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EEOC Issues Final Rule on Employment Wellness Programs and the ADA

On Tuesday May 17, 2016 the EEOC issued its final rule on employer wellness programs. The new rule describes how the Americans with Disabilities Act (ADA) will apply to employer offered wellness programs. The new rule will only apply to wellness programs that require employees to answer disability related questions or to undergo medical examinations in order to participate. Employer wellness programs that do not require employees to answer disability related questions or undergo a medical examination in order to participate will not be affected by this rule. Prior to this rule being issued the EEOC’s ADA regulations said that employers may make inquiries and conduct medical examinations that are part of a voluntary health program, but the regulations did not define what the term “voluntary” meant nor did it explain what is considered a “health program.” The regulations were also silent on whether employers could offer incentives to employees who participate in a program. The proposed rule issued by the EEOC on April 20, 2015, left some employers with questions concerning what under the new rule will constitute a reasonably designed wellness program, what is considered voluntary participation, what type of notice is required, what are the incentive limits, and will any changes to the confidentiality requirements be made? The final rule has attempted to clear up these questions. First, disability related inquires and medical examinations are allowed under the new rule, but they must be “reasonably designed.” In order to be reasonably designed, the program must not require a burdensome amount of time in order to participate, require unreasonable intrusive procedures, be a vehicle for the violation of the ADA or other employment discrimination prohibiting laws, or require significant costs to be incurred by the employee. Second, participation in employer wellness programs must be voluntary. This means employers cannot require participation, deny health coverage for non-participation, or take any other adverse or coercive actions against employees who do not participate or fail to reach the program’s goals. Third, notice of what employee information will be collected, how it will be used, and who will use it is required for employer wellness programs. If an employer already provides this notice to employees, then no new notice is required, but if the notice is not detailed enough the employer will have to send new notice to employees. Fourth, the incentive limit is generally 30% of the total cost for self-only coverage of the plan in which the employee is currently enrolled. However, there are differences on what plans employees can receive these incentives on, which is determined by what type of health care options the employer provides. Additionally, employers who offer smoking cessation programs that only ask if an employee uses tobacco and does not test for the presence of tobacco or nicotine can offer up to a 50 percent incentive because asking such questions is not considered a disability related inquiry under the new rule. Finally, the new rule does not change pre-existing confidentiality requirements under the ADA. However, it does add two new requirements. First, information from a wellness program can only be collected in aggregate form to prevent disclosure or identification of the employees participating in the program. Second, an employer cannot require employees to waive any confidentiality protections, or agree to let the employer sell any information obtained through a wellness program to a third party. Employers need to have wellness programs in compliance with this new rule by January 1, 2017. For more information about this new rule, click here.