EEOC Removes Final Rules that Permitted Employers to Offer Incentives to Encourage the Disclosure of Health Information in Connection with an Employer Wellness Program

Category: Blog Posts
Date: Feb 21, 2019 12:00 PM
EEOC Removes Final Rules that Permitted Employers to Offer Incentives to Encourage the Disclosure of Health Information in Connection with an Employer Wellness Program

This post was authored by Carla McCormack.

In December 2018, the Equal Employment Opportunity Commission (“EEOC”) removed Final Rules that permitted employers to offer incentives to encourage the disclosure of health information in connection with an employer wellness program.  This change is effective January 1, 2019.

An employer wellness program, generally offered through an employer-provided health plan, is intended to help employees improve their health and also to reduce healthcare costs for the employer.  These programs sometimes seek to use medical questionnaires or health risk assessments (“HRA”) to determine a person’s health risk factors, such as body weight, cholesterol, blood glucose, and blood pressure levels.  They implicate several legal provisions in their request for information.

One such provision, the Americans with Disabilities Act (“ADA”), prohibits employment discrimination because of disability.  The other provision, the Genetic Information Nondiscrimination Act, prohibits employment discrimination because of genetic information.  These laws generally prohibit an employer from obtaining and using information about employees’ health conditions or the health conditions of the employees’ family members.

However, these laws allow employers to ask health-related questions and conduct medical examinations if the employer is providing health or genetic services as part of a “voluntary” wellness program.  In May of 2016, the EEOC issued Final Rules expressing its position on when participating in an employer wellness program is “voluntary” under the ADA and GINA.

The EEOC’s Final Rules permitted an employer to offer incentives (up to 30 percent of the total cost of self-only coverage) to encourage employees to answer disability-related questions or undergo medical examinations as part of the wellness program.  They also permitted an employer to offer inducements (up to 30 percent of the total cost of self-only coverage) to encourage an employee’s spouse to provide information on the spouse’s current health status by completing a HRA as part of the wellness program.

Shortly thereafter, in October 2016, the American Association of Retired Persons (“AARP”) filed suit against the EEOC.  It alleged that the incentive portion of the Final Rules violate the ADA and GINA and were not voluntary.  The 30% incentive “pressured” employees to “divulge” “confidential health information” about themselves and “confidential genetic information” about their spouses as part of an employee wellness program.  The incentive acted as a “penalty” if the employees choose to keep their medical information private and not participate in the program.

After some initial filings, in August 2017, the court denied the EEOC’s motion to dismiss and granted the AARP’s motion for summary judgment.  The court found that the EEOC failed to provide a “reasoned explanation” for the 30 % incentive in the ADA and GINA rules.  Because the court believed that vacating the incentive rules would be disruptive in the middle of the plan year, it decided not to vacate the rules “for the present.”  Instead, it remanded the rules to the EEOC for reconsideration.

In December 2017, the AARP requested that the court alter or amend its decision not to vacate the incentive rules. One reason for the request was the representation of the EEOC that it intended to issue its new final rule in October 2019 that would be applicable “at the earliest” in 2021.  The court granted AARP’s motion and vacated the incentive rules.  The court also stayed when the ruling would take effect until January 1, 2019 to avoid the potential for disruption.

In December of 2018, and shortly before the court’s order would take effect, the EEOC removed the two Final Rules challenged by the AARP.  The EEOC also has represented its intent to issue proposed rules addressing the concerns of the court in June of 2019.  This leaves a gap of almost six months without guidance from the EEOC on this issue.

We will keep you apprised of the proposed new rules when the EEOC issues them.  In the meantime, employers should be aware that there are risks to offering incentives to encourage the disclosure of health information in connection with an employer wellness program.  Such incentives potentially affect the voluntary nature of the program.  Employers should contact legal counsel to discuss these risks and on what to do in the interim.

 

 

The text of the original rules can be found at:

The text of the EEOC’s removal of the challenged rules can be found at:

A copy of the AARP complaint, and the court decisions referenced in this blog, can be found at:

The text of the EEOC’s anticipated June 2019 date to issue the new proposed rules can be found at:

Contact Us

General Inquiries

info@lcwlegal.com

Contact a Specific Office

Our Locations

Media Inquiries

Please contact Cynthia Weldon, Director of Marketing & Training, 800.981.2000.

close

back