EEOC Examines Risk of Discrimination in Wellness Programs Offered by Employers Under the Affordable Care Act

Spacious_Gym_Floor.JPGThe Patient Protection and Affordable Care Act (ACA, or “Obamacare” to some) creates a variety of incentives to encourage employers to create and sponsor “wellness programs” for their employees. Several federal agencies, including the Department of Labor (DOL), have issued rules implementing these incentives within the requirements of federal statutes like the Health Insurance Portability and Accountability Act (HIPAA). The Equal Employment Opportunity Commission (EEOC), which enforces employment nondiscrimination statutes, was not involved in those rulemaking processes. It issued a Notice of Proposed Rulemaking in March 2015, stating that it will review how the Americans with Disabilities Act (ADA), 42 U.S.C. § 12101 et seq., affects the wellness program provisions of the ACA. It issued a proposed rule in April.

The Public Health Service Act (PHSA), as amended by HIPAA and the ACA, defines a “wellness program” as “a program offered by an employer that is designed to promote health or prevent disease.” 42 U.S.C. § 300gg-4(j)(1)(A). HIPAA prohibits discrimination in group health plans, in terms of eligibility, benefits, and other factors, based on a participant’s health. It makes one exception, however, by allowing discounts, rebates, or other benefits for participants who follow an employer-sponsored wellness program.

The DOL, the Department of Health and Human Services (HHS), and the Internal Revenue Service (IRS) jointly issued a final rule implementing the HIPAA nondiscrimination provisions for wellness programs. 71 Fed. Reg. 75014 (Dec. 13, 2006). The rule established two types of wellness programs: participatory programs, which should be made available to all similarly-situated employees regardless of their health status; and health-contingent programs, which may be tailored to employees’ particular health needs, such as a program to help employees quit smoking.

The ACA, enacted in 2010, amended the PHSA and other statutes to reflect the 2006 regulations. It also expanded the nondiscrimination provisions to the individual health insurance market. It did not, however, expand the wellness program nondiscrimination exception to individual coverage. The DOL, HHS, and IRS issued a proposed new rule implementing these provisions of the ACA in November 2012, 77 Fed. Reg. 70619 (Nov. 26, 2012); and a final rule about seven months later, 78 Fed. Reg. 33157 (Jun. 3, 2013).

The 2013 regulations acknowledge that they do not address whether wellness programs comply with the ADA or other nondiscrimination statutes, including Title VII of the Civil Rights Act of 1964 and the Genetic Information Nondiscrimination Act (GINA) of 2008. 78 Fed. Reg. at 33168. On March 20, 2015, the EEOC issued a Notice of Proposed Rulemaking, in which it stated its intention “to address the interaction between Title I of the ADA and financial incentives as part of wellness programs offered through group health plans.” The agency issued a proposed rule the following month. 80 Fed. Reg. 21659 (Apr. 20, 2015).

The EEOC’s proposed rule would only apply to employer-sponsored wellness programs that could have a disparate impact on people with disabilities, or who belong to another protected class. The key factor, according to the EEOC, is whether a wellness program is truly voluntary, or whether it could lead to the involuntary disclosure of information protected by laws like the ADA and GINA. The rule would require employers to give notice of what medical information would be required to participate in a wellness program, and it would limit the disclosure of information obtained by wellness programs to employers.The comment period for the rule ends on June 19, 2015.

If you need to speak to an employment discrimination lawyer in New Jersey or New York, contact the Resnick Law Group online, at 973-781-1204, or at 646-867-7997.

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Photo credit: www.localfitness.com.au [Attribution, CC BY-SA 3.0 or GFDL], via Wikimedia Commons.

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