Wellness programs are an increasingly common feature of employee health benefits, but additional guidance is needed to stop employers from violating federal equal employment opportunity laws, labor advocates told the Equal Employment Opportunity Commission (EEOC) at a May 8, 2013, meeting in Washington, D.C. Business advocates, meanwhile, sought clarification that incentive-based wellness programs do not violate employment discrimination laws.
"The EEOC meeting was just the beginning of its analysis of employer wellness programs and formal guidance from the EEOC is not expected for some time," according to an alert by law firm Sidley Austin LLP. "Employers nevertheless must now navigate the area carefully as there are increasing challenges in the courts concerning the interplay between wellness programs and these statutes."
Expansion of Wellness Programs
“There has been broad, bipartisan support for the expanded use of wellness programs to reduce health insurance and health care costs, but today’s meeting underscored the importance of ensuring that those programs are designed and implemented in a manner that is consistent with federal equal employment opportunity laws,” said EEOC Chair Jacqueline A. Berrien at the conclusion of the hearing.
A majority of employers now offer some type of wellness program: 94 percent of organizations with more than 200 workers, and 63 percent of smaller ones, testified Karen Pollitz of the Kaiser Family Foundation, which researches health care issues. She added that many of these programs offer some financial incentive for participation—which can range from gift cards to higher employer contributions for insurance premiums—or penalties like additional surcharges to employees for health insurance.
ADA and GINA Concerns
Wellness initiatives and the statutes that the EEOC enforces most commonly intersect when the programs require medical exams or ask disability-related questions, both of which would ordinarily give rise to a violation of the Americans with Disabilities Act (ADA), EEOC acting Associate Legal Counsel Christopher Kuczynski told the commission. He explained that, although the ADA allows employers to request medical information in connection with voluntary wellness programs, the meaning of “voluntary” merits further clarification.
Some panelists argued that the EEOC’s regulations under the Genetic Information Nondiscrimination Act (GINA)—which prohibits acquiring genetic information including family medical history—should provide guidance on whether spouses of employees may be asked for health information in the context of wellness programs.
Speaking on behalf of the Consortium of Citizens with Disabilities (CCD), Jennifer Mathis warned against using penalties or monetary incentives to get workers to join wellness programs. Citing the high unemployment rate for people with disabilities, Mathis told the commission that her organization “is concerned that employer-based health programs which penalize people with disabilities for not being as ‘well’ as others—and for failing to disclose disability-related information the ADA permits them to keep confidential—make it even more difficult for individuals with disabilities to obtain employment on fair and equal terms.”
Leslie Silverman, a former EEOC vice chair and partner at law firm Proskauer Rose LLP, urged the commission to provide guidance on the application of the ADA and GINA to wellness programs in order to aid employer compliance and clarify the relationship among those statutes, the Health Information Portability and Accountability Act (HIPAA) and Patient Protection and Affordable Care Act (PPACA) provisions on incentives and penalties.
Gender- and Age-Discrimination Issues
Although most of the panelists discussed wellness programs in the context of ADA or GINA violations, Judith Lichtman of the National Partnership for Women & Families brought up potential violations of Title VII of the Civil Rights Act’s prohibitions on race, sex and national-origin discrimination, and the Age Discrimination in Employment Act’s (ADEA) prohibitions on discrimination against people 40 and older.
Lichtman noted that women and older people tend to have more health problems than men and the young. Many health conditions, such as obesity, diabetes and hypertension, disproportionately affect members of racial minorities. Punitive measures for failing to meet certain biometric markers, therefore, could have an unjustified disparate impact on certain groups, in violation of both Title VII and the ADEA, she told the commission.
Employers Seek Safeguards
The ERISA Industry Committee (ERIC), representing employers that sponsor benefit plans, strongly encouraged the agency to adopt guidance that makes it clear incentive-based workplace wellness programs are permissible, so as to allow these programs to expand and succeed.
“Workplace wellness programs have proved effective in containing health costs, reducing disability claims and improving workers’ productivity,” Amy Moore , a partner at Covington & Burling LLP, testified on behalf of ERIC.
“Employees value these programs, and they benefit from the programs’ emphasis on promoting good health and addressing health problems before the problems become more serious and more costly to treat,” she noted.
Moore said that ERIC would like the EEOC to emphasize that wellness incentives do not violate the ADA and that the PPACA and HIPAA permit incentives for voluntary workplace wellness programs, subject to certain limits and other requirements. She also expressed concern that the EEOC might consider a workplace wellness program to be in violation of the ADA even if it fully complies with the PPACA and HIPAA.
“Since Congress has determined that an incentive up to 30 percent of the annual cost of coverage does not prevent a wellness program from being voluntary for purposes of HIPAA, the commission should acknowledge that the same incentive does not prevent a wellness program from being voluntary for purposes of the ADA,” Moore argued. “The commission should also confirm that an incentive is permissible under the ADA regardless of whether it is presented as a reward or as a penalty.”
Moore added that, in ERIC’s view, the commission’s position that GINA prohibits an employer from offering workers a financial incentive to provide family medical history in a health-risk assessment has severely impaired the effectiveness of workplace wellness programs. She encouraged the commission to issue guidance clarifying that employers may offer incentives to encourage employees’ spouses to provide information about their own medical history, noting that ERIC members are concerned that the EEOC will interpret Title II of GINA as prohibiting spousal incentives.
“If employers are forced to remove spousal incentives from their workplace wellness programs in order to avoid the risk of enforcement action, the effectiveness of the programs will be diminished,” Moore said.
The EEOC will keep the meeting record open until May 23, 2013, and invites members of the public to submit written comments on any issues or matters discussed at the hearing. "Employers may want to take this opportunity to tell the EEOC why they believe these programs are important to the efficient operation of their businesses," advised an alert by law firm Jackson Lewis LLP.
Public comments may be e-mailed to: Commissionmeetingcomments@eeoc.gov. Comments will be made public, and the sender’s e-mail address will automatically appear on the message. Public comments may also be mailed to Commission Meeting, EEOC Executive Officer, 131 M St. N.E., Washington, DC 20507. Written testimony delivered at the meeting is available on the EEOC website.
Stephen Miller, CEBS, is an online editor/manager for SHRM.
Related External Articles:
EEOC to Take a Closer Look at Employer Wellness Programs, Jackson Lewis LLP, May 2013
The Legal Risks Behind Workplace Wellness Programs, Locke Lord LLP, May 2013
EEOC Hears Call for Guidance on Employer Wellness Programs During Public Meeting, Sidley Austin LLP, May 2013
Related SHRM Articles:
Use of Outcomes-Based Health Incentives Still Growing, SHRM Online Benefits, May 2013
Proposed Rule Clarifies Minimum Value Determinations, (includes wellness program incentives), SHRM Online Benefits, May 2013
Tax Implications of Wellness Rewards, SHRM Online Legal Issues, April 2013
Finding Success with Progress-Based Health Incentives, SHRM Online Benefits, December 2012
Study: Preventing Health Risks Has Rapid Payoff, SHRM Online Benefits, December 2012
Getting Results-Based Wellness Communications Right, SHRM Online Benefits, November 2012
Groups Issue Guidance for Outcomes-Based Wellness Incentives, SHRM Online Benefits, July 2012
Employers: Higher Wellness Incentive Is Reform’s ‘Most Beneficial’ Element, SHRM Online Benefits, July 2011
Wellness Program with Nonparticipation Penalty Upheld, SHRM Online Legal Issues, April 2011
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