How Healthy is Your Plan? Final Rules Clarify Wellness Program Requirements

Due to their promotion of healthy living and their potential for lowering benefit costs, employer wellness programs are becoming increasingly popular. However, there has been some concern about how exactly employers are allowed to run these programs due to the need to comply with three separate federal regulations:

-Health Insurance Portability Accountability Act (HIPAA) – Prohibits discrimination based on health factors

-Americans with Disabilities Act (ADA) – Requires that disabled individuals be reasonably accommodated and prohibits asking about or examining for disabilities (unless part of a voluntary program)

-Genetic Information Nondiscrimination Act (GINA) – Prohibits requesting genetic information (unless part of a voluntary program)

Because employer wellness programs involve exams and the collection of information, these programs must be careful about what they ask and how they ask it. They also need to be wary of the level of incentives that they offer; if incentives are too good, or the penalties too severe, the program essentially becomes non-voluntary (in other words, who wouldn’t want to join?). In addition, complying with one set of regulations, such as HIPAA and ACA, could still violate other regulations, like ADA and GINA.

Fortunately, on May 16, 2016, the U.S. Equal Employment Opportunity Commission (EEOC) released final rules to clarify how employers can design their wellness programs. From the final rules can be pulled the following guidelines:

– Programs must be reasonably designed to promote health or prevent disease

Wellness programs need to have a “reasonable chance” to improve a participant’s health or prevent disease and must not be “unreasonably intrusive” or “overly burdensome.”

– Programs must be voluntary

These programs cannot require employee participation or deny health coverage to non-participating employees.

– Incentives may not exceed the allowable limit

The EEOC has set the limit at 30% of the total cost of self-only coverage under the employee’s health plan. If the employer offers more than one health plan, the 30% limit applies to the lowest cost self-only plan. Note, an employer can up this incentive to 50% for wellness questions pertaining to tobacco use.

– Programs must be confidential

Information collected from wellness program participants must be kept confidential. This information may only be received in aggregate form, and employers may not require agreement to transfer or disclose information or waive confidentiality.

With these clarifications from EEOC, employers should be in a better position to design their wellness programs without violating any regulations. The new provisions of the final rule must be followed with plan years starting on or after January 1, 2017.

For more information, visit EEOC’s official page: https://www.eeoc.gov/laws/regulations/qanda-gina-wellness-final-rule.cfm