Genetic Information Nondiscrimination Act, 31143-31159 [2016-11557]

Download as PDF Federal Register / Vol. 81, No. 95 / Tuesday, May 17, 2016 / Rules and Regulations transgender status, and sexual orientation), color, religion, national origin, or age. Additionally, if a wellness program requirement (such as a particular blood pressure or glucose level or body mass index) disproportionately affects individuals on the basis of some protected characteristic, an employer may be able to avoid a disparate impact claim by offering and providing a reasonable alternative standard. Section 1630.14(d)(6): Inapplicability of the ADA’s Safe Harbor Provision Finally, section 1630.14(d)(6) states that the ‘‘safe harbor’’ provision, set forth in section 501(c) of the ADA, 42 U.S.C. 12201(c), that allows insurers and benefit plans to classify, underwrite, and administer risks, does not apply to wellness programs, even if such programs are part of a covered entity’s health plan. The safe harbor permits insurers and employers (as sponsors of health or other insurance benefits) to treat individuals differently based on disability, but only where justified according to accepted principles of risk classification (some of which became unlawful subsequent to passage of the ADA). See Senate Report at 85–86; House Education and Labor Report at 137–38. It does not apply simply because a covered entity asserts that it used information collected as part of a wellness program to estimate, or to try to reduce, its risks or health care costs. Dated: May 11, 2016. For the Commission: Jenny R. Yang, Chair. [FR Doc. 2016–11558 Filed 5–16–16; 8:45 am] BILLING CODE 6570–01–P EQUAL EMPLOYMENT OPPORTUNITY COMMISSION 29 CFR Part 1635 RIN 3046–AB02 Genetic Information Nondiscrimination Act Equal Employment Opportunity Commission. ACTION: Final rule. AGENCY: The Equal Employment Opportunity Commission (EEOC or Commission) is issuing a final rule to amend the regulations implementing Title II of the Genetic Information Nondiscrimination Act of 2008 as they relate to employer-sponsored wellness programs. This rule addresses the extent to which an employer may offer an inducement to an employee for the employee’s spouse to provide information about the spouse’s manifestation of disease or disorder as part of a health risk assessment (HRA) administered in connection with an employer-sponsored wellness program. Several technical changes to the existing mstockstill on DSK3G9T082PROD with RULES2 SUMMARY: VerDate Sep<11>2014 18:56 May 16, 2016 Jkt 238001 regulations are included. Published elsewhere in this issue of the Federal Register, the EEOC also issued a final rule to amend the regulations and interpretive guidance implementing Title I of the Americans with Disabilities Act (ADA) that addresses the extent to which employers may use incentives to encourage employees to participate in wellness programs that ask them to respond to disability-related inquiries and/or undergo medical examinations. DATES: Effective date: This rule is effective July 18, 2016. Applicability date: This rule is applicable beginning on January 1, 2017. FOR FURTHER INFORMATION CONTACT: Christopher J. Kuczynski, Assistant Legal Counsel, at (202) 663–4665 (voice), or Kerry E. Leibig, Senior Attorney Advisor, at (202) 663–4516 (voice), or (202) 663–7026 (TTY). (These are not toll free numbers.) Requests for this rule in an alternative format should be made to the Office of Communications and Legislative Affairs, at (202) 663–4191 (voice) or (202) 663–4494 (TTY). (These are not toll free numbers.) SUPPLEMENTARY INFORMATION: The Commission issued a proposed rule in the Federal Register on October 30, 2015, for a 60-day notice and comment period, which was extended for an additional 30 days and ended on January 28, 2016. After consideration of the public comments, the Commission has revised portions of both the final rule and the preamble. Introduction Several federal laws govern wellness programs offered by employers. Employer-sponsored wellness programs must comply with Title II of the Genetic Information Nondiscrimination Act of 2008 (GINA),1 Title I of the ADA,2 and other employment discrimination laws enforced by the EEOC. Employersponsored wellness programs that are part of, or provided by, a group health plan 3, or that are provided by a health insurance issuer offering group health insurance in connection with a group health plan, must also comply with the Health Insurance Portability and Accountability Act of 1996 (HIPAA) nondiscrimination provisions, as amended by the Affordable Care Act, which is enforced by the Department of 1 42 U.S.C. 2000ff–2000ff–11. U.S.C. 12101–12117. 3 The term ‘‘group health plan’’ includes both insured and self-insured group health plans, and is used interchangeably with the terms ‘‘health plan’’ and ‘‘the plan’’ in this Final Rule. 2 42 PO 00000 Frm 00019 Fmt 4701 Sfmt 4700 31143 Labor (DOL), Department of the Treasury (Treasury), and Department of Health and Human Services (HHS) (referred to collectively as the triDepartments).4 This final rule relates specifically to the requirements of Title II of GINA as they apply to employersponsored wellness programs, though other applicable laws are discussed in some detail. Congress enacted Title II of GINA to protect job applicants, current and former employees, labor union members, and apprentices and trainees from employment discrimination based on their genetic information.5 GINA generally restricts the acquisition and disclosure of genetic information and prohibits the use of genetic information in making employment decisions.6 The EEOC issued implementing regulations on November 9, 2010, to provide all persons subject to Title II of GINA additional guidance with regard to the law’s requirements.7 Discussion Title II of GINA prohibits the use of genetic information in making employment decisions in all circumstances, with no exceptions. It also restricts employers and other 4 The Patient Protection and Affordable Care Act, Public Law 111–148, and the Health Care and Education Reconciliation Act, Public Law 111–152, are known collectively as the Affordable Care Act. Section 1201 of the Affordable Care Act amended and moved the nondiscrimination and wellness provisions of the Public Health Service (PHS) Act from section 2702 to section 2705 and extended the nondiscrimination provisions to the individual health insurance market. The Affordable Care Act also added section 715(a)(1) to the Employee Retirement Income Security Act (ERISA) and section 9815(a)(1) to the Internal Revenue Code (Code) to incorporate the provisions of part A of title XXVII of the PHS Act, including PHS Act section 2705, into ERISA and the Code. 5 Title I of GINA applies to genetic information discrimination in health coverage (not employment), is applicable to group health plans and health insurance issuers, and is administered by the tri-Departments. Under Title I, group health plans may include, as part of a HRA, questions regarding the manifestation of a disease or disorder of individuals covered under the plan, but not genetic information (defined to include genetic test information about the individual or of family members of the individual or the manifestation of disease or disorder in family members of the individual not covered under the plan). See 42 U.S.C. 300gg–91(d)(16); see also 26 CFR 54.9802– 3T(b)(2); 29 CFR 2590.702–1(b)(2); 45 CFR 146.122(a)(3). This final rule, however, which is specific to Title II, provides that all health information provided by a spouse to an employer as part of a HRA is genetic information with respect to the employee, even where both the employee and spouse are covered by the plan. 6 S. Rep. No. 110–48, at 10 (2007); H.R. Rep. No. 110–28, pt. 3, at 29 (2007). 7 See Regulations Under the Genetic Information Nondiscrimination Act of 2007, 75 FR 68,912 (Nov. 9, 2010) (codified at 29 CFR pt. 1635). E:\FR\FM\17MYR2.SGM 17MYR2 31144 Federal Register / Vol. 81, No. 95 / Tuesday, May 17, 2016 / Rules and Regulations mstockstill on DSK3G9T082PROD with RULES2 entities covered by GINA 8 from requesting, requiring, or purchasing genetic information, unless one or more of six narrow exceptions applies, and strictly limits the disclosure of genetic information by GINA-covered entities.9 The statute and the 2010 Title II final rule define ‘‘genetic information’’ to include: Information about an individual’s genetic tests; information about the genetic tests of a family member; information about the manifestation of a disease or disorder in family members of an individual (i.e., family medical history); 10 requests for and receipt of genetic services by an individual or a family member; and genetic information about a fetus carried by an individual or family member or of an embryo legally held by the individual or family member using assisted reproductive technology.11 Family members of an individual include someone who is a dependent of an individual through marriage, birth, adoption, or placement for adoption and any other individual who is a first-, second-, third-, or fourth-degree relative of the individual.12 There are only six limited circumstances in which an employer 13 may request, require, or purchase 8 Unless otherwise noted, the term ‘‘GINA’’ refers to Title II of GINA. 9 See 42 U.S.C. 2000ff–2000ff–11; see also 29 CFR 1635.4–1635.9. 10 Congress recognized ‘‘that a family medical history could be used as a surrogate for genetic traits by a health plan or health insurance issuer. A consistent history of a heritable disease in a patient’s family may be viewed to indicate that the patient himself or herself is at increased risk for that disease.’’ For that reason, Congress believed it was important to include family medical history in the definition of ‘‘genetic information.’’ S. Rep. No. 110–48, at 28. 11 See 42 U.S.C. 2000ff(4), 2000ff–8(b); see also 29 CFR 1635.3. 12 See 42 U.S.C. 2000ff(3)(A) (defining family member for purposes of GINA to include a dependent within the meaning of section 701(f)(2) of ERISA); see also 29 CFR 1635.3(a). The Commission’s definition of ‘‘dependent’’ is solely for purposes of interpreting Title II of GINA, and is not relevant to interpreting the term ‘‘dependent’’ under Title I of GINA or under section 701(f)(2) of ERISA and the parallel provisions of the PHS Act and the Code. See the preamble to the EEOC’s regulations implementing Title II of GINA at 75 FR 68,914, note 5 (and the preamble to the regulations implementing Title I of GINA at 74 FR 51,664, 51,666) for additional information. 13 GINA applies to individuals and covered entities in addition to employees and employers, including employment agencies, unions and their members, and joint-labor management training and apprenticeship programs. See 42 U.S.C. 2000ff–1, 2000ff–2, 2000ff–3, 2000ff–4 (describing the prohibited practices of each of these entities); see also 29 CFR 1635.2(b) (defining ‘‘covered entity’’), 1635.4 (describing prohibited practices). For the sake of readability, and recognizing that employers will be the covered entity most likely to offer employer-sponsored wellness programs, the preamble will refer to employers and employees throughout. VerDate Sep<11>2014 18:56 May 16, 2016 Jkt 238001 genetic information about an applicant or employee. One exception permits employers that offer health or genetic services, including such services offered as part of voluntary wellness programs,14 to request genetic information as part of these programs, as long as certain specific requirements are met.15 The regulations implementing Title II currently make clear that one of the requirements is that the employersponsored wellness program cannot condition inducements to employees on the provision of genetic information.16 This requirement is derived from a prohibition in Title I of GINA (which applies to health plans and health insurance issuers) against adjusting premium or contribution amounts on the basis of genetic information.17 14 A wellness program, defined as a ‘‘program offered by an employer that is designed to promote health or prevent disease,’’ is one type of health or genetic service that an employer might offer. See Section 2705(j)(1)(A) of the PHS Act, as amended by the Affordable Care Act. A wellness program that provides medical care (including genetic counseling) may constitute a group health plan required to comply with section 9802 of the Code, 26 U.S.C. 9802, section 702 of the ERISA, 29 U.S.C. 1182, or section 2705 of the PHS Act (i.e., Title I of GINA). Regulations issued under these statutes address employer-sponsored wellness programs that collect genetic information. Moreover, employer-sponsored wellness programs that condition rewards on an individual satisfying a standard related to a health factor must meet additional requirements. See 26 CFR 54.9802–1(f); 29 CFR 2590.702(f); 45 CFR 146.121(f). As noted above, the EEOC has also issued a final rule amending the regulations and interpretive guidance implementing Title I of the ADA as they relate to employer-sponsored wellness programs. See 29 CFR 1630.14, published elsewhere in this issue of the Federal Register. 15 See 42 U.S.C. 2000ff–1(b)(2), 2000ff–2(b)(2), 2000ff–3(b)(2), 2000ff–4(b)(2); see also 29 CFR 1635.8(b)(2). Other health or genetic services include services such as an Employee Assistance Program or a health clinic that provides flu shots. Under GINA, employers may request genetic information as part of such health or genetic services, as long as the requirements of 29 CFR 1635.8(b)(2) are met. 16 See 29 CFR 1635.8(b)(2)(ii). Consistent with the requirements of paragraph (b)(2)(i) of this section, a covered entity may not offer an inducement for individuals to provide genetic information, but may offer inducements for completion of HRAs that include questions about family medical history or other genetic information, provided the covered entity makes clear, in language reasonably likely to be understood by those completing the HRA, that the inducement will be made available whether or not the participant answers questions regarding genetic information. 17 Title I of GINA applies to genetic information discrimination in health coverage and not employment. The Departments responsible for enforcing Title I determined that permitting employers to condition wellness program inducements on the provision of genetic information would undermine Title I’s prohibition on adjusting premium or contribution amounts on the basis of genetic information. For more on the protections provided by Title I of GINA, see DOL— Employee Benefits Security Administration, FAQs on the Genetic Information Nondiscrimination Act (2010), www.dol.gov/ebsa/pdf/faq-GINA.pdf. For a PO 00000 Frm 00020 Fmt 4701 Sfmt 4700 Although the EEOC received no comments prior to the publication of the Title II final rule in 2010 regarding how GINA’s restriction on employers’ acquiring genetic information interacts with the practice of offering employees inducements where a spouse participates in an employer-sponsored wellness program, this question arose after publication of the Title II final rule in 2010. Read one way, such a practice could be interpreted to violate the 29 CFR 1635.8(b)(2)(ii) prohibition on providing financial inducements in return for an employee’s protected genetic information. This is because information an employer seeks from a spouse (who is a ‘‘family member’’ under GINA as set forth at 42 U.S.C. 2000ff(4)(a)(ii) and 29 CFR 1635.3(a)(1)) about his or her manifestation of disease or disorder is treated under GINA as requesting genetic information about the employee. Although the EEOC’s original regulations specifically permitted employers to seek information about manifestation of diseases or disorders in employees’ family members who are receiving health or genetic services from the employer, including such services offered as part of a voluntary employersponsored wellness program,18 the regulations did not say whether inducements could be provided in exchange for such information. The Commission now finalizes the clarification that an employer may, in certain circumstances, offer an employee limited inducements for the employee’s spouse to provide information about the spouse’s manifestation of disease or disorder as part of a HRA administered in connection with an employer-sponsored wellness program, provided that GINA’s confidentiality requirements are observed and any information obtained is not used to discriminate against an employee.19 However, this narrow exception to the general rule that inducements may not be offered in exchange for an employee’s genetic information does not extend to genetic information about a spouse or to discussion of how Titles I and II of GINA allow employers and plans to use financial inducements to promote employee wellness and healthy lifestyles, see the preamble to the 2010 Title II final rule at 75 FR 68,923 (Nov. 9, 2010). 18 See 29 CFR 1635.8(c)(2). 19 One industry group argued that using the phrase ‘‘current or past health status’’ to describe the types of questions to spouses that could include inducements was confusing because not all information about a spouse’s current or past health status meets the definition of genetic information. In order to clarify that the rule only applies to questions asked of the spouse that meet the definition of genetic information, the final rule will replace the phrase ‘‘current or past health status’’ with ‘‘manifestation of disease or disorder.’’ E:\FR\FM\17MYR2.SGM 17MYR2 Federal Register / Vol. 81, No. 95 / Tuesday, May 17, 2016 / Rules and Regulations information about manifestation of diseases or disorders in, or genetic information about, an employee’s children. Background on the Notice of Proposed Rulemaking on GINA and EmployerSponsored Wellness Programs mstockstill on DSK3G9T082PROD with RULES2 The Commission drafted a Notice of Proposed Rulemaking (NPRM) that was circulated to the Office of Management and Budget for review (pursuant to Executive Order 12866) and to federal executive branch agencies for comment (pursuant to Executive Order 12067).20 The NPRM was then published in the Federal Register on October 30, 2015 for a 60-day public comment period,21 which was extended for an additional 30 days 22 and ended on January 28, 2016. The NPRM sought comment on the proposed revisions to the GINA regulation which: • Clarified that an employer may offer, as part of its health plan, a limited inducement (in the form of a reward or penalty) to an employee whose spouse (1) is covered under the employee’s health plan; (2) receives health or genetic services offered by the employer, including as part of a wellness program; and (3) provides information about his or her current or past health status. • Explained that the total inducement for an employee and spouse to participate in an employer-sponsored wellness program that is part of a group health plan and collects information about the spouse’s current or past health status may not exceed 30 percent of the total cost of the plan in which the employee and any dependents are enrolled. • Described how inducements must be apportioned between the employee and spouse. • Explained that inducements may be financial or in kind, consistent with regulations issued by DOL, HHS, and Treasury to implement the wellness program provisions in the Affordable Care Act. For that reason, the proposed rule deleted the term ‘‘financial’’ where it appeared as a modifier for the term ‘‘inducement’’ in 29 CFR 1635.8(b)(2). 20 While there are differences between the definitions and requirements for wellness programs set forth in the Affordable Care Act, PHS Act, ERISA, the Code, and Title II of GINA, this final rule is being issued after review by and consultation with the tri-Departments. 21 Genetic Information Nondiscrimination Act, 80 FR 66853 (proposed October 30, 2015) (to be codified at 29 CFR part 1635). 22 Genetic Information Nondiscrimination Act, 80 FR 75956 (proposed December, 7, 2015) (to be codified at 29 CFR part 1635). VerDate Sep<11>2014 18:56 May 16, 2016 Jkt 238001 • Explained that any request for current or past health status information from an employee’s spouse must comply in all other respects with 29 CFR 1635.8(b)(2) concerning requests for genetic information that are part of voluntary health or genetic services offered by an employer. • Explained that an employer may not require employees (or employees’ spouses or dependents covered by the employees’ health plan) to agree to the sale, or waive the confidentiality, of their genetic information as a condition for receiving an inducement or participating in an employer-sponsored wellness program. • Added an example making it clear that a request for current or past health status information from an employee’s spouse who is participating in a wellness program does not constitute an unlawful request for genetic information about the employee. • Made several technical changes to correct a previous drafting error and to add references, where needed, to HIPAA and the Affordable Care Act. Additionally, the Commission specifically sought comments on several other issues, including: • Whether employers that offer inducements to encourage the spouses of employees to disclose information about current or past health status must also offer similar inducements to persons who choose not to disclose such information but, who instead, provide certification from a medical professional stating that the spouse is under the care of a physician and that any medical risks identified by that physician are under active treatment. • Whether the proposed authorization requirements apply only to employersponsored wellness programs that offer more than de minimis rewards or penalties to employees whose spouses provide information about current or past health status as part of a HRA. • Which best practices or procedural safeguards ensure that employersponsored wellness programs are designed to promote health or prevent disease and do not operate to shift costs to employees with spouses who have health impairments or stigmatized conditions. • Whether the rule should include more specific guidance to employers regarding how to implement the requirements of 29 CFR 1635.9(a) for electronically stored records. If so, what procedures are needed to achieve GINA’s goal of ensuring the confidentiality of genetic information with respect to electronic records stored by employers. PO 00000 Frm 00021 Fmt 4701 Sfmt 4700 31145 • Whether there are best practices or procedural safeguards to ensure that information about spouses’ current health status is protected from disclosure. • Whether the regulation should restrict the collection of any genetic information by an employer-sponsored wellness program to only the minimum necessary to directly support the specific wellness activities, interventions, and advice provided through the program—namely information collected through the program’s HRA and biometric screening. Should programs be prohibited from accessing genetic information from other sources, such as patient claims data and medical records data. • Whether employers offer (or are likely to offer in the future) wellness programs outside of a group health plan or group health insurance coverage that use inducements to encourage employees’ spouses to provide information about current or past health status as part of a HRA, and the extent to which the GINA regulations should allow inducements provided as part of such programs. Summary of Revisions and Response to Comments During the 60-day comment period, which was extended by 30 days, the Commission received 3,003 23 comments on the NPRM from a wide spectrum of stakeholders, including, among others: Individuals, including individuals with disabilities; disability rights and other advocacy organizations and their members; members of Congress; employer associations and industry groups; and health insurance issuers, third party administrators, and wellness vendors. The comments from individuals included 2,911 similar, but not uniform, letters—almost all of which were submitted by a national organization that supports women and families. Most of the comments (3,000) were submitted through the United States Government’s electronic docket system, Regulations.gov, under EEOC– 2015–0009. The remaining three comments were mailed or faxed to the Executive Secretariat. The Commission has reviewed and considered each of the comments in preparing this final rule. The first section of this preamble begins by clarifying the purpose of this rule. It goes on to address general comments about the interaction between GINA and the wellness program provisions of 23 One of these comments was withdrawn when the commenter submitted a ‘‘corrected’’ version of the comment. E:\FR\FM\17MYR2.SGM 17MYR2 31146 Federal Register / Vol. 81, No. 95 / Tuesday, May 17, 2016 / Rules and Regulations HIPAA, as amended by the Affordable Care Act; interaction between GINA and the ADA; the final rule’s applicability date; the rule’s treatment of inducements for information from the children of employees; the confidentiality protections of the rule; tobacco cessation programs; and the Commission’s burden calculations. The second section discusses comments submitted in response to questions the NPRM asked about several issues, as noted above. The third section addresses comments regarding specific provisions of the rule. General Comments Purpose of the Rule Many comments submitted by individuals objected to a rule that would allow employers to charge employees more for benefits based on the illness of family members, impose stiff penalties on people that do not measure up to certain health guidelines, allow employers to fire or otherwise adversely treat employees based on medical information collected through employer-sponsored wellness programs, and/or allow ‘‘metrics’’ that would harm millions of people with disabilities. This rule, however, is more limited in scope. Instead, it addresses the very limited question of the extent to which an employer may offer inducements to an employee for the employee’s spouse to provide information about the spouse’s manifestation of disease or disorder as part of a HRA administered in connection with an employersponsored wellness program. The absolute prohibition on the use of genetic information to make employment decisions enshrined in Title II of GINA remains intact, as do the existing protections of Title I of the ADA, which prohibits discrimination on the basis of disability. mstockstill on DSK3G9T082PROD with RULES2 Interaction Between GINA and HIPAA’s Wellness Program Provisions The Commission received comments expressing support for and/or concerns about employer-sponsored wellness programs. For example, many commenters stated that although properly designed employer-sponsored wellness programs have the potential to help employees become healthier and bring down health care costs, they believe that these programs also carry serious potential for discrimination in ways already prohibited by GINA and other civil rights laws, by allowing employers to coerce employees into providing genetic information (as well as other health information). Disability rights and health advocacy groups VerDate Sep<11>2014 18:56 May 16, 2016 Jkt 238001 expressed concern that the EEOC was abandoning its prior position that GINA prohibits financial inducements in return for all genetic information, while employer and industry groups commented that the proposed rule’s limitation on inducements was inconsistent with the wellness program rules under section 2705(j) of the PHS Act. Disability rights groups further noted that there was no need to alter Title II of GINA’s prohibition on financial incentives in order to conform to laws that regulate insurance discrimination, given that Title II of GINA is about employment discrimination, and pointed out that the tri-Department wellness regulations explicitly state that GINA imposes separate and additional restrictions. Although the Commission recognizes that compliance with the standards in HIPAA, as amended by the Affordable Care Act, is not determinative of compliance with Title II of GINA,24 we believe that the final rule interprets GINA in a manner that reflects both GINA’s goal of providing strong protections against employment discrimination based on the possibility that an employee or the employee’s family member may develop a disease or disorder in the future and HIPAA’s provisions promoting wellness programs. Additionally, as we pointed out in the preamble to the proposed rule, allowing limited inducements for spouses to provide information about manifested diseases or disorders (but not their own genetic information) as part of a HRA administered in connection with an employer-sponsored wellness program is consistent with HIPAA, as amended by the Affordable 24 As the tri-Department wellness regulations acknowledge, the Affordable Care Act did not amend or overturn GINA, and compliance with the Affordable Care Act and its implementing regulations is not determinative of compliance with GINA. See Incentives for Nondiscriminatory Wellness Programs in Group Health Plans, 78 FR 33158, 33168 (June 3, 2013). A publication issued jointly by the tri-Departments further explains that a wellness program that complies with the triDepartments’ wellness program regulations does not necessarily comply with any other provision of the PHS Act, the Code, ERISA, (including the Consolidated Omnibus Budget Reconciliation Act (COBRA) continuation provisions), or any other state or federal law, such as the ADA, or the privacy and security obligations of HIPAA, where applicable. Similarly, the fact that an employersponsored wellness program meets the requirements of the ADA is not determinative of compliance with the PHS Act, ERISA, or the Code. See DOL—Employee Benefits Security Administration, FAQs about the Affordable Care Act Implementation (part XXV), Question 2 (2015), http://www.dol.gov/ebsa/pdf/faq-aca25.pdf and https://www.cms.gov/CCIIO/Resources/Fact-Sheetsand-FAQs/Downloads/Tri-agency-Wellness-FAQS4-16-15pdf-AdobeAcrobat-Pro.pdf. PO 00000 Frm 00022 Fmt 4701 Sfmt 4700 Care Act, and Title I of GINA.25 Accordingly, after consideration of all of the comments, the Commission reaffirms its conclusion that allowing inducements in return for a spouse providing information about his or her manifestation of disease and disorder, while limiting inducements to prevent economic coercion, is the best way to effectuate the purposes of the wellness provisions of GINA and HIPAA. Interaction With the ADA and Other Equal Employment Opportunity (EEO) Laws The Commission received a number of comments requesting that the final rule be issued jointly with the final ADA wellness rule, a suggestion that has been adopted. Comments raising more substantive concerns about the interaction between the ADA and GINA focused on the desire for alignment of the inducement limits available under the statutes, suggesting that the incentive limit under the ADA, which is based on the total cost of self-only coverage, be revised to correspond with the inducement limit proposed in the GINA NPRM, which is based on the total cost of coverage for the plan in which the employee and any dependents are enrolled. The Commission declines to adopt this recommendation, however, because the ADA does not apply to the inducements employer-sponsored wellness programs offer in connection with spousal participation. As discussed in more detail below, this final GINA rule will, consistent with the ADA final rule, limit the maximum share of the inducement attributable to the employee’s participation in an employer-sponsored wellness program (or multiple employer-sponsored wellness programs that request such information) to up to 30 percent of the cost of self-only coverage. Furthermore, the maximum total inducement for a spouse to provide information about his or her manifestation of disease or disorder will also be 30 percent of the total cost of (employee) self-only coverage, so that the combined total inducement will be no more than twice the cost of 30 percent of self-only coverage. An advocacy group representing older individuals commented that protections similar to those proposed in the ADA wellness NPRM against conditioning access to employer-provided health insurance on the provision of medical information to an employer-sponsored wellness program and on retaliation against those who do not participate should be included in the GINA final 25 See E:\FR\FM\17MYR2.SGM 80 FR at 66857, supra note 20. 17MYR2 Federal Register / Vol. 81, No. 95 / Tuesday, May 17, 2016 / Rules and Regulations mstockstill on DSK3G9T082PROD with RULES2 rule. Protections in the statute and the existing GINA regulations make clear that an employer may not use genetic information to make employment decisions, including decisions about benefits.26 Both the statute and the existing regulations also provide that it is unlawful for an employer to discriminate against any individual because that individual has opposed any act or practice made unlawful by Title II of GINA.27 We agree, however, that it would improve the final rule specifically to provide that it is a violation of Title II of GINA for an employer to deny access to health insurance or any package of health insurance benefits to an employee and/ or his or her family members, or to retaliate against an employee, based on a spouse’s refusal to provide information about his or her manifestation of disease or disorder to an employer-sponsored wellness program. We have added clarification to the final rule at § 1635.8(b)(2)(v). Another advocacy group whose mission is to protect the rights of women and girls asked that the final rule include language making clear that in addition to complying with the requirements of the final rule, employers must abide by other nondiscrimination provisions, including, for example, Title VII of the Civil Rights Act of 1964. We have not added any language to the final rule on this topic because the existing regulations already state that nothing contained in § 1635.8(b)(2) limits the rights or protections of an individual under the ADA, or other applicable civil rights laws, or under HIPAA, as amended by GINA. We have made technical revisions to this provision due to the changes made to the renumbering of other provisions. Applicability Date Employer associations and industry groups submitted comments regarding the effective date of the final rule, recommending that it allow enough time for employers to bring their wellness programs into compliance, that it be issued jointly with the ADA wellness rule, and that it not be applied retroactively. The Commission agrees and concludes that the provisions of § 1635.8(b)(2)(iii) related to wellness program inducements will apply only prospectively to employer-sponsored wellness programs as of the first day of the first plan year that begins on or after January 1, 2017, for the health plan used 26 See 42 U.S.C. 2000ff–1(a), 2000ff–2(a), 2000ff– 3(a), 2000ff–4(a); 29 CFR 1635.4. 27 See 42 U.S.C. 2000ff–8(c); 29 CFR 1635.7. VerDate Sep<11>2014 18:56 May 16, 2016 Jkt 238001 to determine the level of inducement permitted under this regulation. So, for example, if the plan year for the health plan used to calculate the permissible inducement limit begins on January 1, 2017, that is the date on which the provisions of this rule governing inducements apply to the employersponsored wellness program. If the plan year of the plan used to calculate the level of inducements begins on March 1, 2017, the provisions on inducements will apply to the employer-sponsored wellness program as of that date. For this purpose, the second lowest cost Silver Plan is treated as having a calendar year plan year. All other provisions of this final rule are clarifications of existing obligations that apply at, and prior to, issuance of this final rule.28 Prohibition on Inducements for Information From Children of Employees A number of advocacy groups, employer groups, and industry groups, in addition to members of Congress, submitted comments concerning the Commission’s proposal that no inducement be permitted in return for the current or past health status information or the genetic information of employees’ children. Two commenters, pointing to the fact that Title II of GINA defines ‘‘family members’’ to include both spouses and children, argued that there was no basis for making a distinction between spouses and children and that, therefore, no inducements should be permitted in return for current or past health information of either. Others argued that prohibiting inducements in return for past or current health information of children conflicts with the Affordable Care Act’s requirement that employers who offer health insurance coverage to dependents of employees must offer coverage to dependents up to age 26 and that, therefore, inducements should be permitted in return for current or past health information from both spouses and children. Although some commenters agreed with the 28 Prior EEOC interpretations set forth in the 2010 final rule implementing Title II of GINA, Regulations Under the Genetic Information Nondiscrimination Act of 2007, 75 FR 68912 (Nov. 9, 2010) (codified at 29 CFR part 1635), and the proposed rule on GINA and employer-sponsored wellness programs, Genetic Information Nondiscrimination Act, 80 FR 66853 (proposed Oct. 30, 2015) (to be codified at 29 CFR part 1635), may be considered in determining whether inducements provided prior to this applicability date for an employee’s spouse or other dependents to provide information about their manifested diseases or disorders as part of an employer-sponsored wellness program comply with GINA. PO 00000 Frm 00023 Fmt 4701 Sfmt 4700 31147 Commission’s argument that health information about a child is more likely to reveal genetic information about an employee, one commenter noted that this does not support the distinction made in the proposed rule because the same cannot be said of health information about a spouse and adopted children. Commenters also asked for clarification of whether the prohibition applied to the current or past health status information of all children, including children up to the age of 26 who are permitted to remain on their parents’ health plans, or just minor children, with some urging the Commission to extend the prohibition and others arguing that children between the ages of 18 and 26 were not in need of this additional protection and would benefit from participation in an employer-sponsored wellness program. The Commission maintains its conclusion that the information about the manifestation of a disease or disorder in an employee’s child can more easily lead to genetic discrimination against an employee than information about an employee’s spouse. Even where the information provided concerns an adopted child, it is unlikely that a wellness program will know whether the child is biological or adopted, and the information may therefore be used to make predictions about an employee’s health. Consequently, the final rule provides that no inducements are permitted in return for information about the manifestation of disease or disorder of an employee’s children and makes no distinction between adult and minor children or between biological and adopted children. The fact that the final rule treats health information about spouses and children differently with respect to wellness program inducements, however, does not alter the statutory definition of family member, which includes both spouses and children. Nor does the distinction, as suggested by some commenters, mean that employers are prohibited from offering health or genetic services (including participation in an employer-sponsored wellness program) to an employee’s children on a voluntary basis. They may do so, but may not offer any inducement in exchange for information about the manifestation of any disease or disorder in the child.29 The Commission agrees with commenters who suggested that the final rule should clarify that the prohibition on inducements applies to adult children. The possibility that 29 See E:\FR\FM\17MYR2.SGM 29 CFR 1635.8(b)(2)(A)(iii). 17MYR2 31148 Federal Register / Vol. 81, No. 95 / Tuesday, May 17, 2016 / Rules and Regulations mstockstill on DSK3G9T082PROD with RULES2 information about a child could be used to discriminate against an employee on the basis of genetic information is not diminished by the age of the child whose information is provided. Therefore, the rule does not distinguish between minor children and those 18 years of age and older, and makes explicit that the prohibition extends to adult children. This clarification is being made to 29 CFR 1635.8(b)(2)(A)(iii). Confidentiality Protections The Commission received numerous comments from individuals and advocacy groups asking that we strengthen the confidentiality protections of the rule, especially given that the availability of inducements in return for certain genetic information would likely mean that more genetic information will end up in the hands of employer-sponsored wellness programs. Commenters questioned how employersponsored wellness programs would use the information, to whom they would disclose and/or sell it, and how they would ensure that it remained confidential. One commenter further noted that many people erroneously assume that the privacy protections of HIPAA apply to all employer-sponsored wellness programs and therefore ‘‘may let their privacy guard down.’’ Some of these commenters provided specific examples of ways in which employersponsored wellness programs were not maintaining, or might not maintain in the future, the confidentiality of genetic information in their possession— pointing to, for example, advances in technology that allow for the reidentification and de-aggregation of unidentifiable and aggregate data that some employer-sponsored wellness programs are taking or might take advantage of—and/or made specific suggestions on how GINA’s confidentiality protections could be improved. These suggestions included, among other ideas: Adding a requirement that individuals have the right to receive copies of all personal information collected about them as part of an employer-sponsored wellness program, to challenge the accuracy and completeness of that information, and to obtain a list of parties with whom that information was shared and a description of the compensation or consideration received for that disclosure; providing that covered entities are strictly liable for any confidentiality breaches and are not permitted to disclaim liability for harms that result from sharing data; requiring wellness programs to delete all genetic information obtained about an VerDate Sep<11>2014 18:56 May 16, 2016 Jkt 238001 individual participating in the employer-sponsored wellness program if that individual stops participating and requests that his or her genetic information be deleted; and prohibiting the storage of individually identifiable information obtained by the wellness program on work computers, servers, or paper files. Another commenter noted that the rule should include confidentiality protections for health information provided by spouses who do not want that information to fall into the hands of the employee, due, for example, to domestic violence. In response, the Commission notes that Title II of GINA and the existing regulations implementing it include specific confidentiality provisions which require employers and other covered entities that possess genetic information to maintain it in medical files (including where the information exists in electronic forms or files) that are separate from personnel files and treat such information as a confidential medical record. These provisions prohibit the disclosure of genetic information except in six very limited circumstances.30 The provision which allows employers to acquire genetic information as part of health or genetic services such as employer-sponsored wellness programs further requires that the authorization an individual must sign explain the restrictions on the disclosure of that information; that individually identifiable genetic information is provided only to the individual receiving the services and the licensed health care professionals or board certified genetic counselors involved in providing those services; and that any individually identifiable genetic information is only available for purposes of the health or genetic services and is not disclosed to the employer except in aggregate terms.31 The Commission intends to continue its vigorous enforcement of these requirements and believes that they already provide strong protections against unlawful disclosure of genetic information provided as part of employer-sponsored wellness programs.32 Some of the ideas offered by advocacy groups as best practices, such as giving individuals the right to receive copies of genetic information collected about them, are already requirements of the regulation.33 Although others may 30 See 42 U.S.C. 2000ff–5; 29 CFR 1635.9. 