Presenters
Ilyse W. Schuman
Co-chair of the Workplace
Policy Institute
Russell D. ChapmanSpecial Counsel
Agenda
• Wellness Programs: A Short History
• ADA and Wellness
• EEOC and Wellness
• EEOC Final ADA Wellness Regulations
• GINA and Wellness
• EEOC Final GINA Wellness Regulations
• Tax Treatment of Wellness Programs
• Privacy and Other Issues
Wellness Programs: A Short History
• 1990: Americans With Disabilities Act
• 1996: HIPAA
• 2006: HIPAA Wellness Regulations
• 2008: ADA Amendments Act
• 2010: Affordable Care Act
• 2013: ACA Wellness Regulations
• 2016: EEOC ADA and GINA Regulations
ACA Wellness Regulations
• Participatory Programs
– Available to all similarly situated individuals
• Health Contingent Programs
– Activity-Only Programs
– Outcome-Based Programs
– Reasonable Alternative Standard
– Rewards
– Annual opportunity
– Reasonable design
ADA and Wellness
• Enforcing the ADA:
– Disability discrimination in terms and
conditions of employment
• Including “fringe benefits”
– Disability-related inquiries or medical
examinations
• Exceptions:
–Job related and subject to business
necessity
–Voluntary wellness program
ADA “Safe Harbor”
• Exempts bona fide employee benefit plans if the
plan is not used as a subterfuge to avoid the
purposes of the ADA, and
– is based on underwriting risks, classifying risks, or
administering such risks that are based on or not
inconsistent with State law; or
– is not subject to State laws regulating insurance
• Are the “voluntariness” exception and the “bona
fide benefit plan” exceptions mutually exclusive?
• Seff v. Broward County
EEOC and Wellness
• EEOC’s basic position
• Ruling history
• 2014 EEOC Lawsuits:
– Orion
– Flambeau
– Honeywell
• Lastest salvo: EEOC’s Notice of
Supplemental Authority
EEOC’s Response
• Seff v. Broward County
• EEOC v. Flambeau, Inc.
“.. wellness program qualified
as a "term … of a bona fide benefit plan" within
the meaning of the safe harbor provision..”
“..the safe harbor may extend to
wellness programs that are
part of an insurance benefit
plan..”
“The [EEOC] believes
both cases were
wrongly decided.”
- Preamble to final regulations
ADA: Disability-Related Questions
• The ADA “voluntariness” exception applies
only to ADA’s “no disability related
question or medical examinations” prong
• Question: What is a “disability related”
question?
• Answer: It is a question the answer to
which would disclose the presence of a
disability or provide information about a
disability.
Disability-Related Questions
• Examples:
– Have you ever been diagnosed or told that
you have: Diabetes, hypertension, heart
trouble, cancer, liver trouble, asthma, etc.?
– Do you get depressed?
– What daily medications do you take?
– How much alcohol do you drink?
– What is your blood pressure?
– What is your BMI?
Non-disability Related Questions
• Examples:
– How often do you eat breakfast?
– How many servings of fruits and vegetables
do you eat each day?
– Do you take a vitamin supplement?
– Do you have a health care directive to
physicians?
– Do you regularly see a physician for routine
health care?
EEOC Final ADA Wellness Regs
• Released May 17, 2016
• Generally will apply to the first plan year
beginning on or after January 1, 2017
– BUT… be careful, some of the rules are just
considered clarifications and are effective
immediately!
• Good faith reliance probably available
• Given EEOC’s litigation history, early
compliance is recommended
Final ADA Wellness Regulations
• Medical examinations and/or disability-
related inquiries allowed, but only if:
– The program is reasonably designed to
promote health or prevent disease; and
– The program is voluntary.
Reasonable Design
• To be reasonably designed to promote
health, a program must:
– have reasonable chance of improving the health of, or
preventing disease in, participating employees;
• e.g., program cannot simply collect health information without
following up with information or advice
• may use information to design program specifically intended
to treat at least of subset of conditions found
– not be overly burdensome;
– not be a subterfuge for violating the ADA or other laws
prohibiting employment discrimination; and
– not be highly suspect in the method chosen to
promote health or prevent disease.
Voluntary
• To be voluntary a program must:
– not require employees to participate (e.g.,
through coercive incentives);
– not be a “gatekeeper” to medical coverage;
– not take adverse action (coercion, retaliation,
intimidation, threats, etc.) based on the
program; and
– must comply with the new notice rules.
Limits on Incentives
• Core element of the new regulations
• Basic rule: The use of financial incentives is
permissible if they do not exceed 30% of total
(COBRA) cost of self-only coverage in group
health plan.
• NOTE: EEOC INCENTIVE RULES ARE NOT
CONSISTENT WITH ACA REGULATIONS
• What if the wellness program is separate from
the group health plan?
• What if no group health plan offered?
• What about Smoking Cessation Programs?
