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Proposed Updates to Employer Wellness Programs

On April 20, 2015, the Equal Employment Opportunity Commission (EEOC) issued a proposal on how Title I of the Americans with Disabilities Act (ADA) applies to employer wellness programs that are part of a group health plan. The proposal’s objective is to change how employers can incentivize workplace wellness plans to encourage employee participation under the ADA. The proposed rule would extend the current cap (30% of the total cost of employee-only coverage in a reward or penalty) to include wellness programs that ask an employee to respond to a disability-related inquiry or undergo a medical examination. While the law currently restricts employers from obtaining medical information from employees by generally prohibiting them from making disability-related inquiries or requiring medical examinations, the proposal would provide an exception to this rule, so long as the employee’s participation in the wellness program is voluntary.

ADA Wellness Programs

In this context, the term “wellness program” refers to programs and activities typically offered through employer-provided health plans as a means to help employees improve health and reduce health care costs. Popular workplace wellness programs include friendly competitions aimed at helping employees stop smoking or lose weight (i.e. encouraging employees to “count their steps” and compete against other employees in daily mileage). Other programs obtain medical information from employees by asking them to complete a health risk assessment or undergo biometric screening for risk factors for certain diseases. While a program reasonably designed to promote health or prevent disease can be considered an employee health program, it is important to discuss the potential legal risks of a wellness program with your legal counsel prior to implementing the program.

When is a health program considered “voluntary”?

The EEOC proposed several requirements that an employer must meet in order for employee participation in a wellness program to be considered “voluntary”. For instance, an employer:

·       May not require employee participation;

·       May not deny access to or limit health coverage for non-participation; and

·       May not take any other adverse action or retaliate against, interfere with, coerce, intimidate, or threaten employees;

Lastly, under the proposed rule, an employer must provide a notice clearly explaining what medical information will be obtained, how it will be used, who will receive it, and the restrictions on disclosure. Furthermore, employers would be required to provide reasonable accommodations for employees with disabilities in order to all them to participate in workplace wellness programs and obtain any incentives offered.

While employee health programs that do not include disability-related inquiries or medical examinations, will not be subject to this proposed change, many wellness programs will be. The public has until July to comment.

If you are interested in discussing its potential effects on your business, contact the experienced Los Angeles business employment lawyers at Hart, Wattesr & Carter today.