42 U.S.C. 2000ff–1(b)(2), 2000ff–2(b)(2), 2000ff–3(b)(2), 2000ff–4(b)(2); 29 CFR 1635.8(b)(2)(i). 32 Nothing in this rule is intended to affect the ability of a health oversight agency to receive data under HIPAA. See 45 CFR 164.501 and 164.512(d). 33 See 29 CFR 1635.9(b)(1). 31 See PO 00000 Frm 00024 Fmt 4701 Sfmt 4700 make sense as best practices, such as allowing an individual to challenge the accuracy of genetic information within the employer’s possession, the Commission does not believe it is necessary to add to the already stringent confidentiality requirements that exist in the regulations. Tobacco Cessation Several commenters asked that the Commission clarify its position on GINA’s application to tobacco-related employer-sponsored wellness programs, such as smoking cessation programs. In response, we reaffirm that the inducement rules in § 1635.8(b)(2) apply only to health and genetic services that request genetic information. An employer-sponsored wellness program does not request genetic information when it asks the spouse of an employee whether he or she uses tobacco or ceased using tobacco upon completion of a wellness program or when it requires a spouse to take a blood test to determine nicotine levels, as these are not requests for information about the spouse’s manifestation of disease or disorder. Burden One commenter asserted that the EEOC underestimated the burden the proposed rule would impose on employers, arguing that the rule was an economically significant one that would have an annual effect on the economy of $100 million or more. Among other things, the commenter argued that the EEOC underestimated training, compliance review, and program revision costs; failed to include ‘‘familiarization’’ costs; and failed to provide necessary empirical support for various conclusions. We disagree. The proposed rule appropriately estimated the training cost by using wage data from the Bureau of Labor Statistics indicating a median $49.41 per hour wage for human resource management professionals.34 Although the commenter argues that this rate should be tripled to reflect ‘‘fully loaded’’ hourly rates paid by the government to private contractors for professional labor, actual hourly wages of human resource professionals better estimate the economic costs of training. The fully loaded hourly rate inappropriately includes coverage of the private contractor’s fixed costs and, as a result, will erroneously bias the estimated economic impact. Costs such 34 The EEOC estimated that a covered entity will train three human resource management professionals, for one hour each. The estimated cost was $49.41 per person and $148.23 per covered entity. E:\FR\FM\17MYR2.SGM 17MYR2 mstockstill on DSK3G9T082PROD with RULES2 Federal Register / Vol. 81, No. 95 / Tuesday, May 17, 2016 / Rules and Regulations as a private contractor’s office rent and marketing budget are not an economic impact of the regulation. As such, the estimate of the marginal economic impact of the regulation excludes firms’ fixed costs because those costs are incurred whether or not the GINA regulation is revised. Moreover, in most cases, a covered entity’s compliance effort will be conducted by its own human resource management professionals. The median wage of human resource management professionals therefore reasonably estimates the economic impact of up to three person-hours of staff time. The EEOC’s estimates of three human resource professionals per covered entity and one hour per person are cautious and reflect agency experience and expertise. In response to the commenter’s argument that the projected costs should have included the hiring of a private contractor to provide training, we reiterate that human resource professionals will be able to learn what is necessary for compliance with the rule by reading the EEOC’s freely provided technical assistance documents, or participating in our general or GINA-specific outreach programs, many of which are free. Although the commenter asserts that ‘‘great effort’’ will be expended by entities that are not covered by Title II of GINA in reading the rule to ensure that they are not covered and that these costs should be included, the proposed regulation does not alter long established coverage requirements of Title II of GINA, and it is unlikely that entities that have never before concerned themselves with compliance with this and other workplace nondiscrimination laws will now undergo ‘‘great effort’’ to ensure that the changes in this rule do not apply to them. Finally, we note that the final rule does not require any changes to employer-sponsored wellness programs that are already in compliance with Title II of GINA and its existing implementing regulations. Instead, this rule merely clarifies that offering limited inducements to spouses is permitted in certain circumstances. We, therefore, reiterate our conclusion that the rule will not have an annual effect on the economy of $100 million or more, or adversely affect in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or state, local or tribal governments or communities. VerDate Sep<11>2014 18:56 May 16, 2016 Jkt 238001 Comments Responding to Questions in the NPRM One commenter argued that the Commission could not take any action on issues described only in the portion of the NPRM that asked questions because the mere posing of a question does not provide the regulated community with sufficient information to adequately assess the impact of any eventual proposal as required by the Administrative Procedure Act (APA). We note, however, that notice is sufficient under the APA when the final rule ‘‘follow[s] logically’’ from the notice so that ‘‘interested parties [are allowed] a fair opportunity to comment’’ upon what becomes the final rule.35 The NPRM described the ‘‘subjects and issues involved’’ as required by the APA.36 The fact that the EEOC did receive comments on all seven of the ‘‘subjects and issues’’ raised in the questions demonstrates that the notice was adequate.37 Certification in Lieu of Spouse Providing Information About Manifestation of Disease or Disorder Individuals, including individuals with disabilities and their advocates, as well as one insurance company and one industry group, commented that spouses should be allowed to provide a certification from a medical professional stating that the spouse is under the care of a physician and that any medical risks identified by that physician are under active treatment, instead of being required to answer questions about manifested diseases or disorders. By contrast, most of the health insurance issuers, industry groups, and employer groups that commented argued that allowing a spouse to receive the same inducement for completing such a certification would circumvent the ability of an employer-sponsored wellness program to assess and mitigate health risks. Several industry groups also pointed out that this alternative was not necessary because the triDepartment wellness regulations 35 See Conn. Light & Power v. Nuclear Regulatory Comm’n., 673 F.2d 525, 533 (D.C. Cir. 1982). 36 ‘‘The Administrative Procedure Act requires an agency engaged in informal rule-making to publish a notice of proposed rule-making in the Federal Register that includes ‘either the terms or substance of the proposed rule or a description of the subjects and issues involved.’ ’’ See id. at 530 (quoting the APA, 5 U.S.C. 553(b)(3)). 37 ‘‘The purpose of the comment period is to allow interested members of the public to communicate information, concerns, and criticisms to the agency during the rule-making process.’’ Id.; see also City of Stoughton v. EPA, 858 F.2d 747, 753 (D.C. Cir. 1988) (holding that petitioner could not challenge sufficiency of notice when petitioner had submitted comments on the issue that petitioner claimed was inadequately noticed). PO 00000 Frm 00025 Fmt 4701 Sfmt 4700 31149 already provide a waiver standard that is sufficient to ensure individuals can earn full inducements even if an impairment makes it difficult to meet the requirements of a health-contingent wellness program. The Commission has decided that although some spouses may already be aware of their particular risk factors, a general certification or attestation that they are receiving medical care for those risks would limit the effectiveness of employer-sponsored wellness programs that the Affordable Care Act intended to promote. For example, employers may use aggregate information from HRAs to determine the prevalence of certain conditions in their workforce and in the families of their workforce for the purpose of designing specific programs aimed at improving the health of employees and spouses with those conditions.38 The Commission concludes that protections in the final rule—such as the requirement that employer-sponsored wellness programs that collect genetic information be reasonably designed to promote health and prevent disease and the existing confidentiality requirements—provide spouses with significant protections without adopting a medical certification as an alternative to providing information about the manifestation of disease or disorder. Applying Authorization Requirements Only to Employer-Sponsored Wellness Programs That Offer More Than De Minimis Inducements for Information About Spouses’ Manifestation of Disease or Disorder Most of the individuals and advocacy groups who commented on this issue argued that the authorization requirements should apply to all employer-sponsored wellness programs, regardless of the level of inducement offered, in order to provide appropriate protections for genetic information. Some of these commenters noted that employers have ways to pressure employees to participate in wellness programs that have nothing to do with inducements, and others noted that any ambiguity in the definition of ‘‘de minimis’’ could lead to failure to obtain authorization even when significant inducements are offered. Although one health insurance company asserted that the authorization rule should apply to all employer-sponsored wellness programs due to the administrative complications that different standards 38 See, e.g., RAND Health, Workplace Wellness Programs Study Final Report, 101 (2013), http:// www.rand.org/content/dam/rand/pubs/ research_reports/RR200/RR254/RAND_RR254.pdf [hereinafter RAND Final Report]. E:\FR\FM\17MYR2.SGM 17MYR2 31150 Federal Register / Vol. 81, No. 95 / Tuesday, May 17, 2016 / Rules and Regulations mstockstill on DSK3G9T082PROD with RULES2 would cause, most health insurance companies, as well as the employer associations and industry groups that commented on this issue, went beyond asserting that there should be a de minimis exception to the authorization rules and argued for more significant revisions to the proposed rule. For example, some argued that the EEOC has no statutory authority to impose a requirement that employers obtain authorization from spouses, others argued that asking a spouse about his or her own health was not genetic information and, therefore, not subject to GINA at all, others argued that a de minimis exception should apply to all of the requirements of the proposed rule, and still others argued that the EEOC should consider whether the authorization requirement in general serves any purpose, given that a family’s decision to participate in an employersponsored wellness program should be sufficient confirmation of voluntariness. We decline to exclude programs that offer de minimis inducements from the authorization requirement of the rule. Although commenters gave examples of some inducements that might be considered de minimis, no commenters offered a workable principle that could be used as the basis for defining which inducements are de minimis and which are not. We suspect that employers’ interpretation of the term would vary, and there is no clear basis on which to establish a threshold for the de minimis value. We have responded to arguments that the authorization requirement of the rule be eliminated for various reasons in the in-depth discussion of the authorization provision, below. (See Comments Regarding Specific Provisions: Authorization for Collection of Genetic Information). Best Practices or Procedural Safeguards To Ensure Employer-Sponsored Wellness Programs Are Designed To Promote Health or Prevent Disease and Do Not Operate To Shift Costs Individuals and advocacy groups responded to this question with the same suggestions they made for strengthening the definition of employer-sponsored wellness programs that are ‘‘reasonably designed to promote health or prevent disease,’’ discussed below, raising ideas such as requiring that employer-sponsored wellness programs be based on scientifically valid evidence or that they include due process protections for individuals who claim rules are unfairly applied to them. Health insurance issuers, employer associations, and industry groups similarly reasserted the objections they raised in response to the VerDate Sep<11>2014 18:56 May 16, 2016 Jkt 238001 proposed rule’s suggestion that a ‘‘reasonably designed’’ standard be adopted, arguing that existing HIPAA, Affordable Care Act, and GINA protections are sufficient to protect against discrimination and unlawful disclosures of genetic information. Some also expressed frustration with the very idea that employer-sponsored wellness programs might operate to shift costs in a discriminatory way. The final rule will not adopt additional protections to safeguard spousal information or prevent cost-shifting, because existing protections are sufficient. We will, however, discuss these issues in more detail below, given that they essentially reiterate comments received in response to the proposal to adopt a ‘‘reasonably designed’’ standard. (See Comments Regarding Specific Provisions: Health or Genetic Services Must Be Reasonably Designed). More Specific Guidance and Procedures on Confidentiality Requirements for Electronically Stored Records Several commenters urged the EEOC to convene expert stakeholder groups or hold public meetings to determine what guidance should be offered to employers on how to protect electronically stored data. Some commented that the EEOC should require specific protocols to maximize the safety of electronically stored genetic information without providing specifics; others provided suggested restrictions or referred to security standards such as those being developed by the Precision Medicine Initiative or those that already exist under the HIPAA Privacy and Security Rules (some arguing that HIPAA’s existing standard already sufficiently restricts employer-provided wellness programs and others arguing that rules identical to those under HIPAA should be specifically applied to all employerprovided wellness programs). Others argued that since it is unclear whether certain kinds of genetic information can ever be stored in a way that prevents reidentification, employers should not be permitted to store such data (e.g., molecular genetic data). The goal of the confidentiality and disclosure rules of GINA is to protect genetic information as required by the statute whether that information is in paper or electronic format. As noted above, the regulations already have specific confidentiality provisions that require employers and other covered entities that possess genetic information to maintain it in medical files (including where the information exists in electronic forms or files) that are separate from personnel files, and treat such information as a confidential PO 00000 Frm 00026 Fmt 4701 Sfmt 4700 medical record. These provisions prohibit the disclosure of genetic information except in six very limited circumstances.39 The provision that allows employers to acquire genetic information as part of health or genetic services such as wellness programs further requires that the authorization form the employer must provide to an individual to sign before providing genetic information as part of health or genetic services must explain the restrictions on the disclosure of that information. Specifically, the authorization must explain that individually identifiable genetic information is provided only to the individual receiving the services and the licensed health care professionals or board certified genetic counselors involved in providing those services; and that any individually identifiable genetic information is only available for purposes of the health or genetic services and is not disclosed to the employer except in aggregate terms.40 Although we do not believe that it is necessary to adopt additional protections for electronically stored data, we believe there are certain best practices that employers may want to consider in terms of safeguarding all genetic information in their possession.41 Best Practices or Procedural Safeguards To Ensure That Information About Spouses’ Manifested Diseases or Disorders Is Protected From Disclosure Those who commented on this question raised points quite similar to those raised about ensuring the confidentiality of electronically stored data, which are discussed above. Health insurance issuers, employer associations, and industry groups asserted that existing HIPAA privacy and security requirements, along with GINA’s existing rules, were sufficient, while advocacy groups provided ideas for strengthening applicable confidentiality requirements. We reiterate that we do not believe that additional protections are needed, given GINA’s requirements that genetic information be kept confidential and disclosed in only six limited circumstances, but urge employers to consider adopting best practices such as 39 See 42 U.S.C. 2000ff–5(b); 29 CFR 1635.9. 29 CFR 1635.8(b)(2)(i). 41 See, e.g., 29 CFR part 1630 app. 1630.14(d)(4)(i) through (iv): Confidentiality, which describes best practices such as ensuring that individuals who handle medical information (in this case, genetic information) that is part of an employee health program are not responsible for making decisions related to employment, and that breaches of confidentiality are reported to affected employees immediately and thoroughly investigated. 40 See E:\FR\FM\17MYR2.SGM 17MYR2 Federal Register / Vol. 81, No. 95 / Tuesday, May 17, 2016 / Rules and Regulations mstockstill on DSK3G9T082PROD with RULES2 those set forth in the appendix accompanying the ADA Final Rule, issued today. Such practices include adoption and communication of strong privacy policies, training for individuals who handle confidential medical information, encryption of electronic files, and policies that require prompt notification of employees whose information is compromised if data breaches occur. Restriction on the Collection of Genetic Information to Only the Minimum Necessary to Directly Support the Specific Wellness Activities and Prohibition on Accessing Genetic Information From Other Sources Individuals and advocacy groups argued that the collection of genetic information by employer-sponsored wellness programs should be restricted to the minimum necessary to directly support specific wellness activities and interventions. Many of these commenters also urged the EEOC to prohibit employer-sponsored wellness programs from obtaining genetic information from sources other than voluntarily submitted health risk assessments and biometric screenings, such as patient claims data or medical records data. Taking the opposite view, health insurance issuers, employer associations, and industry groups argued against adopting any further restrictions on employer-sponsored wellness programs. Some asserted that information from sources such as claims data and medical records assists in the development of effective employersponsored wellness programs and that restricting access to it would impede the design and success of the programs. These commenters also pointed out that when an employer-sponsored wellness program is offered as part of a health plan, it may work more optimally to allow that program to quickly identify people in need of services by using claims data already being received by the administrator of the health plan. These and other commenters noted that no additional restrictions were needed because the existing frameworks of the ADA and GINA adequately limit the information that may be collected as part of an employer-sponsored wellness program, while others said that existing tri-Department wellness rules requiring ‘‘reasonable design’’ ensure that programs are nondiscriminatory. Several of these commenters also noted that any additional restrictions would unnecessarily stifle innovation in the design and implementation of employer-sponsored wellness programs. The final rule will not include a specific restriction on the collection of VerDate Sep<11>2014 18:56 May 16, 2016 Jkt 238001 genetic information to only the minimum necessary to directly support specific employer-sponsored wellness program activities or a limitation on accessing genetic information from other sources. The Commission believes that the protections in the final rule— such as the requirement that employersponsored wellness programs that collect genetic information be reasonably designed to promote health and prevent disease and the existing confidentiality requirements—provide significant protections for employees and spouses without adopting further restrictions or limitations. (See Comments Regarding Specific Provisions: Health or Genetic Services Must Be Reasonably Designed). Employer-Sponsored Wellness Programs Offered Outside of Employer-Sponsored Group Health Plans Numerous comments offering a broad range of opinions were submitted in response to the question in the NPRM asking whether employers offer or are likely to offer wellness programs outside of a group health plan or group health insurance coverage that use inducements to encourage employees’ spouses to provide information about current or past health status as part of a HRA, and the extent to which the GINA regulations should allow inducements provided as part of such programs. Some commenters stated many employers already offer wellness programs that are outside group health plans, while others pointed out that employer-sponsored wellness programs that offer medical care are group health programs in themselves. Some argued that the final rule should apply both to wellness programs that are part of an employer-sponsored health plan and to wellness programs offered by employers outside such plans, while others asked the EEOC to clarify what it means for a wellness program ‘‘to be part of, or provided by, a group health plan.’’ Others argued against applying the final rule to programs offered by employers that operate outside group health plans (thereby either allowing these programs to impose higher inducements in return for genetic information or, in the opinion of one advocacy group, meaning that these programs would be prohibited from offering inducements for genetic information at all). One employer association asserted that many of its members offer inducements for HRAs only under employer-sponsored wellness programs that are part of a larger group health plan, but that the breadth of the tri-Department’s wellness program rules has the effect of applying at least some nondiscrimination PO 00000 Frm 00027 Fmt 4701 Sfmt 4700 31151 requirements to nearly all wellness programs. That commenter concluded that it would be a better use of the EEOC’s time to work on the alignment of Title II of GINA with the Affordable Care Act, rather than focusing on this issue. One industry group indicated that the proposed rule failed to provide guidance for stand-alone wellness programs and argued that anything less than the 30 percent maximum incentive standard would conflict with the Affordable Care Act. Rather than listing factors for determining whether an employersponsored wellness program is part of, or outside of, an employer-sponsored group health plan, the Commission has decided that all of the provisions in this rule apply to all employer-sponsored wellness programs that request genetic information. This means that this rule applies to employer-sponsored wellness programs that are: Offered only to spouses of employees enrolled in an employer-sponsored group health plan; offered to spouses of all employees regardless of whether the employee or spouse is enrolled in such a plan; or offered as a benefit of employment to spouses of employees of employers who do not sponsor a group health plan or group health insurance. We considered taking the position that employer-sponsored wellness programs that are not offered through a group health plan and that request information about the manifestation of disease or disorder from spouses could not offer any inducements. However, having concluded that some level of inducement is consistent with other requirements of 29 CFR 1635.8(b)(2), including the requirement that the employer-sponsored wellness program be ‘‘voluntary,’’ where the wellness program is part of a group health plan, there seemed to be no basis for reaching a contrary conclusion with respect to employer-sponsored wellness programs that are outside of a group health plan. At the same time, allowing unlimited inducements where an employersponsored wellness program is not offered through a group health plan would be inconsistent with our position that limitations on spousal inducements are necessary to promote GINA’s interest in limiting access to genetic information and ensuring that inducements are not so high as to be coercive. Accordingly, as noted below, this rule explains how to calculate the permissible inducement level for employer-sponsored wellness programs regardless of whether they are related to a group health plan. E:\FR\FM\17MYR2.SGM 17MYR2 31152 Federal Register / Vol. 81, No. 95 / Tuesday, May 17, 2016 / Rules and Regulations mstockstill on DSK3G9T082PROD with RULES2 Comments Regarding Specific Provisions Section 1635.8(b)(2)(i)(A) Health or Genetic Services Must Be Reasonably Designed The NPRM proposed that employers may request, require, or purchase genetic information as part of health or genetic services only when those services, including any acquisition of genetic information that is part of those services, are reasonably designed to promote health or prevent disease. Many commenters, including health insurance issuers, employer associations, industry groups, and a Congressional committee, urged the EEOC to strike this requirement, noting that it was beyond the EEOC’s authority under GINA to impose a reasonable design requirement on health and genetic services and that the EEOC should leave it to the tri-Departments to determine what constitutes a reasonably designed employer-sponsored wellness program. Some of these commenters further noted that the proposed requirement was confusing because even though it sounded very similar, or even identical, to the corresponding requirement in the Affordable Care Act, it seemed to mean something different. They urged the Commission to delete the examples in the preamble and instead make clear that, as with the Affordable Care Act, satisfaction of the reasonable design standard is based on all facts and circumstances. Several of these commenters made specific mention of the preamble’s example of a HRA that would not meet the ‘‘reasonably designed’’ standard—one that collected information without providing follow-up information or advice—arguing that this conclusion did not conform to the Affordable Care Act’s definition and that it is not always appropriate to provide follow-up information. Some further argued that if the Commission was going to rely on examples to explain the standard, it should put the examples in the regulation itself and make them more detailed. Individuals and advocacy groups, on the other hand, argued that the new standard was not sufficiently rigorous and that it should be based on clinical guidelines or national standards, or that there should be a stronger connection between the content of a HRA and the development of specific disease management programs. Some argued, for example, for a requirement that employer-sponsored wellness programs collect no more than the minimum necessary information from spouses directly linked to specific program VerDate Sep<11>2014 18:56 May 16, 2016 Jkt 238001 services in order to meet the ‘‘reasonably designed’’ standard and/or that employer-sponsored wellness programs be required to provide scientific evidence that demonstrates that the program improves health or prevents disease. Others noted that the standard as described has virtually no meaning and will allow employers to decide for themselves what is ‘‘reasonable.’’ The final rule acknowledges that satisfaction of the ‘‘reasonably designed’’ standard must be determined by examining all of the relevant facts and circumstances and otherwise retains the requirement in the NPRM that employers may request, require, or purchase genetic information as part of health or genetic services only when those services, including any acquisition of genetic information that is part of those services, are reasonably designed to promote health or prevent disease. As noted in the NPRM, in order to meet this standard, the program must have a reasonable chance of improving the health of, or preventing disease in, participating individuals, and must not be overly burdensome, a subterfuge for violating Title II of GINA or other laws prohibiting employment discrimination, or highly suspect in the method chosen to promote health or prevent disease. The examples in the preamble to the proposed rule were intended simply to illustrate how this standard works. We now clarify, in agreement with several comments about one of these examples, that programs consisting of a measurement, test, screening, or collection of health-related information without providing results, follow-up information, or advice designed to improve the participant’s health would not be reasonably designed to promote health or prevent disease, unless the collected information actually is used to design a program that addresses at least a subset of conditions identified. Additionally, we would consider a program to not be reasonably designed to promote health or prevent disease if it imposes, as a condition of obtaining a reward, an overly burdensome amount of time for participation, requires unreasonably intrusive procedures, or places significant costs related to medical examinations on employees. We also would not consider a program to be reasonably designed to promote health or prevent disease if it exists merely to shift costs from the covered entity to targeted employees based on their health or if the employer is only using the program for data collection or to try to determine its future health costs. Additionally, under these rules, PO 00000 Frm 00028 Fmt 4701 Sfmt 4700 an employer-sponsored wellness program is not reasonably designed if it penalizes an employee because a spouse’s manifestation of disease or disorder prevents or inhibits the spouse from participating or from achieving a certain health outcome. For example, an employer may not deny an employee an inducement for participation of either the employee or the spouse in an employer-sponsored wellness program because the employee’s spouse has blood pressure, a cholesterol level, or a blood glucose level that the employer considers too high. The Commission believes that because the requirement that an employer-sponsored wellness program be ‘‘reasonably designed to promote health or prevent disease’’ is a standard with which health plans are now sufficiently familiar, it is reasonable to apply that standard under GINA to employers that sponsor wellness programs. For consistency, this same requirement, with the same examples, has recently been adopted under the ADA.42 Although the standard is less stringent than some commenters would prefer, the Commission believes it provides a sufficient level of protection against the misuse of employee genetic information while providing a degree of flexibility in designing wellness programs. Section 1635.8(b)(2)(iii) When an Inducement May Be Offered As noted in the general comments section, above, numerous individuals and advocacy groups urged the Commission to abandon the position set forth in the proposed rule that employers may offer limited inducements when a spouse who receives genetic services offered by an employer provides information about his or her current or past health status information as part of a HRA. These commenters, as well as some members of Congress, argued that the absolute prohibition on financial inducements set forth in the existing GINA regulations should be reaffirmed, arguing that allowing employersponsored wellness programs to offer inducements in exchange for spouses to provide information about their current or past health status would be coercive and would substantially weaken GINA’s protections. Several industry and employer groups, on the other hand, expressed support for the proposed rule’s clarification that GINA does not preclude inducements for spouses for 42 See 29 CFR 1630.14(d)(1); published elsewhere in this issue of the Federal Register. E:\FR\FM\17MYR2.SGM 17MYR2 mstockstill on DSK3G9T082PROD with RULES2 Federal Register / Vol. 81, No. 95 / Tuesday, May 17, 2016 / Rules and Regulations completion of HRAs when the requirements of § 1635.8(b)(2)(i) were met, while expressing deep dissatisfaction with the limitations on those inducements. As noted above, one industry group argued that use of the phrase ‘‘current or past health status’’ in describing the types of questions to spouses that could include inducements was confusing because not all information about a spouse’s current or past health status meets the definition of genetic information. For example, some might consider questions about height, weight, and exercise regimes to be questions about ‘‘current health status,’’ although such questions asked of an employee’s spouse are not requests for genetic information under GINA. The Commission retains the NPRM’s requirements that, consistent with the requirements of § 1635.8(b)(2)(i) and (ii), a covered entity may offer an inducement to an employee whose spouse provides information about the spouse’s own current or past health status as part of a HRA. In order to clarify that the rule only applies to questions asked of the spouse that meet the definition of genetic information, the final rule will replace the phrase ‘‘current or past health status’’ with ‘‘manifestation of disease or disorder.’’ Moreover, as discussed in detail above, because the final rule will apply not only to employer-sponsored wellness programs that are part of group health plans, but to all wellness programs offered by employers, the language of the final rule at § 1635.8(b)(2)(iii) will be revised to eliminate references to the employer’s health plan. (See Comments Responding to Questions: Wellness Programs Offered Outside of EmployerSponsored Group Health Plans.) The final rule will also explain how inducement limits are to be calculated in situations where participation in an employer-sponsored wellness program does not depend on enrollment in a particular group health plan, and in situations where an employer does not offer a group health plan but still wants to offer inducements for employees and their spouses to participate in wellness programs. Finally, the final rule retains the requirement that no inducement may be offered in return for the spouse providing his or her own genetic information, including results of his or her genetic tests, as well as the prohibition on providing inducements in return for health information about an employee’s children.43 (See General 43 29 CFR 1635.8(b)(2)(i)(B). Title I of GINA specifically prohibits a group health plan and a health insurance issuer in the group or individual market from collecting (including requesting, VerDate Sep<11>2014 18:56 May 16, 2016 Jkt 238001 Comments: Prohibition on Inducements for Information From Children of Employees.) Level of Inducement That May Be Offered The Commission received numerous comments on this provision of the proposed rule. As stated in the general comments section of this preamble, individuals and health advocacy groups said that the proposed rule was based on the erroneous assumption that the GINA rule must be ‘‘conformed’’ to provisions of the Affordable Care Act concerning employer-sponsored wellness programs. These and other commenters, including some members of Congress, commented that allowing employer-sponsored wellness programs to offer inducements up to 30 percent in exchange for spouses to provide information about their current or past health status would be coercive and would substantially weaken GINA’s protection and urged the Commission to strike this proposal and reaffirm that inducements are not permitted in return for genetic information. Other advocacy groups argued that allowing inducements for spousal information would lead to conflict within families, worsening the mental and physical health of family members when, for example, an employee and spouse disagree about whether the spouse will provide the information needed to obtain a reward or avoid a penalty. One commenter noted that a rule that permits employers to increase the amount an employee pays for health insurance by as much as 30 percent of the total cost of coverage if the employee or the employee’s spouse fails to provide certain health information would lead some to forego employerrequiring or purchasing) genetic information prior to or in connection with enrollment in health coverage or for underwriting purposes. See 26 CFR 54.9802–3T(b), (d); 29 CFR 2590.702–1(b), (d); 45 CFR 146.122(b), (d); 45 CFR 147.110; 45 CFR 148.180(b), (d). ‘‘Underwriting purposes’’ includes rules for eligibility for benefits and the computation of premium or contribution amounts under the plan or coverage including any discounts, rebates, payments in kind, or other premium differential mechanisms in return for activities such as completing a HRA or participating in a wellness program. See 26 CFR 54.9802–3T(d)(1)(ii); 29 CFR 2590.702–1(d)(1)(ii); 45 CFR 146.122(d)(1)(ii); 45 CFR 148.180(f)(1)(ii). Consequently, employersponsored wellness programs that provide rewards for completing HRAs that request a plan participant’s genetic information, including family medical history, violate the prohibition against requesting genetic information for underwriting purposes, regardless of whether the plan participant provides authorization. Under Title I of GINA, a group health plan and a health insurance issuer in the group or individual market may request genetic information through a HRA as long as the request is not in connection with enrollment and no rewards are provided. PO 00000 Frm 00029 Fmt 4701 Sfmt 4700 31153 provided health insurance and thus increase the pool of families without ‘‘good’’ health insurance coverage. Employer and industry groups, however, commented that the EEOC should align the inducement limits for employer-sponsored wellness programs with the inducement limits established in the tri-Department wellness regulations. One industry group asserted that requests to an individual for information about his or her own past or current health status is not genetic information (except for genetic test results) and that the EEOC therefore did not have authority under GINA to adopt requirements with respect to inducements for this information. Another industry group, after expressing strong disapproval of the proposed rule’s inducement limitation, went on to provide suggestions for improving the description of that limitation if the Commission were to adopt it, suggesting, for example, that certain provisions in the regulatory language be moved. Although some of these commenters appreciated that the proposed rule based the inducement limit on the total cost of coverage for the plan in which the employee and any dependents are enrolled, employer associations and industry groups generally asserted that the inducement limits should conform to those established by the tri-Department wellness regulations, particularly the lack of incentive limits on participatory programs. Most individuals and advocacy groups that submitted comments did not comment on the proposed rule’s discussion of how inducements should be apportioned. Two groups that did comment indicated their support for the idea, assuming that the EEOC was going to move forward with the proposal to allow inducements. In contrast, numerous health insurance issuers, employer associations, industry groups, as well as a Congressional committee and various United States Senators, commented that the apportionment rule should be eliminated, arguing that it was administratively complicated and/ or that it conflicts with the triDepartments’ wellness regulations, which does not require apportionment. Many of these commenters also pointed out that the apportionment rule conflicts with the general practice of providing an equal inducement to an employee and a spouse when both participate in an employer-sponsored wellness program and that encouraging a larger inducement for spouses was arbitrary, implied that the spouse’s achievement of a health goal is more E:\FR\FM\17MYR2.SGM 17MYR2 mstockstill on DSK3G9T082PROD with RULES2 31154 Federal Register / Vol. 81, No. 95 / Tuesday, May 17, 2016 / Rules and Regulations valuable than the employee’s equal accomplishment, and/or conflicted with the idea of a reasonably designed wellness program. One group requested that, if the EEOC were to move forward with apportionment rules, the rule clarify that the amount of the inducement attributable to the spouse does not have to be paid directly to the spouse but, instead, could be paid as part of a premium reduction or in any other way that the other portion of the inducement was being paid. The Commission agrees