EEOC Issues Model Notice for Employer Wellness Plans

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Workplace wellness programs can be used to promote employee health, but employers that collect health information must provide advance notice to participants about how the information will be used.

The Equal Employment Opportunity Commission (EEOC) recently issued two final rules that offer guidance to employers about how their wellness programs can comply with the Americans with Disabilities Act (ADA) and the Genetic Information Nondiscrimination Act (GINA). These rules are scheduled to take effect for plan years beginning on or after Jan. 1, 2017.

Under the ADA final rule, employers must provide notice to wellness program participants if they collect health information through health risk assessments (HRAs), biometric screenings or other means.

To assist employers in their compliance efforts, the EEOC posted answers to frequently asked questions (FAQs) and issued a sample notice that employers may use as a template.

The agency clearly stated that employers need to provide the notice to employees before the submission of any health information, so that workers have enough time to decide whether they want to participate, Kenneth Mason told SHRM Online. Mason is an attorney with Spencer Fane's employee benefits practice group in Overland Park, Kan.

Employers may use the EEOC's sample notice, or they may create their own form.

"However, employers who choose not to use the model need to make sure that any alternative notice contains all of the information required by the new regulations, including what information will be collected, how it will be used, who will receive it and how it will be kept confidential," said Mary Bauman, a benefits attorney with Miller Johnson in Grand Rapids, Mich.

Guidance on ADA Compliance

The EEOC defines wellness programs as "health promotion and disease prevention programs and activities offered to employees as part of an employer-sponsored group health plan or separately as a benefit of employment."

Through these programs, many employers collect health risk assessment information or biometric data from participants, which raises concerns about compliance with the ADA and other federal statutes.

Under the ADA, an employer typically can't obtain medical information from employees unless it is collected as part of a "voluntary employee health program." Confusion about the definitions of "voluntary" and "health program" led the EEOC to issue the ADA final rule.

The rule sets the parameters for financial incentives that employers may provide for program participation. Employers generally may offer incentives of up to 30 percent of the total cost of self-only coverage if they collect health information as part of a wellness program. A higher percentage may be offered for tobacco-cessation programs that merely ask if an employee smokes, rather than require employees to be tested for nicotine use.

Access and Confidentiality

Under the rule, the EEOC made clear that employers must provide reasonable accommodations for employees with disabilities to participate in wellness programs, unless those accommodations would result in an undue hardship for the employer.

The ADA final rule provided additional confidentiality requirements for data collected through wellness programs and established that the programs and related health inquiries must be "reasonably designed to promote health or prevent disease."

Thus, employers must do more than simply collect information. They must also provide feedback about risk factors or use aggregate information to tailor programs aimed at specific conditions affecting workers.

Advance Notice Required

Prior to collecting health information, employers must provide notice to employees about what information will be collected, how it will be used, who will receive it and how it will be kept confidential.

"The new sample notice posted on the EEOC website is a model notice" that "includes brackets" for employer customization, Bauman explained. "For example, the model contemplates that the notice will be edited to describe the incentive provided, the requirements to obtain the incentive, contact information to request a reasonable accommodation or alternative standard, and who will be receiving health information."

"It's important for employers to understand their program offerings," Mason said. "What are the incentives they are providing, how much and what types?

"There may be a laundry list of things employers want employees to do, which may require more than just filling in the blanks on the sample notice," he added. "Employers may want to include an attachment, such as a chart or list."

Prepare Notice Now

Although the ADA final rule—including the notice requirement—applies as of the first day of the plan year beginning on or after Jan. 1, 2017, the notice must be furnished to employees before they provide any health information.

"For this reason, I think employers should begin to prepare the notice now," Bauman said.

The notice may be provided in any format that will be effective in reaching the relevant employees.

"The employer will know if e-mail or hand distribution is more appropriate for its workforce," Mason said.

"Interestingly, the FAQs caution about providing the notice along with a lot of information unrelated to the wellness program, which may cause employees to ignore or misunderstand the notice," Bauman said. 

Mason said employers shouldn't merely include the notice in an open enrollment kit. Employers may still want to provide the notice at the time of enrollment to help employees determine what plan to select, but it should also be provided closer in time to the data collection. 

As a best practice, employers should distribute the notice 10 days to two weeks prior to when the employee will complete an HRA, give blood or undergo other testing, Mason said.

One Notice Fits All?

Mason said the ADA sample notice does a good job of referring to other rules that apply to wellness programs, such as GINA and the Health Insurance Portability and Accountability Act (HIPAA), as amended by the Affordable Care Act.

However, if the wellness program is offered as part of a health plan subject to HIPAA, employers may need to obtain additional employee authorization that isn't part of the model notice, he said.

"Additionally, under GINA, if an employer is asking an employee's spouse to fill out an HRA, it will need authorization from the spouse to use that information," Mason said. "But for most wellness plans, the sample notice will fit the bill."​

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