The Equal Employment Opportunity Commission (EEOC) has proposed amendments to the regulations under the Americans with Disabilities Act (ADA) as they relate to wellness programs that are part of an employer's group health plan. The EEOC is requesting comments on the proposed amendments, including comments on several specific questions.

Action Needed: Plan sponsors have until June 19, 2015 to decide whether they want to make any comments and to submit those comments.

How to Submit Comments: Comments, identified by RIN number 3046-AB01, may be submitted electronically at Federal Rulemaking Portal: http://www.regulations.gov; via facsimile (up to six pages) at (202) 663-4114; via mail to: Bernadette B. Wilson, Acting Executive Officer, Executive Secretariat, Equal Employment Opportunity Commission, U.S. Equal Employment Opportunity Commission, 131 M Street NE., Washington, DC 20507; or via hand delivery to Ms. Wilson.

Background: The ADA prohibits discrimination against individuals on the basis of disability, including any group health benefits available by virtue of employment. The ADA restricts employers from obtaining medical information from employees by generally prohibiting them from making disability-related inquiries or requiring medical examinations. However, an exemption is provided that allows employers to "conduct voluntary medical examinations, including voluntary medical histories, which are part of an employee health program available to employees at that work site."¹ The EEOC has viewed wellness programs as health programs and has stated that wellness programs are voluntary as long as an employer neither requires participation nor penalizes employees who do not participate. However, the regulations did not address the extent to which incentives might affect the voluntary nature of a wellness program.

Existing ACA Regulations: Under the Health Insurance Portability and Accountability Act (HIPAA), as amended by the Affordable Care Act (ACA), a group health plan is allowed to have premium discounts or rebates or modifications to cost-sharing in return for adherence to certain programs of health promotion and disease prevention. Under the ACA regulations, two categories of wellness programs are defined:

1. Participatory Programs: These wellness programs do not provide a reward or do not include conditions for obtaining a reward that are based upon on an individual satisfying a standard related to a health factor.
2. Health-contingent Programs: These programs (which can be either activity-only or outcome-based) require individuals to satisfy a standard related to a health factor to obtain a reward (or require an individual to undertake more than a similarly situated individual based on a health factor in order to obtain the same reward). ACA regulations have set forth five requirements for health-contingent wellness programs, generally summarized as follows:
   1. All eligible individuals must be given the opportunity to qualify for the reward at least once per year;
   2. The total reward offered to an individual under all health-contingent wellness programs with respect to a plan cannot exceed 30 percent of the total cost of employee-only coverage under the plan, including both employee and employer contributions (or 50 percent to the extent that the additional percentage is attributed to tobacco prevention or reduction);²
   3. The program must be reasonably designed to promote health or prevent disease;
   4. The full reward must be available to all similarly situated individuals (and provide a reasonable alternative if an individual has a medical condition that makes it difficult to satisfy, or to attempt to satisfy, the standard); and,
   5. Plans must disclose the availability of a reasonable alternative standard to qualify for the reward in all plan materials describing the terms of a health-contingent wellness program and in any disclosure that an individual did not satisfy an initial outcome-based standard.

Proposed ADA Rules: The proposed regulations issued by the EEOC would revise the ADA rules in light of the amendments made to HIPAA by the ACA. In general, the proposed regulations would require wellness programs to:

