Regulations Under the Americans With Disabilities Act, 31125-31143 [2016-11558]
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Vol. 81
Tuesday,
No. 95
May 17, 2016
Part III
Equal Employment Opportunity Commission
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29 CFR Parts 1630 and 1635
Regulations Under the Americans With Disabilities Act; Genetic Information
Nondiscrimination Act
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Federal Register / Vol. 81, No. 95 / Tuesday, May 17, 2016 / Rules and Regulations
EQUAL EMPLOYMENT OPPORTUNITY
COMMISSION
29 CFR Part 1630
RIN 3046–AB01
Regulations Under the Americans With
Disabilities Act
Equal Employment
Opportunity Commission.
ACTION: Final rule.
AGENCY:
The Equal Employment
Opportunity Commission (EEOC or
Commission) is issuing its final rule to
amend the regulations and interpretive
guidance implementing Title I of the
Americans with Disabilities Act (ADA)
to provide guidance on 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.
This rule applies to all wellness
programs that include disability-related
inquiries and/or medical examinations
whether they are offered only to
employees enrolled in an employersponsored group health plan, offered to
all employees regardless of whether
they are enrolled in such a plan, or
offered as a benefit of employment by
employers that do not sponsor a group
health plan or group health insurance.
Published elsewhere in this issue of the
Federal Register, the EEOC also issued
a final rule to amend the regulations
implementing Title II of the Genetic
Information Nondiscrimination Act
(GINA) that addresses the extent to
which employers may offer incentives
for an employee’s spouse to participate
in a wellness program.
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, (202) 663–4665, or Joyce
Walker-Jones, Senior Attorney Advisor,
(202) 663–7031, or (202) 663–7026
(TTY), Office of Legal Counsel, U.S.
Equal Employment Opportunity
Commission. (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, (202) 663–4191
(voice) or (202) 663–4494 (TTY). (These
are not toll free numbers.)
SUPPLEMENTARY INFORMATION:
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SUMMARY:
Introduction
This rule applies to wellness
programs that are considered ‘‘employee
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health programs’’ under Title I of the
ADA.1 It does not apply to programs
that may be provided by entities other
than those subject to Title I, such as
social service agencies covered under
Title II of the ADA,2 or places of public
accommodation subject to Title III of the
ADA,3 that may provide similar
programs to individuals who are
considered volunteers.
A wellness program that is an
employee health program may be part of
a group health plan or may be offered
outside of a group health plan or group
health insurance coverage.4 All of the
provisions in this rule, including the
requirement to provide a notice and
limitations on incentives, apply to all
employee health programs that ask
employees to respond to disabilityrelated inquiries and/or undergo
medical examinations. Wellness
programs that do not include disabilityrelated inquiries or medical
examinations (such as those that
provide general health and educational
information) are not subject to this final
rule, although such programs must be
available to all employees and must
provide reasonable accommodations to
employees with disabilities.
Discussion
Many employers that sponsor group
health plans also offer health promotion
and disease prevention activities,
known as wellness programs, to
employees enrolled in a health plan.5
Some employers, however, offer
wellness programs that are available to
1 42
U.S.C. 12101–12117.
U.S.C. 12131–12134.
3 42 U.S.C. 12181–12189.
4 The term ‘‘group health plan,’’ which includes
both insured and self-insured group health plans,
as defined in the Employee Retirement Income
Security Act (ERISA) section 733(a), is an
‘‘employee welfare benefit plan’’ to the extent that
the plan provides medical care to employees and
their dependents directly or through insurance,
reimbursement, or otherwise. An employer may
establish or maintain more than one group health
plan. ERISA section 3(1) defines an ‘‘employee
welfare benefit plan’’ as ‘‘any plan, fund, or
program . . . established or maintained by an
employer or by an employee organization, or by
both, to the extent that such plan, fund, or program
was established or is maintained for the purpose of
providing for its participants or their beneficiaries
. . . medical, surgical, or hospital care or benefits,
or benefits in the event of sickness, accident,
disability, death or unemployment . . . .’’
5 An annual survey conducted by the Kaiser
Family Foundation Health Research and
Educational Trust indicated that 55 percent of large
firms that offered wellness programs said that most
of their wellness benefits were provided by the
group health plan. See Karen Pollitz & Matthew
Rae, Kaiser Family Foundation, Workplace
Wellness Programs Characteristics and
Requirements 5 (2016), https://
kaiserfamilyfoundation.files.wordpress.com/2016/
01/8742-02-workplace-wellness-programscharacteristics-and-requirements.pdf.