that the proposed rule’s apportionment standards, which would have permitted a larger inducement to the spouse for providing similar information to that which the employee provided, is overly complicated and sends the wrong message about the value of employersponsored wellness programs for each participating individual. Moreover, we determined, in developing the final ADA rule on employer-sponsored wellness programs, that incentives in excess of 30 percent of the cost of selfonly coverage offered in exchange for an employee answering disability-related questions or taking medical examinations as part of a wellness program would be coercive. We see no reason for adopting a different threshold where the employee’s spouse is the individual whose health information is being sought. Consequently, this final rule states that when an employee and the employee’s spouse are given the opportunity to enroll in an employersponsored wellness program, the inducement to each may not exceed 30 percent of the total cost of (1) self-only coverage under the group health plan in which the employee is enrolled (including both employee and employer cost), if enrollment in the plan is a condition for participation in the wellness program; (2) self-only coverage under the group health plan offered by the employer (including both employee and employer cost), where the employer offers a single group health plan, but participation in a wellness program does not depend on the employee’s or spouse’s enrollment in that plan; (3) the lowest cost self-only coverage under a major medical group health plan offered by the employer (including both employee and employer cost), where the employer has more than one group health plan, but enrollment in a particular plan is not a condition for participating in the wellness program; or (4) the second lowest cost Silver Plan 44 available on the Exchange in the 44 There are four ‘‘metal’’ categories of health plans in the Exchanges established under the Affordable Care Act: Bronze, Silver, Gold, and VerDate Sep<11>2014 18:56 May 16, 2016 Jkt 238001 location that the employer identifies as its principal place of business if the employer offers no group health plan. In this last instance, the maximum inducement to the employee and the spouse is equal to 30 percent of the cost of covering an individual who is a 40year-old non-smoker. Thus, the amount of the inducement available to the spouse cannot exceed the amount an employer may offer to an employee, under the ADA, to participate in a wellness program that includes disability-related questions or a medical examination. The final rule includes examples explaining how the inducement limits are to be calculated. For example, if an employee is enrolled in a group health plan through the employer at a total cost (taking into account both employer and employee contributions towards the cost of coverage) of $14,000 for family coverage, that plan has a self-only option for a total cost of $6,000, and the employer provides the option of participating in a wellness program to the employee and spouse if they participate in the plan, the employer may not offer more than $1,800 to the employee and $1,800 to the spouse. If participation in a particular group health plan is not required for the employee and spouse to earn an inducement and the employer has only one group health plan under which selfonly coverage costs $7,000, the employee and the spouse can each get an inducement of up to $2,100. If participation in a particular group health plan is not required for the employee and the spouse to earn an inducement and the employer has more than one group health plan and selfonly coverage under the major medical group health plans range in cost from $5,000 to $8,000, the employee and spouse can each get an inducement of up to $1,500. Finally, if the employer offers no group health plan at all and the second lowest-cost Silver Plan available through the state or federal health care Exchange established under the Affordable Care Act in the location that the employer identifies as its principal place of business would cost a 40-year-old non-smoker $4,000, the maximum inducement the employer could offer the employee and the spouse would be no more than $1,200 each to answer questions about their current health or to take a medical examination as part of a wellness program. Platinum. See How To Pick a Health Insurance Plan: The ‘‘Metal Categories’’, Healthcare.gov, https://www.healthcare.gov/choose-a-plan/planscategories (last visited March 29, 2016). PO 00000 Frm 00030 Fmt 4701 Sfmt 4700 As noted in the ADA final rule, the Commission has concluded that the employer’s lowest total cost self-only coverage under a major medical group health plan is an appropriate benchmark for establishing the inducement limit where an employer has more than one group health plan and participation in an employer-sponsored wellness program does not depend on enrollment in any particular plan for two reasons. First, it offers employers predictability and administrative efficiency in complying with the rule. Second, the rule is consistent with the Commission’s objective of ensuring that inducements in return for a spouse providing information about his or her manifestation of disease or disorder are not coercive. The second lowest cost Silver Plan available on the Exchange in the location that the employer identifies as its principal place of business is used as a benchmark for determining the amount of an eligible individual’s premium tax credit for purchasing health insurance on the Exchange.45 This is the most popular plan on the Exchanges, and information about its costs for individuals who are 40 years old and non-smokers is available to the public.46 Additionally, because the Silver Plan typically is neither the least nor the most expensive plan available on the Exchanges, inducement limits that are tied to its costs may promote participation in wellness programs while not being so high as to be coercive. Revisions will be made to § 1635.8(b)(2)(iii) to correspond to these changes. We also clarify that the portion of the inducement attributable to the spouse’s provision of information about his or her manifestation of disease or disorder need not be paid directly to the spouse, but may be paid in whatever way the remaining portion of the inducement is made such as, for example, as part of a reduction in premium. Authorization for Collection of Genetic Information Although numerous health and other advocacy groups agreed that authorization is a much needed component of employer-sponsored wellness programs that collect genetic 45 See 26 U.S.C. 36B(b)(2). e.g., HHS, Health Insurance Marketplaces 2015 Open Enrollment Period: March Enrollment Report (2015), https://aspe.hhs.gov/sites/default/ files/pdf/83656/ib_2015mar_enrollment.pdf (HHS report covering marketplace enrollment from November 15, 2014 through February 15, 2015, indicating that, based on enrollment through all marketplaces, 67 percent of people who selected a marketplace plan selected Silver.) 46 See, E:\FR\FM\17MYR2.SGM 17MYR2 mstockstill on DSK3G9T082PROD with RULES2 Federal Register / Vol. 81, No. 95 / Tuesday, May 17, 2016 / Rules and Regulations information, they went on to argue that the authorization requirements of GINA should be strengthened. Some noted that the authorization forms currently in use by wellness vendors tend to use arcane language, are insufficiently understood, and/or on occasion are hidden in obscure links that few people read. Others suggested that in order to truly ensure that participation in an employer-sponsored wellness program that collects genetic information is voluntary, authorization requirements should allow a participant who indicates that his or her participation is not voluntary to obtain the reward or avoid the penalty even if his or her spouse does not provide the requested information. Several advocacy groups suggested that the Commission provide model authorization forms and notices. While some health insurance issuers and industry groups agreed that the Commission should provide model language that would satisfy the authorization requirements, these commenters, as well as employer groups, generally urged the Commission to strike or limit the authorization requirement. Some argued that the Commission did not have the authority to require spouses to provide authorization because the statutory language requires that prior, knowing, written, and voluntary authorization be provided by the employee, not by other individuals. Others noted that requiring multiple authorization forms would unduly complicate the operation of employer-sponsored wellness programs and that a single authorization completed by the employee should be sufficient. This final rule adds no new notice or authorization requirements. It reaffirms that when an employer offers an employee an inducement in return for his or her spouse’s providing information about the spouse’s manifestation of disease or disorder as part of a HRA, the HRA (which may include a medical questionnaire, a medical examination, or both), must otherwise comply with § 1635.8(b)(2)(i) in the same manner as if completed by the employee, including the requirement that the spouse provide prior knowing, voluntary, and written authorization when the spouse is providing his or her own genetic information, and the requirement that the authorization form describe the confidentiality protections and restrictions on the disclosure of genetic information. The employer also must obtain authorization from the spouse when collecting information about the spouse’s manifestation of disease or VerDate Sep<11>2014 18:56 May 16, 2016 Jkt 238001 disorder, although a separate authorization for the acquisition of this information from the employee is not necessary. The Commission believes that GINA’s existing authorization requirements prohibit many of the practices about which advocacy groups expressed concern. For example, these requirements already prohibit an employer-sponsored wellness program that collects genetic information from using an authorization notice that uses arcane legal language or is otherwise difficult to understand.47 Moreover, although it is true that GINA’s statutory language, at 42 U.S.C. 2000ff–1(b)(2)(B), states that the ‘‘employee’’ must provide prior, knowing, voluntary, and written authorization, the EEOC’s original implementing regulations use the broader term ‘‘individual’’ when describing the prior, knowing, voluntary, and written authorization requirement.48 As noted in the preamble to the proposed rule, the Commission believes that ‘‘individual’’ best reflects the intent of Congress, especially when considering the provisions in 42 U.S.C. 2000ff-1(b), which prohibit employers from requesting, requiring, or purchasing genetic information about both employees and their family members with limited exceptions, and the general purpose of the statute. Section 1635.8(b)(2)(vi) Prohibition on Conditioning Participation in an Employer-Sponsored Wellness Program on Agreeing To Sale of Genetic Information or Waiving Confidentiality Individuals and advocacy groups that commented on this portion of the proposed rule supported it but requested that it be strengthened. They 47 The GINA notice and authorization requirement, which was included in the EEOC’s regulations pursuant to a specific statutory requirement, see 42 U.S.C. 2000ff-1(b)(2)(B), is only met if the covered entity uses an authorization form that (1) is written so that the individual from whom the genetic information is being obtained is reasonably likely to understand it; (2) describes the type of genetic information that will be obtained and the general purpose for which it will be used; and (3) describes the restrictions on disclosure of genetic information. The GINA notice and authorization rule also requires that individually identifiable genetic information is provided only to the individual (or family member if the family member is receiving genetic services) and the licensed health care professionals or board certified genetic counselors involved in providing such services, and is not accessible to managers, supervisors, or others who make employment decisions, or to anyone else in the workplace; and, finally, that any individually identifiable genetic information provided under 29 CFR 1635.8(b)(2) is only available for purposes of such services and is not disclosed to the covered entity except in aggregate terms that do not disclose the identity of specific individuals. See 29 CFR 1635.8(b)(2)(i). 48 See 29 CFR 1635.8(b)(2)(i)(B). PO 00000 Frm 00031 Fmt 4701 Sfmt 4700 31155 argued, for example, that the provision should be expanded to not only prohibit conditioning participation in an employer-sponsored wellness program on agreeing to the sale of genetic information, but also other forms of sharing genetic information such as exchanges and transfers. Others argued that the provision should state that harm will be presumed from unauthorized disclosure of genetic information and that, if sharing does occur, employers should be required to reveal the identity of those with whom they shared the genetic information. One industry group expressed support for the notion that genetic information, as one type of protected health information, should not be sold, but noted that this did not necessarily apply to de-identified or aggregate data. The Commission agrees that this prohibition should be expanded. The final rule therefore prohibits a covered entity from conditioning participation in an employer-sponsored wellness program or an inducement on an employee, an employee’s spouse, or other covered dependent agreeing to the sale, exchange, sharing, transfer, or other disclosure of genetic information (except to the extent permitted by paragraph 1635.8(b)(2)(i)(D)), or waiving protections provided under § 1635.9. As explained above, however, the Commission does not believe that any further changes are needed because the confidentiality protections of § 1635.9, as well as the specific disclosure rules that apply to health and genetic services set forth at § 1635.8(b)(2), provide strong protections against disclosure of genetic information. (See General Comments: Confidentiality Provisions.) Section 1635.8(c)(2) Employer Permitted To Seek Medical Information Few people commented on the new example the EEOC added to this section of the rule. Two industry groups that did comment supported the EEOC’s acknowledgement that employers may ask for information about the manifestation of disease, disorder, or pathological condition of a family member if that individual is receiving genetic services on a voluntary basis. However, comments indicated that clarification is needed for this example to be understood. As noted in the preamble to the proposed rule, this provision cross-references 29 CFR 1635.8(b)(2) to make clear that an employer may request information about the manifestation of disease, disorder, or pathological condition of a family member who is participating in voluntary genetic services only when all of the requirements for seeking genetic E:\FR\FM\17MYR2.SGM 17MYR2 31156 Federal Register / Vol. 81, No. 95 / Tuesday, May 17, 2016 / Rules and Regulations mstockstill on DSK3G9T082PROD with RULES2 information as part of a voluntary health or genetic service, including the rules on authorization and inducements, are met. In other words, this example does not create an exception to the general rule that inducements in return for genetic information are only permitted in one specific circumstance—when an employee’s spouse is asked to provide information about his or her manifestation of disease, disorder, or pathological condition as part of a HRA. We have revised the regulatory language so that it emphasizes the requirements of § 1635.8(b)(2), including the rules on authorization and inducements. Removal of Term ‘‘Financial’’ From Definition of ‘‘Inducement’’ Industry groups, employer associations, and several United States Senators urged the Commission to alter this proposal so that the final rule applies only to financial incentives. These groups argued that an expansion of the definition of inducement would be inconsistent with the Affordable Care Act and Congressional intent and would increase administrative burden by requiring employers to calculate the value of in-kind inducements, such as gift cards, raffle tickets, and key chains. Many argued that applying the inducement rule to in-kind inducements would cause employers to eliminate them altogether. The final rule reaffirms the Commission’s proposal to remove the term ‘‘financial’’ as a modifier of the type of inducements discussed in the regulations and make clear that the term ‘‘inducements’’ includes both financial and in-kind inducements, such as timeoff awards, prizes, or other items of value, in the form of either rewards or penalties. Contrary to several comments received, this clarification is consistent with the tri-Department wellness program provisions, which generally define a reward as ‘‘a discount or rebate of a premium or contribution, a waiver of all or part of a cost-sharing mechanism, an additional benefit, or any financial or other incentive.’’ 49 Thus, because the incentive limits in the Affordable Care Act apply to in-kind incentives when they are offered within health-contingent programs, Congress and the tri-Departments clearly considered that these amounts would have to be calculated. Employers have flexibility to determine the value of in49 See 26 CFR 54.9802–1(f)(1)(i); 29 CFR 2590.702(f)(1)(i); 45 CFR 146.121(f)(1)(i); see also DOL—Employee Benefits Security Administration, FAQs on Affordable Care Act Implementation (Part XXIX) and Mental Health Parity Implementation, Question 11 (2015), http://www.dol.gov/ebsa/pdf/ faq-aca29.pdf. VerDate Sep<11>2014 18:56 May 16, 2016 Jkt 238001 kind incentives, as long as the method is reasonable. Technical Amendments We received no comments concerning the proposed technical amendments to the rule and they are therefore adopted without change. Regulatory Procedures Executive Order 12866 Pursuant to Executive Order 12866, the EEOC has coordinated this final rule with the Office of Management and Budget. Under section 3(f)(1) of Executive Order 12866, the EEOC has determined that the regulation will not have an annual effect on the economy of $100 million or more, or adversely affect in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or state, local or tribal governments or communities.50 Although a detailed cost-benefit assessment of the regulation is not required, the Commission notes that the rule will aid compliance with Title II of GINA by employers. Currently, employers face uncertainty as to whether providing an employee with an inducement if his or her spouse provides information about the spouse’s manifestation of disease or disorder on a HRA will subject them to liability under Title II of GINA. This rule will clarify that offering limited inducements in these circumstances is permitted by Title II of GINA if the requirements of section 202(b)(2)(A) of GINA otherwise have been met. We believe that a potential benefit of this rule is that it will provide employers that adopt wellness programs that include spousal inducements with clarity about their obligations under GINA. The Commission does not believe the costs to employers associated with the rule are significant. Under HIPAA, as amended by the Affordable Care Act, inducements of up to 30 percent of the total cost of coverage in which an employee is enrolled are permitted where the employee and the employee’s dependents are given the opportunity to fully participate in a health-contingent wellness program. This final rule simply clarifies that a similar inducement is permissible under Title II of GINA where an employer offers inducements for an employee’s spouse enrolled in the group health plan to provide information about his or her manifestation of disease or disorder. Where participation in the employer50 See General Comments: Burden for our response to the commenter who expressed disagreement with our burden calculations. PO 00000 Frm 00032 Fmt 4701 Sfmt 4700 sponsored wellness program does not depend on enrollment in a particular group health plan, employers will be able to calculate the amount of the permissible inducement by reference to easily verifiable sources, such as the cost of the group health plans they provide or by reference to the second lowest cost Silver Plan available on the Exchange in the location that the Employer identifies as its principal place of business. The Commission further believes that employers will face initial start-up costs to train human resources staff and others on the revised rule. The EEOC conducts extensive outreach and technical assistance programs, many of them at no cost to employers, to assist in the training of relevant personnel on EEO-related issues. For example, in FY 2014, the agency’s outreach programs reached more than 236,000 persons through participation in more than 3,500 no-cost educational, training and outreach events. Now that the rule has become final, we will include information about the revisions to the GINA regulations in our outreach programs in general and continue to offer GINA-specific outreach programs which will, of course, include information about the revisions. As is our practice when issuing new regulations and policy guidances, we have posted two technical assistance documents on our Web site explaining the revisions to the GINA regulations.51 We estimate that there are approximately 782,000 employers with 15 or more employees subject to Title II of GINA 52 and, of that number, one half to two thirds (391,000 to 521,333) offer some type of employer-sponsored wellness program.53 In the proposed rule, we assumed that nearly half of employer-sponsored wellness programs 51 See Qs and As: The Equal Employment Opportunity Commission’s Final Rule on the Genetic Information Nondiscrimination Act and Employer Wellness Programs, EEOC, https:// www.eeoc.gov/laws/types/genetic.cfm (last visited April 14, 2016); Small Business Fact Sheet: Final Rule on Title II of the Genetic Information Nondiscrimination Act and Employer Wellness Programs, EEOC, https://www.eeoc.gov/laws/types/ genetic.cfm (last visited April 14, 2016). 52 See Firm Size Data, Small Business Administration, http://www.sba.gov/advocacy/849/ 12162 (last visited March 28, 2016). 53 See RAND Final Report, supra note 36, xiv, http://www.rand.org/content/dam/rand/pubs/ research_reports/RR200/RR254/RAND_RR254.pdf; see also Employer Health Benefits Survey, 6 (2014), http://files.kff.org/attachment/2014-employerhealth-benefits-survey-full-report [hereinafter the Kaiser Survey]. According to the RAND Final Report, ‘‘approximately half of U.S. employers offer wellness promotion initiatives.’’ By contrast, the Kaiser Survey found that ‘‘[s]eventy-four percent of employers offering health benefits’’ offer at least one wellness program. E:\FR\FM\17MYR2.SGM 17MYR2 Federal Register / Vol. 81, No. 95 / Tuesday, May 17, 2016 / Rules and Regulations mstockstill on DSK3G9T082PROD with RULES2 are open for participation by the spouses or dependents of workers, and used the highest estimates, to conclude that approximately 260,667 employers will be covered by this requirement.54 Because the final rule now applies to a broader set of wellness programs offered by employers, we will increase these estimates and assume that 347,556 employers (two thirds of those who offer some type of wellness program) offer spouses an opportunity to participate in, at the very least, an employer-sponsored wellness program that is outside or not part of a group health plan. We further estimate that the typical human resource professional will need to dedicate, at most, 60 minutes to gain a satisfactory understanding of the revised regulations and that the median hourly pay rate of a human resource professional is approximately $49.41.55 Assuming that an employer will train up to three human resource professionals/managers on the requirements of this rule, we estimate that initial training costs will be approximately $51,518,230.56 The Commission sought comments on these cost estimates and responded to the one comment received above. (See the discussion in General Comments: Burden.) Finally, GINA’s plain language (at 42 U.S.C. 2000ff–(1)(b)(2)) and the EEOC’s regulations (at 29 CFR 1635.8(b)(2) and (c)(2)) make clear that an employer must obtain authorization for the collection of genetic information as part of providing 54 Although the Kaiser Survey reports that 51 percent of large employers versus 32 percent of small employers ask employees to complete a HRA, see Kaiser Survey, supra note 50, we are not aware of any data indicating what percentage of those employers provide spouses with the opportunity to participate in the HRA. We therefore have substituted a more general statistic to allow an estimate of the number of employers who will be covered by the requirements of this proposed rule. See Karen Pollitz & Matthew Roe, Kaiser Family Foundation, Workplace Wellness Programs Characteristics and Requirements 5 (2016), http:// kff.org/private-insurance/issue-brief/workplacewellness-programs-characteristics-andrequirements/ (noting that nearly half (48 percent) of employer wellness programs are open for participation by the spouses or dependents of workers, as well as workers). 55 See Occupational Employment and Wages, Bureau of Labor Statistics, http://www.bls.gov/oes/ current/oes113121.htm (last visited March 28, 2016). 56 A study published in 2009 by the Society for Human Resource Management (SHRM) found that the median number of full-time equivalents for a HR department was three. See SHRM, Human Capital Benchmarking Study 2009 Executive Summary, 6 (2009), https://www.shrm.org/ Research/SurveyFindings/Articles/Documents/ 090620_Human_Cap_Benchmark_FULL_FNL.pdf. Because we are not aware of any more specific data on the average number of human resources professionals per covered employer, we have based our estimates on this figure. VerDate Sep<11>2014 18:56 May 16, 2016 Jkt 238001 health or genetic services to employees and their family members on a voluntary basis. Consequently, this rule imposes no new obligations with respect to authorization for the collection of genetic information. Paperwork Reduction Act This rule contains no new information collection requirements subject to review by the Office of Management and Budget under the Paperwork Reduction Act (44 U.S.C. chapter 35). Regulatory Flexibility Act Title II of GINA applies to all employers with 15 or more employees, approximately 764,233 of which are small firms (entities with 15–500 employees) according to data provided by the Small Business Administration Office of Advocacy.57 The Commission certifies under 5 U.S.C. 605(b) that this final rule will not have a significant economic impact on a substantial number of small entities because it imposes no reporting burdens and only minimal costs on such firms. The rule simply clarifies that employers that offer wellness programs are free to adopt a certain type of inducement without violating GINA. It also corrects an internal citation and provides citations to the Affordable Care Act. It does not require any action on the part of covered entities, except to the extent that those entities created documentation or forms which cite to GINA for the proposition that the entity is unable to offer inducements to employees in return for a spouse’s completion of HRAs that request information about the spouse’s manifestation of disease or disorder. We do not have data on the number or size of businesses that may need to alter documents relating to their employersponsored wellness programs. However, our experience with enforcing the ADA, which required all employers with 15 or more employees to remove medical inquiries from application forms, suggests that revising questionnaires to eliminate or alter an instruction would not impose significant costs. To the extent that employers will expend resources to train human resources staff and others on the revised rule, we reiterate that the EEOC conducts extensive outreach and technical assistance programs, many of them at no cost to employers, to assist in the training of relevant personnel on EEO-related issues. For example, in 57 See Firm Size Data, Small Business Administration, http://www.sba.gov/advocacy/849/ 12162 (last visited March 28, 2016). PO 00000 Frm 00033 Fmt 4701 Sfmt 4700 31157 fiscal year 2014, the agency’s outreach programs reached more than 236,000 persons through participation in more than 3,500 no-cost educational, training and outreach events. We will put information about the revisions to the GINA regulations in our outreach programs in general and continue to offer GINA-specific outreach programs which will, of course, include information about the revisions now that the rule is final. We will also post technical assistance documents on our Web site explaining the revisions to the GINA regulations, as we do with all of our new regulations and policy documents. We estimate that the typical human resources professional will need to dedicate, at most, 60 minutes to gain a satisfactory understanding of the revised regulations. We further estimate that the median hourly pay rate of a human resource professional is approximately $49.41.58 Assuming that small entities have between one and five human resource professionals/managers, we estimate that the cost per entity of providing appropriate training will be between approximately $49.41 and $247.05. The EEOC does not believe that this cost will be significant for the impacted small entities. Unfunded Mandates Reform Act of 1995 This final rule will not result in the expenditure by state, local, or tribal governments, in the aggregate, or by the private sector, of $100 million or more in any one year, and it will not significantly or uniquely affect small governments. Therefore, no actions were deemed necessary under the provisions of the Unfunded Mandates Reform Act of 1995. List of Subjects in 29 CFR Part 1635 Administrative practice and procedure, Equal employment opportunity. For the reasons set forth in the preamble, the EEOC amends chapter XIV of title 29 of the Code of Federal Regulations as follows: PART 1635—[AMENDED] 1. The authority citation for part 1635 is revised to read as follows: ■ Authority: 29 U.S.C. 2000ff. 2. In § 1635.8(b): a. Redesignate paragraphs (b)(2)(i)(A) through (D) as paragraphs (b)(2)(i)(B) through (E); ■ b. Add new paragraph (b)(2)(i)(A); ■ ■ 58 See Occupational Employment and Wages, supra note 53. E:\FR\FM\17MYR2.SGM 17MYR2 31158 Federal Register / Vol. 81, No. 95 / Tuesday, May 17, 2016 / Rules and Regulations c. Revise paragraph (b)(2)(ii) introductory text; ■ d. Redesignate paragraphs (b)(2)(iii) and (iv) as paragraphs (b)(2)(vi) and (vii); ■ e. Add new paragraphs (b)(2)(iii) through (v); ■ f. Revise newly redesignated paragraph (b)(2)(vii); and ■ g. Revise paragraph (c)(2). The revisions and additions read as follows: ■ § 1635.8 Acquisition of genetic information. mstockstill on DSK3G9T082PROD with RULES2 * * * * * (b) * * * (2) * * * (i) * * * (A) The health or genetic services, including any acquisition of genetic information that is part of those services, are reasonably designed to promote health or prevent disease. A program satisfies this standard if it has a reasonable chance of improving the health of, or preventing disease in, participating individuals, and it is not overly burdensome, is not a subterfuge for violating Title II of GINA or other laws prohibiting employment discrimination, and is not highly suspect in the method chosen to promote health or prevent disease. A program is not reasonably designed to promote health or prevent disease if it imposes a penalty or disadvantage on an individual because a spouse’s manifestation of disease or disorder prevents or inhibits the spouse from participating or from achieving a certain health outcome. For example, an employer may not deny an employee an inducement for participation of either the employee or the spouse in an employer-sponsored wellness program because the employee’s spouse has blood pressure, a cholesterol level, or a blood glucose level that the employer considers too high. In addition, a program consisting of a measurement, test, screening, or collection of healthrelated information without providing participants with results, follow-up information, or advice designed to improve the participant’s health is not reasonably designed to promote health or prevent disease, unless the collected information actually is used to design a program that addresses at least a subset of conditions identified. Whether health or genetic services are reasonably designed to promote health or prevent disease is evaluated in light of all the relevant facts and circumstances. * * * * * (ii) Consistent with, and in addition to, the requirements of paragraph (b)(2)(i) of this section, a covered entity VerDate Sep<11>2014 18:56 May 16, 2016 Jkt 238001 may not offer an inducement (financial or in-kind), whether in the form of a reward or penalty, for individuals to provide genetic information, except as described in paragraphs (b)(2)(iii) and (iv) of this section, but may offer inducements for completion of health risk assessments that include questions about family medical history or other genetic information, provided the covered entity makes clear, in language reasonably likely to be understood by those completing the health risk assessment, that the inducement will be made available whether or not the participant answers questions regarding genetic information. * * * * * (iii) Consistent with, and in addition to, the requirements of paragraphs (b)(2)(i) and (ii) of this section, a covered entity may offer an inducement to an employee whose spouse provides information about the spouse’s manifestation of disease or disorder as part of a health risk assessment. No inducement may be offered, however, in return for the spouse’s providing his or her own genetic information, including results of his or her genetic tests, or for information about the manifestation of disease or disorder in an employee’s children or for genetic information about an employee’s children, including adult children. The health risk assessment, which may include a medical questionnaire, a medical examination (e.g., to detect high blood pressure or high cholesterol), or both, must otherwise comply with paragraph (b)(2)(i) of this section in the same manner as if completed by the employee, including the requirement that the spouse provide prior, knowing, voluntary, and written authorization, and the requirement that the authorization form describe the confidentiality protections and restrictions on the disclosure of genetic information. The health risk assessment must also be administered in connection with the spouse’s receipt of health or genetic services offered by the employer, including such services offered as part of an employersponsored wellness program. When an employee and spouse are given the opportunity to participate in an employer-sponsored wellness program, the inducement to each may not exceed: (A) Thirty percent of the total cost of self-only coverage under the group health plan in which the employee is enrolled, if enrollment in the plan is a condition for participation in the employer-sponsored wellness program. For example, if an employee is enrolled in health insurance through the PO 00000 Frm 00034 Fmt 4701 Sfmt 4700 employer at a total cost (taking into account both employer and employee contributions toward the cost of coverage) of $14,000 for family coverage, that plan has a self-only option for $6,000, and the employer provides the option of participating in a wellness program to the employee and spouse because they are enrolled in the plan, the employer may not offer more than $1,800 to the employee and $1,800 to the spouse. (B) Thirty percent of the total cost of self-only coverage under the group health plan offered by the employer where the employer offers a single group health plan, but participation in a wellness program does not depend on the employee’s or spouse’s enrollment in that plan. For example, if the employer offers one group health plan and self-only coverage under that plan costs $7,000, and the employer provides the option of participation in a wellness program to the employee and the spouse, the employer may not offer more than $2,100 to the employee and $2,100 to the spouse. (C) Thirty percent of the total cost of the lowest cost self-only coverage under a major medical group health plan offered by the employer, if the employer offers more than one group health plan but enrollment in a particular plan is not a condition for participation in the wellness program. For example, if the employer has more than one major medical group health plan under which self-only coverage ranges in cost from $5,000 to $8,000, and the employer provides the option of participation in a wellness program to the employee and the spouse, the employer may not offer more than $1,500 to the employee and $1,500 to the spouse. (D) Thirty percent of the cost of selfonly coverage available to an individual who is 40 years old and a non-smoker under the second lowest cost Silver Plan available through the Exchange in the location that the employer identifies as its principal place of business is located, where the employer has no group health plan. For example, if the cost of insuring a 40-year-old non-smoker is $4,000 annually, the maximum inducement the employer could offer the employee and the spouse would be no more than $1,200 each. (iv) A covered entity may not, however, condition participation in an employer-sponsored wellness program or provide any inducement to an employee, or the spouse or other covered dependent of the employee, in exchange for an agreement permitting the sale, exchange, sharing, transfer, or other disclosure of genetic information, including information about the E:\FR\FM\17MYR2.SGM 17MYR2 Federal Register / Vol. 81, No. 95 / Tuesday, May 17, 2016 / Rules and Regulations mstockstill on DSK3G9T082PROD with RULES2 manifestation of disease or disorder of an employee’s family member (except to the extent permitted by paragraph (b)(2)(i)(D)) of this section, or otherwise waiving the protections of § 1635.9. (v) A covered entity may not deny access to health insurance or any package of health insurance benefits to an employee, or the spouse or other covered dependent of the employee, or retaliate against an employee, due to a spouse’s refusal to provide information about his or her manifestation of disease or disorder to an employer-sponsored wellness program. * * * * * (vii) Nothing contained in paragraphs (b)(2)(ii) through (v) of this section limits the rights or protections of an individual under the Americans with Disabilities Act (ADA), as amended, or other applicable civil rights laws, or under the Health Insurance Portability and Accountability Act (HIPAA), as amended by GINA. For example, if an employer offers an inducement for participation in disease management programs or other programs that promote healthy lifestyles and/or require individuals to meet particular health goals, the employer must make reasonable accommodations to the extent required by the ADA; that is, the employer must make modifications or adjustments that enable a covered entity’s employee with a disability to enjoy equal benefits and privileges of employment as are enjoyed by its other similarly situated employees without disabilities unless such covered entity can demonstrate that the accommodation would impose an undue hardship on the operation of its business. See 29 CFR 1630.2(o)(1)(iii) and 29 CFR 1630.9(a). In addition, if the employer’s wellness program provides (directly, through reimbursement, or otherwise) medical care (including genetic counseling), the program may constitute a group health plan and must comply with the special requirements VerDate Sep<11>2014 18:56 May 16, 2016 Jkt 238001 for employer-sponsored wellness programs that condition rewards on an individual satisfying a standard related to a health factor, including the requirement to provide an individual with a reasonable alternative (or waiver of the otherwise applicable standard) under HIPAA, when it is unreasonably difficult due to a medical condition to satisfy or medically inadvisable to attempt to satisfy the otherwise applicable standard. See section 9802 of the Internal Revenue Code (26 U.S.C. 9802, 26 CFR 54.9802–1 and 54.9802– 3T), section 702 of the Employee Retirement Income Security Act of 1974 (ERISA) (29 U.S.C. 1182, 29 CFR 2590.702 and 2590.702–1), and section 2705 of the Public Health Service (PHS) Act (45 CFR 146.121, 146.122, and 147.110), as amended by section 1201 of the Affordable Care Act. * * * * * (c) * * * (2) A covered entity does not violate this section when it requests, requires, or purchases genetic information or information about the manifestation of a disease, disorder, or pathological condition of an individual’s family member who is receiving health or genetic services on a voluntary basis, as long as the requirements of paragraph (b)(2) of this section, including those concerning authorization and inducements, are met. For example, an employer does not unlawfully acquire genetic information about an employee when it asks the employee’s family member who is receiving health services from the employer if her diabetes is under control. Nor does an employer unlawfully acquire genetic information about an employee when it seeks information—through a medical questionnaire, a medical examination, or both—about the manifestation of disease, disorder, or pathological condition of the employee’s family member who is completing a health risk assessment on a voluntary basis in PO 00000 Frm 00035 Fmt 4701 Sfmt 9990 31159 connection with the family member’s receipt of health or genetic services (including health or genetic services provided as part of an employersponsored wellness program) offered by the employer in compliance with paragraph (b)(2) of this section. * * * * * ■ 3. In § 1635.11, revise paragraphs (b)(1)(iii) and (iv) to read as follows: § 1635.11 Construction. * * * * * (b) * * * (1) * * * (iii) Section 702(a)(1)(F) of ERISA (29 U.S.C. 1182(a)(1)(F)), section 2705(a)(6) of the PHS Act, as amended by section 1201 of the Affordable Care Act and section 9802(a)(1)(F) of the Internal Revenue Code (26 U.S.C. 9802(a)(1)(F)), which prohibit a group health plan or a health insurance issuer in the group or individual market from discriminating against individuals in eligibility and continued eligibility for benefits based on genetic information; or (iv) Section 702(b)(1) of ERISA (29 U.S.C. 1182(b)(1)), section 2705(b)(1) of the PHS Act, as amended by section 1201 of the Affordable Care Act and section 9802(b)(1) of the Internal Revenue Code (26 U.S.C. 9802(b)(1)), as such sections apply with respect to genetic information as a health statusrelated factor, which prohibit a group health plan or a health insurance issuer in the group or individual market from discriminating against individuals in premium or contribution rates under the plan or coverage based on genetic information. * * * * * Dated: May 11, 2016. For the Commission: Jenny R. Yang, Chair. [FR Doc. 2016–11557 Filed 5–16–16; 8:45 am] BILLING CODE 6570–01–P E:\FR\FM\17MYR2.SGM 17MYR2

