On April 20, 2015, the Equal Employment Opportunity Commission (“EEOC”) issued a Notice of Proposed Rule Making (“NPRM”) addressing how Title I of the Americans with Disabilities Act (“ADA”) applies to employer wellness programs. The NPRM, which closed to public comments on June 19, 2015, also provides guidance as to how employers can ensure that their wellness programs comply with the Health Insurance Portability and Accountability Act (“HIPAA”) as modified by the Affordable Care Act. 

Wellness programs have become increasingly common in the workplace, with many employers offering financial incentives to employees who complete health-risk assessment questionnaires or participate in biometric screening programs. Although collection of employee medical information is generally prohibited by the ADA, wellness programs are permitted if they are part of a voluntary employee health program. 

After filing three major lawsuits in 2014 against employers with wellness programs that allegedly failed to fit within this exception, the EEOC issued its NPRM to outline five key requirements for a complaint wellness program.

1. An employer wellness program must be voluntary. An employer may not require employees to participate nor deny access to health coverage or limit coverage under its health plan for nonparticipation. Additionally, employers may not subject nonparticipants or those failing to achieve certain health metrics to any adverse action or retaliation (including threats of discipline). The employer must provide a notice describing what medical information will be gathered, how it will be used, who will receive it and all restrictions on disclosure. The notice must be written in a manner understandable by a reasonable employee.

2. An employer wellness program must be reasonably designed to promote health or prevent disease. The EEOC considers programs that either collect information in order to provide individual employees with health feedback or that use aggregate data to create wellness programs aimed at specific medical conditions to be reasonable. Any program that is overly burdensome or appears to simply be an effort at circumventing ADA restrictions or other employment discrimination laws is prohibited.

3. Employers are permitted to offer employees certain incentives for participating in a valid wellness program and achieving particular health goals, but those incentives may not exceed 30% of the total cost of employee-only health care coverage. Similarly, employers may assess a penalty for nonparticipation in a wellness program, but that penalty is capped at the same 30% of the total cost of employee-only health care coverage.

4. Employers are generally allowed to receive medical information in aggregate form only if it does not disclose, and is not reasonably likely to disclose, the identity of individual employees. When wellness programs are part of a group health plan, the employer may meet its obligation to keep medical information private by complying with the HIPAA Privacy Rule. Non-HIPAA covered entities may meet this requirement by signing a certification, as provided for in HIPAA regulations, that they will not use or disclose individually identifiable medical information for any employment-related purpose.

5. Employer health programs must provide reasonable accommodations to disabled employees to enable them to participate in wellness programs and earn offered incentives. This includes providing alternative screening options (for example, providing an alternative to a blood draw for employees for whom this may be dangerous) and providing wellness program materials in alternate forms (such as in Braille for employees with visual impairments).

With the commenting period closed and the expectation that a final rule will be published quickly, employers should take this opportunity to review their wellness programs and evaluate whether any changes are needed.