2 42
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all employees whether or not they are
enrolled in an employer-sponsored
health plan, while other employers do
not offer a group health plan or group
health insurance coverage but offer
some type of workplace wellness
program. Many of these programs obtain
medical information from employees by
asking them to complete a health risk
assessment (HRA) and/or undergo
biometric screenings for risk factors
(such as high blood pressure or
cholesterol). Other wellness programs
provide educational health-related
information or programs that may
include: nutrition classes, weight loss
and smoking cessation programs, onsite
exercise facilities, and/or coaching to
help employees meet health goals.
Some employers offer incentives to
encourage employees simply to
participate in a wellness program, while
others offer incentives based on whether
employees achieve certain health
outcomes.6 Incentives can be framed as
rewards or penalties and often take the
form of prizes, cash, or a reduction or
increase in health care premiums or cost
sharing.
Applicable Federal Laws
Several federal laws govern wellness
programs offered by employers.
Wellness programs must comply with
Title I of the ADA, Title II of GINA,7 and
other employment discrimination laws
enforced by the EEOC. Wellness
programs that are part of or provided by
a group health plan or by a health
insurance issuer offering group health
insurance in connection with a group
health plan also must comply with the
nondiscrimination provisions of the
Health Insurance Portability and
Accountability Act of 1996 (HIPAA), 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 triDepartments.’’ 8 A wellness program
6 See RAND Health, Workplace Programs Study:
Final Report xx (2013), https://www.rand.org/
content/dam/rand/pubs/research_reports/RR200/
RR254/RAND_RR254.pdf [hereinafter RAND Final
Report]. The study found that 69 percent of
employers with at least 50 employees offer financial
incentives to encourage employee participation,
while 10 percent offer incentives tied to health
outcomes. By contrast, a survey conducted by the
Kaiser Foundation found that 36 percent of large
employers with 200 or more employees and 18
percent of smaller employers offer financial
incentives to participate in a wellness program. See
Employer Health Benefits Survey, Kaiser Family
Foundation (2014), https://kff.org/health-costs/
report/2014-employer-health-benefits-survey/
[hereinafter Kaiser Survey].
7 42 U.S.C. 2000ff–2000ff–11.
8 The Patient Protection and Affordable Care Act,
Pub. L. 111–148, 124 Stat. 119 (2010) (codified as
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that is part of a group health plan also
must comply with HIPAA’s Privacy,
Security, and Breach notification
requirements discussed later in this
preamble.
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Title I of the ADA and Other Laws
Prohibiting Employment Discrimination
Title I of the ADA prohibits
discrimination against individuals on
the basis of disability in regard to
employment compensation and other
terms, conditions, and privileges of
employment, including ‘‘fringe benefits
available by virtue of employment,
whether or not administered by the
covered entity.’’ 9 The ADA also restricts
the medical information employers may
obtain from employees by generally
prohibiting them from making
disability-related inquiries or requiring
medical examinations.10 The statute,
however, provides an exception to this
rule for voluntary employee health
programs, which include many
workplace wellness programs.11
amended in scattered sections of 25 U.S.C., 26
U.S.C., 29 U.S.C., and 42 U.S.C.), and the Health
Care and Education Reconciliation Act of 2010,
Pub. L. 111–152, 124 Stat. 1029 (codified at 42
U.S.C. 18121, 18043; 26 U.S.C. 1411, 4191; 20
U.S.C. 1087i–2), 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 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,
making them applicable to group health plans and
group health insurance issuers.
9 42 U.S.C. 12112(a); 29 CFR 1630.4(a)(1)(vi). Title
I of the ADA applies to, in addition to employers,
covered entities including employment agencies,
labor organizations, and joint-labor management
committees. See 42 U.S.C. 12111(2), (4), (5),
12112(b) (describing the prohibited practices of
each of these entities); see also 29 CFR 1630.2(b)
(giving the definition of covered entity),
1630.4(a)(1) (describing prohibited practices).
Although employers generally will be the ADA
covered entities that offer wellness programs, this
preamble, the final rule, and the interpretive
guidance frequently use the term ‘‘covered entity,’’
as that term appears throughout EEOC’s entire ADA
regulation.
10 42 U.S.C. 12112(d)(4)(A) (stating that a covered
entity ‘‘shall not require a medical examination and
shall not make inquiries of an employee as to
whether such employee is an individual with a
disability or as to the nature or severity of the
disability, unless such examination or inquiry is
shown to be job-related and consistent with
business necessity’’). The EEOC refers to the types
of inquiries prohibited by the ADA as ‘‘disabilityrelated inquiries’’ and has issued guidance on what
constitutes such an inquiry. See EEOC Enforcement
Guidance on Disability-Related Inquiries and
Medical Examinations of Employees Under the
Americans with Disabilities Act, Question 1 (2000),
https://www.eeoc.gov/policy/docs/guidanceinquiries.html [hereafter Guidance].
