United States: The Latest EEOC Regulations on Wellness Plans

The Affordable Care Act (ACA) encourages employers to boost participation in wellness programs by offering higher limits on incentives to employees who take part in these initiatives. At the same time, the federal government continues to discourage employers from doling out financial incentives in a discriminatory manner. Some employers do so by making it unduly hard or impossible for certain people to meaningfully participate in a wellness program.

Just how popular are wellness programs?

Wellness programs were already somewhat popular before the Affordable Care Act (ACA), but they seem to be particularly flourishing ever since the act's passage.

According to the 2015 International Foundation of Employee Benefit Plans Workplace Wellness Trends survey, nearly 90% of corporate and public sector respondents offer "wellness-related initiatives." Meanwhile, about 80% of them reported using "some type of incentive to encourage healthy behavior."

The ACA has likely had a strong impact, too, with 40% of employers stating that the act has caused them to devote more attention to their wellness programs.

Underlying statutes

To more closely enforce compliance, the Equal Employment Opportunity Commission (EEOC) recently finalized a pair of regulations that take effect on January 1, 2017. Even if your benefit plan year begins after the start of the calendar year, you'll need to comply with these regs by the first of the year. So, assuming you offer a wellness program, it's advisable to start studying up on them now.

The EEOC's two regulatory packages interpret how two laws apply to wellness program incentives:

  1. The Americans with Disabilities Act (ADA), and
  2. The Genetic Information Nondiscrimination Act (GINA).

Some wellness programs have incentives that are contingent on employees performing a particular task or achieving a specific outcome, as opposed to simply participating. For example, participants might have to submit a health risk assessment or lose a particular amount of weight. These types of programs have already been covered by regulations under the Health Insurance Portability and Accountability Act (HIPAA), as modified by the ACA.

Under those ACA/HIPAA rules, when the wellness programs are offered in conjunction with health plans, incentive programs must:

  • Satisfy employee notification requirements,
  • Allow employees to try to re-qualify annually,
  • Cap the incentive at 30% of the cost of health coverage (50% for smoking cessation programs), and
  • Provide employees who have a health condition that impedes their satisfying standard program requirements a reasonable alternative way to do so.

Wellness programs offered independently of the health plan, or in conjunction with a health plan but that only require employees to participate without having to achieve any particular results, aren't governed by the existing ACA/HIPAA regulations. But these programs are covered by the EEOC's new ADA and GINA regulations — as are the kinds of wellness programs already covered by the ACA/HIPAA rules.

Zeroing in on data

The new ADA and GINA regulations zero in on programs that require employees to furnish health or genetic data via a health risk assessment, biometric screening or any other kind of medical exam. Although the new ADA and GINA regulations cover much of the same territory as the ACA/HIPAA rules, there are some differences.

One distinction deals with limits on the wellness incentive size. Under the ACA/HIPAA rules, the 30% (50% for smoking cessation) of health coverage cost cap is based on the cost of single coverage under the plan covering the employee — even if that particular plan is more expensive than other plans offered by the employer.

Also, if a spouse is covered by the wellness plan, and the spouse is covered under the health plan, the 30% limit is still based on the cost of that employee + spouse coverage, even though it will be higher than a single-only plan. The same principle applies for family plans.

In contrast, the ADA and GINA regulations are less generous. They limit the cost-of-coverage base to the cost of the least expensive single-only coverage, regardless of which plan the employee is actually enrolled in.

Smoking cessation

Additionally, the ADA regulations are more restrictive with respect to the 50% incentive ceiling for smoking cessation programs. Under the ACA/HIPAA rules, smoking cessation program participants can either:

  • Be required to simply certify that they have quit smoking, or
  • Be subjected to a medical test that would determine whether the individual has indeed given up the habit.

But under the new ADA rules, if the smoking cessation program participant must be subjected to medical testing, the incentive cap is lowered to 30%.

Closing the gateways

The ADA and GINA regs forbid employers from asking employees for health or genetic information unless they do so via a voluntary wellness program. This means employee participation in a wellness program must be voluntary in order for the employer to obtain health data. But what does "voluntary" mean?

One important definition is that employees cannot be penalized for not participating in a wellness program by losing eligibility to participate in the employer's health plan. Denying an employee health plan coverage would violate the ACA anyway, but the EEOC wanted to make sure employers don't try to chip away at this requirement with an approach called a "gateway plan."

Typically, a gateway plan is an enhanced plan in which employees are, initially, enrolled automatically. (They might subsequently choose to switch to a less expensive, no-frills plan.) Under the new ADA regulations, employers cannot make participation in a wellness program a requirement for employees to remain in that original gateway plan.

Making the right changes

The January 1, 2017 effective date for the new ADA and GINA regulations set forth by the EEOC technically applies to only the explicit changes in the wellness incentive cap. Other matters addressed in the regs represent interpretations of existing law. So, in theory, they kicked in when the regulations were finalized on May 17.

We've discussed only some highlights of the EEOC regulations. Be sure to consult your benefits advisor to determine what compliance changes you may need to make to your wellness program.

If you have questions about the EEOC regulations, please contact Ron Present, Partner and Health Care Industry Group Leader, at rpresent@bswllc.com or 314.983.1358.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Ron M. Present, CALA, CNHA, LNHA, FACHCA
 
In association with
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

Disclaimer

Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

Registration

Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

Cookies

A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

Links

This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

Mail-A-Friend

If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

Security

This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.