Wellness programs and liability: What could proposed EEOC rules mean for corporate America?

By Heide Brandes
The Daily Record Newswire
 
Imagine this scenario.

You are required to submit genetic information and background health information in order to participate in a group health plan at the office. Your parents both have had cancer and heart disease.

Suddenly, the employer is looking at you. Do you have those same health risks? Did you inherit those illnesses? Are you too much of a health risk to participate in your employer’s health plan?

Two new proposed rules by the U.S. Equal Employment Opportunity Commission are trying to clarify just what employers can require as far as mandatory information about health in regard to company wellness programs.

The U.S. Equal Employment Opportunity Commission published a notice of proposed rule-making in April 2015, describing how Title I of the Americans with Disabilities Act, or ADA, applies to employer wellness programs that are part of group health plans.

A second proposal, released in October, amends the regulations of the Genetic Information Nondiscrimination Act, or GINA, as they relate to employer wellness programs that are part of group health plans.
The proposed rule says employers that offer wellness programs may provide limited financial and other incentives in exchange for an employee’s spouse providing information about his or her current or past health status.

“The EEOC is attempting to try to provide guidance to employers about how they can operate their wellness programs while ensuring that they aren’t discriminating against disabilities or not inquiring about personal health in a way that violates federal law or places an employee in a position where their rights are violated,” said Adam Childers, an attorney with Crowe & Dunlevy.

The EEOC’s proposed rules provide guidance to both employers and employees about how wellness programs offered can be in compliance with the ADA and GINA.

So, what do these two proposals mean for companies?

“Under both of these proposed regulations, an employer may not use the information gathered from the wellness program to discriminate against an employee,” said Byrona J. Maule, shareholder and director at Phillips Murrah PC.

“So if an employer uses the information to discriminate against an employee, the employer could be liable for back wages, benefits, compensatory damages, front pay, reinstatement, attorneys’ fees and costs.”
According to Childers, most businesses have two types of wellness programs. One is a voluntary program that focuses on better health, weight loss, smoking cessation or fitness. The second is contingent, meaning that in order to get health insurance, employees have to make available background health information or biometrics.

“To even gain coverage, the employee has to provide information on their health or genetic background, and that’s where the GINA act comes into play,” said Childers.

“I believe that these two rules are trying to put employers on notice on how much they can ask or have mandatory when it’s a wellness program, especially contingent wellness programs for health insurance.”
Many employers that provide health insurance also offer workplace wellness programs intended to encourage healthier lifestyles or prevent disease, and these programs can use tools like health risk assessments and biometric screenings to determine risk factors.

Many corporate wellness programs also give financial and other incentives to employees who participate.

Under the new proposal, the ADA will allow employers to issue questionnaires about employee health or encourage them to undergo medical examinations, but only if it is voluntary and part of an employee health program.

Prior to the proposed rule, the EEOC had not clarified whether employers may offer incentives to encourage employees to participate in such programs or whether offering incentives would make participation involuntary, said Christine Saah Nazar, spokeswoman for the U.S. Equal Employment Opportunity Commission.

The proposed rule clarifies that employers can offer incentives up to 30 percent of the cost of employee-only coverage to employees who participate in a wellness program and/or for achieving health outcomes.

The proposal also describes what wellness programs are and are not, defines what it means for an employee health program to be voluntary and explains how ADA rules requiring employers to keep medical information confidential apply to medical information obtained as part of voluntary employee health programs.

“The regulations also provide additional safeguards, such as provisions regarding confidentiality of the information gathered; that the information may not be used to discriminate against an employee; and which require that an employer provide a reasonable accommodation to an employee with a disability that would allow the employee to participate in the wellness programs and to earn whatever incentive an employer offers,” said Maule.

“The regulations also make it clear that an employer cannot interfere with an employee’s ADA rights, prohibits such actions as coercing, threatening or intimidating an employee to participate in a program, or for not achieving a particular health outcome.”

The proposed rule addressing Title II of GINA focuses on the extent to which an employer may offer incentives for an employee’s spouse to provide information about his or her current or past health status as part of an employer-sponsored wellness program.

“GINA comes into play because family and individual medical histories are considered genetic information, which an employer is barred from collecting in most circumstances,” said Nazar.

GINA allows employers to request an employee’s genetic information, on a voluntary basis, for the purpose of providing health or genetic services, including wellness programs.

However, the current regulations said that a wellness program cannot require employees to provide their genetic information as a condition of receiving incentives, and the current GINA regulations could be read as prohibiting employers from offering incentives in return for a spouse providing his or her current or past health information.

“Genetic information is broadly defined to include the information regarding an employee’s family members, including an employee’s spouse and children, current or past health status,” Maule said.

“There is a narrow exception which permits employers that offer health or genetic services, including voluntary wellness programs, to request genetic information as a part of these programs, as long as the multiple strict requirements are met. One such requirement is that the wellness program cannot offer inducements to employees on the provision of the genetic information.”

GINA clearly prohibits wellness programs from requiring employees to provide their genetic information as a condition for receiving incentives.

“This exception does not apply to an employee’s children, as the genetic information of an employee’s children is much more likely to lead to employment discrimination, because the genetic information of an employee’s child could easily provide information about the employee’s genetics, while the genetic information of an employee’s spouse would not provide information about the employee’s genetics,” said Maule.

Although Maule and Childers both agreed that most of their clients do not require biometrics or genetic information contingent to receive health coverage, the trend is gaining in popularity.

“We’re building up to that,” said Childers. “The common theme of what the EEOC is trying to address is not discriminating due to disability or genetic history. But employers see it in a much different way.”

Corporate wellness programs were created through joint partnerships between corporations, the Department of Labor and attorneys, Childers said, creating a “safe harbor” for wellness programs to be able to ask health questions because it was for the betterment of the employee.

“Now, businesses feel like the EEOC did an about face to attack wellness programs so aggressively,” he said.

In fact, on Dec. 31, a district court in Wisconsin ruled against the EEOC in the case EEOC vs. Flambeau. Flambeau required an extensive questionnaire and biometrics in order for employees to reap wellness benefits. The courts rejected the EEOC’s complaint, saying the action fell under the “safe harbor” with ADA.

“That was a huge victory for employers,” Childers said. “I’m interested to see what the question period, which the U.S. Chamber of Commerce and business community participated in, and this recent court case will mean for these new rulings.”

“EEOC received nearly 2,750 public comments on the NPRM from a wide spectrum of stakeholders. We are drafting the final rule and expect to issue it, along with GINA Wellness final rule, this spring,” said Nazar.

Childers said employers should take a close look to determine how these rules will affect their wellness programs.

“Talk to employment lawyers or HIPPA experts who can audit the program to see if it’s in good standing,” he said.
 

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