11 42 U.S.C. 12112(d)(4)(B). A covered entity may
conduct voluntary medical examinations, including
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Additionally, the ADA requires
employers to provide reasonable
accommodations (modifications or
adjustments) to enable individuals with
disabilities to have equal access to
fringe benefits, such as general health
and educational wellness programs,
offered to individuals without
disabilities.12 Employers also must
comply with other laws the EEOC
enforces that prohibit discrimination
based on race, color, national origin, sex
(including pregnancy, gender identity,
transgender status, and sexual
orientation), religion, compensation,
age, or genetic information.13
HIPAA’s Nondiscrimination Provisions
HIPAA’s nondiscrimination
provisions, as amended by the
Affordable Care Act, generally prohibit
group health plans and health insurance
issuers providing group health
insurance in connection with a group
health plan from discriminating against
participants and beneficiaries in
premiums, benefits, or eligibility based
on a health factor.14 An exception to the
general rule allows premium discounts,
or rebates or modification to otherwise
applicable cost sharing (including
copayments, deductibles, or
voluntary medical histories, that are part of an
employee health program available to employees at
that work site.
12 42 U.S.C. 12112(b)(5)(A); 29 CFR 1630.9
(prohibiting covered entity from failing to provide
reasonable accommodations absent undue
hardship); 29 CFR 1630.2(o)(1)(iii) (providing that
reasonable accommodation includes modifications
and adjustments that enable a covered entity’s
employees to enjoy ‘‘equal benefits and privileges
of employment’’).
13 See Title VII of the Civil Rights Act of 1964
(Title VII), 42 U.S.C. 2000e–2000e–17; the Equal
Pay Act of 1963, 29 U.S.C. 206(d); the Age
Discrimination in Employment Act of 1967 (ADEA),
29 U.S.C. 621–634; and Title II of GINA. However,
this rule concerns only the application of the ADA’s
rules limiting disability-related inquiries and
medical examinations of employees to employersponsored wellness programs. Compliance with the
limits on incentives in this rule does not necessarily
result in compliance with other nondiscrimination
laws or other parts of the ADA. For example, as the
interpretive guidance explains, even if an
employer’s wellness program complies with the
incentive limits set forth in the ADA regulations,
the employer violates Title VII or the ADEA if that
program discriminates on the basis of race, color,
national origin, sex (including pregnancy, gender
identity, transgender status, and sexual orientation),
religion, or age.
14 The nondiscrimination provisions originally
enacted in HIPAA set forth eight health statusrelated factors, which the December 13, 2006, final
regulations refer to as ‘‘health factors.’’ 71 FR 75014
(Dec. 13, 2006). Under HIPAA and the 2006
regulations, as well as under PHS Act section 2705
(as added by the Affordable Care Act), the eight
health factors are: health status, medical condition
(including both physical and mental illnesses),
claims experience, receipt of health care, medical
history, genetic information, evidence of
insurability (including conditions arising out of acts
of domestic violence), and disability.
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coinsurance), in return for adherence to
certain programs of health promotion
and disease prevention.15
The 2013 final tri-Department
regulations to implement HIPAA’s
nondiscrimination provisions discuss
two types of wellness programs:
‘‘participatory’’ and ‘‘health
contingent.’’ 16 Participatory wellness
programs either do not provide a reward
or do not include any condition for
obtaining a reward that is based on an
individual satisfying a standard related
to a health factor. Examples of
participatory wellness programs include
programs that ask employees only to
complete a HRA or attend a smoking
cessation program. The tri-Department
regulations do not impose any incentive
limits on ‘‘participatory’’ wellness
programs and state that they are
permissible as long as they are made
available to all similarly situated
individuals.
Health-contingent wellness programs,
which may be either activity-only or
outcome-based, require individuals to
satisfy a standard related to a health
factor to obtain a reward. Examples of
health-contingent wellness programs
include a program that requires
employees to walk or do a certain
amount of exercise weekly (an activitybased program) or to reduce their blood
pressure or cholesterol level (an
outcome-based program) in order to
earn an incentive. Incentives offered in
connection with health-contingent
wellness programs generally must not
15 Prior to the enactment of the Affordable Care
Act, HIPAA added section 9802 of the Code, section
702 of ERISA, and section 2702 of the PHS Act.
DOL, Treasury, and HHS issued joint final
regulations in 2006 regarding wellness programs in
connection with a group health plan or group
health insurance coverage under which any of the
conditions for obtaining a reward are based on
satisfying a standard related to a health factor. See
26 CFR 54.9802–1(f); 29 CFR 2590.702(f); 45 CFR
146.121(f). Paragraph (f)(2) of the 2006 regulations
limited the total reward for such wellness programs
to 20 percent of the total cost of coverage under the
plan. The Affordable Care Act amended the PHS
Act to raise the limitation on incentives to 30
percent of the total cost of coverage under the plan.
