If an employer does not charge a COBRA premium for that coverage, the employer can, but is not required to, include the cost of wellness program coverage in the amount reported on the W For plan or policy years ending before October 1, , employers sponsoring self-insured group health plans must pay PCORI fees, which are intended to support clinical effectiveness research.
PCORI fees apply to a wellness program only if the program provides significant benefits in the nature of medical care or treatment. From through , each state that operates a health insurance exchange was required to establish a temporary reinsurance program for the non-grandfathered plans individual market, to which health insurers and group health plans were required to contribute.
However, reinsurance contributions were not required for a wellness program if the program did not provide major medical coverage. Typical wellness programs that include an HRA, biometric screening, or limited health coaching do not rise to the level of major medical coverage and, therefore, were not subject to the reinsurance contribution requirements.
A wellness program must comply with Title I of GINA if it is itself a group health plan or is part of a group health plan. Applying these definitions, it appears that the following types of wellness programs involve the collection of genetic information as defined under Title I of GINA:.
Because GINA prohibits the collection of genetic information for underwriting purposes, which includes changing deductibles or other cost-sharing mechanisms, or providing discounts, rebates, payments in kind, or other premium differential mechanisms in return for activities such as completing an HRA or participating in a wellness program, the types of wellness programs highlighted above may give rise to compliance issues under Title I of GINA.
We discuss below approaches that can be taken to mitigate the GINA Title I risk related to these common wellness program designs. Title II prohibits employers from discriminating against their employees on the basis of genetic information and, subject to limited exceptions, prohibits employers from requesting, requiring, or purchasing genetic information with respect to an employee or a family member of the employee.
The and final regulations GINA Wellness Program Regulations provided much needed clarity regarding the extent to which inducements could be used as part of a wellness program that includes genetic information. However, the U. Under the GINA Wellness Program Regulations, an employer can request, require, or purchase genetic information about an employee or a family member of the employee if the employer offers health or genetic services, including as part of a voluntary wellness program, and all of the following conditions are satisfied:.
Under the GINA Wellness Program Regulations, an employer may not offer any inducement whether financial or in-kind and whether in the form of a reward or penalty for individuals to provide genetic information. However, an employer may offer inducements for completion of an HRA that includes questions about family medical history or other genetic information, provided the employer makes it clear that the inducement will be made available whether or not the participant answers questions regarding genetic information.
These limitations were intended to ensure that participation remained voluntary, without the inducement becoming unduly coercive. An employer may offer financial inducements to encourage individuals who have voluntarily provided genetic information e.
In no case may an employer condition participation in a wellness program on, or provide any inducement in exchange for, an agreement permitting the sale, exchange, sharing, transfer, or other disclosure of genetic information other than transfers to healthcare professionals or genetic counselors providing genetic services or to the individual or family member.
To avoid GINA non-compliance, an employer can consider the following wellness program designs, particularly if it intends to include spouses in an HRA or biometric screening component of the program:. No genetic information program. For a wellness program that is a group health plan or is part of a group health plan and thus is subject to Title I of GINA, no inducement can be offered for the collection of genetic information.
As a result, until further EEOC guidance is issued, the only wellness program designs that will definitively comply with Title II of GINA are ones that do not offer any inducement for the collection of genetic information, similar to the wellness program designs described with respect to GINA Title I compliance above. These types of wellness programs can still include biometric screening and HRA features that employees and spouses are encouraged to complete, but no rewards or penalties would be associated with whether the employee or spouse completes an HRA or biometric screening involving genetic information.
Title I of the ADA has two primary requirements that an employer should consider when designing its wellness program, whether or not the wellness program is itself a group health plan or part of a group health plan: 1 the program must not be discriminatory with respect to disability, and 2 medical examinations and inquiries generally must be voluntary. An employer cannot discriminate against a qualified employee on the basis of disability with regard to the terms, conditions, and privileges of employment.
Reasonable accommodations must be provided, absent undue hardship, to enable employees with disabilities to earn whatever financial incentive an employer offers as part of its wellness program. However, reasonable accommodation under the ADA is also required for a participation-only program even though HIPAA does not require participation-only programs to offer a reasonable alternative standard.
The ADA generally prohibits an employer from requiring medical examinations or making medical inquiries, unless such examination or inquiry is job-related and consistent with business necessity or is voluntary and part of an employee health program.
The ADA Wellness Program Regulations clarified that a program that simply promotes a healthier lifestyle but does not ask any disability-related questions or require medical examinations e. Under the ADA Wellness Program Regulations, an employer may conduct voluntary medical examinations and inquiries as part of an employee health program such as medical screening for high blood pressure, weight control, and cancer detection , provided that:. Such an employee health program which may be offered in connection with a wellness program must be reasonably designed to promote health or prevent disease, taking into account all the relevant facts and circumstances.
