Final Rules for Wellness Programs Includes New Notice Requirement

On August 23, 2016 By Tevis

Over the last few years, employers have been introducing wellness programs to their employees, mostly for health care cost containment purposes. The Health Insurance Portability and Accountability Act of 1996 (HIPAA) formalized wellness programs to the extent most such programs could be treated as group health plans. As a result of subsequent legislation, including the Affordable Care Act (ACA) and regulatory guidance, employers must meet a specific set of guidelines for its programs to qualify as wellness programs. The two main types are: Participating Programs and Health Contingent Programs.

The purpose of this Benefits Alert is to provide employers who already have wellness programs or who intend to introduce one as of their next plan year the ability to meet current Equal Employment Opportunity Commission (EEOC) compliance requirements under the Americans with Disabilities Act (ADA).

EEOC Final Regulations Release

On May 17, 2016, the EEOC published two final rules under the ADA and Genetic Information Nondiscrimination Act (GINA) as they relate to employer wellness programs. The final regulations clarify prior inconsistencies between the EEOC’s April 2015 proposed regulations and the existing wellness program guidance issued under the HIPAA and the ACA, specifically with regards to notice requirements, wellness program eligibility restrictions, and maximum incentive limits.

Discussion

  1. Non-Discrimination. HIPAA generally prohibits employers from discriminating against employees under a group health plan based on a health-status related factor. HIPAA provides an exception from this rule for wellness programs so long as such programs comply with a set of regulations promulgated by ACA. The ACA regulation allow for “participatory” wellness programs offered to similarly situated individuals and “health-contingent” wellness programs that follow the following conditions:
  1. Wellness Rule. Title I of the ADA prohibits employers from discriminating against individuals on the basis of disability and limits an employer’s ability to make disability-related inquires or require medical exams unless the inquires/medical exams are provided voluntarily as part of an employee health program (e.g. a wellness program that offers medical screenings, weight control, cancer detection, etc.). The final rule requires the following conditions be met for the program to remain voluntary:
  1. Reasonably Designed and Voluntary Participation. The final rules contain additional guidance on these two terms:

To be “Reasonably Designed,” the information collected must be provided to the plan participant. This includes measurements, tests, screenings and/or follow-up information or advice designed to improve the participant’s health, or it will fail the “Reasonably Designed” requirement.

The notice requirement applies to all wellness programs, whether or not they are part of a group health plan or stand-alone.

  1. Final GINA Rule. Title II of GINA prohibits employers from discriminating against their employees on the basis of “genetic information” and restricts employers’ ability to request, require, or purchase genetic information with respect to an employee or an employee’s family members. Genetic information includes information about the individual’s or family member’s genetic tests, the manifestation of a disease or disorder (i.e., family medical history), and the individual’s request for or receipt of genetic services. With respect to pregnant women, genetic information specifically includes information about the fetus she is carrying.
  2. GINA and Wellness. The GINA final rule requires employers sponsoring wellness programs that ask for genetic information to follow the following conditions:

ADA Notice Requirements

The ADA final rule requires employers who offer wellness programs that collect employee health information to provide a notice to employees informing them what information will be collected, how it will be used, who will receive it, and what will be done to keep it confidential. Wellness programs often gather health information through voluntary health risk assessments or voluntary biometric screenings that include medical examinations (such as tests to detect high blood pressure, high cholesterol, or diabetes). The EEOC has published questions and answers about the notice, along with a sample notice.

Notice Format. So long as the required information is provided, employers need not use the precise wording in the sample notice and may tailor their notices to the specific features of their wellness programs. Employers that already provide notices under HIPAA may comply with the ADA rules by revising their notices as necessary to include all required information. Notices may be provided in hard copy or by email but should not be buried in unrelated information. Employees with disabilities may need to receive notices in an alternative format.

Copyright © 2016 Alfred B. Fowler, Attorney at Law · All Rights Reserved. Reprint with permission only. This Benefits Alert is published as an information source for our clients and colleagues. It is general in its nature and is no substitute for legal advice or opinion in any particular case.

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