See PHS Act section 2705(j)(3)(A). The triDepartments issued final regulations in June 2013
to implement PHS Act section 2705 and amend the
2006 HIPAA regulations regarding
nondiscriminatory wellness programs in group
health coverage. Incentives for Nondiscriminatory
Wellness Programs in Group Health Plans, 78 FR
33158 (June 3, 2013) (codified at 26 CFR 54.9802–
1; 29 CFR 2590.702; 45 CFR 46.121). Under the
2013 final regulations on nondiscriminatory
wellness programs, references to ‘‘a plan providing
a reward’’ include both providing a reward (such
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) and imposing a penalty (such as
a surcharge or other financial or nonfinancial
disincentive).’’
16 See 26 CFR 54.9802–1(f); 29 CFR 2590.702(f);
45 CFR 146.121(f).
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exceed 30 percent of the total cost of
self-only health coverage where only an
employee, not the employee’s
dependents, is eligible for the wellness
program.17 There are five requirements
for health-contingent wellness programs
under PHS Act section 2705 and the
2013 final regulations. Generally,
health-contingent wellness programs
must be available to all similarly
situated individuals and must: (1) Give
eligible individuals an opportunity to
qualify for a reward at least once per
year; (2) limit the size of the reward to
no more than 30 percent of the total cost
of coverage (or, 50 percent to the extent
that the wellness program is designed to
prevent or reduce tobacco use): (3)
provide a reasonable alternative
standard (or waiver) to qualify for a
reward; (4) be reasonably designed to
promote health or prevent disease and
not be overly burdensome; and, (5)
disclose the availability of a reasonable
alternative standard to qualify for the
reward in plan materials that provide
details regarding the wellness
program.18
Finally, the 2013 final regulations
recognize that compliance with
HIPAA’s nondiscrimination rules (as
amended by the Affordable Care Act),
including the wellness program
requirements, is not determinative of
compliance with any other provision of
any other state or federal law, including,
but not limited to, the ADA, Title VII,
and GINA.19
17 Under the tri-Department wellness regulations
implementing section 2705 of the PHS Act (as
amended by the Affordable Care Act), the
applicable percentage is increased to 50 percent to
the extent that the additional percentage is in
connection with a program designed to prevent or
reduce tobacco use. See 26 CFR 54.9802–1(f)(5); 29
CFR 2590.702(f)(5); 45 CFR 146.121(f)(3).
18 Although the five requirements for healthcontingent programs generally are the same for
activity-only wellness programs and outcome–
based wellness programs under the tri-Department
regulations, there are some differences. For the
requirements applicable to activity-only programs,
see 26 CFR 54.9802–1(f)(3), 29 CFR 2590.702(f)(3),
and 45 CFR 146.121(f)(3). For requirements
applicable to outcome–based programs, see 26 CFR
54.9802–1(f)(4), 29 CFR 2590.702(f)(4), and 45 CFR
146.121(f)(4).
19 See Incentives for Nondiscriminatory Wellness
Programs in Group Health Plans, 78 FR at 33168
(‘‘The Departments recognize that many other laws
may regulate plans and issuers in their provision of
benefits to participants and beneficiaries. These
laws include, but are not limited to, the ADA, Title
VII of the Civil Rights Act of 1964, Code section
105(h) and PHS Act section 2716 (prohibiting
discrimination in favor of highly compensated
individuals), the Genetic Information
Nondiscrimination Act of 2008, the Family and
Medical Leave Act, ERISA’s fiduciary provisions,
and State law.’’). A publication jointly issued by the
tri-Departments also explains that the fact that a
wellness program complies with the tri-Department
wellness program regulations does not necessarily
mean it complies with any other provision of the
PHS Act, the Code, ERISA (including the
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Background on the Notice of Proposed
Rulemaking on the ADA and 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 April 20, 2015, for
a 60-day public comment period.21
The NPRM re-asserted the
Commission’s position that, as required
by the ADA, employee health programs
that include disability-related inquiries
or medical examinations (including
inquiries or medical examinations that
are part of a HRA or medical history)
must be ‘‘voluntary,’’ and defined what
that term meant in light of the
amendments made to HIPAA by the
Affordable Care Act. The NPRM sought
comment on wellness programs in
general and on any of the proposed
revisions to the ADA regulations and
interpretative guidance at § 1630.14,
which:
—Explained that an ‘‘employee health
program’’ must be ‘‘reasonably
designed to promote health or prevent
disease’’ and must not be ‘‘overly
burdensome, a subterfuge for violating
the ADA or other laws prohibiting
employment discrimination, or highly
suspect in the method chosen to
promote health or prevent disease’’;
—Defined the term ‘‘voluntary’’ and
explained that in order for
participation in an employee health
program to be voluntary, a covered
entity may not require employees to
participate, deny access to health
coverage for nonparticipation,
generally limit coverage under its
health plans, take any other adverse
action, or retaliate, interfere with,
coerce, intimidate, or threaten an
employee who does not participate or
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. Similarly, the
fact that a 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 Affordable Care Act Implementation (Part
XXV), https://www.dol.gov/ebsa/faqs/faqaca25.html.
