released proposed new regulations under the Americans with Disabilities Act (ADA) and the Non-Discrimination Genetic Information Act (GINA) for employer-offered wellness programs. (The proposed regulations have not yet been published in the federal register by January 15, 2021.) If completed, the proposed regulations would clarify the extent to which wellness programs that comply with the separate regulations issued by the IRS, DOL and HHS are related to wellness plans issued under the Affordable Care Act can be created under ADA and GINA. It remains to be seen whether the Biden administration will push the proposal forward or return to the drawing board.
Many employers offer wellness programs to encourage healthy habits, increase productivity, and reduce the cost of health plans. Depending on the design of the program and whether incentives are offered, wellness programs raise a number of questions under various federal laws, including ERISA, HIPAA, ADA, GINA, COBRA, and anti-discrimination laws such as ADEA and Title VII of the Civil Rights Act of 1964 For the past 20 years, the following have been rules for wellness programs that offer incentives, such as: B. a discount on health insurance premiums or a price of particular importance:
HIPAA prohibits discrimination based on a factor of health (e.g. health status), health status, medical history or genetic information.
The ADA requires reasonable accommodation for disabilities and prohibits disability-related medical examinations unless they are “voluntary”.
GINA prohibits employers from soliciting or using genetic information, including family history, unless the information is provided “voluntarily”.
There is a concern that failure to provide an incentive to a wellness plan to someone who does not meet the required conditions may be viewed as a penalty who discriminates on the basis of a health factor and / or that the opportunity cost of giving up an incentive makes the program effective and involuntary .
The long-standing HIPAA regulations, last updated in 2013 to incorporate provisions of the Affordable Care Act, provide a roadmap for a wellness program to comply with HIPAA’s non-discrimination rules. These regulations divide wellness plans into two categories:
Participation programswhere there are no significant barriers to participation (physical or otherwise) and where incentives are not dependent on the performance of activities related to a health determinant or on the achievement of a health determinant goal. Examples of participatory programs include reimbursement of gym membership or incentives to conduct a health risk assessment or biometric screening. and
Health Quota Programswhen an incentive is dependent on the performance of an activity related to a health factor or the achievement of a health factor goal. A health-related program can be “activity-based” (when an incentive is dependent on completing an activity related to a health factor, such as daily exercise, without the need to achieve a specific result) or “result-based” (if) Incentive depends on achieving an outcome (e.g. lowering cholesterol or BMI).
The HIPAA regulations allow incentives for participatory programs without limitation, provided they are offered to all, and allow health-related programs if the following requirements are met:
The program must be properly designed to promote health or prevent disease.
The program must be made available to all peers and offer the opportunity to qualify for the incentive at least once a year.
The program must provide reasonable alternatives for those who have a medical condition that makes it unreasonably difficult to adhere to the required standard (e.g. completing an exercise plan or lowering cholesterol or BMI). and
The value of the incentive cannot exceed 30% of the applicable health insurance premium (the employee-only premium if the program is offered only to employees, or a family premium if the program is offered to family members). For tobacco cessation programs, the percentage can be up to 50%.
Although the HIPAA regulations set clear standards for wellness programs, the EEOC cautioned that a program that complies with the HIPAA regulations may not meet the separate requirements of the ADA, GINA, or other federal laws. In particular, the EEOC warned that offering incentives to test for conditions such as BMI and cholesterol may violate the ADA’s prohibition on voluntary medical examinations and that offering incentives to conduct a health risk assessment that includes family history , possibly against the ban on GINA involuntary collection of genetic information violates.
EEOC regulations 2016 according to ADA and GINA
In 2016, the EEOC issued regulations that resolved the uncertainty under both ADA and GINA. Based on comments from stakeholders, the 2016 EEOC rules stated that incentives (whether as a reward or as a penalty) would not make a program involuntary if the incentives were not highly valuable. To this end, the EEOC regulations have adopted the 30% and 50% caps from the HIPAA regulations, but with minor adjustments. The 2016 EEOC regulations made no distinction between programs offered within or outside the framework of an employer-sponsored group health plan.
However, the clarity that the 2016 EEOC regulations provided was short-lived. By order of a federal judge, the rules were lifted because the EEOC had not provided enough data to support its conclusion that 30% (50% for smoking cessation) was the appropriate line to determine that a program was still voluntary.
The new EEOC proposal
After a renewed examination, the EEOC has now published new proposed regulations both within the framework of the ADA and the GINA. The proposed regulations address the court’s concern about the 2016 Regulations by stating that any incentive more than minor would make a program involuntary. However, the proposed ADA regulation provides a new “safe haven” that would allow health plans to provide greater incentives to participate in certain health dependent Wellness programs – but no family history or other genetic information – when the requirements of the HIPAA regulations are met.
De Minimis Incentive Standard
The proposed rules state that any incentive that is more than minor will generally make a program involuntary. The proposed regulations do not define “de minimis” but provide some examples: a water bottle or gift card of “modest” value would be de minimis; However, an incentive of just $ 50 per month, a gym membership, or a plane ticket would break the de minimis threshold.
Like the 2016 regulations, the proposed regulations also prohibit employers from requiring participation, limiting coverage or benefits for failure to attend, taking negative action for failure to attend or achieve a health outcome, or requiring consent to share information with a third party . In addition, the proposed ADA regulations maintain the requirement from the 2016 regulations that any medical condition or medical history information be kept confidential and kept in separate files (with limited exceptions). Both regulations limit the employer’s ability to receive employee information other than in aggregated form.
New ADA “Safe Harbor” for health-related programs in group health plans
As noted above, the proposed ADA rules (but not the proposed GINA rules) contain an important exception to the de minimis incentive restriction that is intended to be aligned with the HIPAA framework. This exception is based on an ADA rule that enables a company that manages a benefit plan to address underwriting risk to an extent that does not conflict with state law. As suggested, a wellness program can qualify for this safe haven if the following conditions are met:
The program is risk-based, not an attempt to evade the purposes of ADA’s employee equality regulations.
The program is a health-related program that is incorporated into (or independently qualified as such) a group health plan subject to HIPAA regulations. The proposed rules describe various factors used to determine whether a program is integrated into a group health plan – for example, whether the incentive is limited to employees who have been enrolled in the plan, whether the incentive is based on cost-sharing or rewards under the Plan is tied to whether the program provider has a contract with the plan and whether the plan includes the welfare program as the coverage period.
The value of the incentive is within the limit set in the HIPAA rules (30% of the cost of coverage or 50% for tobacco reduction programs).
The proposed GINA rules do not contain a similar exception. Accordingly, incentives that are more than minor may not rely on an employee to provide family medical or other genetic information. (For this purpose, a spouse’s medical history generally counts as family medical information.) For example, if an incentive is offered to conduct a health risk assessment, employees must be told that they may qualify for the incentive, even if they don’t Answer questions about family history or other genetic information.
A comment period is 60 days after the proposed regulations have been published in the Federal Register. Specific areas that the EEOC would like to seek input on include whether regulations should include disclosure requirements, what types of incentives should be treated as de minimis, and how employers use information from health risk assessments and biometric screenings.
The proposed regulations offset the need to ban incentives that have a coercive effect while opening a pathway based on health risk tests and assessments to control plan costs. Time will tell if the rules are finalized in their current form. In the meantime, employers who maintain wellness programs should consult an attorney on how best to manage compliance obligations and mitigate risks.
© 2020 Proskauer Rose LLP. National Law Review, Volume XI, Number 15
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