New rules for workplace wellness plans have finally been proposed just as more employers are incorporating such programs to help their workers improve their health and reduce their health insurance premiums.
The Equal Employment Opportunity Commission has proposed rules that aim to set guidelines for employer-sponsored wellness plans that prohibit discrimination against individuals who may be unable to meet the goals set out in these programs.
The new rules also designate what would constitute a reasonably designed plan under the Americans with Disabilities Act (ADA) and the Affordable Care Act, as well as how employers treat medical information collected via a wellness plan.
Some employers will offer financial incentives employees that meet certain goals through their wellness plans, such as losing weight, smoking cessation and other health measures. Some programs penalize employees that do not participate in the programs by requiring them to pay a higher percentage of their premium.
The EEOC’s proposed rules, which are undergoing an open comment period now, seek to set guidelines for how wellness plans can operate in a non-discriminatory fashion.
Here’s what you, as an employer, need to know about the proposed regulations:
Financial incentives
- They limit the financial incentives employers can provide to staff who participate in health-contingent-based wellness programs (described later) to 30% of the annual cost of self-only coverage.
- Financial incentives tied to smoking cessation programs would be limited to 50% of the total annual cost of self-only coverage.
Must promote health or prevent disease
- Wellness plans must have a reasonable chance of improving health or preventing disease in participating employees, must not be unduly burdensome to employees, and must not violate the ADA.
EXAMPLE: Reasonable design – A program that collects information from a health risk assessment to provide feedback to employees about their health risks, or that uses aggregate information from health risk assessments to design programs aimed at particular medical conditions, is reasonably designed.
Not reasonable design – A program that collects information without providing feedback to employees, or without using the information to design specific health programs, is not reasonably designed.
Must be voluntary
- Employers must not require employees to participate in a wellness program, must not deny health insurance or reduce health benefits if workers do not participate, and must not discipline them for not participating.
- Employers must not penalize employees by forcing them to take on a larger share of their premium. However, employees can be given the aforementioned financial incentives for participating.
Must not be discriminatory
- Wellness programs must never be used to discriminate based on disability, and safeguards must be in place to prevent such discrimination.
- Employers must not interfere with the ADA rights of employees who do not want to participate in wellness programs, and must not coerce, intimidate or threaten employees to get them to participate or achieve certain health outcomes.
Medical information confidentiality
- Medical information obtained through a wellness program must be kept confidential.
- Generally, employers may only receive medical information in aggregate form that does not disclose, and is not reasonably likely to disclose, the identity of specific employees.
- Employers must provide employees with a notice that describes what medical information will be collected as part of the wellness program, who will receive it, how the information will be used, and how it will be kept confidential.
- Medical information collected as a part of a wellness program may be disclosed to employers only in an aggregate form that does not reveal the employees’ identities, and must be kept confidential in accordance with ADA requirements. Best practices for securing confidentiality will be provided.
Reasonable accommodation
- Employers must provide reasonable accommodations that enable employees with disabilities to participate and to earn whatever incentives the employer offers.
EXAMPLE An employer that offers an incentive for employees to attend a nutrition class must, absent undue hardship, provide a sign language interpreter for a deaf employee who needs one to participate in the class.
The proposed rules will be open for public comment until June 19, at which point the EEOC’s board of commissioners will review the comments and make any necessary changes before issuing the final rules.