Yesterday, the EEOC issued its long-awaited formal notice of proposed rulemaking on wellness programs. These new rules are meant to harmonize the Affordable Care Act’s tax advantages with the requirements of the Americans with Disabilities Act. They address what “voluntary” and “incentive” truly mean in wellness programs, as well as the limits on how employee health information can be used.
The EEOC has been working on these rules since last year. Their efforts began after the agency filed an unsuccessful motion for a temporary injunction meant to stop the implementation of parts of a large employer’s wellness program. The motion attempted to prohibit Honeywell from implementing changes to its wellness program that (as the EEOC characterized it) “penalized” employees if they chose not to submit to biometric testing, including a blood draw. The agency has engaged in other, similar litigation, bringing lawsuit after lawsuit against employers that required employees to submit to health testing.
The proposed wellness program rules state that participation in wellness programs be voluntary, and define what makes a program voluntary. A wellness program must not:
- Require employees to participate;
- Deny coverage under any of the employer’s group health plans or benefit packages because of non-participation; or
- Result in adverse employment action or retaliation, coercion, or intimidation of employees.
Further, if the program is part of a group health plan, the program must give specific, understandable notice of how medical information obtained as part of the program will be used, who will use the information, restrictions on the disclosure of the information, and what steps will be taken to protect the information.
As for incentives, the EEOC has set a very specific threshold for allowable monetary value. If an employer offers an incentive to employees who participate in a wellness plan, the incentive cannot have a value of more than 30 percent of the total cost of employee-only health coverage.
Finally, the new rules limit how an employer or group health plan can collect and use health information, including biometric testing, obtained as part of a wellness program. The information may only be collected if it is intended to promote health or prevent disease. That means, among other things, that the information must be shared with the employee so that he or she can take steps to improve health. If an employer suggests a specific plan to improve an employee’s health based on the information, the employer cannot set unreasonable timeframes or procedures that would be burdensome to the employee.
Public comment on these proposed rules can be submitted until early June, with issuance of final rules to follow. Much commentary is expected, from employee and employer groups alike. We’ll keep you posted.