The road to health plan compliance has never been straight and narrow but it has become more winding over the years. The path to compliance has become even more treacherous with the issuance of two new final regulations by the Equal Employment Opportunity Commission (EEOC) that impact wellness programs: final regulations implementing portions of the Americans with Disabilities Act (ADA) and portions of Title II of the Genetic Information Nondiscrimination Act (GINA).

These final regulations overlay regulations implementing the bona fide wellness program rules under the Affordable Care Act (ACA). Leading benefits attorney John Hickman will provide a walk-through of these new requirements (and other trending benefits topics) in his presentation at the 2016 Advanced Employment Issues Symposium (AEIS). The following Q&A provides a preview of that discussion.

How does the ADA impact employer wellness programs?

The ADA generally prohibits employers from making disability related inquiries or requiring medical exams that are not job related unless they are part of a voluntary employee health program. Until the proposed regulations were issued in 2015, there was little doubt that the ADA impacted employer wellness programs but the extent of that impact simply wasn’t clear.

For example, agency enforcement guidance issued by the EEOC in 2000 indicated that any incentives issued in connection with programs that make disability related inquiries or require medical exams that were more than de minimis were not voluntary. Much to the chagrin of many well-intentioned employers, the EEOC prosecuted a number of employers under this highly malleable standard.

So how exactly will these new rules impact a wellness program?

In general, the final ADA regulations provide the following directions for employer sponsored wellness programs:

The final ADA regulations identify the contents of the notice and the EEOC has also provided a model notice that employers may use if they do not wish to develop their own. This ADA notice requirement overlaps with, but is not co-extensive with the Health Insurance Portability and Accountability Act (HIPAA) privacy notice requirement.

The final ADA regulations provide benchmarks for calculating the 30% limit and those benchmarks vary depending on the extent of the employer’s group health plan coverage, if any. This 30% limit overlaps with, but is not identical to, the ACA/HIPAA wellness incentive limitation.

The final ADA regulations provide directions for reasonably designing a wellness program to promote health and prevent disease and the extent to which the ADA’s confidentiality requirements apply to wellness programs.

• A wellness program that makes a disability related inquiry or requires a medical exam will not be considered voluntary for purposes of the ADA unless special notice is provided to participants that describes, among other things, the information that will be collected and the manner in which it will be used.
• In addition, a wellness program will not be considered voluntary if any inducements offered in connection with disability related inquiries or medical exams exceed 30% of the total cost of self only group health plan coverage (30% limit).
• All wellness programs, even those that do not include disability related inquiries or require a medical exam, must be reasonably designed to promote health and prevent disease and must also satisfy the ADA’s confidentiality provisions.

When do I need to comply?

The voluntary requirements applicable to programs that include disability related inquiries or require medical exams (i.e. the notice and inducement limits) are effective on the first day of plan years beginning on or after January 1, 2017; however, the other requirements are effective immediately because they are mere reiterations of existing requirements of the ADA.

Employers who currently maintain a wellness program should ensure that it is complying with the ADA’s confidentiality requirements and that the program is reasonably designed to promote health and prevent disease. A preventive checkup now can help prevent a huge liability later.

John Hickman will provide insightful commentary on how the latest legal and regulatory developments affecting healthcare and benefits impact workplaces across the country during the 21st annual AEIS Opening Panel: HR’s Biggest and Most Pressing Employment Law Risks. He will also present a breakout session at AEIS—Critical Health and Wellness Benefits Compliance Updates: The Latest Legal Risks under the ACA, ADA, HIPAA, and ERISA—where he'll discuss the new EEOC wellness rule and more. AEIS takes place November 9-11, 2016, at the Paris Las Vegas Hotel. Click here to register today.