Part 2: Navigating the legal landmines that surround effective Wellness Programs

Last month I shared a blog discussing navigating the wellness program legal landmines PART ONE. 

Read PART ONE of the blog here.  In this PART TWO blog I have outlined wellness programs as they apply to tobacco use, HIPAA regulations, safe harbor provisions, and employee confidentiality information.

• Regarding incentives to motivate employees to stop using tobacco, the ADA rule—unlike the ACA—makes a distinction between tobacco-cessation programs that require employees to be tested for nicotine use and programs that only ask employees if they smoke.
  • A wellness program that merely asks employees whether or not they use tobacco (or whether they ceased using tobacco by the end of the program) is not a wellness program that asks disability-related questions. Therefore, the rule's 30 percent incentive limit does not apply and an employer can offer an incentive up to 50 percent of the cost of self-only coverage,” the EEOC stated.
  • However, where an employer requires any biometric screening or other medical procedure that tests for the presence of nicotine or tobacco, the rule’s 30 percent incentive limit applies, according to the rule.
  • This rule contradicts previously existing rules allowing an incentive up to 50 percent for smoking cessation, and retains a convoluted requirement to apportion the incentive to spouses under GINA. This conflict will likely have to be addressed by the new guidelines defined by the EEOC in 2021.
• Under existing HIPAA regulations, a participatory wellness program must be made available to all similarly situated individuals regardless of health status.
  • The ACA implementing regulations require that wellness programs provide a reasonable alternative or waiver for achieving a wellness incentive if an individual can’t participate or achieve program goals due to a health condition or disability.
  • In its final ADA rule, the EEOC reiterated that, “absent undue hardship” to the employer—a phrase that is not explained—“the ADA requires employers to make all wellness programs, even those that do not obtain medical information, available to all employees [and] to provide reasonable accommodations (adjustments or modifications) to employees with disabilities.
  • These accommodations should “enable employees with disabilities to earn whatever financial incentive an employer or other covered entity offers.”
• The safe harbor provision does not apply to employer wellness programs, since insurers are not allowed to collect or use this information to determine whether employees with certain health conditions are insurable or to set insurance premiums. The final rule adds a new provision explicitly stating that the safe harbor provision does not apply to wellness programs even if they are part of an employer's health plan.
• Employers must take clear actions to protect the confidentiality of the information collected. These actions include:
  • An employer may only receive information collected by a wellness program in aggregate form that does not disclose, and is not reasonably likely to disclose, the identity of specific individuals except as necessary to administer the plan.
  • An employer may not require an employee to agree to the sale, exchange, transfer, or other disclosure of medical information or to waive confidentiality protections under the ADA in exchange for an incentive or as a condition for participating in a wellness program, except to the extent permitted by the ADA to carry out specific activities related to the wellness program.
  • The GINA rule includes a requirement that statutory notice and consent provisions for health and genetic services be provided to employees and their family members.
  • The interpretive guidance published along with the final ADA rule and the preamble to the GINA final rule identify some best practices for ensuring confidentiality, such as:
    • Adopting and communicating clear policies.
    • Training employees who handle confidential information.
    • Encrypting health information.
    • Providing prompt notification of employees and their family members if breaches occur.
    • The ADA rule also requires that employers give participating employees a notice that tells them what information will be collected as part of the wellness program, with whom it will be shared and for what purpose, the limits on disclosure, and the way information will be kept confidential.

Yes, the guidelines are unduly complicated and wrought with subjectivity due to the conflicts that exist between many of the laws already on the books.  The EEOC has its work cut out for itself to alleviate these conflicts and define a clear set of rules that employers can follow with some level of confidence.  Until then, we are stuck with the four pages of rules defined in this blog.  2021 is right around the corner – stay tuned!

For more information on implementing a wellness program in your business, contact our Sioux City law firm, Sioux Falls law firm, or Omaha law firm today!