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 Amendments to Regulations Under the
Americans With Disabilities Act, 80 FR 21659
(proposed April 20, 2015)(to be codified at 29 CFR
part 1630).
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fails to achieve certain health
outcomes, and must provide a notice
clearly explaining what medical
information will be obtained, how it
will be used, who will receive it, and
the restrictions on disclosure;
—Clarified that an employer may offer
incentives up to a maximum of 30
percent of the total cost of self-only
coverage to promote an employee’s
participation in a wellness program
that includes disability-related
inquiries or medical examinations
(including a blood test to detect the
presence of nicotine as part of a
smoking cessation program), and that
this limit applies whether the
program is participatory only, health
contingent, or a program that includes
both participatory and healthcontingent components;
—Explained the requirements
concerning the confidentiality of
medical information obtained as part
of voluntary employee health
programs and added a new paragraph
that provided that a covered entity
only may receive information
collected by a wellness program in
aggregate form that does not disclose,
and is not reasonably likely to
disclose, the identity of specific
individuals except as necessary to
administer the plan; and
—Clarified that compliance with the
rules governing voluntary employee
health programs, including the limits
on financial incentives applicable
under the ADA, does not ensure
compliance with all of the
antidiscrimination laws the EEOC
enforces.
The NPRM also explained that the
references to the requirement to provide
a notice and the limitations on
incentives in the proposed rule, and the
changes to the corresponding section of
the interpretive guidance, apply only to
wellness programs that are part of or
provided by a group health plan or by
a health insurance issuer offering health
insurance in connection with a group
health plan. The proposed rule asked for
comments on whether employers offer
or are likely to offer wellness programs
outside of a group health plan or group
health insurance coverage and whether
the Commission should issue
regulations specifically limiting
incentives provided as part of such
programs.
Additionally, the Commission
specifically sought comments on several
other issues, including:
—Whether to be ‘‘voluntary’’ under the
ADA, entities that offer incentives to
encourage employees to disclose
medical information also must offer
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similar incentives to persons who
choose not to disclose such
information but who, instead, provide
certification from a medical
professional stating that the employee
is under the care of a physician;
—Whether to be considered ‘‘voluntary’’
under the ADA, the incentives
provided in a wellness program that
asks employees to respond to
disability-related inquiries and/or
undergo medical examinations may
not be so large as to render health
insurance coverage unaffordable
under the Affordable Care Act 22 and,
therefore, in effect coercive for an
employee;
—Whether employees participating in
wellness programs that include
disability-related inquiries and/or
medical examinations, and that are
part of a group health plan, should be
required to provide prior, written, and
knowing authorization that their
participation is voluntary and
whether there are existing forms that
could provide adequate protection;
—Whether the proposed notice
requirement should apply only to
wellness programs that offer more
than de minimis rewards or penalties
to employees who participate (or
decline to participate) in wellness
programs that ask them to respond to
disability-related inquiries and/or
undergo medical examinations; and
—Whether the proposed rule’s 30
percent limit on incentives offered
with respect to wellness programs
that ask employees to respond to
disability-related inquiries and/or
undergo medical examinations would
have any impact on programs
intended to prevent or reduce tobacco
use.
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Summary of Revisions and Response to
Comments
During the 60-day comment period,
the Commission received nearly 2,750
public comments on the NPRM from a
22 Specifically, the Commission sought input on
whether it would be appropriate to provide that the
incentives employers offer to employees to promote
participation in wellness programs must not render
the cost of health insurance unaffordable to
employees within the meaning of 26 U.S.C.
36B(c)(2)(C) as implemented by 26 CFR 54.4980H–
5(e), under which an offer of health insurance
coverage is affordable if the employee’s required
contribution for self-only coverage is no more than
a specified percentage (9.5 percent as adjusted) of
household income (or based on one of three
affordability safe harbors set forth in 26 CFR
54.4980H–5(e)). For purposes of sections 36B and
4980H of the Code, the affordability of eligible
employer-sponsored coverage is determined by
assuming that each employee fails to satisfy the
requirements of a wellness program, except for the
requirements of a nondiscriminatory wellness
program related to tobacco use. See 26 CFR 1.36B–
2(c)(3)(v)(A)(4).
