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Proposed Regulations Address When Wellness Programs Violate The ADA

On April 20, 2015, the Equal Employment Opportunity Commission (“EEOC”) proposed its long-awaited regulations on wellness programs and the Americans with Disabilities Act (“ADA”). Wellness programs are permitted under the regulations to both the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”) and the Affordable Care Act (“ACA”). Additionally, the ADA specifies that voluntary medical examinations are allowed in conjunction with wellness programs. Nevertheless, over the last several months, the EEOC has brought suit against several companies alleging that their wellness programs violated the ADA. Accordingly, many have welcomed the proposed regulations to provide some guidance regarding when wellness programs may violate the ADA.

The proposed regulations provide that any employee health program “must be reasonably designed to promote health or prevent disease.” To reach that standard, the program must have a reasonable chance of improving the health or preventing disease in participating employees. 29 C.F.R. § 1630.14(d)(1). It also must not be a subterfuge for violating the ADA or other laws against employment discrimination, and it must not be overly burdensome. Id.

Any employee health program that includes disability-related questions or medical examinations (including having such questions or examinations as part of a health risk assessment) must be voluntary. To be voluntary, the employer sponsoring the program must not: (1) require employees to participate; (2) deny coverage of any group health plan or particular benefits packages because of non-participation; (3) take any adverse employment action or retaliate, interfere with, coerce, intimidate, or threaten employees. 29 C.F.R. § 1630.14(d)(2)(i)-(iii).

Incentives may be used in an employee wellness program, as long as the incentive (either reward or penalty) does not make the program involuntary. A program will be voluntary under the ADA if the maximum allowable incentive available under the program does not exceed 30% of the total cost of employee-only coverage. 29 C.F.R. § 1630.14(d)(3).

HIPAA regulations, as amended by the ACA, permit incentives as high as 50% of the total cost of employee coverage for tobacco-related wellness programs, such as smoking cessation programs. Since the 30% figure set forth above applies only to employee health programs that include disability-related inquiries or medical examinations, a smoking cessation program that only asks employees if they use tobacco, or if they ceased using tobacco after completing the program, may offer incentives of up to 50%, because they are not subject to the 30% cap under the proposed regulations. On the other hand, if a smoking cessation program requires a biometric screening or other medical examination to detect the presence of nicotine or tobacco, such a program would be subject to the 30% cap because such a screening or examination constitutes a medical examination. 29 C.F.R. § Part 1630 (Appendix).

If the health program is a wellness program that is part of a group health plan and includes disability-related questions or medical examinations, notice must be given to employees that: (1) is written to be reasonably understandable to the employee; (2) describes the type of medical information to be obtained and the specific purposes for which it will be used; (3) describes the restrictions on the disclosure of the information, the employer representatives and other parties with whom the information will be shared, and the methods to be used to make sure the information is not improperly disclosed, including whether they comply with HIPAA regulations. 29 C.F.R. § 1630.14(d)(2)(iv). Medical information or history may only be provided to an ADA-covered entity in the aggregate, so that individual identities are not disclosed. 29 C.F.R. § 1630.14(d)(6).

The proposed regulations caution that compliance with ADA regulations does not relieve employers from complying with all other laws, including all other anti-discrimination laws, as well as the Genetic Information Nondiscrimination Act of 2008 (“GINA”). 29 C.F.R. § 1630.14(d)(7). The EEOC’s discussion of the proposed regulations indicates that the EEOC plans further rulemaking specific to GINA at a later date.

As part of the issuance of the proposed regulations, the EEOC has invited comments on several different topics related to the proposed regulations. Comments must be received on or before June 19, 2015. The proposed regulations, the EEOC’s analysis, and further information about sending comments to the EEOC regarding the proposed regulations are available on the Federal Register website at www.gpo.gov/fdsys/pkg/FR-2015-04-20/pdf/2015-08827.pdf.  After the EEOC reviews all comments, it will issue final regulations, which may differ substantially from the proposed regulations.

Please contact Whitney Rahman at (717) 509-7237 or swr@blakingerthomas.com if you have questions about the proposed regulations, or any other employment or labor law issue.

 **This update is provided for informational purposes only andshould not be construed as legal advice or as creating anattorney-client relationship where one does not already exist**