Clients advised to revisit wellness programs
The Equal Employment Opportunity Commission released its final rules on employer-sponsored wellness programs and how those programs must comply with the Americans with Disabilities Act and the Genetic Insurance Nondiscrimination Act.
The final rules largely echo what was in the proposed rules issued last year, says Steve Wojcik, vice president, public policy with the National Business Group on Health, an industry group representing large employers.
The EEOC “reiterated a ban on plan designs in which more generous plan options are only available to those who complete a health assessment or biometric screening or something of that sort,” says Wojcik. “We had asked for some flexibility in that area but, again, it’s fairly consistent with what they proposed a year ago.”
The rules apply to all employer-sponsored wellness programs, even those offered outside of a group health plan, says Leslie Anderson, a consultant at Mercer. “They will have very broad applicability, including to employers that offer their wellness programs to all their employees, whether or not they’re enrolled in a group health plan,” she says.
Other areas the EEOC clarifies include:
- Spousal incentives are limited to 30% of the total cost of self-only coverage, as it is for employees with self-only coverage. The cost of family medical coverage does not factor in to the incentive limit under the EEOC rules.
- Incentives for spouses, while permissible for health assessments, biometric screenings and questions about current health status, are not allowed if tied to questions about family history or genetic tests.
- Incentives for children, including adult children, tied to health assessments, biometric screenings, family history or genetic tests are prohibited under the rules.
Most provisions of the rules are effective for plan years beginning Jan. 1, 2017. “The notice requirements and incentive limits are applicable on the first day of the first plan year on or after Jan. 1, 2017 [but] it looks like every other provision is essentially already in effect,” says Tami Simon, employee benefits attorney and managing director of Xerox HR Services’ Knowledge Resource Center. “That seems to be a little minutiae there that people are missing.”
Also of note, says Amy Bergner of PricewaterhouseCoopers, is that the EEOC addresses two court cases in the final rules, including EEOC v. Flambeau, in which a district court in Wisconsin ruled that Flambeau did not violate the ADA by requiring employees to complete an HRA and biometric screening in order to be eligible for its self-funded group health plan.
“The EEOC addresses these court decisions head on and says ‘no, we totally disagree with this.’ And so I think they’re kind of staking out their position that they will continue to litigate,” she says. “And, now that they have final regulations in place they may become more aggressive in their enforcement against employers.”
“Employers are still moving in the direction of more well-being, more wellness, than less."
Simon agrees, saying if the EEOC sues an employer over its wellness program she “would expect less leniency than they would have otherwise shown under a proposed set of rules or even before that. Because now, technically, we know what they think.”
Simon advises employers to seek counsel with trusted advisers, look at their current wellness programs in light of the final regulations, conduct a gap analysis and risk assessment and determine what, if any, changes are needed.
Neither Simon nor Bergner think the final rules will have a chilling effect on wellness programs. “Employers are still moving in the direction of more well-being, more wellness, than less,” says Bergner.
Sixty-seven percent of employers plan to expand their investment in well-being programs over the next three to five years, according to a Fidelity/National Business Group on Health survey released last month.
“I would hope that employers would continue to be committed to their cultures of health,” says Simon.