This week, the Equal Employment Opportunity Commission ("EEOC") released a new set of FAQs on its wellness notice requirements, along with a sample notice for employers. The wellness notice will accompany the final rules at https://www.gpo.gov/fdsys/pkg/FR-2016-05-17/pdf/2016-11558.pdf. The FAQs and Specimen Wellness Notice apply to employer-sponsored wellness programs. New ADA requirements for such employer-sponsored programs will necessitate changes for existing wellness programs as of the 2017 plan year. The new ADA rules establish incentive parameters for wellness programs that request employees to respond to any questions about disabilities or undergo medical examinations. The rules expand the reasonable design standard for the structure of the programs, and also establish incentive limits on wellness programs that ask for an employee’s spouse to provide health information as part of a health risk assessment or other medical screening. Finally, the ADA’s new rules expand upon the notice requirements for all wellness programs that contain these elements. These changes are effective on the first day of the plan year that begins on or after January 1, 2017.
The EEOC’s new rules are different and more extensive than those established by the ADA. While the EEOC rules use the same standard as the ADA with regard to limiting the value of incentive and penalties to no more than 30% of the premium value, unlike the ADA rules, the EEOC rules allow the 30% value to be applied to the entire cost of the premium if an employee has dependants covered through the group plans. The EEOC new rules limit the value of the inducements to merely 30% of the employee-only premium, not 30% of the actual cost of employee plus dependant coverage. This change allows employers that encourage spouses to provide a health history by offering the spouse an inducement of up to 30% of the employee-only premium as well. These two incentives can be stacked together if the employee also provides medical information.
With regard to incentives for smoking cessation, the EEOC’s new rules are also more restrictive than the current ADA standards, which allow participants premium variations of up to 50% of total premium value. Smoking cessation and wellness programs that simply ask participants about the smoking history are permitted to include the higher level of incentives, but if such programs require medical tests to determine the presence of nicotine, any incentive or penalty is limited to 30% of the single employee rate.
The EEOC’s new rules exceed the scope of the ADA’s wellness program standards as well. The ADA’s incentive limitations and notice requirements apply only to health-contingent wellness programs. On the other hand, the EEOC’s new rules apply to all wellness programs, including participatory wellness programs that include disability-related inquiries or medical examinations. The new standards even apply to wellness programs that are not contingent on an employee’s participation in the group health plan.
The EEOC’s new rules also include a notice and privacy requirement applicable to wellness programs, not just health-contingent wellness programs. This may require employers that are not currently required to provide wellness program notices to employees to create such notices. A new template is being developed by the EEOC. In the interim, if an employer already provides the required wellness notice to participants in a health-contingent wellness program, the new extended language can be included in that notice.
Finally, as a result of recent litigation filed by the EEOC against employers, it has been established that the new ADA rule with respect to “safe harbor” provisions does not apply to wellness programs that allow for disability-related inquiries or require medical examinations. The rules require employers that offer wellness programs that collect employee health information to provide a notice to employees informing them what information will be collected, how it will used, who will receive it and what procedures will be employed to maintain confidentiality. The FAQs confirm that the notice to employees may be provided electronically and, as is noted above, is effective the first day of the plan year that begins on or after January 1, 2017.