Agencies

[Federal Register Volume 81, Number 95 (Tuesday, May 17, 2016)]
[Rules and Regulations]
[Pages 31143-31159]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-11557]


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EQUAL EMPLOYMENT OPPORTUNITY COMMISSION

29 CFR Part 1635

RIN 3046-AB02


Genetic Information Nondiscrimination Act

AGENCY: Equal Employment Opportunity Commission.

ACTION: Final rule.

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SUMMARY: The Equal Employment Opportunity Commission (EEOC or 
Commission) is issuing a final rule to amend the regulations 
implementing Title II of the Genetic Information Nondiscrimination Act 
of 2008 as they relate to employer-sponsored wellness programs. This 
rule addresses the extent to which an employer may offer an inducement 
to an employee for the employee's spouse to provide information about 
the spouse's manifestation of disease or disorder as part of a health 
risk assessment (HRA) administered in connection with an employer-
sponsored wellness program. Several technical changes to the existing 
regulations are included. Published elsewhere in this issue of the 
Federal Register, the EEOC also issued a final rule to amend the 
regulations and interpretive guidance implementing Title I of the 
Americans with Disabilities Act (ADA) that addresses the extent to 
which employers may use incentives to encourage employees to 
participate in wellness programs that ask them to respond to 
disability-related inquiries and/or undergo medical examinations.

DATES: Effective date: This rule is effective July 18, 2016.
    Applicability date: This rule is applicable beginning on January 1, 
2017.

