To the average worker, the process of offering a few incentives to participate in a wellness program would appear to be a simple one. As those of us working in the employee benefits industry know, appearances can be deceiving. The administration of even seemingly simple employee benefits can be tightly prescribed by the intricate tapestry of laws and regulations that govern our plans and programs. Recently, a few new threads have been woven into the compliance tapestry for wellness program incentives, and these new threads may require employers and program sponsors to carefully review and possibly change their programs.
In May 2016, the Equal Employment Opportunity Commission (EEOC) released two sets of final regulations focused on wellness incentives. One set was issued under the Americans with Disabilities Act (ADA), and the other set was issued under the Genetic Information Nondiscrimination Act (GINA). For an overview of the new rules, the EEOC has provided separate question-and-answer web pages for the ADA rules and the GINA rules.
[Related: Wellness Done Right—Resources and Success Stories]
These new regulations are layered on top of existing rules about wellness incentives from the Health Information Portability and Accountability Act (HIPAA) and the Affordable Care Act (ACA). The new ADA and GINA rules have some similarities to the HIPAA/ACA rules, but they also have some important differences related to the types of programs and participants covered, the maximum incentive amount, notification requirements, the effect on health coverage access and the need for confidentiality. Hence the need to weave all the rules together!
[Related: HIPAA Privacy E-Learning Course]
If a wellness program is subject to the new ADA and GINA rules, what are the dos and don’ts?
Things wellness program sponsors must do:
- Provide a notice to employees about what information will be collected as part of the wellness program, who will receive it, how it will be used, and how it will be kept confidential. EEOC has provided a sample notice for this purpose and answers to common questions about the sample notice.
- Obtain written authorization from spouses before the employer offers an incentive to collect spouses’ health status information in a health risk assessment
- Limit the incentive to 30% of the total cost of self-only coverage for the least expensive health plan offered (not the cost of coverage in which the employee is enrolled)
- Assign a reasonable value to “in-kind” wellness incentives (e.g., prizes, time off) given to employees.
Things wellness program sponsors cannot do:
- Require employees to participate
- Bar enrollment or limit options in a group health plan for employees who choose not to participate in a wellness program
- Increase the incentive from 30% to 50% of the total cost of self-only health coverage for smoking cessation programs if the plan sponsor tests employees for tobacco use (ACA/HIPAA rules allow the 30% incentive limit to be increased to 50% for incentives related to tobacco use, but ADA rules do not allow this increase if the plan sponsor requires the disclosure of disability-related information, medical exams or nicotine tests. If the plan sponsor simply asks a worker whether he or she uses tobacco, without testing, the incentive may be increased to 50%.)
- Provide incentives in exchange for health information about a worker’s children
- Use a “gateway” design that requires participants to complete a health risk assessment or biometric screening before they have access to enhanced tiers or options in a health plan.
There’s a helpful table that compares the three sets of rules in an article from the law firm Troutman Sanders. Examples of how the ACA/HIPAA, ADA and GINA rules would be applied in typical wellness programs are included in a recent article from Willis Towers Watson.
[Related: Americans with Disabilities Act (ADA) E-Learning Course]
The changes brought about by the new ADA and GINA regulations are effective as of the first plan year beginning on or after January 1, 2017. There’s a limited amount of time to make sure your compliance tapestry is woven correctly and doesn’t unravel under government scrutiny.
Kelli Kolsrud, CEBS
Director, Information Services and Publications at the International Foundation