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wide spectrum of stakeholders,
including, among others: Individuals,
including individuals with disabilities
and those who are considered
overweight or have eating disorders;
disability rights and other advocacy
organizations and their members; civil
rights groups; federal and state
government employees and
representatives, including a joint letter
from members of Congress; employer
associations and industry groups and
law firms on their behalf; and health
insurance issuers and associations
representing them, third party
administrators, and wellness vendors
(referred to as ‘‘health care groups’’).
The comments from individuals
included 2,410 similar, but not uniform,
letters—almost all of which were
submitted by a national organization
that supports women and families—
urging the Commission to address HRAs
that ask women whether they are
pregnant or plan on becoming pregnant.
Most of the comments (2,723) were
submitted through the United States
Government’s electronic docket system,
Regulations.gov. The remaining 25
comments (a few of which also were
submitted through Regulations.gov)
were mailed or faxed to the Executive
Secretariat. Additionally, members of
the Commission met or had telephone
conversations with several stakeholder
groups, a number of which also
submitted written comments.
The Commission has reviewed and
considered each of the comments in
preparing this final rule. The first
section of this preamble addresses
general comments concerning the
Commission’s interpretation of the
interaction between the ADA and
HIPAA’s wellness program provisions,
the final rule’s applicability date, and
the ADA’s ‘‘safe harbor’’ provision.
The second section discusses
comments submitted in response to
questions the NPRM asked about several
issues, as noted above.
Finally, because three of the questions
asked in the NPRM directly relate to the
provisions regarding the notice
requirement and the limitations on
incentives, the preamble addresses
those comments in the last section that
discusses comments regarding specific
provisions.
General Comments
Interaction Between the ADA and
HIPAA’s Wellness Program Provisions
The Commission received a number
of comments expressing support for,
and concerns about, wellness programs.
For example, while many commenters
stated that properly designed wellness
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programs have the potential to help
employees become healthier and bring
down health care costs, they believe that
these programs also carry serious
potential to discriminate in ways long
prohibited by the civil rights laws by
allowing employers to coerce employees
into providing medical information.
Disability rights and advocacy groups
expressed concerns that the EEOC was
abandoning its prior position that a
voluntary wellness program that
includes disability-related inquiries
and/or medical examinations cannot
involve penalties, while employer and
industry groups commented that the
proposed rule’s limitation on incentives
is inconsistent with the tri-Department
rules.
Although the Commission recognizes
that compliance with the standards in
HIPAA, as amended by the Affordable
Care Act, is not determinative of
compliance with the ADA, we believe
that the final rule interprets the ADA in
a manner that reflects the ADA’s goal of
limiting employer access to medical
information and is consistent with
HIPAA’s provisions promoting wellness
programs. Accordingly, after
consideration of all of the comments,
the Commission reaffirms its conclusion
that allowing certain incentives related
to wellness programs, while limiting
them to prevent economic coercion that
could render provision of medical
information involuntary, is the best way
to effectuate the purposes of the
wellness program provisions of both
laws.
Applicability Date
Employer associations and industry
groups also 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 GINA
wellness rule, and that it not be applied
retroactively. The Commission agrees
and concludes that the provisions of
this rule set forth at § 1630.14(d)(2)(iv)
(concerning notice) and § 1630.14(d)(3)
(concerning incentives) will apply only
prospectively to employer 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 incentive
permitted under this regulation. So, for
example, if the plan year for the health
plan used to calculate the permissible
incentive limit begins on January 1,
2017, that is the date on which the
provisions of this rule governing
incentives apply to the wellness
program. If the plan year of the plan
used to calculate the level of incentives
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begins on March 1, 2017, the provisions
on incentives and notice requirements
will apply to the 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.23
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ADA’s ‘‘Safe Harbor’’ Provision
A number of stakeholders commented
on a footnote in the NPRM, which noted
that the ADA’s safe harbor provision
applicable to insurance 24 does not
apply to wellness programs that include
disability-related questions or medical
examinations. The safe harbor provision
states, in pertinent part, that an insurer
or any entity that administers benefit
plans is not prohibited from
‘‘establishing, sponsoring, observing or
administering the terms of a bona fide
benefit plan based on underwriting
risks, classifying risks, or administering
such risks that are based on or not
inconsistent with state law.’’
Employer associations and industry
groups that commented on the footnote
thought that the safe harbor provision
applies to wellness programs that ask
disability-related questions or require
medical examinations. Several members
of Congress asserted that the EEOC was
inappropriately seeking to rewrite the
statute and vacate court decisions
through regulation. A few commenters
distinguished between wellness
programs that are part of a group health
plan, to which the commenters said the
safe harbor should apply, and those that
are not part of a group health plan, to
which it should not apply. Several
noted that information obtained through
wellness programs could provide
employers with valuable insight that
would help them develop and
administer present and future plans.
