On April 20, 2015, the U.S. Equal Employment Opportunity Commission (“EEOC”) published a proposed rule related to employee wellness programs.
Employee wellness programs are typically offered by employers to improve employee health and reduce costs associated with health care. Such programs often include incentives, such as cash or other prizes, to encourage employees to lead a healthier lifestyle. These programs may also incorporate health-related screenings and assessments, which measure and track employees’ in their effort to reach certain health goals.
Employee wellness programs must comply with the Americans with Disabilities Act (“ADA”), various anti-discrimination laws, and the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”). In an effort to provide guidance as to whether an employee wellness program complies with these various laws, the EEOC proposed a rule explaining: (a) what a voluntary employee wellness program is, (b) notice requirements related to confidential medical information obtained through a wellness program, and (c) what incentives an employer may offer in connection with such a program.
In general, wellness programs must be reasonably designed to improve health or prevent disease, must not be unduly burdensome to employees and must not violate the ADA. The ADA prohibits employers from discriminating against individuals on the basis of a disability and generally prohibit employers from making disability-related inquiries. However, voluntary medical examinations are permitted for a “voluntary” wellness program.
The proposed EEOC rule sets forth the following requirements regarding voluntary wellness programs:
- Employees may not be required to participate, may not be denied health insurance or given reduced health benefits, and may not be disciplined for not participating in the wellness program.
- Employers may not interfere with the ADA rights of employees who don’t want to participate, and may not coerce employees to participate or achieve certain health outcomes. Additionally, employers must provide reasonable accommodations that allow individuals to participate in wellness programs and earn incentives.
- Employers must notify employees as to what medical information will be collected as part of the wellness program, who will receive the information, how the information will be used, and how the information will be kept confidential. Such information shall be kept confidential and employers may only receive medical information in aggregate form, i.e. identities of specific employees are not disclosed.
The EEOC’s proposed rule also clarified that incentives related to employee wellness programs are allowable if the incentives do not exceed 30% of the total cost of employee-only coverage. For example, if the total cost paid by the employer and employee for self-only coverage is $5,000, the maximum incentive for an employee under that plan is $1,500.
The deadline for public comments on the proposed rule is June 19, 2015 and comments can be made here.