This rule is similar to the standard for health-contingent wellness programs and the reasonable design criterion under GINA described above and generally means that the program:. Specifically, collecting medical information through an HRA without providing employees follow-up information or advice, such as providing feedback about risk factors or using aggregate information to design programs or treat any specific conditions, would not be reasonably designed to promote health. A program also is not reasonably designed if it exists mainly to shift costs from the employer to targeted employees based on their health.
An employer might conclude from aggregate information, for example, that a significant number of its employees have diabetes or high blood pressure and might design specific programs that would enable employees to treat or manage these conditions. Under the ADA Wellness Program Regulations, participation in a wellness program or other employee health program is considered voluntary for this purpose if the employer:.
The extent to which an employer may provide incentives for wellness program participation without jeopardizing its voluntary status is uncertain. The incentive limitations were intended to ensure that participation remained voluntary, without the inducement becoming unduly coercive.
An employer cannot require an employee to agree to the sale, exchange, sharing, transfer, or other disclosure of medical information except to the extent permitted by the ADA Wellness Program Regulations to carry out specific activities related to the wellness program , or to waive any confidentiality protections in this part as a condition for participating in a wellness program or for earning any incentive the employer offers in connection with such a program.
Medical information obtained by wellness programs subject to the ADA Wellness Program Regulations may only be disclosed to employers in aggregate form.
Note that a smoking cessation program that merely asks employees whether they use tobacco or whether they ceased using tobacco upon completion of the program is not an employee health program that includes disability-related inquiries or medical examinations. As such, the vacated incentive limitations in the ADA Wellness Program Regulations would not have applied to such a program.
However, a tobacco-related program that tests for the presence of nicotine or tobacco would be an employee health program that includes disability-related inquiries or medical examinations. Image Caption. You have successfully saved this page as a bookmark. OK My Bookmarks. Please confirm that you want to proceed with deleting bookmark. Delete Cancel. You have successfully removed bookmark. Delete canceled. Please log in as a SHRM member before saving bookmarks.
OK Proceed. Your session has expired. Please log in as a SHRM member. EEOC modifies its regulations. What remains in the regulations presently is that a health program that includes disability-related inquiries or medical examinations such as a health risk assessment or biometric screening is voluntary as long as the program meets certain requirements:.
Second, an employer may not require an employee to agree to the sale, exchange, sharing, transfer, or other disclosure of medical information, or to waive confidentiality protections under the ADA as a condition for participating in a wellness program or receiving an incentive for participating, except to the extent permitted by the ADA to carry out specific activities related to the wellness program.
For example, where a wellness program is part of a group health plan, HIPAA's privacy, security, and breach notification rules protect information collected from or created about participants that can be used to identify them such as their address or birth date and that relates to any past or present health condition and sets limits on the uses and disclosures that may be made of such information.
An employer that sponsors a group health plan may receive this information but must certify to the plan that it will safeguard and not improperly use or share it.
Generally, wellness programs can comply with EEOC's final rule by complying with their obligations under the HIPAA Privacy Rule, and employers can comply with their obligations by certifying that they will not use any personally identifiable information for employment purposes and abiding by that certification.
For example, if the health plan that is used to calculate the permissible incentive limit begins on January 1, , that is the date on which the rules on incentives and the notice requirements apply to the wellness program. If the plan used to calculate the level of incentives begins on March 1, , the provisions on incentives and notice requirements will apply to the wellness program as of that date. The rest of the provisions of the rule, which simply clarify existing obligations, apply both before and after publication of the final rule.
The effective date is the date on which the rule will be in the Code of Federal Regulations, the official publication for federal regulations. The applicability date is the date on which employers have to comply with the requirement to provide a notice and the provisions limiting incentives. This rule says that employers may offer limited inducements incentives for an employee's spouse to participate in a wellness program.
Background 1. What is a wellness program? ADA Protections 2. What is the ADA and how does it apply to wellness programs? Purpose of the Rule 3. Why did EEOC issue this final rule? Does this rule apply to wellness programs that are not part of an employer's group health plan?
What is the ADA's "safe harbor" provision, and does it apply to wellness programs that include disability-related inquiries or medical examinations? What standards apply to wellness programs that ask employees to provide medical information? What are some examples of wellness programs that meet the "reasonably designed" standard? When is an employee's participation in a wellness program considered "voluntary"? Specifically, an employer: may not require any employee to participate; may not deny any employee who does not participate in a wellness program access to health coverage or prohibit any employee from choosing a particular plan; and may not take any other adverse action or retaliate against, interfere with, coerce, intimidate, or threaten any employee who chooses not to participate in a wellness program or fails to achieve certain health outcomes.
Does an employer have to create a new notice to comply with this rule? Incentives Permitted