The Equal Employment Opportunity Commission (EEOC) has partially helped pave the way for employers who may have been on the fence when it comes to growing or starting corporate wellness programs with its latest decision.
The EEOC’s latest proposed rule in part clarifies that corporate wellness programs that comply with the Affordable Care Act’s (ACA) wellness incentive limits generally meet the rules for voluntary wellness programs under the Americans with Disabilities Act (ADA).
Simply, employers can deliver financial penalties without violating the ADA to employees who decide not to participate in wellness programs. The regulations stopped short of offering guidance on how other federal laws—for instance, the ACA—affect wellness programs.
Calling it welcome news for both employers and employees, the National Business Group on Health (NBGH) President and CEO Brian Marcotte says the proposed rule means employers can breathe a sigh of relief. The NBGH, in Washington, D.C., is a non-profit organization that represents large employers' perspective on national health policy. Business Group members, which include 67 Fortune 100 companies, provide health coverage for more than 50 million U.S. workers, retirees and their families.
"The EEOC has lifted a cloud of uncertainty that has been hovering over employer-sponsored wellness programs since the EEOC's legal actions last year," said Marcotte. "We applaud the EEOC for issuing the proposed rules that signal a unified government policy in support of wellness programs, which help employees improve their health and wellbeing."
Marcotte was referring to a lawsuit the EEOC brought against Honeywell in 2014 that took the position that Honeywell’s wellness program, which asked employees to reveal certain health information in order to get a discount on their health insurance, was discriminatory. More specifically, the EEOC said Honeywell’s biometric screening program for employees and their families violated the ADA and the health privacy provision of Health Insurance Portability and Accountability Act (HIPAA).
"Companies view investments in the health of employees as an important element to creating an engaged, productive and competitive workforce," Marcotte says. "Our research also shows that employees value participating in these programs that help them stay healthy."
Wellness programs with incentives are a growing trend. According to a survey released last month by The NBGH and Fidelity Investments, 97% of large employers offer a health risk assessment, biometric screening or other wellness program in 2015. And more than three-in-four (79%) employers use incentives to engage employees in these programs.
Unresolved issues remain
Despite EEOC's proposed rules clarification on screenings and penalties, it left a number of issues unresolved. For example, the issue of wellness screening for family members and the Genetic Information Nondiscrimination Act (GINA) was not addressed, according to Sarah Millar, a partner and vice chair of the Employee Benefits & Executive Compensation Practice Group at Drinker Biddle in Chicago.
Even so, the recent EEOC move was necessary, she says.
"We now know what the EEOC is thinking on how much is too much to get employees to participate," Millar says. "The short answer is up to 30 percent of the cost of group insurance coverage for the employee only, not dependents."
The EEOC's proposed rule makes clear that wellness programs are permitted under the ADA, but that they may not be used to discriminate based on disability. The rule explains that under the ADA, companies may offer incentives of up to 30 percent of the total cost of employee-only coverage in connection with wellness programs. At the same time, the wellness program has to be reasonably designed to improve health or prevent disease and requires a reasonable accommodation based on ADA guidelines.
The other open question that the EEOC is going to issue guidance on is impact of GINA, Millar says, and this is where the spouse/family member issue comes into play.
"For example, asking a spouse for medical information is discriminatory with respect to genetic data for that employee based on the very broad definition of spouse within GINA," she says. "Some here guidance would be very helpful."
With the cumulative effect of these different laws and agencies, employers may question the utility of wellness because they are more complex to administer, she adds, noting that in her view it would be more helpful to have one standard to apply to both the ADA and ACA issues.
Millar explains that that this will be one of the key themes from the business community during the EEOC’s 60-day public comment period.
Steve Wojcik, vice president of public policy at NBGH agrees, but says his organization is "cautiously optimistic" now that government policy is aligned in support of these programs.
"The proposed rule clarifies one major concern, but we still have some concerns about the details and will be addressing them when we submit our comments," he says. "We hope that the effect of the rule will be to promote employer-sponsored wellness initiatives and not stifle them."
