Employers’ wellness programs are becoming a popular vehicle for employees to achieve healthier lives. The Equal Employment Opportunity Commission (“EEOC”) recently proposed long-awaited wellness guideline. The agency was publicly made aware of the need for the guidance when a panel representing businesses and healthcare providers met with EEOC leadership in May 2013.
Purpose of the Guidelines
In part, the guidelines were issued to reduce apparent friction between the Affordable Care Act (“ACA”) and the Americans with Disabilities Act (“ADA”). ACA clearly allows employers to use financial incentives to encourage participation in company-based wellness programs, but the ADA has been the basis of several EEOC lawsuits claiming such incentives discriminate on the basis of disability. The EEOC hopes to eliminate confusion by using these guidelines to discuss essential features that need to be included in wellness programs.
Guidelines
First, the goal of a wellness program must be to “promote health or prevent disease.” For instance, an employer can use aggregate health data to design a program to target specific health risks.
Second, employers may encourage, but may not coerce employees to participate in wellness programs. The guidelines allow programs to be framed as rewards or penalties. Specifically, employers can reduce participants’ “employee-only” coverage costs by up to 30%. However, employers may not refuse to provide non-participants with coverage, or offer them fewer health benefits. The guidelines also explicitly prohibit discipline, alteration of an existing accommodation, or termination for an employee’s refusal to participate.
Third, employee health information must be kept confidential. When collecting health information, employers should inform employees how their information will be used and who will have access to it. Once the data is collected, employers should only maintain aggregate health information, which is designed to protect the identities of the individual participants.
Finally, wellness programs must accommodate employees with disabilities, not only enabling them to participate in the program, but also allowing them to achieve the offered incentives. For example, if a health program offers financial incentives for achieving a certain cholesterol level and an employee is medically unable to have blood drawn, the program must provide an alternate form of testing cholesterol, or use another health indicator.
Penalties
Approximately 25% of the large corporations that currently make use of financial incentives in wellness programs impose some kind of penalties on non-participants. Honeywell International, Inc. is among the companies penalizing non-participants, charging them an annual premium of $500. Additionally, the company charged an increased penalty to smokers, ranging between $1500 and $2000 annually. Last year the EEOC filed suit against Honeywell for this policy. While the case is pending, the court has allowed Honeywell’s penalty program to continue. Resolution of this lawsuit and others like it will provide employers with more direction on negative financial incentives as part of workplace wellness programs.
Conclusion
The EEOC is accepting public comment on its proposed rules until June 19, 2015. Although the rules have not been finalized, changes made at this stage of the process are usually minor. While many questions need to be resolved, the government guidelines will help organizations in streamlining rules regarding wellness programs.