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EEOC Issues New Wellness Proposed Regulations

In response to employer and employee concerns regarding wellness initiatives aimed at improving the health status of its workforce, the EEOC issued new proposed regulations on the intersection of wellness incentives and the Americans with Disabilities Act (ADA). In the new EEOC guidance, in order to comply with the ADA’s rule permitting disability-related inquiries and medical examinations by a voluntary health program (the category most wellness programs would most likely fall into), the proposed regulation would require:

1. The maximum allowable incentive an employer could offer, whether as a reward or a penalty, would be 30 percent of the total cost (employer plus employee contribution) of employee-only coverage under the plan. This is the same limit as the ACA’s non-tobacco incentive in wellness programs in which health data is collected. However, the proposed regulation would also cap the higher tobacco incentive at only 30 percent for participation-only wellness programs unless the ADA did not apply to that employer. Thus, the EEOC would not recognize any difference in a tobacco-cessation wellness program between one that merely asked a question of participants about their tobacco use versus requiring a nicotine test in order to verify the use of tobacco.

2. Employers offering a wellness program in conjunction with their group health plan would have to provide a notice to employees that clearly explains what medical information is going to be obtained, who will receive that medical information, how that medical information will be used, the restrictions on the disclosure of that medical information, and the methods that will be employed to prevent improper disclosure of that medical information.

3. The reporting and disclosure of any medical information obtained in a wellness program by either the plan sponsor or a wellness vendor would be subject to new confidentiality provisions.

4. The wellness program design must be reasonably created to promote health status or prevent disease, and not be overly burdensome on plan participants.

For many employers, while the guidance is quite helpful, it is sometimes at odds with permissible programs under health care reform (the ACA). Addressing that inconsistency, the agencies responsible for implementation of the ACA—namely the IRS, DOL, and HHS—also issued guidance in the form of their continuing series of FAQs. In those, the three agencies state that “The fact that a wellness program that complies with the Departments’ wellness program regulations does not necessarily mean it complies with any other provision of the PHS Act, the Code, ERISA, (including the COBRA continuation provisions), or any other State or Federal law, such as the Americans with Disabilities Act or the privacy and security obligations of the Health Insurance Portability and Accountability Act of 1996, where applicable.”

Stay tuned as the public comment period for the EEOC’s new proposed regulation is open until June 19, 2015. We expect many employer, labor organizations, and individuals to offer their input.

Posted on April 22, 2015 by GARY B. KUSHNER, SPHR, CBP, PRESIDENT AND CEO

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