FOR FURTHER INFORMATION CONTACT: Christopher J. Kuczynski, Assistant 
Legal Counsel, at (202) 663-4665 (voice), or Kerry E. Leibig, Senior 
Attorney Advisor, at (202) 663-4516 (voice), or (202) 663-7026 (TTY). 
(These are not toll free numbers.) Requests for this rule in an 
alternative format should be made to the Office of Communications and 
Legislative Affairs, at (202) 663-4191 (voice) or (202) 663-4494 (TTY). 
(These are not toll free numbers.)

SUPPLEMENTARY INFORMATION: The Commission issued a proposed rule in the 
Federal Register on October 30, 2015, for a 60-day notice and comment 
period, which was extended for an additional 30 days and ended on 
January 28, 2016. After consideration of the public comments, the 
Commission has revised portions of both the final rule and the 
preamble.

Introduction

    Several federal laws govern wellness programs offered by employers. 
Employer-sponsored wellness programs must comply with Title II of the 
Genetic Information Nondiscrimination Act of 2008 (GINA),\1\ Title I of 
the ADA,\2\ and other employment discrimination laws enforced by the 
EEOC. Employer-sponsored wellness programs that are part of, or 
provided by, a group health plan \3\, or that are provided by a health 
insurance issuer offering group health insurance in connection with a 
group health plan, must also comply with the Health Insurance 
Portability and Accountability Act of 1996 (HIPAA) nondiscrimination 
provisions, as amended by the Affordable Care Act, which is enforced by 
the Department of Labor (DOL), Department of the Treasury (Treasury), 
and Department of Health and Human Services (HHS) (referred to 
collectively as the tri-Departments).\4\ This final rule relates 
specifically to the requirements of Title II of GINA as they apply to 
employer-sponsored wellness programs, though other applicable laws are 
discussed in some detail.
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    \1\ 42 U.S.C. 2000ff-2000ff-11.
    \2\ 42 U.S.C. 12101-12117.
    \3\ The term ``group health plan'' includes both insured and 
self-insured group health plans, and is used interchangeably with 
the terms ``health plan'' and ``the plan'' in this Final Rule.
    \4\ The Patient Protection and Affordable Care Act, Public Law 
111-148, and the Health Care and Education Reconciliation Act, 
Public Law 111-152, are known collectively as the Affordable Care 
Act. Section 1201 of the Affordable Care Act amended and moved the 
nondiscrimination and wellness provisions of the Public Health 
Service (PHS) Act from section 2702 to section 2705 and extended the 
nondiscrimination provisions to the individual health insurance 
market. The Affordable Care Act also added section 715(a)(1) to the 
Employee Retirement Income Security Act (ERISA) and section 
9815(a)(1) to the Internal Revenue Code (Code) to incorporate the 
provisions of part A of title XXVII of the PHS Act, including PHS 
Act section 2705, into ERISA and the Code.
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    Congress enacted Title II of GINA to protect job applicants, 
current and former employees, labor union members, and apprentices and 
trainees from employment discrimination based on their genetic 
information.\5\ GINA generally restricts the acquisition and disclosure 
of genetic information and prohibits the use of genetic information in 
making employment decisions.\6\ The EEOC issued implementing 
regulations on November 9, 2010, to provide all persons subject to 
Title II of GINA additional guidance with regard to the law's 
requirements.\7\
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    \5\ Title I of GINA applies to genetic information 
discrimination in health coverage (not employment), is applicable to 
group health plans and health insurance issuers, and is administered 
by the tri-Departments. Under Title I, group health plans may 
include, as part of a HRA, questions regarding the manifestation of 
a disease or disorder of individuals covered under the plan, but not 
genetic information (defined to include genetic test information 
about the individual or of family members of the individual or the 
manifestation of disease or disorder in family members of the 
individual not covered under the plan). See 42 U.S.C. 300gg-
91(d)(16); see also 26 CFR 54.9802-3T(b)(2); 29 CFR 2590.702-
1(b)(2); 45 CFR 146.122(a)(3). This final rule, however, which is 
specific to Title II, provides that all health information provided 
by a spouse to an employer as part of a HRA is genetic information 
with respect to the employee, even where both the employee and 
spouse are covered by the plan.
    \6\ S. Rep. No. 110-48, at 10 (2007); H.R. Rep. No. 110-28, pt. 
3, at 29 (2007).
    \7\ See Regulations Under the Genetic Information 
Nondiscrimination Act of 2007, 75 FR 68,912 (Nov. 9, 2010) (codified 
at 29 CFR pt. 1635).
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Discussion

    Title II of GINA prohibits the use of genetic information in making 
employment decisions in all circumstances, with no exceptions. It also 
restricts employers and other

[[Page 31144]]

entities covered by GINA \8\ from requesting, requiring, or purchasing 
genetic information, unless one or more of six narrow exceptions 
applies, and strictly limits the disclosure of genetic information by 
GINA-covered entities.\9\ The statute and the 2010 Title II final rule 
define ``genetic information'' to include: Information about an 
individual's genetic tests; information about the genetic tests of a 
family member; information about the manifestation of a disease or 
disorder in family members of an individual (i.e., family medical 
history); \10\ requests for and receipt of genetic services by an 
individual or a family member; and genetic information about a fetus 
carried by an individual or family member or of an embryo legally held 
by the individual or family member using assisted reproductive 
technology.\11\ Family members of an individual include someone who is 
a dependent of an individual through marriage, birth, adoption, or 
placement for adoption and any other individual who is a first-, 
second-, third-, or fourth-degree relative of the individual.\12\
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    \8\ Unless otherwise noted, the term ``GINA'' refers to Title II 
of GINA.
    \9\ See 42 U.S.C. 2000ff-2000ff-11; see also 29 CFR 1635.4-
1635.9.
    \10\ Congress recognized ``that a family medical history could 
be used as a surrogate for genetic traits by a health plan or health 
insurance issuer. A consistent history of a heritable disease in a 
patient's family may be viewed to indicate that the patient himself 
or herself is at increased risk for that disease.'' For that reason, 
Congress believed it was important to include family medical history 
in the definition of ``genetic information.'' S. Rep. No. 110-48, at 
28.
    \11\ See 42 U.S.C. 2000ff(4), 2000ff-8(b); see also 29 CFR 
1635.3.
    \12\ See 42 U.S.C. 2000ff(3)(A) (defining family member for 
purposes of GINA to include a dependent within the meaning of 
section 701(f)(2) of ERISA); see also 29 CFR 1635.3(a). The 
Commission's definition of ``dependent'' is solely for purposes of 
interpreting Title II of GINA, and is not relevant to interpreting 
the term ``dependent'' under Title I of GINA or under section 
701(f)(2) of ERISA and the parallel provisions of the PHS Act and 
the Code. See the preamble to the EEOC's regulations implementing 
Title II of GINA at 75 FR 68,914, note 5 (and the preamble to the 
regulations implementing Title I of GINA at 74 FR 51,664, 51,666) 
for additional information.
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    There are only six limited circumstances in which an employer \13\ 
may request, require, or purchase genetic information about an 
applicant or employee. One exception permits employers that offer 
health or genetic services, including such services offered as part of 
voluntary wellness programs,\14\ to request genetic information as part 
of these programs, as long as certain specific requirements are 
met.\15\ The regulations implementing Title II currently make clear 
that one of the requirements is that the employer-sponsored wellness 
program cannot condition inducements to employees on the provision of 
genetic information.\16\ This requirement is derived from a prohibition 
in Title I of GINA (which applies to health plans and health insurance 
issuers) against adjusting premium or contribution amounts on the basis 
of genetic information.\17\
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    \13\ GINA applies to individuals and covered entities in 
addition to employees and employers, including employment agencies, 
unions and their members, and joint-labor management training and 
apprenticeship programs. See 42 U.S.C. 2000ff-1, 2000ff-2, 2000ff-3, 
2000ff-4 (describing the prohibited practices of each of these 
entities); see also 29 CFR 1635.2(b) (defining ``covered entity''), 
1635.4 (describing prohibited practices). For the sake of 
readability, and recognizing that employers will be the covered 
entity most likely to offer employer-sponsored wellness programs, 
the preamble will refer to employers and employees throughout.
    \14\ A wellness program, defined as a ``program offered by an 
employer that is designed to promote health or prevent disease,'' is 
one type of health or genetic service that an employer might offer. 
See Section 2705(j)(1)(A) of the PHS Act, as amended by the 
Affordable Care Act. A wellness program that provides medical care 
(including genetic counseling) may constitute a group health plan 
required to comply with section 9802 of the Code, 26 U.S.C. 9802, 
section 702 of the ERISA, 29 U.S.C. 1182, or section 2705 of the PHS 
Act (i.e., Title I of GINA). Regulations issued under these statutes 
address employer-sponsored wellness programs that collect genetic 
information. Moreover, employer-sponsored wellness programs that 
condition rewards on an individual satisfying a standard related to 
a health factor must meet additional requirements. See 26 CFR 
54.9802-1(f); 29 CFR 2590.702(f); 45 CFR 146.121(f). As noted above, 
the EEOC has also issued a final rule amending the regulations and 
interpretive guidance implementing Title I of the ADA as they relate 
to employer-sponsored wellness programs. See 29 CFR 1630.14, 
published elsewhere in this issue of the Federal Register.
    \15\ See 42 U.S.C. 2000ff-1(b)(2), 2000ff-2(b)(2), 2000ff-
3(b)(2), 2000ff-4(b)(2); see also 29 CFR 1635.8(b)(2). Other health 
or genetic services include services such as an Employee Assistance 
Program or a health clinic that provides flu shots. Under GINA, 
employers may request genetic information as part of such health or 
genetic services, as long as the requirements of 29 CFR 1635.8(b)(2) 
are met.
    \16\ See 29 CFR 1635.8(b)(2)(ii). Consistent with the 
requirements of paragraph (b)(2)(i) of this section, a covered 
entity may not offer an inducement for individuals to provide 
genetic information, but may offer inducements for completion of 
HRAs that include questions about family medical history or other 
genetic information, provided the covered entity makes clear, in 
language reasonably likely to be understood by those completing the 
HRA, that the inducement will be made available whether or not the 
participant answers questions regarding genetic information.
    \17\ Title I of GINA applies to genetic information 
discrimination in health coverage and not employment. The 
Departments responsible for enforcing Title I determined that 
permitting employers to condition wellness program inducements on 
the provision of genetic information would undermine Title I's 
prohibition on adjusting premium or contribution amounts on the 
basis of genetic information. For more on the protections provided 
by Title I of GINA, see DOL--Employee Benefits Security 
Administration, FAQs on the Genetic Information Nondiscrimination 
Act (2010), www.dol.gov/ebsa/pdf/faq-GINA.pdf. For a discussion of 
how Titles I and II of GINA allow employers and plans to use 
financial inducements to promote employee wellness and healthy 
lifestyles, see the preamble to the 2010 Title II final rule at 75 
FR 68,923 (Nov. 9, 2010).
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    Although the EEOC received no comments prior to the publication of 
the Title II final rule in 2010 regarding how GINA's restriction on 
employers' acquiring genetic information interacts with the practice of 
offering employees inducements where a spouse participates in an 
employer-sponsored wellness program, this question arose after 
publication of the Title II final rule in 2010. Read one way, such a 
practice could be interpreted to violate the 29 CFR 1635.8(b)(2)(ii) 
prohibition on providing financial inducements in return for an 
employee's protected genetic information. This is because information 
an employer seeks from a spouse (who is a ``family member'' under GINA 
as set forth at 42 U.S.C. 2000ff(4)(a)(ii) and 29 CFR 1635.3(a)(1)) 
about his or her manifestation of disease or disorder is treated under 
GINA as requesting genetic information about the employee. Although the 
EEOC's original regulations specifically permitted employers to seek 
information about manifestation of diseases or disorders in employees' 
family members who are receiving health or genetic services from the 
employer, including such services offered as part of a voluntary 
employer-sponsored wellness program,\18\ the regulations did not say 
whether inducements could be provided in exchange for such information. 
The Commission now finalizes the clarification that an employer may, in 
certain circumstances, offer an employee limited inducements for the 
employee's spouse to provide information about the spouse's 
manifestation of disease or disorder as part of a HRA administered in 
connection with an employer-sponsored wellness program, provided that 
GINA's confidentiality requirements are observed and any information 
obtained is not used to discriminate against an employee.\19\ However, 
this narrow exception to the general rule that inducements may not be 
offered in exchange for an employee's genetic information does not 
extend to genetic information about a spouse or to

[[Page 31145]]

information about manifestation of diseases or disorders in, or genetic 
information about, an employee's children.
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    \18\ See 29 CFR 1635.8(c)(2).
    \19\ One industry group argued that using the phrase ``current 
or past health status'' to describe the types of questions to 
spouses that could include inducements was confusing because not all 
information about a spouse's current or past health status meets the 
definition of genetic information. In order to clarify that the rule 
only applies to questions asked of the spouse that meet the 
definition of genetic information, the final rule will replace the 
phrase ``current or past health status'' with ``manifestation of 
disease or disorder.''
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Background on the Notice of Proposed Rulemaking on GINA and Employer-
Sponsored Wellness Programs

    The Commission drafted a Notice of Proposed Rulemaking (NPRM) that 
was circulated to the Office of Management and Budget for review 
(pursuant to Executive Order 12866) and to federal executive branch 
agencies for comment (pursuant to Executive Order 12067).\20\ The NPRM 
was then published in the Federal Register on October 30, 2015 for a 
60-day public comment period,\21\ which was extended for an additional 
30 days \22\ and ended on January 28, 2016.
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    \20\ While there are differences between the definitions and 
requirements for wellness programs set forth in the Affordable Care 
Act, PHS Act, ERISA, the Code, and Title II of GINA, this final rule 
is being issued after review by and consultation with the tri-
Departments.
    \21\ Genetic Information Nondiscrimination Act, 80 FR 66853 
(proposed October 30, 2015) (to be codified at 29 CFR part 1635).
    \22\ Genetic Information Nondiscrimination Act, 80 FR 75956 
(proposed December, 7, 2015) (to be codified at 29 CFR part 1635).
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    The NPRM sought comment on the proposed revisions to the GINA 
regulation which:
     Clarified that an employer may offer, as part of its 
health plan, a limited inducement (in the form of a reward or penalty) 
to an employee whose spouse (1) is covered under the employee's health 
plan; (2) receives health or genetic services offered by the employer, 
including as part of a wellness program; and (3) provides information 
about his or her current or past health status.
     Explained that the total inducement for an employee and 
spouse to participate in an employer-sponsored wellness program that is 
part of a group health plan and collects information about the spouse's 
current or past health status may not exceed 30 percent of the total 
cost of the plan in which the employee and any dependents are enrolled.
     Described how inducements must be apportioned between the 
employee and spouse.
     Explained that inducements may be financial or in kind, 
consistent with regulations issued by DOL, HHS, and Treasury to 
implement the wellness program provisions in the Affordable Care Act. 
For that reason, the proposed rule deleted the term ``financial'' where 
it appeared as a modifier for the term ``inducement'' in 29 CFR 
1635.8(b)(2).
     Explained that any request for current or past health 
status information from an employee's spouse must comply in all other 
respects with 29 CFR 1635.8(b)(2) concerning requests for genetic 
information that are part of voluntary health or genetic services 
offered by an employer.
     Explained that an employer may not require employees (or 
employees' spouses or dependents covered by the employees' health plan) 
to agree to the sale, or waive the confidentiality, of their genetic 
information as a condition for receiving an inducement or participating 
in an employer-sponsored wellness program.
     Added an example making it clear that a request for 
current or past health status information from an employee's spouse who 
is participating in a wellness program does not constitute an unlawful 
request for genetic information about the employee.
     Made several technical changes to correct a previous 
drafting error and to add references, where needed, to HIPAA and the 
Affordable Care Act.
    Additionally, the Commission specifically sought comments on 
several other issues, including:
     Whether employers that offer inducements to encourage the 
spouses of employees to disclose information about current or past 
health status must also offer similar inducements to persons who choose 
not to disclose such information but, who instead, provide 
certification from a medical professional stating that the spouse is 
under the care of a physician and that any medical risks identified by 
that physician are under active treatment.
     Whether the proposed authorization requirements apply only 
to employer-sponsored wellness programs that offer more than de minimis 
rewards or penalties to employees whose spouses provide information 
about current or past health status as part of a HRA.
     Which best practices or procedural safeguards ensure that 
employer-sponsored wellness programs are designed to promote health or 
prevent disease and do not operate to shift costs to employees with 
spouses who have health impairments or stigmatized conditions.
     Whether the rule should include more specific guidance to 
employers regarding how to implement the requirements of 29 CFR 
1635.9(a) for electronically stored records. If so, what procedures are 
needed to achieve GINA's goal of ensuring the confidentiality of 
genetic information with respect to electronic records stored by 
employers.
     Whether there are best practices or procedural safeguards 
to ensure that information about spouses' current health status is 
protected from disclosure.
     Whether the regulation should restrict the collection of 
any genetic information by an employer-sponsored wellness program to 
only the minimum necessary to directly support the specific wellness 
activities, interventions, and advice provided through the program--
namely information collected through the program's HRA and biometric 
screening. Should programs be prohibited from accessing genetic 
information from other sources, such as patient claims data and medical 
records data.
     Whether employers offer (or are likely to offer in the 
future) wellness programs outside of a group health plan or group 
health insurance coverage that use inducements to encourage employees' 
spouses to provide information about current or past health status as 
part of a HRA, and the extent to which the GINA regulations should 
allow inducements provided as part of such programs.

Summary of Revisions and Response to Comments

    During the 60-day comment period, which was extended by 30 days, 
the Commission received 3,003 \23\ comments on the NPRM from a wide 
spectrum of stakeholders, including, among others: Individuals, 
including individuals with disabilities; disability rights and other 
advocacy organizations and their members; members of Congress; employer 
associations and industry groups; and health insurance issuers, third 
party administrators, and wellness vendors. The comments from 
individuals included 2,911 similar, but not uniform, letters--almost 
all of which were submitted by a national organization that supports 
women and families. Most of the comments (3,000) were submitted through 
the United States Government's electronic docket system, 
Regulations.gov, under EEOC-2015-0009. The remaining three comments 
were mailed or faxed to the Executive Secretariat.
---------------------------------------------------------------------------

    \23\ One of these comments was withdrawn when the commenter 
submitted a ``corrected'' version of the comment.
---------------------------------------------------------------------------

    The Commission has reviewed and considered each of the comments in 
preparing this final rule. The first section of this preamble begins by 
clarifying the purpose of this rule. It goes on to address general 
comments about the interaction between GINA and the wellness program 
provisions of

[[Page 31146]]

HIPAA, as amended by the Affordable Care Act; interaction between GINA 
and the ADA; the final rule's applicability date; the rule's treatment 
of inducements for information from the children of employees; the 
confidentiality protections of the rule; tobacco cessation programs; 
and the Commission's burden calculations.
    The second section discusses comments submitted in response to 
questions the NPRM asked about several issues, as noted above.
    The third section addresses comments regarding specific provisions 
of the rule.

General Comments

Purpose of the Rule

    Many comments submitted by individuals objected to a rule that 
would allow employers to charge employees more for benefits based on 
the illness of family members, impose stiff penalties on people that do 
not measure up to certain health guidelines, allow employers to fire or 
otherwise adversely treat employees based on medical information 
collected through employer-sponsored wellness programs, and/or allow 
``metrics'' that would harm millions of people with disabilities. This 
rule, however, is more limited in scope. Instead, it addresses the very 
limited question of the extent to which an employer may offer 
inducements to an employee for the employee's spouse to provide 
information about the spouse's manifestation of disease or disorder as 
part of a HRA administered in connection with an employer-sponsored 
wellness program. The absolute prohibition on the use of genetic 
information to make employment decisions enshrined in Title II of GINA 
remains intact, as do the existing protections of Title I of the ADA, 
which prohibits discrimination on the basis of disability.

Interaction Between GINA and HIPAA's Wellness Program Provisions

    The Commission received comments expressing support for and/or 
concerns about employer-sponsored wellness programs. For example, many 
commenters stated that although properly designed employer-sponsored 
wellness programs have the potential to help employees become healthier 
and bring down health care costs, they believe that these programs also 
carry serious potential for discrimination in ways already prohibited 
by GINA and other civil rights laws, by allowing employers to coerce 
employees into providing genetic information (as well as other health 
information). Disability rights and health advocacy groups expressed 
concern that the EEOC was abandoning its prior position that GINA 
prohibits financial inducements in return for all genetic information, 
while employer and industry groups commented that the proposed rule's 
limitation on inducements was inconsistent with the wellness program 
rules under section 2705(j) of the PHS Act. Disability rights groups 
further noted that there was no need to alter Title II of GINA's 
prohibition on financial incentives in order to conform to laws that 
regulate insurance discrimination, given that Title II of GINA is about 
employment discrimination, and pointed out that the tri-Department 
wellness regulations explicitly state that GINA imposes separate and 
additional restrictions.
    Although the Commission recognizes that compliance with the 
standards in HIPAA, as amended by the Affordable Care Act, is not 
determinative of compliance with Title II of GINA,\24\ we believe that 
the final rule interprets GINA in a manner that reflects both GINA's 
goal of providing strong protections against employment discrimination 
based on the possibility that an employee or the employee's family 
member may develop a disease or disorder in the future and HIPAA's 
provisions promoting wellness programs. Additionally, as we pointed out 
in the preamble to the proposed rule, allowing limited inducements for 
spouses to provide information about manifested diseases or disorders 
(but not their own genetic information) as part of a HRA administered 
in connection with an employer-sponsored wellness program is consistent 
with HIPAA, as amended by the Affordable Care Act, and Title I of 
GINA.\25\ Accordingly, after consideration of all of the comments, the 
Commission reaffirms its conclusion that allowing inducements in return 
for a spouse providing information about his or her manifestation of 
disease and disorder, while limiting inducements to prevent economic 
coercion, is the best way to effectuate the purposes of the wellness 
provisions of GINA and HIPAA.
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    \24\ As the tri-Department wellness regulations acknowledge, the 
Affordable Care Act did not amend or overturn GINA, and compliance 
with the Affordable Care Act and its implementing regulations is not 
determinative of compliance with GINA. See Incentives for 
Nondiscriminatory Wellness Programs in Group Health Plans, 78 FR 
33158, 33168 (June 3, 2013). A publication issued jointly by the 
tri-Departments further explains that a wellness program that 
complies with the tri-Departments' wellness program regulations does 
not necessarily comply with any other provision of the PHS Act, the 
Code, ERISA, (including the Consolidated Omnibus Budget 
Reconciliation Act (COBRA) continuation provisions), or any other 
state or federal law, such as the ADA, or the privacy and security 
obligations of HIPAA, where applicable. Similarly, the fact that an 
employer-sponsored wellness program meets the requirements of the 
ADA is not determinative of compliance with the PHS Act, ERISA, or 
the Code. See DOL--Employee Benefits Security Administration, FAQs 
about the Affordable Care Act Implementation (part XXV), Question 2 
(2015), http://www.dol.gov/ebsa/pdf/faq-aca25.pdf and https://www.cms.gov/CCIIO/Resources/Fact-Sheets-and-FAQs/Downloads/Tri-agency-Wellness-FAQS-4-16-15pdf-AdobeAcrobat-Pro.pdf.
    \25\ See 80 FR at 66857, supra note 20.
---------------------------------------------------------------------------

Interaction With the ADA and Other Equal Employment Opportunity (EEO) 
Laws

    The Commission received a number of comments requesting that the 
final rule be issued jointly with the final ADA wellness rule, a 
suggestion that has been adopted.
    Comments raising more substantive concerns about the interaction 
between the ADA and GINA focused on the desire for alignment of the 
inducement limits available under the statutes, suggesting that the 
incentive limit under the ADA, which is based on the total cost of 
self-only coverage, be revised to correspond with the inducement limit 
proposed in the GINA NPRM, which is based on the total cost of coverage 
for the plan in which the employee and any dependents are enrolled. The 
Commission declines to adopt this recommendation, however, because the 
ADA does not apply to the inducements employer-sponsored wellness 
programs offer in connection with spousal participation. As discussed 
in more detail below, this final GINA rule will, consistent with the 
ADA final rule, limit the maximum share of the inducement attributable 
to the employee's participation in an employer-sponsored wellness 
program (or multiple employer-sponsored wellness programs that request 
such information) to up to 30 percent of the cost of self-only 
coverage. Furthermore, the maximum total inducement for a spouse to 
provide information about his or her manifestation of disease or 
disorder will also be 30 percent of the total cost of (employee) self-
only coverage, so that the combined total inducement will be no more 
than twice the cost of 30 percent of self-only coverage.
    An advocacy group representing older individuals commented that 
protections similar to those proposed in the ADA wellness NPRM against 
conditioning access to employer-provided health insurance on the 
provision of medical information to an employer-sponsored wellness 
program and on retaliation against those who do not participate should 
be included in the GINA final

[[Page 31147]]

rule. Protections in the statute and the existing GINA regulations make 
clear that an employer may not use genetic information to make 
employment decisions, including decisions about benefits.\26\ Both the 
statute and the existing regulations also provide that it is unlawful 
for an employer to discriminate against any individual because that 
individual has opposed any act or practice made unlawful by Title II of 
GINA.\27\ We agree, however, that it would improve the final rule 
specifically to provide that it is a violation of Title II of GINA for 
an employer to deny access to health insurance or any package of health 
insurance benefits to an employee and/or his or her family members, or 
to retaliate against an employee, based on a spouse's refusal to 
provide information about his or her manifestation of disease or 
disorder to an employer-sponsored wellness program. We have added 
clarification to the final rule at Sec.  1635.8(b)(2)(v).
---------------------------------------------------------------------------

    \26\ See 42 U.S.C. 2000ff-1(a), 2000ff-2(a), 2000ff-3(a), 
2000ff-4(a); 29 CFR 1635.4.
    \27\ See 42 U.S.C. 2000ff-8(c); 29 CFR 1635.7.
---------------------------------------------------------------------------

    Another advocacy group whose mission is to protect the rights of 
women and girls asked that the final rule include language making clear 
that in addition to complying with the requirements of the final rule, 
employers must abide by other nondiscrimination provisions, including, 
for example, Title VII of the Civil Rights Act of 1964. We have not 
added any language to the final rule on this topic because the existing 
regulations already state that nothing contained in Sec.  1635.8(b)(2) 
limits the rights or protections of an individual under the ADA, or 
other applicable civil rights laws, or under HIPAA, as amended by GINA. 
We have made technical revisions to this provision due to the changes 
made to the renumbering of other provisions.

