The Equal Employment Opportunity Commission (EEOC) published a proposed rule to amend Title I of the Americans with Disabilities Act (ADA). The proposed amendments address the interaction of the HIPAA wellness program final regulations and the ADA’s prohibition on employers inquiring about disabilities or requiring medical examinations. Specifically, the amendments aim to ensure that wellness financial incentives and information gathering allowed by HIPAA are not so coercive as to render the programs involuntary to employees. The amendments also address confidentiality and nondiscrimination in employment.
In drafting the proposed rule, the EEOC attempted to harmonize the ADA’s limitation on employer access to individuals’ medical records with HIPAA’s promotion of wellness programs, but there were a few areas where the ADA adds new restrictions:
Wellness Financial Incentive (Reward or Penalty) Limits
Under HIPAA, health-contingent wellness programs can offer employees incentives valued up to a total of 30% of the medical premium. For participatory wellness programs, there is no dollar limit on employer-provided incentives. HIPAA also permits employers to apply up to a 50% surcharge to employees’ medical payroll contributions for tobacco usage.
As proposed, the ADA would apply the 30% incentive limit to the combined incentives from all wellness programs offered (both health-contingent and participatory). However, participatory wellness programs are only subject to the ADA regulations if the program requires participants to answer inquiries about disabilities or submit to medical examinations. This incentive limit would not apply to certain participatory programs, such as those that solely provide, rather than collect, information. For example, nutrition, weight loss, or smoking cessation classes that do not collect health information from attendees would not be subject to the ADA limit. Additionally, smoking cessation programs that merely ask whether or not the participant uses tobacco may still charge up to the 50% surcharge allowed under the HIPAA regulations. However, if the program goes beyond asking and, for instance, utilizes a biometric screening to test for nicotine, that screening would be considered a medical exam and would subject the program to the ADA 30% incentive limit.
Promoting Health in Participatory Wellness Programs
While the HIPAA regulations require that health-contingent wellness programs “be reasonably designed to promote health or prevent disease”, the ADA would require that standard of all wellness programs, including participatory programs. Therefore, even a participatory wellness program that collects a health risk assessment (HRA) would need to have a reasonable chance of actually improving health.
For example, if the employee HRAs show that there is a high rate of occurrence of a specific medical condition, the program could satisfy the health improvement requirement by using the information to implement a special education or prevention program for all participants, targeting that medical condition. Likewise, if the HRA directs participants to education materials on specific health conditions based on their answers or requires a visit to a physician for diagnostic tests, then the HRA would be providing feedback that could have a reasonable chance of improving health or preventing disease. On the other hand, if there is no follow-up or feedback to the participants at all, the program probably would not satisfy the ADA requirement since it does nothing to improve health or prevent disease.
Under existing ADA regulations, employee medical records obtained from participation in wellness programs must be maintained in separate files, kept confidential, and may not be used for any employment or benefit-related purposes. The proposed ADA amendments add an additional restriction that medical information collected by the wellness program administrator may only be disclosed to an employer in aggregate form without revealing individual identities.
The ADA added a voluntary participation requirement on wellness program design that the HIPAA regulations did not address.
To ensure the wellness program is voluntary, the proposed ADA amendments (1) restrict incentive amounts, as noted above, to keep cost from being a coercive factor and (2) outline four other factors required to be a voluntary plan:
- Participation cannot be mandatory;
- Coverage under the group health plan or other benefits cannot be denied based on whether an employee participates;
- No adverse employment action or other discrimination, retaliation, or coercion, etc. can occur for lack of participation or due to whistle-blowing; and
- Written notice must be provided to employees that clearly explains the medical information to be collected, what it will be used for, and the disclosure restrictions, including who will have access and the protections set up to prevent improper disclosure.
While we are waiting for the proposed ADA amendments to be finalized, employers should take them into consideration while designing and implementing wellness programs. Existing wellness programs may need to be adjusted to ensure compliance with incentive limitations and voluntary participation status. For example, employers should not deny access to medical coverage due to wellness program participation, but may charge more or less for coverage, subject to the limits. For assistance with your wellness program, please contact your Keller account team.