Proposed Changes to the ADA’s Applicability to Wellness Programs to Align with Other Laws
The Equal Employment Opportunity Commission (EEOC) has issued proposed changes to how the Americans with Disabilities Act (ADA) will apply to employer wellness programs that are part of a group health plan. These changes will align with existing requirements with which plans must comply under other laws, such as HIPAA.
As a reminder, the ADA prohibits employers from obtaining medical information from an employee, but allows employees to voluntarily undergo medical examinations or submit their information if they are participating in an employee health program.
To whom will the proposed changes apply?
The proposed changes will apply to wellness programs, which are defined as programs that are offered through employer-sponsored health plans with the goal of improving the health of employees and thereby reducing healthcare expenses. To be considered a wellness program within the meaning of the ADA, the program must be designed to promote health or prevent disease.
Must wellness plans comply before the final rule is issued?
Employers may comply before the final rule is issued if they wish to do so, but it is not required at this time. The EEOC has pointed out that many of the requirements in the proposed rule are already requirements under other laws. This includes the criteria for being considered a voluntary program, as well as the criteria for offering reasonable accommodations to employees with disabilities to allow them to participate in wellness programs.
What are the proposed changes?
The prior rule did not clarify whether employers may offer incentives to promote employee participation in a wellness program. The proposed rule clarifies that employers may offer up to 30* percent off the cost of self-only coverage as an incentive to employees who participate in a wellness program, or to those who achieve the desired health outcomes. This incentive limit aligns with that of wellness plan requirements under HIPAA. The proposed rules also clarify that the maximum allowable penalty for not participating or not achieving certain health outcomes is 30 percent of the cost of self-only coverage.
The proposed rule also clarifies the criteria for a wellness program to be considered voluntary, and explains how medical information obtained as part of a voluntary employee health program must be kept confidential.
* Employers can continue to increase their reward up to 50 percent, if the wellness plan includes steps to reduce or prevent tobacco use. This type of wellness program is outside the scope of the EEOC proposed regulations.
How does the proposed rule define a voluntary wellness program?
Under the proposed rule, a wellness program is voluntary if the employer:
- Does not require employees to participate.
- Does not limit or deny health coverage under the health plan if an employee does not participate.
- Does not take any adverse action against employees, such as disciplining an employee who does not achieve certain health goals of the program.
What does the proposed rule say about wellness programs and confidentiality?
The proposed rule clarifies that covered entities, which includes health plans and healthcare providers, may receive information that is collected in relation to a wellness program in aggregate form only. The information may not identify specific individuals, unless it is necessary to administer the plan. It is important to remember that wellness programs offered as part of a group health plan are generally subject to HIPAA, and the privacy of a member’s personal health information must be maintained accordingly.
If you have any questions, please contact your client solutions team.
Compliance Quarterly is being provided as an informational tool. It is recommended that plans consult with their own experts or counsel to review all applicable federal and state legal requirements that may apply to their group health plan. By providing this publication and any attachments, Meritain Health is not exercising discretionary authority over the plan and is not assuming a plan fiduciary role, nor is Meritain Health providing legal advice.