1. Promote health or prevent disease: An employee health program, including any disability-related inquiries or medical examinations that are part of the program, must be reasonably designed to promote health or prevent disease. (proposed new paragraph 1630.14(d)(1)). However, asking employees to provide medical information on a health risk assessment (HRA) without providing any feedback about risk factors or without using aggregate information to design programs or treat any specific conditions would not be reasonably designed to promote health.
2. Be voluntary: A wellness program that requires employees to answer disability-related questions or undergo medical examinations (including disability-related inquiries or medical examinations that are part of an HRA) is voluntary as long as a covered entity (proposed new paragraph 1630.14(d)(2)):
   1. Does not require employees to participate;
   2. Does not deny coverage under any of its group health plans or particular benefit packages within a group health plan for non-participation, or limit the extent of benefits (except as allowed with respect to incentives), for employees who do not participate;
   3. Does not take any adverse employment action or retaliate against, interfere with, coerce, intimidate, or threaten employees within the meaning of section 503 of the ADA;
   4. Where a health program is a wellness program that is part of a group health plan, provides employees with a notice that
      1. Is written so that the employee from whom medical information is being obtained is reasonably likely to understand it;
      2. Describes the type of medical information that will be obtained and the specific purposes for which the medical information will be used; and,
      3. Describes the restrictions on the disclosure of the employee's medical information, the employer representatives or other parties with whom the information is shared, and the methods that the covered entity will use to ensure that medical information is not improperly disclosed (including whether it complies with the HIPAA rules).
3. Cap Incentives: Under the current HIPAA and ACA regulations, the value of incentives under health-contingent wellness programs is capped at 30% (50% for tobacco-related wellness programs) of the total cost of employee-only coverage. The proposed regulations extend the 30% cap on incentives to participatory wellness programs that include disability-related inquiries or medical examinations, and provide that the total allowable incentive available under all programs (both participatory programs and health-contingent programs) may not exceed 30 percent of the total cost of employee-only coverage. Note, that reasonable accommodations must be provided, absent undue hardship, to enable employees with disabilities to earn whatever incentive that is offered under the program. (new paragraph 1630.14(d)(3)).
4. Report medical information or history only in aggregate: Information obtained regarding the medical information or history of any individual may only be provided to an ADA covered entity in aggregate terms that do not disclose, or are not reasonably likely to disclose, the identity of any employee (except as needed to administer a health plan, or as set forth in existing ADA regulations as a permissible medical examination or inquiry under an employee health program).
5. Comply with non-discrimination rules: Compliance with the revised requirements does not relieve a covered entity from the obligation to comply in all respects with the nondiscrimination provisions of other listed laws.

Requested Commentary: The EEOC invites written comments from members of the public on any issues related to the proposed rules, including general comments about wellness programs or about particular practices that might violate the ADA or other laws enforced by the EEOC. In addition, the EEOC specifically requests comments on several issues, paraphrased as follows:

1. Whether the way in which the EEOC proposes to reconcile the ADA's "voluntary" requirement with the current HIPAA and ACA wellness program rules is appropriate.
2. Whether the EEOC's proposed notice requirement also should include a requirement that employees participating in wellness programs provide prior, written, and knowing confirmation that their participation is voluntary.
3. Whether the proposed notice requirement should apply only to wellness programs that offer more than de minimis rewards or penalties to employees who participate (or declined to participate), and if so, how to define "de minimis."
4. Which best practices ensure that wellness programs are designed to promote health and do not operate to shift costs to employees with health impairments or stigmatized conditions?
5. Should ADA regulations limit incentives that promote participation in or the achievement of health outcomes under wellness programs maintained by employers outside of their insured or self-insured group health plans?
6. What will be the practical effect of adopting the 30% limit on incentives, as set forth in the proposed rule, on wellness programs intended to prevent or reduce tobacco use that ask employees to respond to disability-related inquiries and/or undergo medical examinations?

Cheiron Observations: There are important differences between the proposed rules and the 2013 regulations issued under the ACA, particularly with respect to the maximum allowable incentive. We recommend plan sponsors consider providing comments on these regulations. Cheiron health consultants can assist plan sponsors with the review and consideration of the impact of the amendments to the regulations.

The proposed amendments to the regulations, including the listed questions for commentary, are available at http://www.gpo.gov/fdsys/pkg/FR-2015-04-20/pdf/2015-08827.pdf.

Questions and Answers about EEOC's Notice of Proposed Rulemaking on Employer Wellness Programs are available at http://www.eeoc.gov/laws/regulations/qanda_nprm_wellness.cfm.

Cheiron is an actuarial consulting firm that provides actuarial and consulting advice. However, we are neither attorneys nor accountants. Therefore, we do not provide legal services or tax advice.

¹ 42 U.S.C. 12112(d)(4)(B).

² If dependents can participate than the 30 percent is the total cost of the coverage for employee and dependents.