AMERICANS WITH DISABILITIES ACT
The EEOC recently issued its final rule (“Final Rule”) on wellness programs (i.e.,
employee health programs) under Title I of the Americans with Disabilities Act (“ADA”).¹
These wellness programs may be offered within, or outside of, an employer’s group health plan.
The requirements of the Final Rule apply only to employee wellness programs that require
employees to respond to disability-related inquiries and/or undergo medical examinations. The
provisions of the Final Rule regarding notice and incentives will apply to employee wellness
programs as of the first day of the first plan year on or after January 1, 2017, for the health plan
used to determine the level of permissible incentive. The remainder of the Final Rule is effective
now, as it simply clarified existing regulations.
In the Final Rule, the EEOC responds to a number of comments from the public
regarding the operation of employee health programs. It specifically rejects commenters’
requests that an employee be allowed to provide a general certification or attestation that they are
receiving medical care for particular health risks factors in lieu of completing a health risk
assessment (“HRA”) or undergoing a medical examination. According to the EEOC, allowing
such an alternative would limit the effectiveness of the wellness programs as envisioned by the
ACA. The EEOC also declined to incorporate an “affordability standard” into the Final Rule
with respect to the incentive limits. Instead, it extended the 30% limit (under HIPAA and the
ACA) and agreed with the Treasury Regulations that the affordability of eligible employersponsored
coverage should be determined by assuming that employees will fail to satisfy the
requirements of a wellness program.
Not surprisingly, several commenters asked the EEOC to clarify what it means for a
wellness program “to be a part of, or provided by, a group health plan.” However, instead of
providing factors that would answer that question, the EEOC determined that all provisions of
the Final Rule should apply to wellness programs, regardless of whether they are offered within,
or outside of, an employer-sponsored group health plan, when the program includes disabilityrelated
inquiries and/or medical examinations.
The EEOC noted that wellness programs that include “a measurement, test, screening or
collection of health-related information without providing results, follow-up information, or advice designed to improve the health of participating employees would not be reasonably
designed to promote health or prevent disease, unless the collected information actually is used
to design a program that addresses at least a subset of conditions identified.” Furthermore, the
EEOC concluded that imposing a penalty solely based on an employee’s failure to achieve a
health outcome would, in many cases, discriminate based upon a disability.
Voluntariness
The Final Rule also clarifies that a wellness program is voluntary not simply because it
gives employees an option to participate, but also because offering an incentive of up to 30% of
the total cost of self-only coverage does not, without more, make a wellness program coercive.
While an employer may require an employee to pay more for a certain type of coverage if the
employee does not participate in a wellness program that includes disability-related inquiries or
medical examinations, an employer may not deny access “to a benefit available by virtue of
employment.” In other words, an employer cannot condition participation in a group health
plan upon participation in a wellness program, including an HRA. The EEOC expressly
rejected a commenter’s proposal to allow wellness program participants the opportunity to
participate in a comprehensive health plan while offering non-participants a less comprehensive
plan. Instead, the EEOC proposed that a non-participant could pay more for the same
comprehensive health plan by virtue of not receiving incentives of up to 30% of the total cost of
self-only coverage.
Notice Requirements
All wellness programs, whether a part of a group health plan or not, that require
employees to respond to disability-related inquiries and/or undergo medical examinations must
provide employees with a notice, in plain language, that explains the medical information that
will be collected, how it will be used, who will receive it, the restrictions on the disclosure of the
information, and the methods that will be used to prevent improper disclosure. Existing
notifications must be revised, or a new notification developed, when current notifications do not
meet these requirements. The EEOC will provide a sample notice in the next few weeks.
