EEOC Proposes Rules for Employer Wellness Programs to Avoid Potential Discrimination

As the focus on quality and value intensifies, wellness programs will no doubt play an integral role in the health care system. We reported last year in our sister publication Laboratory Industry Report, that it’s still too early to tell if growth in wellness programs will be a significant revenue opportunity for laboratories but laboratory testing is clearly an integral part of identifying, monitoring and managing health conditions such as diabetes, high cholesterol and others that are a focus of wellness efforts. The 2014 Employer Health Benefits Survey from the Henry J. Kaiser Family Foundation reports that “[v]irtually all large employers (200 or more workers) and most smaller employers offer at least one wellness program.” Furthermore, the survey indicated that 36% of large employers and 8% of small employers offering health benefits and wellness programs also include some kind of financial incentives to encourage employee participation in these programs, such as lower premium contribution or deductibles, gift cards or cash. The Equal Employment Opportunity Commission (EEOC) is concerned that employer wellness programs including participation incentives and medical examinations or inquiries about employee’s disabilities could lead to discrimination against employees. So the EEOC issued a proposed rule addressing incentives offered “to encourage employees to participate in wellness programs that include disability-related inquiries and/or medical examinations.” The proposed rule amends regulations and interpretive guidance implementing the Americans with Disabilities Act (ADA). Laboratories should be interested in these guidelines not just for their impact on participation in wellness efforts that could potentially increase demand for laboratory services but also because laboratories are employers too and may be offering these programs. Noting that HIPAA requirements prevent employers from offering incentives so great that they effectively deny coverage or impose too great a penalty on individuals who don’t meet certain health standards, the EEOC said that HIPAA doesn’t limit the information employers can request concerning medical examinations and disabilities under such programs. Thus, the EEOC’s proposed rule requires:

1. Wellness programs that include disability-related inquiries or medical exams “must be reasonably designed to promote health or prevent disease”—that is, it must have “a reasonable chance of improving the health of, or preventing disease in, participating employees, and it is not overly burdensome, is not a subterfuge for violating the ADA or other laws prohibiting employment discrimination, and is not highly suspect in the method chosen to promote health or prevent disease.”
2. To be considered voluntary, an employer offering a wellness program including disability-related inquiries or medical exams must not require participation, deny coverage in group health plans or benefit packages in such plans for lack of participation, or take adverse employment action or retaliate against or intimidate or threaten employees who do not participate or who don’t achieve certain health results. Employers must also provide notice of the medical information that will be collected, who will get the information, how it will be used or disclosed, restrictions on disclosure, and how it will be protected from improper disclosure.
3. Incentives for participation in a wellness program that is part of a group health plan and include “disability-related inquiries” or medical exams can’t exceed 30 percent of the total cost of employee-only coverage or the plan won’t be considered voluntary.
4. Except for certain purposes such as administering a health plan, medical information should be provided in aggregate and not identify the employee.

Takeaway: Workplace wellness programs continue to be a tool for improving health care but the EEOC is concerned they not be used in ways that adversely affect employee/patients.