Two comments expressed the view that
the EEOC has no authority to interpret
the meaning of the safe harbor provision
because it is in Title V of the ADA, not
Title I, and these commenters urged
deletion of the entire footnote.
The Commission has authority to
interpret the safe harbor provision
because, by its express terms, this
23 Prior EEOC interpretations, including those set
forth in the 1991 final rule implementing Title I of
the ADA, Equal Employment Opportunities for
Individuals With Disabilities, 56 FR 35726 (July 26,
1991), and in Commission guidance, Guidance,
supra note 10, may be considered in determining
whether wellness programs that began prior to this
rule’s applicability date and that ask employees
disability-related questions or require them to
undergo medical examinations comply with the
ADA.
24 42 U.S.C. 12201(c).
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provision applies to Titles I through IV
of the ADA. Moreover, as stated in
§ 1630.14(d)(6) of this rule, we reaffirm
our position that the safe harbor
provision does not apply to an
employer’s decision to offer rewards or
impose penalties in connection with
wellness programs that include
disability-related inquiries or medical
examinations.
First, as we observed in the preamble
to our proposed rule, the ADA, codified
at 42 U.S.C. 12112(d)(4)(B), specifically
provides an exception that allows
employers to make disability-related
inquiries or conduct medical
examinations as part of an employee
health program as long as employee
participation is voluntary. To read the
insurance safe harbor provision as
applicable to wellness programs—and
thus to permit incentives in excess of
what this rule allows and even to permit
practices such as requiring employees to
participate in wellness programs in
order to maintain their health
insurance—would render 42 U.S.C.
12112(d)(4)(B) superfluous.25
One commenter disagreed, arguing
that application of the insurance safe
harbor provision to wellness programs
that are part of a group health plan
would not render 42 U.S.C.
12112(d)(4)(B) superfluous, as that
section could still apply to wellness
programs that are not part of a group
health plan. We, however, discern no
Congressional intent—either in the
plain language of 42 U.S.C.
12112(d)(4)(B) or in the legislative
history on that section of the ADA—to
restrict the section’s reach only to health
programs that are not part of a group
health plan.
Additionally, the plain language of
the safe harbor provision, and an
abundance of legislative history
explaining it, make its narrow purpose
clear. At the time the ADA was enacted,
health plans were allowed to engage in
some practices that are no longer
permitted today. For example, before
HIPAA made the practice illegal in
1996, group health plans were allowed
to charge individuals in the plan higher
rates based on increased risks associated
with their medical conditions.26 The
ADA’s safe harbor provision was
intended to protect this now unlawful
practice, provided that such decisions to
treat people differently because of their
medical conditions were based on real
25 See Amendments to Regulations Under the
Americans With Disabilities Act, 80 FR at 21662
n.24.
26 See 29 U.S.C. 1182(b).
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risks and costs associated with those
conditions.
In commenting on the safe harbor
provision, the report of the House
Committee on Education and Labor
accompanying the ADA noted:
Under the ADA, a person with a disability
cannot be denied insurance or be subject to
different terms or conditions of insurance
based on disability alone, if the disability
does not impose increased risks.
* * *
Moreover, while a plan which limits
certain kinds of coverage based on
classification of risk would be allowed under
this section [codified at 42 U.S.C. 12201(c)],
the plan may not refuse to insure, or refuse
to continue to insure, or limit the amount,
extent, or kind of coverage available to an
individual, or charge a different rate for the
same coverage solely because of a physical or
mental impairment, except where the refusal,
limitation, or rate differential is based on
sound actuarial principles or is related to
actual or reasonably anticipated
experience.27
For example, a blind person may not be
denied coverage based on blindness
independent o[f] actuarial risk
classification.28
The same report summarized the safe
harbor’s purpose as follows:
[S]ection 501 is intended to afford insurers
and employers the same opportunities they
would enjoy in the absence of this legislation
to design and administer insurance products
and benefit plans in a manner that is
consistent with basic insurance risk
classification. . . . Without such a
clarification, the legislation could arguably
find violative of its provisions any action
taken by an insurer or employer which treats
disabled persons differently under an
insurance or benefit plan because they
represent an increased hazard of illness or
death.29
The safe harbor provision, then, allows
the insurance industry and sponsors of
insurance plans, such as employers, to
treat individuals differently based on
disability (normally a prohibited
27 See H.R. Rep. No. 101–485, pt. 2, at 136–37
(1990). The report further states that the ‘‘safe
harbor’’ provision ‘‘ensures that decisions
concerning the insurance of persons with
disabilities which are not based on bona fide risk
classification be made in conformity with nondiscrimination requirements’’ and that benefit plans
‘‘need to be able to continue business practices in
the way they underwrite, classify, and administer
risks, so long as they carry out those functions in
accordance with accepted principles of insurance
risk classification.’’ Id.; see also H.R. Rep. No. 101–
485, pt. 3, at 71 (the ‘‘ADA requires that
underwriting and classification of risks be based on
sound actuarial principles or be related to actual or
reasonably anticipated experience’’); S. Rep. No.