Applicability Date

    Employer associations and industry groups submitted comments 
regarding the effective date of the final rule, recommending that it 
allow enough time for employers to bring their wellness programs into 
compliance, that it be issued jointly with the ADA wellness rule, and 
that it not be applied retroactively. The Commission agrees and 
concludes that the provisions of Sec.  1635.8(b)(2)(iii) related to 
wellness program inducements will apply only prospectively to employer-
sponsored wellness programs as of the first day of the first plan year 
that begins on or after January 1, 2017, for the health plan used to 
determine the level of inducement permitted under this regulation. So, 
for example, if the plan year for the health plan used to calculate the 
permissible inducement limit begins on January 1, 2017, that is the 
date on which the provisions of this rule governing inducements apply 
to the employer-sponsored wellness program. If the plan year of the 
plan used to calculate the level of inducements begins on March 1, 
2017, the provisions on inducements will apply to the employer-
sponsored wellness program as of that date. For this purpose, the 
second lowest cost Silver Plan is treated as having a calendar year 
plan year.
    All other provisions of this final rule are clarifications of 
existing obligations that apply at, and prior to, issuance of this 
final rule.\28\
---------------------------------------------------------------------------

    \28\ Prior EEOC interpretations set forth in the 2010 final rule 
implementing Title II of GINA, Regulations Under the Genetic 
Information Nondiscrimination Act of 2007, 75 FR 68912 (Nov. 9, 
2010) (codified at 29 CFR part 1635), and the proposed rule on GINA 
and employer-sponsored wellness programs, Genetic Information 
Nondiscrimination Act, 80 FR 66853 (proposed Oct. 30, 2015) (to be 
codified at 29 CFR part 1635), may be considered in determining 
whether inducements provided prior to this applicability date for an 
employee's spouse or other dependents to provide information about 
their manifested diseases or disorders as part of an employer-
sponsored wellness program comply with GINA.
---------------------------------------------------------------------------

Prohibition on Inducements for Information From Children of Employees

    A number of advocacy groups, employer groups, and industry groups, 
in addition to members of Congress, submitted comments concerning the 
Commission's proposal that no inducement be permitted in return for the 
current or past health status information or the genetic information of 
employees' children. Two commenters, pointing to the fact that Title II 
of GINA defines ``family members'' to include both spouses and 
children, argued that there was no basis for making a distinction 
between spouses and children and that, therefore, no inducements should 
be permitted in return for current or past health information of 
either. Others argued that prohibiting inducements in return for past 
or current health information of children conflicts with the Affordable 
Care Act's requirement that employers who offer health insurance 
coverage to dependents of employees must offer coverage to dependents 
up to age 26 and that, therefore, inducements should be permitted in 
return for current or past health information from both spouses and 
children. Although some commenters agreed with the Commission's 
argument that health information about a child is more likely to reveal 
genetic information about an employee, one commenter noted that this 
does not support the distinction made in the proposed rule because the 
same cannot be said of health information about a spouse and adopted 
children. Commenters also asked for clarification of whether the 
prohibition applied to the current or past health status information of 
all children, including children up to the age of 26 who are permitted 
to remain on their parents' health plans, or just minor children, with 
some urging the Commission to extend the prohibition and others arguing 
that children between the ages of 18 and 26 were not in need of this 
additional protection and would benefit from participation in an 
employer-sponsored wellness program.
    The Commission maintains its conclusion that the information about 
the manifestation of a disease or disorder in an employee's child can 
more easily lead to genetic discrimination against an employee than 
information about an employee's spouse. Even where the information 
provided concerns an adopted child, it is unlikely that a wellness 
program will know whether the child is biological or adopted, and the 
information may therefore be used to make predictions about an 
employee's health. Consequently, the final rule provides that no 
inducements are permitted in return for information about the 
manifestation of disease or disorder of an employee's children and 
makes no distinction between adult and minor children or between 
biological and adopted children.
    The fact that the final rule treats health information about 
spouses and children differently with respect to wellness program 
inducements, however, does not alter the statutory definition of family 
member, which includes both spouses and children. Nor does the 
distinction, as suggested by some commenters, mean that employers are 
prohibited from offering health or genetic services (including 
participation in an employer-sponsored wellness program) to an 
employee's children on a voluntary basis. They may do so, but may not 
offer any inducement in exchange for information about the 
manifestation of any disease or disorder in the child.\29\
---------------------------------------------------------------------------

    \29\ See 29 CFR 1635.8(b)(2)(A)(iii).
---------------------------------------------------------------------------

    The Commission agrees with commenters who suggested that the final 
rule should clarify that the prohibition on inducements applies to 
adult children. The possibility that

[[Page 31148]]

information about a child could be used to discriminate against an 
employee on the basis of genetic information is not diminished by the 
age of the child whose information is provided. Therefore, the rule 
does not distinguish between minor children and those 18 years of age 
and older, and makes explicit that the prohibition extends to adult 
children. This clarification is being made to 29 CFR 
1635.8(b)(2)(A)(iii).

Confidentiality Protections

    The Commission received numerous comments from individuals and 
advocacy groups asking that we strengthen the confidentiality 
protections of the rule, especially given that the availability of 
inducements in return for certain genetic information would likely mean 
that more genetic information will end up in the hands of employer-
sponsored wellness programs. Commenters questioned how employer-
sponsored wellness programs would use the information, to whom they 
would disclose and/or sell it, and how they would ensure that it 
remained confidential. One commenter further noted that many people 
erroneously assume that the privacy protections of HIPAA apply to all 
employer-sponsored wellness programs and therefore ``may let their 
privacy guard down.'' Some of these commenters provided specific 
examples of ways in which employer-sponsored wellness programs were not 
maintaining, or might not maintain in the future, the confidentiality 
of genetic information in their possession--pointing to, for example, 
advances in technology that allow for the re-identification and de-
aggregation of unidentifiable and aggregate data that some employer-
sponsored wellness programs are taking or might take advantage of--and/
or made specific suggestions on how GINA's confidentiality protections 
could be improved. These suggestions included, among other ideas: 
Adding a requirement that individuals have the right to receive copies 
of all personal information collected about them as part of an 
employer-sponsored wellness program, to challenge the accuracy and 
completeness of that information, and to obtain a list of parties with 
whom that information was shared and a description of the compensation 
or consideration received for that disclosure; providing that covered 
entities are strictly liable for any confidentiality breaches and are 
not permitted to disclaim liability for harms that result from sharing 
data; requiring wellness programs to delete all genetic information 
obtained about an individual participating in the employer-sponsored 
wellness program if that individual stops participating and requests 
that his or her genetic information be deleted; and prohibiting the 
storage of individually identifiable information obtained by the 
wellness program on work computers, servers, or paper files. Another 
commenter noted that the rule should include confidentiality 
protections for health information provided by spouses who do not want 
that information to fall into the hands of the employee, due, for 
example, to domestic violence.
    In response, the Commission notes that Title II of GINA and the 
existing regulations implementing it include specific confidentiality 
provisions which require employers and other covered entities that 
possess genetic information to maintain it in medical files (including 
where the information exists in electronic forms or files) that are 
separate from personnel files and treat such information as a 
confidential medical record. These provisions prohibit the disclosure 
of genetic information except in six very limited circumstances.\30\ 
The provision which allows employers to acquire genetic information as 
part of health or genetic services such as employer-sponsored wellness 
programs further requires that the authorization an individual must 
sign explain the restrictions on the disclosure of that information; 
that individually identifiable genetic information is provided only to 
the individual receiving the services and the licensed health care 
professionals or board certified genetic counselors involved in 
providing those services; and that any individually identifiable 
genetic information is only available for purposes of the health or 
genetic services and is not disclosed to the employer except in 
aggregate terms.\31\ The Commission intends to continue its vigorous 
enforcement of these requirements and believes that they already 
provide strong protections against unlawful disclosure of genetic 
information provided as part of employer-sponsored wellness 
programs.\32\ Some of the ideas offered by advocacy groups as best 
practices, such as giving individuals the right to receive copies of 
genetic information collected about them, are already requirements of 
the regulation.\33\ Although others may make sense as best practices, 
such as allowing an individual to challenge the accuracy of genetic 
information within the employer's possession, the Commission does not 
believe it is necessary to add to the already stringent confidentiality 
requirements that exist in the regulations.
---------------------------------------------------------------------------

    \30\ See 42 U.S.C. 2000ff-5; 29 CFR 1635.9.
    \31\ See 42 U.S.C. 2000ff-1(b)(2), 2000ff-2(b)(2), 2000ff-
3(b)(2), 2000ff-4(b)(2); 29 CFR 1635.8(b)(2)(i).
    \32\ Nothing in this rule is intended to affect the ability of a 
health oversight agency to receive data under HIPAA. See 45 CFR 
164.501 and 164.512(d).
    \33\ See 29 CFR 1635.9(b)(1).
---------------------------------------------------------------------------

Tobacco Cessation

    Several commenters asked that the Commission clarify its position 
on GINA's application to tobacco-related employer-sponsored wellness 
programs, such as smoking cessation programs. In response, we reaffirm 
that the inducement rules in Sec.  1635.8(b)(2) apply only to health 
and genetic services that request genetic information. An employer-
sponsored wellness program does not request genetic information when it 
asks the spouse of an employee whether he or she uses tobacco or ceased 
using tobacco upon completion of a wellness program or when it requires 
a spouse to take a blood test to determine nicotine levels, as these 
are not requests for information about the spouse's manifestation of 
disease or disorder.

Burden

    One commenter asserted that the EEOC underestimated the burden the 
proposed rule would impose on employers, arguing that the rule was an 
economically significant one that would have an annual effect on the 
economy of $100 million or more. Among other things, the commenter 
argued that the EEOC underestimated training, compliance review, and 
program revision costs; failed to include ``familiarization'' costs; 
and failed to provide necessary empirical support for various 
conclusions. We disagree.
    The proposed rule appropriately estimated the training cost by 
using wage data from the Bureau of Labor Statistics indicating a median 
$49.41 per hour wage for human resource management professionals.\34\ 
Although the commenter argues that this rate should be tripled to 
reflect ``fully loaded'' hourly rates paid by the government to private 
contractors for professional labor, actual hourly wages of human 
resource professionals better estimate the economic costs of training. 
The fully loaded hourly rate inappropriately includes coverage of the 
private contractor's fixed costs and, as a result, will erroneously 
bias the estimated economic impact. Costs such

[[Page 31149]]

as a private contractor's office rent and marketing budget are not an 
economic impact of the regulation. As such, the estimate of the 
marginal economic impact of the regulation excludes firms' fixed costs 
because those costs are incurred whether or not the GINA regulation is 
revised. Moreover, in most cases, a covered entity's compliance effort 
will be conducted by its own human resource management professionals. 
The median wage of human resource management professionals therefore 
reasonably estimates the economic impact of up to three person-hours of 
staff time. The EEOC's estimates of three human resource professionals 
per covered entity and one hour per person are cautious and reflect 
agency experience and expertise.
---------------------------------------------------------------------------

    \34\ The EEOC estimated that a covered entity will train three 
human resource management professionals, for one hour each. The 
estimated cost was $49.41 per person and $148.23 per covered entity.
---------------------------------------------------------------------------

    In response to the commenter's argument that the projected costs 
should have included the hiring of a private contractor to provide 
training, we reiterate that human resource professionals will be able 
to learn what is necessary for compliance with the rule by reading the 
EEOC's freely provided technical assistance documents, or participating 
in our general or GINA-specific outreach programs, many of which are 
free.
    Although the commenter asserts that ``great effort'' will be 
expended by entities that are not covered by Title II of GINA in 
reading the rule to ensure that they are not covered and that these 
costs should be included, the proposed regulation does not alter long 
established coverage requirements of Title II of GINA, and it is 
unlikely that entities that have never before concerned themselves with 
compliance with this and other workplace nondiscrimination laws will 
now undergo ``great effort'' to ensure that the changes in this rule do 
not apply to them.
    Finally, we note that the final rule does not require any changes 
to employer-sponsored wellness programs that are already in compliance 
with Title II of GINA and its existing implementing regulations. 
Instead, this rule merely clarifies that offering limited inducements 
to spouses is permitted in certain circumstances.
    We, therefore, reiterate our conclusion that the rule will not have 
an annual effect on the economy of $100 million or more, or adversely 
affect in a material way the economy, a sector of the economy, 
productivity, competition, jobs, the environment, public health or 
safety, or state, local or tribal governments or communities.

Comments Responding to Questions in the NPRM

    One commenter argued that the Commission could not take any action 
on issues described only in the portion of the NPRM that asked 
questions because the mere posing of a question does not provide the 
regulated community with sufficient information to adequately assess 
the impact of any eventual proposal as required by the Administrative 
Procedure Act (APA). We note, however, that notice is sufficient under 
the APA when the final rule ``follow[s] logically'' from the notice so 
that ``interested parties [are allowed] a fair opportunity to comment'' 
upon what becomes the final rule.\35\ The NPRM described the ``subjects 
and issues involved'' as required by the APA.\36\ The fact that the 
EEOC did receive comments on all seven of the ``subjects and issues'' 
raised in the questions demonstrates that the notice was adequate.\37\
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    \35\ See Conn. Light & Power v. Nuclear Regulatory Comm'n., 673 
F.2d 525, 533 (D.C. Cir. 1982).
    \36\ ``The Administrative Procedure Act requires an agency 
engaged in informal rule-making to publish a notice of proposed 
rule-making in the Federal Register that includes `either the terms 
or substance of the proposed rule or a description of the subjects 
and issues involved.' '' See id. at 530 (quoting the APA, 5 U.S.C. 
553(b)(3)).
    \37\ ``The purpose of the comment period is to allow interested 
members of the public to communicate information, concerns, and 
criticisms to the agency during the rule-making process.'' Id.; see 
also City of Stoughton v. EPA, 858 F.2d 747, 753 (D.C. Cir. 1988) 
(holding that petitioner could not challenge sufficiency of notice 
when petitioner had submitted comments on the issue that petitioner 
claimed was inadequately noticed).
---------------------------------------------------------------------------

Certification in Lieu of Spouse Providing Information About 
Manifestation of Disease or Disorder

    Individuals, including individuals with disabilities and their 
advocates, as well as one insurance company and one industry group, 
commented that spouses should be allowed to provide a certification 
from a medical professional stating that the spouse is under the care 
of a physician and that any medical risks identified by that physician 
are under active treatment, instead of being required to answer 
questions about manifested diseases or disorders. By contrast, most of 
the health insurance issuers, industry groups, and employer groups that 
commented argued that allowing a spouse to receive the same inducement 
for completing such a certification would circumvent the ability of an 
employer-sponsored wellness program to assess and mitigate health 
risks. Several industry groups also pointed out that this alternative 
was not necessary because the tri-Department wellness regulations 
already provide a waiver standard that is sufficient to ensure 
individuals can earn full inducements even if an impairment makes it 
difficult to meet the requirements of a health-contingent wellness 
program.
    The Commission has decided that although some spouses may already 
be aware of their particular risk factors, a general certification or 
attestation that they are receiving medical care for those risks would 
limit the effectiveness of employer-sponsored wellness programs that 
the Affordable Care Act intended to promote. For example, employers may 
use aggregate information from HRAs to determine the prevalence of 
certain conditions in their workforce and in the families of their 
workforce for the purpose of designing specific programs aimed at 
improving the health of employees and spouses with those 
conditions.\38\ The Commission concludes that protections in the final 
rule--such as the requirement that employer-sponsored wellness programs 
that collect genetic information be reasonably designed to promote 
health and prevent disease and the existing confidentiality 
requirements--provide spouses with significant protections without 
adopting a medical certification as an alternative to providing 
information about the manifestation of disease or disorder.
---------------------------------------------------------------------------

    \38\ See, e.g., RAND Health, Workplace Wellness Programs Study 
Final Report, 101 (2013), http://www.rand.org/content/dam/rand/pubs/research_reports/RR200/RR254/RAND_RR254.pdf [hereinafter RAND Final 
Report].
---------------------------------------------------------------------------

Applying Authorization Requirements Only to Employer-Sponsored Wellness 
Programs That Offer More Than De Minimis Inducements for Information 
About Spouses' Manifestation of Disease or Disorder

    Most of the individuals and advocacy groups who commented on this 
issue argued that the authorization requirements should apply to all 
employer-sponsored wellness programs, regardless of the level of 
inducement offered, in order to provide appropriate protections for 
genetic information. Some of these commenters noted that employers have 
ways to pressure employees to participate in wellness programs that 
have nothing to do with inducements, and others noted that any 
ambiguity in the definition of ``de minimis'' could lead to failure to 
obtain authorization even when significant inducements are offered. 
Although one health insurance company asserted that the authorization 
rule should apply to all employer-sponsored wellness programs due to 
the administrative complications that different standards

[[Page 31150]]

would cause, most health insurance companies, as well as the employer 
associations and industry groups that commented on this issue, went 
beyond asserting that there should be a de minimis exception to the 
authorization rules and argued for more significant revisions to the 
proposed rule. For example, some argued that the EEOC has no statutory 
authority to impose a requirement that employers obtain authorization 
from spouses, others argued that asking a spouse about his or her own 
health was not genetic information and, therefore, not subject to GINA 
at all, others argued that a de minimis exception should apply to all 
of the requirements of the proposed rule, and still others argued that 
the EEOC should consider whether the authorization requirement in 
general serves any purpose, given that a family's decision to 
participate in an employer-sponsored wellness program should be 
sufficient confirmation of voluntariness.
    We decline to exclude programs that offer de minimis inducements 
from the authorization requirement of the rule. Although commenters 
gave examples of some inducements that might be considered de minimis, 
no commenters offered a workable principle that could be used as the 
basis for defining which inducements are de minimis and which are not. 
We suspect that employers' interpretation of the term would vary, and 
there is no clear basis on which to establish a threshold for the de 
minimis value. We have responded to arguments that the authorization 
requirement of the rule be eliminated for various reasons in the in-
depth discussion of the authorization provision, below. (See Comments 
Regarding Specific Provisions: Authorization for Collection of Genetic 
Information).

Best Practices or Procedural Safeguards To Ensure Employer-Sponsored 
Wellness Programs Are Designed To Promote Health or Prevent Disease and 
Do Not Operate To Shift Costs

    Individuals and advocacy groups responded to this question with the 
same suggestions they made for strengthening the definition of 
employer-sponsored wellness programs that are ``reasonably designed to 
promote health or prevent disease,'' discussed below, raising ideas 
such as requiring that employer-sponsored wellness programs be based on 
scientifically valid evidence or that they include due process 
protections for individuals who claim rules are unfairly applied to 
them. Health insurance issuers, employer associations, and industry 
groups similarly reasserted the objections they raised in response to 
the proposed rule's suggestion that a ``reasonably designed'' standard 
be adopted, arguing that existing HIPAA, Affordable Care Act, and GINA 
protections are sufficient to protect against discrimination and 
unlawful disclosures of genetic information. Some also expressed 
frustration with the very idea that employer-sponsored wellness 
programs might operate to shift costs in a discriminatory way. The 
final rule will not adopt additional protections to safeguard spousal 
information or prevent cost-shifting, because existing protections are 
sufficient. We will, however, discuss these issues in more detail 
below, given that they essentially reiterate comments received in 
response to the proposal to adopt a ``reasonably designed'' standard. 
(See Comments Regarding Specific Provisions: Health or Genetic Services 
Must Be Reasonably Designed).

More Specific Guidance and Procedures on Confidentiality Requirements 
for Electronically Stored Records

    Several commenters urged the EEOC to convene expert stakeholder 
groups or hold public meetings to determine what guidance should be 
offered to employers on how to protect electronically stored data. Some 
commented that the EEOC should require specific protocols to maximize 
the safety of electronically stored genetic information without 
providing specifics; others provided suggested restrictions or referred 
to security standards such as those being developed by the Precision 
Medicine Initiative or those that already exist under the HIPAA Privacy 
and Security Rules (some arguing that HIPAA's existing standard already 
sufficiently restricts employer-provided wellness programs and others 
arguing that rules identical to those under HIPAA should be 
specifically applied to all employer-provided wellness programs). 
Others argued that since it is unclear whether certain kinds of genetic 
information can ever be stored in a way that prevents re-
identification, employers should not be permitted to store such data 
(e.g., molecular genetic data).
    The goal of the confidentiality and disclosure rules of GINA is to 
protect genetic information as required by the statute whether that 
information is in paper or electronic format. As noted above, the 
regulations already have specific confidentiality provisions that 
require employers and other covered entities that possess genetic 
information to maintain it in medical files (including where the 
information exists in electronic forms or files) that are separate from 
personnel files, and treat such information as a confidential medical 
record. These provisions prohibit the disclosure of genetic information 
except in six very limited circumstances.\39\ The provision that allows 
employers to acquire genetic information as part of health or genetic 
services such as wellness programs further requires that the 
authorization form the employer must provide to an individual to sign 
before providing genetic information as part of health or genetic 
services must explain the restrictions on the disclosure of that 
information. Specifically, the authorization must explain that 
individually identifiable genetic information is provided only to the 
individual receiving the services and the licensed health care 
professionals or board certified genetic counselors involved in 
providing those services; and that any individually identifiable 
genetic information is only available for purposes of the health or 
genetic services and is not disclosed to the employer except in 
aggregate terms.\40\ Although we do not believe that it is necessary to 
adopt additional protections for electronically stored data, we believe 
there are certain best practices that employers may want to consider in 
terms of safeguarding all genetic information in their possession.\41\
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    \39\ See 42 U.S.C. 2000ff-5(b); 29 CFR 1635.9.
    \40\ See 29 CFR 1635.8(b)(2)(i).
    \41\ See, e.g., 29 CFR part 1630 app. 1630.14(d)(4)(i) through 
(iv): Confidentiality, which describes best practices such as 
ensuring that individuals who handle medical information (in this 
case, genetic information) that is part of an employee health 
program are not responsible for making decisions related to 
employment, and that breaches of confidentiality are reported to 
affected employees immediately and thoroughly investigated.
---------------------------------------------------------------------------

Best Practices or Procedural Safeguards To Ensure That Information 
About Spouses' Manifested Diseases or Disorders Is Protected From 
Disclosure

    Those who commented on this question raised points quite similar to 
those raised about ensuring the confidentiality of electronically 
stored data, which are discussed above. Health insurance issuers, 
employer associations, and industry groups asserted that existing HIPAA 
privacy and security requirements, along with GINA's existing rules, 
were sufficient, while advocacy groups provided ideas for strengthening 
applicable confidentiality requirements. We reiterate that we do not 
believe that additional protections are needed, given GINA's 
requirements that genetic information be kept confidential and 
disclosed in only six limited circumstances, but urge employers to 
consider adopting best practices such as

[[Page 31151]]

those set forth in the appendix accompanying the ADA Final Rule, issued 
today. Such practices include adoption and communication of strong 
privacy policies, training for individuals who handle confidential 
medical information, encryption of electronic files, and policies that 
require prompt notification of employees whose information is 
compromised if data breaches occur.

Restriction on the Collection of Genetic Information to Only the 
Minimum Necessary to Directly Support the Specific Wellness Activities 
and Prohibition on Accessing Genetic Information From Other Sources

    Individuals and advocacy groups argued that the collection of 
genetic information by employer-sponsored wellness programs should be 
restricted to the minimum necessary to directly support specific 
wellness activities and interventions. Many of these commenters also 
urged the EEOC to prohibit employer-sponsored wellness programs from 
obtaining genetic information from sources other than voluntarily 
submitted health risk assessments and biometric screenings, such as 
patient claims data or medical records data. Taking the opposite view, 
health insurance issuers, employer associations, and industry groups 
argued against adopting any further restrictions on employer-sponsored 
wellness programs. Some asserted that information from sources such as 
claims data and medical records assists in the development of effective 
employer-sponsored wellness programs and that restricting access to it 
would impede the design and success of the programs. These commenters 
also pointed out that when an employer-sponsored wellness program is 
offered as part of a health plan, it may work more optimally to allow 
that program to quickly identify people in need of services by using 
claims data already being received by the administrator of the health 
plan. These and other commenters noted that no additional restrictions 
were needed because the existing frameworks of the ADA and GINA 
adequately limit the information that may be collected as part of an 
employer-sponsored wellness program, while others said that existing 
tri-Department wellness rules requiring ``reasonable design'' ensure 
that programs are nondiscriminatory. Several of these commenters also 
noted that any additional restrictions would unnecessarily stifle 
innovation in the design and implementation of employer-sponsored 
wellness programs.
    The final rule will not include a specific restriction on the 
collection of genetic information to only the minimum necessary to 
directly support specific employer-sponsored wellness program 
activities or a limitation on accessing genetic information from other 
sources. The Commission believes that the protections in the final 
rule--such as the requirement that employer-sponsored wellness programs 
that collect genetic information be reasonably designed to promote 
health and prevent disease and the existing confidentiality 
requirements--provide significant protections for employees and spouses 
without adopting further restrictions or limitations. (See Comments 
Regarding Specific Provisions: Health or Genetic Services Must Be 
Reasonably Designed).