Incentives
The EEOC confirmed that an employer may offer incentives up to a maximum of 30% of
the total cost of self-only coverage (including the employee’s and the employer’s contribution),
whether as a reward or penalty. In cases where an employer offers a single group health plan but
an employee who does not enroll in the plan may still participate in the wellness program, the
employer may offer an incentive of up to 30% of the total cost of self-only coverage under the
plan. Where an employer has more than one group health plan, but participation in a wellness
program again does not depend on the employee’s enrollment in the plan, the employer may
offer an incentive of up to 30% of the total cost of the lowest cost self-only coverage under a
major medical group health plan offered by the employer. If the employer does not offer a group
health plan or group health insurance coverage, but an employee may participate in a wellness
program, the employer may offer an incentive of up to 30% of the cost that would be charged for
self-only coverage (for a 40-year-old nonsmoker) in the second lowest cost Silver Plan available
through the state or federal Exchange in the location that the employer identifies as its principal
place of business.
Non-financial and de minimis incentives must be included within the calculation of the
30% cap, despite any perceived difficulty in valuing them. Employers can use any “reasonable”
method to determine the value of in-kind incentives (e.g., a premier parking space).
The Final Rule does not address incentives wellness programs may offer for dependent or
spousal participation because the ADA’s prohibitions on discrimination apply only to applicants
and employees. Nonetheless, employers should be sure to abide by the requirements of Title II
of GINA (discussed herein) in collecting information on an employee’s family member in
exchange for incentives.
With smoking cessation programs, a covered entity may offer incentives as high as 50%
of the cost of self-only coverage, depending upon the type of program. The EEOC reiterates that
the interpretive guidance for the PHS Act states that “because any biometric screening or
other medical procedure that tests for the presence of nicotine or tobacco is a medical
examination under the ACA, the 30 percent incentive limit would apply to such a screening
or procedure.”² On the other hand, smoking cessation programs that simply ask employees
whether or not they use tobacco do not ask disability-related inquiries or include medical
examinations, and therefore may offer incentives of up to 50% of the cost of self-only coverage.
Confidentiality/Privacy
Medical information collected through an employee health program may only be
provided to a covered entity in aggregate terms that do not disclose the identity of specific
individuals, other than as needed to administer the health plan or as specifically permitted under
29 C.F.R. § 1630.14(d)(4). A covered entity is also prohibited from requiring an employee to
agree to the sale, exchange, transfer, or other disclosure of medical information (except as to
carry out the operations of the wellness program) or to waive any confidentiality provisions as a
condition of participating or earning incentives.
GENETIC INFORMATION NONDISCRIMINATION ACT
Title II of the Genetic Information Nondiscrimination Act (“GINA”) applies to
employers with 15 or more employees. In the context of GINA, “genetic information” is
interpreted to mean information about the manifestation of disease or disorder. The Title II Final
Rule (“Final Rule”) does not incorporate a restriction on the collection of genetic information to
the minimum necessary for the employer-sponsored wellness program activities or any limitation
on accessing genetic information from other sources. Rather, in the Final Rule, the EEOC
reiterates that employee wellness programs that collect genetic information must be “reasonably
designed”³ to promote health and prevent disease. Employers can request, require, or purchase
genetic information as part of health or genetic services only when these services are reasonably
designed to promote health or prevent disease.
The provisions of this Final Rule apply regardless of whether a wellness program is
offered as a part of, or outside of, an employer-sponsored group health plan.
The provisions of 29 C.F.R. § 1635.8(b)(2)(iii) on wellness program inducements will
apply prospectively, beginning on the first day of the first plan year on or after January 1, 2017,
for the health plan used to determine the incentives.
Inducements and Spouse Participation in Wellness Programs
A covered entity may offer an inducement to an individual for completion of a health
risk assessment, including one that has questions about family medical history or other genetic
information.4 The inducement, however, must be made available regardless of whether or not
the participant answers questions regarding genetic information, and the health risk assessment
must be administered in connection with the spouse’s receipt of health or genetic services offered
by the employer. Inducements otherwise may not be offered for individuals to provide genetic
information.
