How the ADA drove the EEOC's final rule on wellness programs
The Equal Employment Opportunity Commission acted like a referee in setting guidance for employer wellness programs. The agency reviewed each of its anti-discrimination laws to come up with its final rule. But all “roads” led back to the Americans with Disabilities Act, which protects disabled workers from discrimination.
The EEOC defines “wellness programs” as company-sponsored activities that promote health and disease prevention. Wellness programs can be part of a group health plan or offered separately as an employee benefit. Programs might offer education on nutrition or weight control, coaching with health goals or onsite exercising areas.
Some wellness programs ask employees to complete health risk assessment forms (HRAs) or undergo screenings for diabetes, high blood pressure or other medical conditions. Other companies use incentives, such as cash or gifts, to lure employees into their programs.
Summarizing the final rules
The final rule says employers may offer workers incentives of limited financial value in exchange for medical information workers provide through HRAs and medical exams. To finalize the rules, the EEOC reviewed other laws and how they compared with the ADA.
At the core of the EEOC’s final rules are how employers:
- Structure their wellness programs
- Handle the information collected from HRAs and health screenings
- Give incentives for employee participation
- Avoid violating the ADA and other workplace laws through all the above.
Aligning wellness programs with the ADA
The ADA protects workers with disabilities from discrimination under Title I. Generally, it bars employers from getting medical and disability-related information from employees and job applicants that could be used against them. However, it did allow employers to ask workers health- and disability-related questions and conduct medical exams in voluntary wellness programs with some limitations.
What the ADA didn’t do was define “health program,” clarify “voluntary” and specify whether it allowed incentives to get employees into wellness programs.
The EEOC stepped in to clarify what the ADA left vague. On incentives, the agency ruled that:
- Employers whose wellness programs ask employees questions about their health can only offer incentives of up to 30% of the cost of single coverage.
- Employers must notify employees in a wellness program what health information will be gathered and how it will be used.
Lisa Jean Suter, rewards service director at Welltok Inc., recommends that employers keep within the 30% cap to ensure they’re complying with the law. She also advises employers to have administrative procedures for withholding and reporting taxes on rewards employees earn.
The EEOC also defined “voluntary,” which in the case of wellness programs, means employers can’t offer incentives in such a way that employees feel forced to participate.
The final rules also require wellness programs, including those asking disability-related questions or conducting medical exams, to be “reasonably designed” in promoting health and disease prevention. To satisfy this definition, wellness programs can’t:
- Require employees to spend a burdensome amount of time participating
- Inflict unreasonably intrusive procedures on employees
- Be a ploy for violating the ADA and other anti-discriminatory laws
- Require employees to incur high costs for medical exams
Helping employers comply with the final rules
Ms. Suter offers a three-point compliance plan for wellness programs:
- Review and refresh. Take time each year to get up to date on compliance requirements. Also, update program materials and websites to provide required notifications.
- Respect the requirements. Several laws impose requirements on employer-sponsored wellness programs besides the ADA, including the Health Insurance Portability and Accountability Act (HIPAA), the Patient Protection and Affordable Care Act (ACA) and the Genetic Information Nondiscrimination Act (GINA).
- Right partnership. Large employers have consultants, legal staff and outside counsel to help them navigate the regulatory compliance landscape. Most companies don’t have the resources to tackle this important task. That’s why it’s important to find a partner that will not only provide a platform and administrative services to keep you compliant but also guide you in building a strategy to meet compliance requirements and your company’s goals and objectives.