Employer-Sponsored Wellness Programs Offered Outside of Employer-
Sponsored Group Health Plans

    Numerous comments offering a broad range of opinions were submitted 
in response to the question in the NPRM asking whether employers offer 
or are likely to offer wellness programs outside of a group health plan 
or group health insurance coverage that use inducements to encourage 
employees' spouses to provide information about current or past health 
status as part of a HRA, and the extent to which the GINA regulations 
should allow inducements provided as part of such programs. Some 
commenters stated many employers already offer wellness programs that 
are outside group health plans, while others pointed out that employer-
sponsored wellness programs that offer medical care are group health 
programs in themselves. Some argued that the final rule should apply 
both to wellness programs that are part of an employer-sponsored health 
plan and to wellness programs offered by employers outside such plans, 
while others asked the EEOC to clarify what it means for a wellness 
program ``to be part of, or provided by, a group health plan.'' Others 
argued against applying the final rule to programs offered by employers 
that operate outside group health plans (thereby either allowing these 
programs to impose higher inducements in return for genetic information 
or, in the opinion of one advocacy group, meaning that these programs 
would be prohibited from offering inducements for genetic information 
at all). One employer association asserted that many of its members 
offer inducements for HRAs only under employer-sponsored wellness 
programs that are part of a larger group health plan, but that the 
breadth of the tri-Department's wellness program rules has the effect 
of applying at least some nondiscrimination requirements to nearly all 
wellness programs. That commenter concluded that it would be a better 
use of the EEOC's time to work on the alignment of Title II of GINA 
with the Affordable Care Act, rather than focusing on this issue. One 
industry group indicated that the proposed rule failed to provide 
guidance for stand-alone wellness programs and argued that anything 
less than the 30 percent maximum incentive standard would conflict with 
the Affordable Care Act.
    Rather than listing factors for determining whether an employer-
sponsored wellness program is part of, or outside of, an employer-
sponsored group health plan, the Commission has decided that all of the 
provisions in this rule apply to all employer-sponsored wellness 
programs that request genetic information. This means that this rule 
applies to employer-sponsored wellness programs that are: Offered only 
to spouses of employees enrolled in an employer-sponsored group health 
plan; offered to spouses of all employees regardless of whether the 
employee or spouse is enrolled in such a plan; or offered as a benefit 
of employment to spouses of employees of employers who do not sponsor a 
group health plan or group health insurance.
    We considered taking the position that employer-sponsored wellness 
programs that are not offered through a group health plan and that 
request information about the manifestation of disease or disorder from 
spouses could not offer any inducements. However, having concluded that 
some level of inducement is consistent with other requirements of 29 
CFR 1635.8(b)(2), including the requirement that the employer-sponsored 
wellness program be ``voluntary,'' where the wellness program is part 
of a group health plan, there seemed to be no basis for reaching a 
contrary conclusion with respect to employer-sponsored wellness 
programs that are outside of a group health plan. At the same time, 
allowing unlimited inducements where an employer-sponsored wellness 
program is not offered through a group health plan would be 
inconsistent with our position that limitations on spousal inducements 
are necessary to promote GINA's interest in limiting access to genetic 
information and ensuring that inducements are not so high as to be 
coercive. Accordingly, as noted below, this rule explains how to 
calculate the permissible inducement level for employer-sponsored 
wellness programs regardless of whether they are related to a group 
health plan.

[[Page 31152]]

Comments Regarding Specific Provisions

 Section 1635.8(b)(2)(i)(A) Health or Genetic Services Must Be 
Reasonably Designed

    The NPRM proposed that employers may request, require, or purchase 
genetic information as part of health or genetic services only when 
those services, including any acquisition of genetic information that 
is part of those services, are reasonably designed to promote health or 
prevent disease. Many commenters, including health insurance issuers, 
employer associations, industry groups, and a Congressional committee, 
urged the EEOC to strike this requirement, noting that it was beyond 
the EEOC's authority under GINA to impose a reasonable design 
requirement on health and genetic services and that the EEOC should 
leave it to the tri-Departments to determine what constitutes a 
reasonably designed employer-sponsored wellness program. Some of these 
commenters further noted that the proposed requirement was confusing 
because even though it sounded very similar, or even identical, to the 
corresponding requirement in the Affordable Care Act, it seemed to mean 
something different. They urged the Commission to delete the examples 
in the preamble and instead make clear that, as with the Affordable 
Care Act, satisfaction of the reasonable design standard is based on 
all facts and circumstances. Several of these commenters made specific 
mention of the preamble's example of a HRA that would not meet the 
``reasonably designed'' standard--one that collected information 
without providing follow-up information or advice--arguing that this 
conclusion did not conform to the Affordable Care Act's definition and 
that it is not always appropriate to provide follow-up information. 
Some further argued that if the Commission was going to rely on 
examples to explain the standard, it should put the examples in the 
regulation itself and make them more detailed.
    Individuals and advocacy groups, on the other hand, argued that the 
new standard was not sufficiently rigorous and that it should be based 
on clinical guidelines or national standards, or that there should be a 
stronger connection between the content of a HRA and the development of 
specific disease management programs. Some argued, for example, for a 
requirement that employer-sponsored wellness programs collect no more 
than the minimum necessary information from spouses directly linked to 
specific program services in order to meet the ``reasonably designed'' 
standard and/or that employer-sponsored wellness programs be required 
to provide scientific evidence that demonstrates that the program 
improves health or prevents disease. Others noted that the standard as 
described has virtually no meaning and will allow employers to decide 
for themselves what is ``reasonable.''
    The final rule acknowledges that satisfaction of the ``reasonably 
designed'' standard must be determined by examining all of the relevant 
facts and circumstances and otherwise retains the requirement in the 
NPRM that employers may request, require, or purchase genetic 
information as part of health or genetic services only when those 
services, including any acquisition of genetic information that is part 
of those services, are reasonably designed to promote health or prevent 
disease. As noted in the NPRM, in order to meet this standard, the 
program must have a reasonable chance of improving the health of, or 
preventing disease in, participating individuals, and must not be 
overly burdensome, a subterfuge for violating Title II of GINA or other 
laws prohibiting employment discrimination, or highly suspect in the 
method chosen to promote health or prevent disease. The examples in the 
preamble to the proposed rule were intended simply to illustrate how 
this standard works. We now clarify, in agreement with several comments 
about one of these examples, that programs consisting of a measurement, 
test, screening, or collection of health-related information without 
providing results, follow-up information, or advice designed to improve 
the participant's health would not be reasonably designed to promote 
health or prevent disease, unless the collected information actually is 
used to design a program that addresses at least a subset of conditions 
identified. Additionally, we would consider a program to not be 
reasonably designed to promote health or prevent disease if it imposes, 
as a condition of obtaining a reward, an overly burdensome amount of 
time for participation, requires unreasonably intrusive procedures, or 
places significant costs related to medical examinations on employees. 
We also would not consider a program to be reasonably designed to 
promote health or prevent disease if it exists merely to shift costs 
from the covered entity to targeted employees based on their health or 
if the employer is only using the program for data collection or to try 
to determine its future health costs. Additionally, under these rules, 
an employer-sponsored wellness program is not reasonably designed if it 
penalizes an employee because a spouse's manifestation of disease or 
disorder prevents or inhibits the spouse from participating or from 
achieving a certain health outcome. For example, an employer may not 
deny an employee an inducement for participation of either the employee 
or the spouse in an employer-sponsored wellness program because the 
employee's spouse has blood pressure, a cholesterol level, or a blood 
glucose level that the employer considers too high.
    The Commission believes that because the requirement that an 
employer-sponsored wellness program be ``reasonably designed to promote 
health or prevent disease'' is a standard with which health plans are 
now sufficiently familiar, it is reasonable to apply that standard 
under GINA to employers that sponsor wellness programs. For 
consistency, this same requirement, with the same examples, has 
recently been adopted under the ADA.\42\ Although the standard is less 
stringent than some commenters would prefer, the Commission believes it 
provides a sufficient level of protection against the misuse of 
employee genetic information while providing a degree of flexibility in 
designing wellness programs.
---------------------------------------------------------------------------

    \42\ See 29 CFR 1630.14(d)(1); published elsewhere in this issue 
of the Federal Register.
---------------------------------------------------------------------------

Section 1635.8(b)(2)(iii)

When an Inducement May Be Offered
    As noted in the general comments section, above, numerous 
individuals and advocacy groups urged the Commission to abandon the 
position set forth in the proposed rule that employers may offer 
limited inducements when a spouse who receives genetic services offered 
by an employer provides information about his or her current or past 
health status information as part of a HRA. These commenters, as well 
as some members of Congress, argued that the absolute prohibition on 
financial inducements set forth in the existing GINA regulations should 
be reaffirmed, arguing that allowing employer-sponsored wellness 
programs to offer inducements in exchange for spouses to provide 
information about their current or past health status would be coercive 
and would substantially weaken GINA's protections. Several industry and 
employer groups, on the other hand, expressed support for the proposed 
rule's clarification that GINA does not preclude inducements for 
spouses for

[[Page 31153]]

completion of HRAs when the requirements of Sec.  1635.8(b)(2)(i) were 
met, while expressing deep dissatisfaction with the limitations on 
those inducements. As noted above, one industry group argued that use 
of the phrase ``current or past health status'' in describing the types 
of questions to spouses that could include inducements was confusing 
because not all information about a spouse's current or past health 
status meets the definition of genetic information. For example, some 
might consider questions about height, weight, and exercise regimes to 
be questions about ``current health status,'' although such questions 
asked of an employee's spouse are not requests for genetic information 
under GINA.
    The Commission retains the NPRM's requirements that, consistent 
with the requirements of Sec.  1635.8(b)(2)(i) and (ii), a covered 
entity may offer an inducement to an employee whose spouse provides 
information about the spouse's own current or past health status as 
part of a HRA. In order to clarify that the rule only applies to 
questions asked of the spouse that meet the definition of genetic 
information, the final rule will replace the phrase ``current or past 
health status'' with ``manifestation of disease or disorder.'' 
Moreover, as discussed in detail above, because the final rule will 
apply not only to employer-sponsored wellness programs that are part of 
group health plans, but to all wellness programs offered by employers, 
the language of the final rule at Sec.  1635.8(b)(2)(iii) will be 
revised to eliminate references to the employer's health plan. (See 
Comments Responding to Questions: Wellness Programs Offered Outside of 
Employer-Sponsored Group Health Plans.) The final rule will also 
explain how inducement limits are to be calculated in situations where 
participation in an employer-sponsored wellness program does not depend 
on enrollment in a particular group health plan, and in situations 
where an employer does not offer a group health plan but still wants to 
offer inducements for employees and their spouses to participate in 
wellness programs. Finally, the final rule retains the requirement that 
no inducement may be offered in return for the spouse providing his or 
her own genetic information, including results of his or her genetic 
tests, as well as the prohibition on providing inducements in return 
for health information about an employee's children.\43\ (See General 
Comments: Prohibition on Inducements for Information From Children of 
Employees.)
---------------------------------------------------------------------------

    \43\ 29 CFR 1635.8(b)(2)(i)(B). Title I of GINA specifically 
prohibits a group health plan and a health insurance issuer in the 
group or individual market from collecting (including requesting, 
requiring or purchasing) genetic information prior to or in 
connection with enrollment in health coverage or for underwriting 
purposes. See 26 CFR 54.9802-3T(b), (d); 29 CFR 2590.702-1(b), (d); 
45 CFR 146.122(b), (d); 45 CFR 147.110; 45 CFR 148.180(b), (d). 
``Underwriting purposes'' includes rules for eligibility for 
benefits and the computation of premium or contribution amounts 
under the plan or coverage including any discounts, rebates, 
payments in kind, or other premium differential mechanisms in return 
for activities such as completing a HRA or participating in a 
wellness program. See 26 CFR 54.9802-3T(d)(1)(ii); 29 CFR 2590.702-
1(d)(1)(ii); 45 CFR 146.122(d)(1)(ii); 45 CFR 148.180(f)(1)(ii). 
Consequently, employer-sponsored wellness programs that provide 
rewards for completing HRAs that request a plan participant's 
genetic information, including family medical history, violate the 
prohibition against requesting genetic information for underwriting 
purposes, regardless of whether the plan participant provides 
authorization. Under Title I of GINA, a group health plan and a 
health insurance issuer in the group or individual market may 
request genetic information through a HRA as long as the request is 
not in connection with enrollment and no rewards are provided.
---------------------------------------------------------------------------

Level of Inducement That May Be Offered
    The Commission received numerous comments on this provision of the 
proposed rule. As stated in the general comments section of this 
preamble, individuals and health advocacy groups said that the proposed 
rule was based on the erroneous assumption that the GINA rule must be 
``conformed'' to provisions of the Affordable Care Act concerning 
employer-sponsored wellness programs. These and other commenters, 
including some members of Congress, commented that allowing employer-
sponsored wellness programs to offer inducements up to 30 percent in 
exchange for spouses to provide information about their current or past 
health status would be coercive and would substantially weaken GINA's 
protection and urged the Commission to strike this proposal and 
reaffirm that inducements are not permitted in return for genetic 
information. Other advocacy groups argued that allowing inducements for 
spousal information would lead to conflict within families, worsening 
the mental and physical health of family members when, for example, an 
employee and spouse disagree about whether the spouse will provide the 
information needed to obtain a reward or avoid a penalty. One commenter 
noted that a rule that permits employers to increase the amount an 
employee pays for health insurance by as much as 30 percent of the 
total cost of coverage if the employee or the employee's spouse fails 
to provide certain health information would lead some to forego 
employer-provided health insurance and thus increase the pool of 
families without ``good'' health insurance coverage. Employer and 
industry groups, however, commented that the EEOC should align the 
inducement limits for employer-sponsored wellness programs with the 
inducement limits established in the tri-Department wellness 
regulations. One industry group asserted that requests to an individual 
for information about his or her own past or current health status is 
not genetic information (except for genetic test results) and that the 
EEOC therefore did not have authority under GINA to adopt requirements 
with respect to inducements for this information. Another industry 
group, after expressing strong disapproval of the proposed rule's 
inducement limitation, went on to provide suggestions for improving the 
description of that limitation if the Commission were to adopt it, 
suggesting, for example, that certain provisions in the regulatory 
language be moved. Although some of these commenters appreciated that 
the proposed rule based the inducement limit on the total cost of 
coverage for the plan in which the employee and any dependents are 
enrolled, employer associations and industry groups generally asserted 
that the inducement limits should conform to those established by the 
tri-Department wellness regulations, particularly the lack of incentive 
limits on participatory programs.
    Most individuals and advocacy groups that submitted comments did 
not comment on the proposed rule's discussion of how inducements should 
be apportioned. Two groups that did comment indicated their support for 
the idea, assuming that the EEOC was going to move forward with the 
proposal to allow inducements. In contrast, numerous health insurance 
issuers, employer associations, industry groups, as well as a 
Congressional committee and various United States Senators, commented 
that the apportionment rule should be eliminated, arguing that it was 
administratively complicated and/or that it conflicts with the tri-
Departments' wellness regulations, which does not require 
apportionment. Many of these commenters also pointed out that the 
apportionment rule conflicts with the general practice of providing an 
equal inducement to an employee and a spouse when both participate in 
an employer-sponsored wellness program and that encouraging a larger 
inducement for spouses was arbitrary, implied that the spouse's 
achievement of a health goal is more

[[Page 31154]]

valuable than the employee's equal accomplishment, and/or conflicted 
with the idea of a reasonably designed wellness program. One group 
requested that, if the EEOC were to move forward with apportionment 
rules, the rule clarify that the amount of the inducement attributable 
to the spouse does not have to be paid directly to the spouse but, 
instead, could be paid as part of a premium reduction or in any other 
way that the other portion of the inducement was being paid.
    The Commission agrees that the proposed rule's apportionment 
standards, which would have permitted a larger inducement to the spouse 
for providing similar information to that which the employee provided, 
is overly complicated and sends the wrong message about the value of 
employer-sponsored wellness programs for each participating individual. 
Moreover, we determined, in developing the final ADA rule on employer-
sponsored wellness programs, that incentives in excess of 30 percent of 
the cost of self-only coverage offered in exchange for an employee 
answering disability-related questions or taking medical examinations 
as part of a wellness program would be coercive. We see no reason for 
adopting a different threshold where the employee's spouse is the 
individual whose health information is being sought. Consequently, this 
final rule states that when an employee and the employee's spouse are 
given the opportunity to enroll in an employer-sponsored wellness 
program, the inducement to each may not exceed 30 percent of the total 
cost of (1) self-only coverage under the group health plan in which the 
employee is enrolled (including both employee and employer cost), if 
enrollment in the plan is a condition for participation in the wellness 
program; (2) self-only coverage under the group health plan offered by 
the employer (including both employee and employer cost), where the 
employer offers a single group health plan, but participation in a 
wellness program does not depend on the employee's or spouse's 
enrollment in that plan; (3) the lowest cost self-only coverage under a 
major medical group health plan offered by the employer (including both 
employee and employer cost), where the employer has more than one group 
health plan, but enrollment in a particular plan is not a condition for 
participating in the wellness program; or (4) the second lowest cost 
Silver Plan \44\ available on the Exchange in the location that the 
employer identifies as its principal place of business if the employer 
offers no group health plan. In this last instance, the maximum 
inducement to the employee and the spouse is equal to 30 percent of the 
cost of covering an individual who is a 40-year-old non-smoker. Thus, 
the amount of the inducement available to the spouse cannot exceed the 
amount an employer may offer to an employee, under the ADA, to 
participate in a wellness program that includes disability-related 
questions or a medical examination.
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    \44\ There are four ``metal'' categories of health plans in the 
Exchanges established under the Affordable Care Act: Bronze, Silver, 
Gold, and Platinum. See How To Pick a Health Insurance Plan: The 
``Metal Categories'', Healthcare.gov, https://www.healthcare.gov/choose-a-plan/plans-categories (last visited March 29, 2016).
---------------------------------------------------------------------------

    The final rule includes examples explaining how the inducement 
limits are to be calculated. For example, if an employee is enrolled in 
a group health plan through the employer at a total cost (taking into 
account both employer and employee contributions towards the cost of 
coverage) of $14,000 for family coverage, that plan has a self-only 
option for a total cost of $6,000, and the employer provides the option 
of participating in a wellness program to the employee and spouse if 
they participate in the plan, the employer may not offer more than 
$1,800 to the employee and $1,800 to the spouse. If participation in a 
particular group health plan is not required for the employee and 
spouse to earn an inducement and the employer has only one group health 
plan under which self-only coverage costs $7,000, the employee and the 
spouse can each get an inducement of up to $2,100. If participation in 
a particular group health plan is not required for the employee and the 
spouse to earn an inducement and the employer has more than one group 
health plan and self-only coverage under the major medical group health 
plans range in cost from $5,000 to $8,000, the employee and spouse can 
each get an inducement of up to $1,500. Finally, if the employer offers 
no group health plan at all and the second lowest-cost Silver Plan 
available through the state or federal health care Exchange established 
under the Affordable Care Act in the location that the employer 
identifies as its principal place of business would cost a 40-year-old 
non-smoker $4,000, the maximum inducement the employer could offer the 
employee and the spouse would be no more than $1,200 each to answer 
questions about their current health or to take a medical examination 
as part of a wellness program.
    As noted in the ADA final rule, the Commission has concluded that 
the employer's lowest total cost self-only coverage under a major 
medical group health plan is an appropriate benchmark for establishing 
the inducement limit where an employer has more than one group health 
plan and participation in an employer-sponsored wellness program does 
not depend on enrollment in any particular plan for two reasons. First, 
it offers employers predictability and administrative efficiency in 
complying with the rule. Second, the rule is consistent with the 
Commission's objective of ensuring that inducements in return for a 
spouse providing information about his or her manifestation of disease 
or disorder are not coercive.
    The second lowest cost Silver Plan available on the Exchange in the 
location that the employer identifies as its principal place of 
business is used as a benchmark for determining the amount of an 
eligible individual's premium tax credit for purchasing health 
insurance on the Exchange.\45\ This is the most popular plan on the 
Exchanges, and information about its costs for individuals who are 40 
years old and non-smokers is available to the public.\46\ Additionally, 
because the Silver Plan typically is neither the least nor the most 
expensive plan available on the Exchanges, inducement limits that are 
tied to its costs may promote participation in wellness programs while 
not being so high as to be coercive.
---------------------------------------------------------------------------

    \45\ See 26 U.S.C. 36B(b)(2).
    \46\ See, e.g., HHS, Health Insurance Marketplaces 2015 Open 
Enrollment Period: March Enrollment Report (2015), https://aspe.hhs.gov/sites/default/files/pdf/83656/ib_2015mar_enrollment.pdf 
(HHS report covering marketplace enrollment from November 15, 2014 
through February 15, 2015, indicating that, based on enrollment 
through all marketplaces, 67 percent of people who selected a 
marketplace plan selected Silver.)
---------------------------------------------------------------------------

    Revisions will be made to Sec.  1635.8(b)(2)(iii) to correspond to 
these changes. We also clarify that the portion of the inducement 
attributable to the spouse's provision of information about his or her 
manifestation of disease or disorder need not be paid directly to the 
spouse, but may be paid in whatever way the remaining portion of the 
inducement is made such as, for example, as part of a reduction in 
premium.
Authorization for Collection of Genetic Information
    Although numerous health and other advocacy groups agreed that 
authorization is a much needed component of employer-sponsored wellness 
programs that collect genetic

[[Page 31155]]

information, they went on to argue that the authorization requirements 
of GINA should be strengthened. Some noted that the authorization forms 
currently in use by wellness vendors tend to use arcane language, are 
insufficiently understood, and/or on occasion are hidden in obscure 
links that few people read. Others suggested that in order to truly 
ensure that participation in an employer-sponsored wellness program 
that collects genetic information is voluntary, authorization 
requirements should allow a participant who indicates that his or her 
participation is not voluntary to obtain the reward or avoid the 
penalty even if his or her spouse does not provide the requested 
information. Several advocacy groups suggested that the Commission 
provide model authorization forms and notices. While some health 
insurance issuers and industry groups agreed that the Commission should 
provide model language that would satisfy the authorization 
requirements, these commenters, as well as employer groups, generally 
urged the Commission to strike or limit the authorization requirement. 
Some argued that the Commission did not have the authority to require 
spouses to provide authorization because the statutory language 
requires that prior, knowing, written, and voluntary authorization be 
provided by the employee, not by other individuals. Others noted that 
requiring multiple authorization forms would unduly complicate the 
operation of employer-sponsored wellness programs and that a single 
authorization completed by the employee should be sufficient.
    This final rule adds no new notice or authorization requirements. 
It reaffirms that when an employer offers an employee an inducement in 
return for his or her spouse's providing information about the spouse's 
manifestation of disease or disorder as part of a HRA, the HRA (which 
may include a medical questionnaire, a medical examination, or both), 
must otherwise comply with Sec.  1635.8(b)(2)(i) in the same manner as 
if completed by the employee, including the requirement that the spouse 
provide prior knowing, voluntary, and written authorization when the 
spouse is providing his or her own genetic information, and the 
requirement that the authorization form describe the confidentiality 
protections and restrictions on the disclosure of genetic information. 
The employer also must obtain authorization from the spouse when 
collecting information about the spouse's manifestation of disease or 
disorder, although a separate authorization for the acquisition of this 
information from the employee is not necessary.
    The Commission believes that GINA's existing authorization 
requirements prohibit many of the practices about which advocacy groups 
expressed concern. For example, these requirements already prohibit an 
employer-sponsored wellness program that collects genetic information 
from using an authorization notice that uses arcane legal language or 
is otherwise difficult to understand.\47\ Moreover, although it is true 
that GINA's statutory language, at 42 U.S.C. 2000ff-1(b)(2)(B), states 
that the ``employee'' must provide prior, knowing, voluntary, and 
written authorization, the EEOC's original implementing regulations use 
the broader term ``individual'' when describing the prior, knowing, 
voluntary, and written authorization requirement.\48\ As noted in the 
preamble to the proposed rule, the Commission believes that 
``individual'' best reflects the intent of Congress, especially when 
considering the provisions in 42 U.S.C. 2000ff-1(b), which prohibit 
employers from requesting, requiring, or purchasing genetic information 
about both employees and their family members with limited exceptions, 
and the general purpose of the statute.
---------------------------------------------------------------------------

    \47\ The GINA notice and authorization requirement, which was 
included in the EEOC's regulations pursuant to a specific statutory 
requirement, see 42 U.S.C. 2000ff-1(b)(2)(B), is only met if the 
covered entity uses an authorization form that (1) is written so 
that the individual from whom the genetic information is being 
obtained is reasonably likely to understand it; (2) describes the 
type of genetic information that will be obtained and the general 
purpose for which it will be used; and (3) describes the 
restrictions on disclosure of genetic information. The GINA notice 
and authorization rule also requires that individually identifiable 
genetic information is provided only to the individual (or family 
member if the family member is receiving genetic services) and the 
licensed health care professionals or board certified genetic 
counselors involved in providing such services, and is not 
accessible to managers, supervisors, or others who make employment 
decisions, or to anyone else in the workplace; and, finally, that 
any individually identifiable genetic information provided under 29 
CFR 1635.8(b)(2) is only available for purposes of such services and 
is not disclosed to the covered entity except in aggregate terms 
that do not disclose the identity of specific individuals. See 29 
CFR 1635.8(b)(2)(i).
    \48\ See 29 CFR 1635.8(b)(2)(i)(B).
---------------------------------------------------------------------------

Section 1635.8(b)(2)(vi) Prohibition on Conditioning Participation in 
an Employer-Sponsored Wellness Program on Agreeing To Sale of Genetic 
Information or Waiving Confidentiality

    Individuals and advocacy groups that commented on this portion of 
the proposed rule supported it but requested that it be strengthened. 
They argued, for example, that the provision should be expanded to not 
only prohibit conditioning participation in an employer-sponsored 
wellness program on agreeing to the sale of genetic information, but 
also other forms of sharing genetic information such as exchanges and 
transfers. Others argued that the provision should state that harm will 
be presumed from unauthorized disclosure of genetic information and 
that, if sharing does occur, employers should be required to reveal the 
identity of those with whom they shared the genetic information. One 
industry group expressed support for the notion that genetic 
information, as one type of protected health information, should not be 
sold, but noted that this did not necessarily apply to de-identified or 
aggregate data.
    The Commission agrees that this prohibition should be expanded. The 
final rule therefore prohibits a covered entity from conditioning 
participation in an employer-sponsored wellness program or an 
inducement on an employee, an employee's spouse, or other covered 
dependent agreeing to the sale, exchange, sharing, transfer, or other 
disclosure of genetic information (except to the extent permitted by 
paragraph 1635.8(b)(2)(i)(D)), or waiving protections provided under 
Sec.  1635.9. As explained above, however, the Commission does not 
believe that any further changes are needed because the confidentiality 
protections of Sec.  1635.9, as well as the specific disclosure rules 
that apply to health and genetic services set forth at Sec.  
1635.8(b)(2), provide strong protections against disclosure of genetic 
information. (See General Comments: Confidentiality Provisions.)