Maximum Wellness Incentives I
1. To be eligible to participate in the
wellness program employee must be
enrolled in a specific group health plan:
– 30% of total cost of employee-only coverage
for that plan
2. Employee need not be enrolled group
health plan and employer maintains only
one group health plan:
– 30% of total cost of employee-only coverage
of the group health plan
Maximum Wellness Incentives II
3. Employee must be enrolled in a group health
plan to participate in the wellness program, but
need not be enrolled in any specific plan:
– 30% of lowest total cost of employee-only coverage
for a “major medical” plan maintained by the
employer
4. Employer does not maintain any group health
insurance or plan:
– 30% of the 2d lowest cost of Silver Plan Exchange
coverage for a 40-year-old nonsmoker at the
employer’s principal place of business
EEOC’s Lowest Common Denominator
• EEOC establishes a lower ceiling
• ACA regs index reward to coverage in which
employee is enrolled
• EEOC indexes to “lowest cost” unless employee
must enroll in a specific plan or employer has
but one plan
• ACA permits indexing to cost of family coverage
• But note: ADA does not apply to spouses or
dependents
– GINA regs address spouses and dependents
ADA vs ACA
Biggest limitation of EEOC ADA Regs:
• No distinction between participatory and
health-contingent programs
• All are treated as outcomes-based
EEOC Thumbs Down to Participatory
Programs
• No wellness program may
– Provide reward in excess of 30%
• Except some tobacco cessation programs
– Deny access to health plan coverage
– Deny access to any health plan or coverage
option
• Example: To participate in “high” plan,
must complete HRA/Health screen,
otherwise must participate in HMO or
HDHP
What About: Tobacco?
EEOC Interpretive Guidance permits 50%
incentive if:
• Compliance with tobacco cessation
wellness program is not determined
through a “test, measurement or screen”
• I.e., compliance determined through
enrollment form, questionnaire, affidavit or
“honor system”
Integration of Tobacco Incentive
• ACA: Wellness aimed at tobacco
cessation may be 50%
– But a separate health-contingent reward
reduces the 50% by up to 30%
• EEOC ADA regs are silent on this
allocation
– Do not apply a HRA/Screening participatory
reward in addition to tobacco reward
– Use allocation method
Coordination with DOL Regs
EEOC DOL
Free scale in exchange
for completing HRQ Premium reduction for
lowering cholesterol
On-site flu shots
ACA/ADA Crackup
• DOL– No incentive limits
for participatory
programs!
– 50% incentive for all
tobacco programs
– Gatekeeper
approach OK for
participatory
program
• EEOC– 30% limit applies to
all programs
– Some tobacco
programs capped at
30%
– Gatekeeper
prohibited
ADA and Reasonable Accommodation
EEOC’s position:
• ADA reasonable accommodation standards apply to
wellness programs
Examples:
• Hearing impaired employee must be provided translator
to attend wellness, nutrition or smoking cessation class
• Employee cannot go through blood draw – test by other
means or waive requirement
• Employee cannot receive inoculation by injection –
inoculate by other means (nasal spray)
Other possible required accommodations:
• Religious objections
GINA and Wellness
Genetics Information Nondiscrimination Act (GINA)
• Makes it illegal to use genetic information in
making employment decisions
• Restricts employers from requesting, requiring
or purchasing genetic information
• Plan may not offer inducements for providing
genetic information
• Genetic information includes family medical
history (including spouses, adopted children)
EEOC’s Basic Premise
• Employer’s request of information about a
“manifested disease or disorder” of
employee’s family member is a request for
genetic information and therefore
PROHIBITED• So spouse’s (or child’s) health risk
assessment or health screen is prohibited
by GINA
Final GINA Wellness Regulations
• Apply to all wellness programs
• Limited safe harbor for health risk assessments (“HRA”) that request
spouse’s health information.
• Cannot offer inducement for the spouse to disclose genetic
information outside HRA.
• Limits generally track EEOC’s ADA regulations.
• But note: Spouse gets own reward limitation:
– 30% of cost of employee coverage
– theoretically could go to 60% of cost of employee only coverage if both
spouse and employee comply
– this limit could exceed ADA limit for a health-contingent program – so
test the lower limit
– Requesting spouse’s own genetic information still prohibited unless no
incentive attached
Children Are Out!
• GINA Wellness Regulations:
No inducements permitted for health
information about a participant’s child!
None
Zero
Zip
Nada
Tax Treatment of Wellness Programs
• IRS memorandum reminds plan sponsors to watch the
taxation of rewards.
• Employer may not exclude from an employee’s gross
income:
– payments of cash rewards;
– Income reimbursements of premiums for participating
in a wellness program if the premiums for the
wellness program were originally made by salary
reduction through a section 125 plan.
• Wearable devices? Gift cards? Watch the taxation!!
Privacy and Other Issues
Stand-alone programs that provide health care:
• May be group health plans that must comply
with ERISA, COBRA, ACA, HIPAA, etc.
Wearable devices:
• Many provide location and other personal data –
make sure you are not inadvertently tracking
your employees
• Do not allow connection between these devices
and your computer system!
Thank you!
Russell D. Chapman
Littler Mendelson, P.C. Dallas, TX
(214) 880-817
Ilyse W. Schuman
Littler Mendelson, P.C. Washington, DC
202.423.2223