Federal agencies recently released a Proposed Rule to amend regulations and provide guidance on implementing Title I of the Americans with Disabilities Act (ADA) as it relates to employer wellness programs.
Title I of the ADA applies to employers with 15 or more employees, prohibits discrimination against people with disabilities, and requires equal opportunity in promotion and benefits, among other things. Under the Proposed Rule, wellness programs that are part of or are provided by a group health plan or by a health insurance issuer (carrier) offering group health insurance in conjunction with a group health plan are required to provide a notice and describe the use of incentives. In the Proposed Rule, "group health plan" refers to both insured and self-insured group health plans. All of the other proposed changes relate to "health programs," which include wellness programs regardless of whether they are offered as part of or outside of a group health plan or group health insurance coverage. The term "incentives" includes financial and in-kind incentives for participation such as awards of time off, prizes, or other items of value.
Rules for wellness programs have been in effect since 2007, with additional rules that went into effect for the 2014 plan year under the Patient Protection and Affordable Care Act (PPACA). Wellness programs are either "participatory" or "health-contingent." A participatory program is one that either has no reward or penalty (such as providing free flu shots) or simply rewards participation (such as a program that reimburses the cost of a membership to a fitness facility or the cost of a seminar on nutrition). As long as a participatory program is equally offered to all similar employees, no special requirements will apply to the program.
Health-contingent wellness programs are either classified as "activity only" or "outcome based." Health-contingent wellness programs are programs that base incentives or requirements in any way on an employee's health status. Health status includes things like body mass index (BMI), blood glucose level, blood pressure, cholesterol level, fitness level, regularity of exercise, and nicotine use. A wellness program with health-contingent requirements must meet all of these requirements:
- Give employees a chance to qualify for the incentive at least once a year
- Cap the incentive at 30 percent of the total cost of employee-only coverage under the plan, including both the employee and employer contributions, with a 50 percent cap for tobacco cessation or reduction
- Be reasonably designed to promote health or prevent disease
- Provide that the full reward must be available to all similarly situated individuals with a "reasonable alternative" method of qualifying for the incentive for some individuals
- Describe the availability of the alternative method of qualifying for the incentive in written program materials
The ADA restricts employers from obtaining medical information from employees by generally prohibiting them from making disability-related inquiries or requiring medical examinations, with an exception for voluntary medical examinations for wellness programs. The Proposed Rule announced that federal agencies decided that allowing certain incentives related to a wellness program, while limiting them to prevent economic coercion that could make the program involuntary, is the best way to achieve the purposes of the wellness program provisions of both the ADA and HIPAA.
Download UBA’s PPACA Advisor, “Proposed Rule on Wellness Programs Under the Americans with Disabilities Act” for comprehensive information on how the Proposed Rule:
- Defines “voluntary”
- Addresses the disclosure of medical information
- Limits incentives
- Defines when smoking cessation programs would be subject to incentive limitations
- Would protect individually identifiable health information