Section 1635.8(c)(2) Employer Permitted To Seek Medical Information

    Few people commented on the new example the EEOC added to this 
section of the rule. Two industry groups that did comment supported the 
EEOC's acknowledgement that employers may ask for information about the 
manifestation of disease, disorder, or pathological condition of a 
family member if that individual is receiving genetic services on a 
voluntary basis. However, comments indicated that clarification is 
needed for this example to be understood. As noted in the preamble to 
the proposed rule, this provision cross-references 29 CFR 1635.8(b)(2) 
to make clear that an employer may request information about the 
manifestation of disease, disorder, or pathological condition of a 
family member who is participating in voluntary genetic services only 
when all of the requirements for seeking genetic

[[Page 31156]]

information as part of a voluntary health or genetic service, including 
the rules on authorization and inducements, are met. In other words, 
this example does not create an exception to the general rule that 
inducements in return for genetic information are only permitted in one 
specific circumstance--when an employee's spouse is asked to provide 
information about his or her manifestation of disease, disorder, or 
pathological condition as part of a HRA. We have revised the regulatory 
language so that it emphasizes the requirements of Sec.  1635.8(b)(2), 
including the rules on authorization and inducements.

Removal of Term ``Financial'' From Definition of ``Inducement''

    Industry groups, employer associations, and several United States 
Senators urged the Commission to alter this proposal so that the final 
rule applies only to financial incentives. These groups argued that an 
expansion of the definition of inducement would be inconsistent with 
the Affordable Care Act and Congressional intent and would increase 
administrative burden by requiring employers to calculate the value of 
in-kind inducements, such as gift cards, raffle tickets, and key 
chains. Many argued that applying the inducement rule to in-kind 
inducements would cause employers to eliminate them altogether.
    The final rule reaffirms the Commission's proposal to remove the 
term ``financial'' as a modifier of the type of inducements discussed 
in the regulations and make clear that the term ``inducements'' 
includes both financial and in-kind inducements, such as time-off 
awards, prizes, or other items of value, in the form of either rewards 
or penalties. Contrary to several comments received, this clarification 
is consistent with the tri-Department wellness program provisions, 
which generally define a reward as ``a discount or rebate of a premium 
or contribution, a waiver of all or part of a cost-sharing mechanism, 
an additional benefit, or any financial or other incentive.'' \49\ 
Thus, because the incentive limits in the Affordable Care Act apply to 
in-kind incentives when they are offered within health-contingent 
programs, Congress and the tri-Departments clearly considered that 
these amounts would have to be calculated. Employers have flexibility 
to determine the value of in-kind incentives, as long as the method is 
reasonable.
---------------------------------------------------------------------------

    \49\ See 26 CFR 54.9802-1(f)(1)(i); 29 CFR 2590.702(f)(1)(i); 45 
CFR 146.121(f)(1)(i); see also DOL--Employee Benefits Security 
Administration, FAQs on Affordable Care Act Implementation (Part 
XXIX) and Mental Health Parity Implementation, Question 11 (2015), 
http://www.dol.gov/ebsa/pdf/faq-aca29.pdf.
---------------------------------------------------------------------------

Technical Amendments

    We received no comments concerning the proposed technical 
amendments to the rule and they are therefore adopted without change.

Regulatory Procedures

Executive Order 12866

    Pursuant to Executive Order 12866, the EEOC has coordinated this 
final rule with the Office of Management and Budget. Under section 
3(f)(1) of Executive Order 12866, the EEOC has determined that the 
regulation will not have an annual effect on the economy of $100 
million or more, or adversely affect in a material way the economy, a 
sector of the economy, productivity, competition, jobs, the 
environment, public health or safety, or state, local or tribal 
governments or communities.\50\
---------------------------------------------------------------------------

    \50\ See General Comments: Burden for our response to the 
commenter who expressed disagreement with our burden calculations.
---------------------------------------------------------------------------

    Although a detailed cost-benefit assessment of the regulation is 
not required, the Commission notes that the rule will aid compliance 
with Title II of GINA by employers. Currently, employers face 
uncertainty as to whether providing an employee with an inducement if 
his or her spouse provides information about the spouse's manifestation 
of disease or disorder on a HRA will subject them to liability under 
Title II of GINA. This rule will clarify that offering limited 
inducements in these circumstances is permitted by Title II of GINA if 
the requirements of section 202(b)(2)(A) of GINA otherwise have been 
met. We believe that a potential benefit of this rule is that it will 
provide employers that adopt wellness programs that include spousal 
inducements with clarity about their obligations under GINA.
    The Commission does not believe the costs to employers associated 
with the rule are significant. Under HIPAA, as amended by the 
Affordable Care Act, inducements of up to 30 percent of the total cost 
of coverage in which an employee is enrolled are permitted where the 
employee and the employee's dependents are given the opportunity to 
fully participate in a health-contingent wellness program. This final 
rule simply clarifies that a similar inducement is permissible under 
Title II of GINA where an employer offers inducements for an employee's 
spouse enrolled in the group health plan to provide information about 
his or her manifestation of disease or disorder. Where participation in 
the employer-sponsored wellness program does not depend on enrollment 
in a particular group health plan, employers will be able to calculate 
the amount of the permissible inducement by reference to easily 
verifiable sources, such as the cost of the group health plans they 
provide or by reference to the second lowest cost Silver Plan available 
on the Exchange in the location that the Employer identifies as its 
principal place of business.
    The Commission further believes that employers will face initial 
start-up costs to train human resources staff and others on the revised 
rule. The EEOC conducts extensive outreach and technical assistance 
programs, many of them at no cost to employers, to assist in the 
training of relevant personnel on EEO-related issues. For example, in 
FY 2014, the agency's outreach programs reached more than 236,000 
persons through participation in more than 3,500 no-cost educational, 
training and outreach events. Now that the rule has become final, we 
will include information about the revisions to the GINA regulations in 
our outreach programs in general and continue to offer GINA-specific 
outreach programs which will, of course, include information about the 
revisions. As is our practice when issuing new regulations and policy 
guidances, we have posted two technical assistance documents on our Web 
site explaining the revisions to the GINA regulations.\51\
---------------------------------------------------------------------------

    \51\ See Qs and As: The Equal Employment Opportunity 
Commission's Final Rule on the Genetic Information Nondiscrimination 
Act and Employer Wellness Programs, EEOC, https://www.eeoc.gov/laws/types/genetic.cfm (last visited April 14, 2016); Small Business Fact 
Sheet: Final Rule on Title II of the Genetic Information 
Nondiscrimination Act and Employer Wellness Programs, EEOC, https://www.eeoc.gov/laws/types/genetic.cfm (last visited April 14, 2016).
---------------------------------------------------------------------------

    We estimate that there are approximately 782,000 employers with 15 
or more employees subject to Title II of GINA \52\ and, of that number, 
one half to two thirds (391,000 to 521,333) offer some type of 
employer-sponsored wellness program.\53\ In the proposed rule, we 
assumed that nearly half of employer-sponsored wellness programs

[[Page 31157]]

are open for participation by the spouses or dependents of workers, and 
used the highest estimates, to conclude that approximately 260,667 
employers will be covered by this requirement.\54\ Because the final 
rule now applies to a broader set of wellness programs offered by 
employers, we will increase these estimates and assume that 347,556 
employers (two thirds of those who offer some type of wellness program) 
offer spouses an opportunity to participate in, at the very least, an 
employer-sponsored wellness program that is outside or not part of a 
group health plan. We further estimate that the typical human resource 
professional will need to dedicate, at most, 60 minutes to gain a 
satisfactory understanding of the revised regulations and that the 
median hourly pay rate of a human resource professional is 
approximately $49.41.\55\ Assuming that an employer will train up to 
three human resource professionals/managers on the requirements of this 
rule, we estimate that initial training costs will be approximately 
$51,518,230.\56\ The Commission sought comments on these cost estimates 
and responded to the one comment received above. (See the discussion in 
General Comments: Burden.)
---------------------------------------------------------------------------

    \52\ See Firm Size Data, Small Business Administration, http://www.sba.gov/advocacy/849/12162 (last visited March 28, 2016).
    \53\ See RAND Final Report, supra note 36, xiv, http://www.rand.org/content/dam/rand/pubs/research_reports/RR200/RR254/RAND_RR254.pdf; see also Employer Health Benefits Survey, 6 (2014), 
http://files.kff.org/attachment/2014-employer-health-benefits-survey-full-report [hereinafter the Kaiser Survey]. According to the 
RAND Final Report, ``approximately half of U.S. employers offer 
wellness promotion initiatives.'' By contrast, the Kaiser Survey 
found that ``[s]eventy-four percent of employers offering health 
benefits'' offer at least one wellness program.
    \54\ Although the Kaiser Survey reports that 51 percent of large 
employers versus 32 percent of small employers ask employees to 
complete a HRA, see Kaiser Survey, supra note 50, we are not aware 
of any data indicating what percentage of those employers provide 
spouses with the opportunity to participate in the HRA. We therefore 
have substituted a more general statistic to allow an estimate of 
the number of employers who will be covered by the requirements of 
this proposed rule. See Karen Pollitz & Matthew Roe, Kaiser Family 
Foundation, Workplace Wellness Programs Characteristics and 
Requirements 5 (2016), http://kff.org/private-insurance/issue-brief/workplace-wellness-programs-characteristics-and-requirements/ 
(noting that nearly half (48 percent) of employer wellness programs 
are open for participation by the spouses or dependents of workers, 
as well as workers).
    \55\ See Occupational Employment and Wages, Bureau of Labor 
Statistics, http://www.bls.gov/oes/current/oes113121.htm (last 
visited March 28, 2016).
    \56\ A study published in 2009 by the Society for Human Resource 
Management (SHRM) found that the median number of full-time 
equivalents for a HR department was three. See SHRM, Human Capital 
Benchmarking Study 2009 Executive Summary, 6 (2009), https://www.shrm.org/Research/SurveyFindings/Articles/Documents/090620_Human_Cap_Benchmark_FULL_FNL.pdf. Because we are not aware of 
any more specific data on the average number of human resources 
professionals per covered employer, we have based our estimates on 
this figure.
---------------------------------------------------------------------------

    Finally, GINA's plain language (at 42 U.S.C. 2000ff-(1)(b)(2)) and 
the EEOC's regulations (at 29 CFR 1635.8(b)(2) and (c)(2)) make clear 
that an employer must obtain authorization for the collection of 
genetic information as part of providing health or genetic services to 
employees and their family members on a voluntary basis. Consequently, 
this rule imposes no new obligations with respect to authorization for 
the collection of genetic information.

Paperwork Reduction Act

    This rule contains no new information collection requirements 
subject to review by the Office of Management and Budget under the 
Paperwork Reduction Act (44 U.S.C. chapter 35).

Regulatory Flexibility Act

    Title II of GINA applies to all employers with 15 or more 
employees, approximately 764,233 of which are small firms (entities 
with 15-500 employees) according to data provided by the Small Business 
Administration Office of Advocacy.\57\
---------------------------------------------------------------------------

    \57\ See Firm Size Data, Small Business Administration, http://www.sba.gov/advocacy/849/12162 (last visited March 28, 2016).
---------------------------------------------------------------------------

    The Commission certifies under 5 U.S.C. 605(b) that this final rule 
will not have a significant economic impact on a substantial number of 
small entities because it imposes no reporting burdens and only minimal 
costs on such firms. The rule simply clarifies that employers that 
offer wellness programs are free to adopt a certain type of inducement 
without violating GINA. It also corrects an internal citation and 
provides citations to the Affordable Care Act. It does not require any 
action on the part of covered entities, except to the extent that those 
entities created documentation or forms which cite to GINA for the 
proposition that the entity is unable to offer inducements to employees 
in return for a spouse's completion of HRAs that request information 
about the spouse's manifestation of disease or disorder. We do not have 
data on the number or size of businesses that may need to alter 
documents relating to their employer-sponsored wellness programs. 
However, our experience with enforcing the ADA, which required all 
employers with 15 or more employees to remove medical inquiries from 
application forms, suggests that revising questionnaires to eliminate 
or alter an instruction would not impose significant costs.
    To the extent that employers will expend resources to train human 
resources staff and others on the revised rule, we reiterate that the 
EEOC conducts extensive outreach and technical assistance programs, 
many of them at no cost to employers, to assist in the training of 
relevant personnel on EEO-related issues. For example, in fiscal year 
2014, the agency's outreach programs reached more than 236,000 persons 
through participation in more than 3,500 no-cost educational, training 
and outreach events. We will put information about the revisions to the 
GINA regulations in our outreach programs in general and continue to 
offer GINA-specific outreach programs which will, of course, include 
information about the revisions now that the rule is final. We will 
also post technical assistance documents on our Web site explaining the 
revisions to the GINA regulations, as we do with all of our new 
regulations and policy documents.
    We estimate that the typical human resources professional will need 
to dedicate, at most, 60 minutes to gain a satisfactory understanding 
of the revised regulations. We further estimate that the median hourly 
pay rate of a human resource professional is approximately $49.41.\58\ 
Assuming that small entities have between one and five human resource 
professionals/managers, we estimate that the cost per entity of 
providing appropriate training will be between approximately $49.41 and 
$247.05. The EEOC does not believe that this cost will be significant 
for the impacted small entities.
---------------------------------------------------------------------------

    \58\ See Occupational Employment and Wages, supra note 53.
---------------------------------------------------------------------------

Unfunded Mandates Reform Act of 1995

    This final rule will not result in the expenditure by state, local, 
or tribal governments, in the aggregate, or by the private sector, of 
$100 million or more in any one year, and it will not significantly or 
uniquely affect small governments. Therefore, no actions were deemed 
necessary under the provisions of the Unfunded Mandates Reform Act of 
1995.

List of Subjects in 29 CFR Part 1635

    Administrative practice and procedure, Equal employment 
opportunity.

    For the reasons set forth in the preamble, the EEOC amends chapter 
XIV of title 29 of the Code of Federal Regulations as follows:

PART 1635--[AMENDED]

0
1. The authority citation for part 1635 is revised to read as follows:

    Authority: 29 U.S.C. 2000ff.

0
2. In Sec.  1635.8(b):
0
a. Redesignate paragraphs (b)(2)(i)(A) through (D) as paragraphs 
(b)(2)(i)(B) through (E);
0
b. Add new paragraph (b)(2)(i)(A);

[[Page 31158]]

0
c. Revise paragraph (b)(2)(ii) introductory text;
0
d. Redesignate paragraphs (b)(2)(iii) and (iv) as paragraphs (b)(2)(vi) 
and (vii);
0
e. Add new paragraphs (b)(2)(iii) through (v);
0
f. Revise newly redesignated paragraph (b)(2)(vii); and
0
g. Revise paragraph (c)(2).
    The revisions and additions read as follows:


Sec.  1635.8  Acquisition of genetic information.

* * * * *
    (b) * * *
    (2) * * *
    (i) * * *
    (A) The health or genetic services, including any acquisition of 
genetic information that is part of those services, are reasonably 
designed to promote health or prevent disease. A program satisfies this 
standard if it has a reasonable chance of improving the health of, or 
preventing disease in, participating individuals, and it is not overly 
burdensome, is not a subterfuge for violating Title II of GINA or other 
laws prohibiting employment discrimination, and is not highly suspect 
in the method chosen to promote health or prevent disease. A program is 
not reasonably designed to promote health or prevent disease if it 
imposes a penalty or disadvantage on an individual because a spouse's 
manifestation of disease or disorder prevents or inhibits the spouse 
from participating or from achieving a certain health outcome. For 
example, an employer may not deny an employee an inducement for 
participation of either the employee or the spouse in an employer-
sponsored wellness program because the employee's spouse has blood 
pressure, a cholesterol level, or a blood glucose level that the 
employer considers too high. In addition, a program consisting of a 
measurement, test, screening, or collection of health-related 
information without providing participants with results, follow-up 
information, or advice designed to improve the participant's health is 
not reasonably designed to promote health or prevent disease, unless 
the collected information actually is used to design a program that 
addresses at least a subset of conditions identified. Whether health or 
genetic services are reasonably designed to promote health or prevent 
disease is evaluated in light of all the relevant facts and 
circumstances.
* * * * *
    (ii) Consistent with, and in addition to, the requirements of 
paragraph (b)(2)(i) of this section, a covered entity may not offer an 
inducement (financial or in-kind), whether in the form of a reward or 
penalty, for individuals to provide genetic information, except as 
described in paragraphs (b)(2)(iii) and (iv) of this section, but may 
offer inducements for completion of health risk assessments that 
include questions about family medical history or other genetic 
information, provided the covered entity makes clear, in language 
reasonably likely to be understood by those completing the health risk 
assessment, that the inducement will be made available whether or not 
the participant answers questions regarding genetic information.
* * * * *
    (iii) Consistent with, and in addition to, the requirements of 
paragraphs (b)(2)(i) and (ii) of this section, a covered entity may 
offer an inducement to an employee whose spouse provides information 
about the spouse's manifestation of disease or disorder as part of a 
health risk assessment. No inducement may be offered, however, in 
return for the spouse's providing his or her own genetic information, 
including results of his or her genetic tests, or for information about 
the manifestation of disease or disorder in an employee's children or 
for genetic information about an employee's children, including adult 
children. The health risk assessment, which may include a medical 
questionnaire, a medical examination (e.g., to detect high blood 
pressure or high cholesterol), or both, must otherwise comply with 
paragraph (b)(2)(i) of this section in the same manner as if completed 
by the employee, including the requirement that the spouse provide 
prior, knowing, voluntary, and written authorization, and the 
requirement that the authorization form describe the confidentiality 
protections and restrictions on the disclosure of genetic information. 
The health risk assessment must also be administered in connection with 
the spouse's receipt of health or genetic services offered by the 
employer, including such services offered as part of an employer-
sponsored wellness program. When an employee and spouse are given the 
opportunity to participate in an employer-sponsored wellness program, 
the inducement to each may not exceed:
    (A) Thirty percent of the total cost of self-only coverage under 
the group health plan in which the employee is enrolled, if enrollment 
in the plan is a condition for participation in the employer-sponsored 
wellness program. For example, if an employee is enrolled in health 
insurance through the employer at a total cost (taking into account 
both employer and employee contributions toward the cost of coverage) 
of $14,000 for family coverage, that plan has a self-only option for 
$6,000, and the employer provides the option of participating in a 
wellness program to the employee and spouse because they are enrolled 
in the plan, the employer may not offer more than $1,800 to the 
employee and $1,800 to the spouse.
    (B) Thirty percent of the total cost of self-only coverage under 
the group health plan offered by the employer where the employer offers 
a single group health plan, but participation in a wellness program 
does not depend on the employee's or spouse's enrollment in that plan. 
For example, if the employer offers one group health plan and self-only 
coverage under that plan costs $7,000, and the employer provides the 
option of participation in a wellness program to the employee and the 
spouse, the employer may not offer more than $2,100 to the employee and 
$2,100 to the spouse.
    (C) Thirty percent of the total cost of the lowest cost self-only 
coverage under a major medical group health plan offered by the 
employer, if the employer offers more than one group health plan but 
enrollment in a particular plan is not a condition for participation in 
the wellness program. For example, if the employer has more than one 
major medical group health plan under which self-only coverage ranges 
in cost from $5,000 to $8,000, and the employer provides the option of 
participation in a wellness program to the employee and the spouse, the 
employer may not offer more than $1,500 to the employee and $1,500 to 
the spouse.
    (D) Thirty percent of the cost of self-only coverage available to 
an individual who is 40 years old and a non-smoker under the second 
lowest cost Silver Plan available through the Exchange in the location 
that the employer identifies as its principal place of business is 
located, where the employer has no group health plan. For example, if 
the cost of insuring a 40-year-old non-smoker is $4,000 annually, the 
maximum inducement the employer could offer the employee and the spouse 
would be no more than $1,200 each.
    (iv) A covered entity may not, however, condition participation in 
an employer-sponsored wellness program or provide any inducement to an 
employee, or the spouse or other covered dependent of the employee, in 
exchange for an agreement permitting the sale, exchange, sharing, 
transfer, or other disclosure of genetic information, including 
information about the

[[Page 31159]]

manifestation of disease or disorder of an employee's family member 
(except to the extent permitted by paragraph (b)(2)(i)(D)) of this 
section, or otherwise waiving the protections of Sec.  1635.9.
    (v) A covered entity may not deny access to health insurance or any 
package of health insurance benefits to an employee, or the spouse or 
other covered dependent of the employee, or retaliate against an 
employee, due to a spouse's refusal to provide information about his or 
her manifestation of disease or disorder to an employer-sponsored 
wellness program.
* * * * *
    (vii) Nothing contained in paragraphs (b)(2)(ii) through (v) of 
this section limits the rights or protections of an individual under 
the Americans with Disabilities Act (ADA), as amended, or other 
applicable civil rights laws, or under the Health Insurance Portability 
and Accountability Act (HIPAA), as amended by GINA. For example, if an 
employer offers an inducement for participation in disease management 
programs or other programs that promote healthy lifestyles and/or 
require individuals to meet particular health goals, the employer must 
make reasonable accommodations to the extent required by the ADA; that 
is, the employer must make modifications or adjustments that enable a 
covered entity's employee with a disability to enjoy equal benefits and 
privileges of employment as are enjoyed by its other similarly situated 
employees without disabilities unless such covered entity can 
demonstrate that the accommodation would impose an undue hardship on 
the operation of its business. See 29 CFR 1630.2(o)(1)(iii) and 29 CFR 
1630.9(a). In addition, if the employer's wellness program provides 
(directly, through reimbursement, or otherwise) medical care (including 
genetic counseling), the program may constitute a group health plan and 
must comply with the special requirements for employer-sponsored 
wellness programs that condition rewards on an individual satisfying a 
standard related to a health factor, including the requirement to 
provide an individual with a reasonable alternative (or waiver of the 
otherwise applicable standard) under HIPAA, when it is unreasonably 
difficult due to a medical condition to satisfy or medically 
inadvisable to attempt to satisfy the otherwise applicable standard. 
See section 9802 of the Internal Revenue Code (26 U.S.C. 9802, 26 CFR 
54.9802-1 and 54.9802-3T), section 702 of the Employee Retirement 
Income Security Act of 1974 (ERISA) (29 U.S.C. 1182, 29 CFR 2590.702 
and 2590.702-1), and section 2705 of the Public Health Service (PHS) 
Act (45 CFR 146.121, 146.122, and 147.110), as amended by section 1201 
of the Affordable Care Act.
* * * * *
    (c) * * *
    (2) A covered entity does not violate this section when it 
requests, requires, or purchases genetic information or information 
about the manifestation of a disease, disorder, or pathological 
condition of an individual's family member who is receiving health or 
genetic services on a voluntary basis, as long as the requirements of 
paragraph (b)(2) of this section, including those concerning 
authorization and inducements, are met. For example, an employer does 
not unlawfully acquire genetic information about an employee when it 
asks the employee's family member who is receiving health services from 
the employer if her diabetes is under control. Nor does an employer 
unlawfully acquire genetic information about an employee when it seeks 
information--through a medical questionnaire, a medical examination, or 
both--about the manifestation of disease, disorder, or pathological 
condition of the employee's family member who is completing a health 
risk assessment on a voluntary basis in connection with the family 
member's receipt of health or genetic services (including health or 
genetic services provided as part of an employer-sponsored wellness 
program) offered by the employer in compliance with paragraph (b)(2) of 
this section.
* * * * *
0
3. In Sec.  1635.11, revise paragraphs (b)(1)(iii) and (iv) to read as 
follows:


Sec.  1635.11  Construction.

* * * * *
    (b) * * *
    (1) * * *
    (iii) Section 702(a)(1)(F) of ERISA (29 U.S.C. 1182(a)(1)(F)), 
section 2705(a)(6) of the PHS Act, as amended by section 1201 of the 
Affordable Care Act and section 9802(a)(1)(F) of the Internal Revenue 
Code (26 U.S.C. 9802(a)(1)(F)), which prohibit a group health plan or a 
health insurance issuer in the group or individual market from 
discriminating against individuals in eligibility and continued 
eligibility for benefits based on genetic information; or
    (iv) Section 702(b)(1) of ERISA (29 U.S.C. 1182(b)(1)), section 
2705(b)(1) of the PHS Act, as amended by section 1201 of the Affordable 
Care Act and section 9802(b)(1) of the Internal Revenue Code (26 U.S.C. 
9802(b)(1)), as such sections apply with respect to genetic information 
as a health status-related factor, which prohibit a group health plan 
or a health insurance issuer in the group or individual market from 
discriminating against individuals in premium or contribution rates 
under the plan or coverage based on genetic information.
* * * * *

    Dated: May 11, 2016.

    For the Commission:
Jenny R. Yang,
Chair.
[FR Doc. 2016-11557 Filed 5-16-16; 8:45 am]
 BILLING CODE 6570-01-P