Final Word on Employer Wellness Plans

Employee wellness plans are a hot item these days.  Increasingly, wellness plans are seen as a benefit to both employees and employers alike. As many employers jump on the bandwagon of this growing health trend, they should be aware of the other legal implications of creating and implementing these programs within their company. For example, a popular topic ever since the EEOC issued its proposed regulations last year has been how employee wellness programs can comply with existing regulations such as the ADA and Title II of the Genetic Information Nondiscrimination Act (GINA). Well now it’s time for employers to take note because the EEOC has just finalized its rules in this regard.

This week the EEOC issued a final rule to amend the regulations implementing Title II of GINA as they relate to employer wellness programs. A notice of proposed rulemaking was previously issued on October 30, 2015. The final rule says employers may provide limited financial and other inducements (also called incentives) in exchange for an employee’s spouse providing information about his or her current or past health status as part of a wellness program, whether or not the program is part of a group health plan.

Both the ADA and GINA generally prohibit employers from gathering information about employees’ health conditions or about the health conditions of their family members.  However, under both laws, employers are permitted to ask health-related questions and conduct medical examinations if the purpose is to provide health or genetic services as part of a voluntary wellness program.

The new rules were designed to address whether offering any type of incentives to employees, their family members or spouses, to provide health information would make the wellness programs involuntary.  Additionally, the EEOC stated the purpose of the rules is so ensure that the wellness programs are actually promoting good health and not just gathering sensitive medical information that can be used to impermissibly shift health insurance costs to the employee.

The first rule provides that in certain circumstances an employer may offer limited inducements for the employee’s spouse to provide information about the spouse’s manifestation of disease or disorder, as long GINA’s confidentiality requirements are observed and the information is not used to discriminate against the employee. The rule also provides that the value of the maximum incentive attributable to a spouse’s participation may not exceed 30% of the total cost of self-only coverage.  This is the same incentive that is allowed for the employee.  Notably, the rule does not allow incentives in exchange for specified genetic information about the employee, the employee’s spouse or children.

According to the EEOC, the second rule provides that wellness programs that are part of a group health plan and that ask questions about employees’ health or include medical examinations may offer incentives of up to 30% of the total cost of self-only coverage.

The final rules will go into effect in 2017 and apply to all employee sponsored wellness programs.  Now is the time for employers to begin thinking about implementation of changes into employee wellness programs to ensure compliance with the new and evolving rules.


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