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For years employers have been designing their wellness plans to satisfy the requirements of the HIPAA regulations. While the HIPAA compliance roadmap was clear, there was uncertainty as to when a wellness plan would satisfy the requirements of the Americans with Disabilities Act (ADA) when the wellness plan included disability-related inquiries, or medical examination or inquiries, including medical history questions. After years of employer requests and a number of EEOC lawsuits alleging that certain wellness plan practices violated the ADA, the EEOC has issued proposed regulatory guidance regarding wellness plan compliance with the ADA.

While the EEOC’s proposed regulations are similar in many respects to the HIPAA wellness regulations, there are some differences that employers should consider as they design their wellness plans for next year. Those differences include the following for wellness plans that have disability-related inquiries or medical examinations or inquiries, such as health risk assessments or biometric screening:

•30% reward/penalty cap is calculated only on the total costs of employee-only coverage (not on family or other levels of coverage).
•The EEOC’s proposed regulations extend the 30% cap to apply to participatory only wellness plans.
•Tobacco related incentives are limited to 30% of the total cost of employee-only coverage if the tobacco related incentive/penalty relies upon a medical examination (such as measuring nicotine levels in a blood draw). If the individual is only asked about tobacco product use, then a 50% incentive/penalty is acceptable.
•Health risk assessments and biometric screenings are allowable, with the following additional requirements:

1) They must have reasonable chance of improving the health of or preventing disease in participating employees (for example, the employer will use the results to inform employees of health risks or will use de-identified aggregate data in designing programs targeted to meet identified health risks in its particular employee population).

2) They must not be overly burdensome.

•A new notice requirement generally will apply and require employers to explain what medical information will be obtained, who will receive it, how it will be used, the restrictions on the disclosure of the medical information and what methods will be used to prevent improper disclosure.

Employers should also remember that the ADA wellness plan exception that allows for disability-related inquiries or medical examinations only applies to “voluntary” wellness plans. Not surprisingly, the EEOC interprets this to mean that employees may not be required to participate, and the employer may not take adverse employment action against any employees who refuse to participate. Further, a wellness plan will not be voluntary if the employer denies coverage under any of its group health plans or benefit packages within a group health plan, or limits the extent of benefits (except as allowed by the incentive award/penalty rules) for non-participation.

The EEOC guidance reminds employers that wellness programs must be accessible to individuals with disabilities. The guidance also notes that compliance with the EEOC proposed wellness plan regulations does not necessarily mean that a wellness plan is also compliant with other laws such as the Genetic Information Nondiscrimination Act of 2008 (GINA), Title VII, the Equal Pay Act, and the Age Discrimination in Employment Act.

While this alert highlights many of the differences between the HIPAA wellness plan regulations and the EEOC’s proposed guidance, employers should thoroughly review their welfare plan design and administration based on the EEOC’s proposed guidance.

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