The same general inducement limits apply under the GINA Final Rule as the ADA Final
Rule (i.e., 30% of the total cost of self-only coverage) and are applied individually to the
employee and spouse. The portion of an inducement attributable to the spouse’s provision of
information about his or her manifestation of disease or disorder does not have to be paid to the
spouse but it may be paid in whatever way the remaining portion of the inducement is made.
As in the ADA Final Rule, the EEOC declines in the GINA Final Rule to adopt a medical
certification option in alternative to providing information about the manifestation of disease or
disorder when participating in an employer wellness program. The EEOC also declined to adopt
commenters’ suggestion that the employer only be required to comply with authorization
requirements when more than de minimis inducements are offered for genetic information in a
wellness program. “Inducements” include both financial and in-kind inducements, though
employers have flexibility in valuing in-kind incentives.
Medical Information of Employee’s Children
The Final Rule expressly prohibits inducements in return for information about the
manifestation of disease or disorder in an employee’s children and makes no distinction between
adult and minor children or between biological and adopted children. While an employee’s
children are permitted to participate in an employer’s wellness program on a voluntary basis, the
program may not offer any inducement in exchange for information about the manifestation of
disease or disorder in the child.
Confidentiality
The Final Rule reiterates that employers and other covered entities maintaining genetic
information must keep the information in medical files that are separate from personnel files, and
the information must be treated as confidential. Genetic information can only be disclosed in six
very limited circumstances set forth in 29 C.F.R. § 1635.9, none of which would likely occur
except for an employee’s request for the information. When employers obtain genetic
information as a part of an employer-sponsored wellness program, the authorization signed by
the participating individual must explain the restrictions on disclosure of the information; that the
individually identifiable genetic information is provided only to the individual receiving the
services and the providers involved in services; and that individually identifiable genetic
information is only available for health or genetic services and is only disclosed to the employer
in aggregate terms.
A covered entity may not condition participation in an employer-sponsored wellness
program or an inducement on an employee, his or her spouse, or other covered dependent
agreeing to the sale, exchange, sharing, transfer, or other disclosure of genetic information,
except where expressly permitted under the regulations
Notice/Authorization Requirements
Employers must provide authorizations to individuals to be signed prior to sharing
genetic information as part of health or genetic services, including prior to HRAs for employees
and spouses. The authorization must explain that individually identifiable genetic information is
provided only to the individual receiving the services and the licensed health care professionals
or board certified genetic counselors involved in providing the services and that individually
identifiable genetic information is only available for purposes of the health or genetic services.
The information cannot be disclosed to the employer other than in aggregate terms.
This material is intended for general information purposes only and does not constitute legal advice. For legal
issues that arise, legal counsel should be consulted.
1 Other federal laws, including Title II of the Genetic Information Nondiscrimination Act and the Health
Insurance Portability and Accountability Act, apply to wellness programs that are offered through group health plans
as well.
2 “Although the fact that someone smokes is not information about a disability, the ADA’s provisions
limiting disability-related inquiries and medical examinations apply to all applicants and employees, whether or not
they have disabilities. Moreover, whatever benefit smoking cessation programs that are part of wellness programs
may have, the Commission can discern no reason for treating medical examinations to detect the use of nicotine
differently from any other medical examinations when the ADA makes no such distinction.” 81 Fed. Reg. 31136.
3 Satisfaction of the “reasonably designed” standard is determined based on a review of the relevant facts
and circumstances. However, to meet the standard, the program must “have a reasonable chance of improving the
health of, or preventing disease in, participating individuals, and must not be overly burdensome, a subterfuge for
violating Title II of GINA or other laws prohibiting employment discrimination, or highly suspect in the method
chosen to promote health or prevent disease.”
4 The health risk assessment must include a requirement that the individual provide prior, knowing,
voluntary, and written authorization, and the authorization form must describe the confidentiality protections and
restrictions on the disclosure of genetic information. See 29 C.F.R. § 1635.8(b)(2)(iii).