101–116, at 84 (1989) (‘‘The Committee does not
intend that any provisions of this legislation should
affect the way the insurance industry does business
[under] State laws.’’).
28 H.R. Rep. No. 101–485, pt. 2, at 137.
29 Id. at 137–38; see also S. Rep. No. 101–116, at
85–86.
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practice under the ADA), but only if the
differences can be justified by increased
risks and costs ‘‘based on sound
actuarial data and not on
speculation.’’ 30
Nowhere does the ADA’s legislative
history refer to wellness programs in
connection with the safe harbor
provision. The evidence, in fact, is to
the contrary. The only reference to
wellness programs is in a committee
report discussing the ADA provision
governing voluntary health programs.31
Consistent with this legislative
history, EEOC’s ADA regulations, the
interpretive guidance accompanying
them, and interim enforcement
guidance that the Commission issued in
1993 and that is still in effect, confirm
that the safe harbor provision applies to
the practices of the insurance industry
with respect to the use of sound
actuarial data to make determinations
about insurability and the establishment
of rates. Section 1630.16(f) of the
regulations incorporates the language of
section 501(c) of the ADA. The
interpretive guidance provides that the
safe harbor provision ‘‘is a limited
exception that is only applicable to
those who establish, sponsor, observe,
or administer benefit plans, such as
health and insurance plans. . . . The
purpose of this provision is to permit
the development and administration of
benefit plans in accordance with
accepted principles of risk
assessment.’’ 32 EEOC’s interim
guidance on insurance further states:
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Risk classification refers to the
identification of risk factors and the grouping
of those factors that pose similar risks. Risk
factors may include characterizations such as
age, occupation, personal habits (e.g.,
smoking), and medical history. Underwriting
refers to the application of the various risk
factors or risk classes to a particular
individual or group (usually only if the group
is small) for the purpose of determining
whether to provide insurance.33
30 H.R. Rep. No. 101–485, pt. 3, at 70. The safe
harbor provision also permitted practices such as
excluding or limiting coverage for individuals with
pre-existing conditions (now prohibited as a result
of the Affordable Care Act), even though they
adversely affect people with disabilities, as long as
they were not a subterfuge to evade the purposes
of the ADA. See S. Rep. No. 101–116, at 29; H.R.
Rep. No. 101–485, pt. 2, at 59.
31 See H.R. Rep. No. 101–485, pt. 2, at 75 (noting
that ‘‘[a] growing number of employers . . . are
offering voluntary wellness programs’’ and that
‘‘[a]s long as the programs are voluntary and the
medical records are maintained in a confidential
manner and not used for the purpose of limiting
health insurance eligibility or preventing
occupational advancement, these activities would
fall within the purview of accepted activities’’).
32 29 CFR part 1630, app. 1630.16(f).
33 EEOC, Interim Enforcement Guidance:
Application of the ADA to Health Insurance 13,
n.15 (1993), https://eeoc.gov/policy/docs/
guidance.pdf.
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Although employers claim that they use
wellness programs to make their
employees healthier and thus ultimately
to reduce their health care costs, such
use of wellness programs does not
constitute underwriting or risk
classification protected by the insurance
safe harbor.
The Commission disagrees with the
result in the two district court decisions
that have applied the safe harbor
provision far more expansively to
support employers’ imposition of
penalties on employees who do not
answer disability-related questions or
undergo medical examinations in
connection with wellness programs, Seff
v. Broward County 34 and EEOC v.
Flambeau, Inc.35 However, neither court
ruled that the language of the statute
was unambiguous. Hence, the agency
has the authority and responsibility to
provide its own considered analysis of
the statutory provision, which is
provided above.36
The Commission also believes both
cases were wrongly decided. The
employers in Seff and Flambeau did not
use wellness programs in a manner
consistent with the application of the
safe harbor provision. In neither Seff nor
Flambeau did the employer or its health
plan use wellness program data to
determine insurability or to calculate
insurance rates based on risks
associated with certain conditions—the
practices the safe harbor provision was
intended to permit. Moreover, there is
no evidence in either Seff or Flambeau
that the decision to impose a surcharge
or to exclude an employee from
coverage under a health plan was based
on actual risks that non-participating
employees posed.
Seff, in particular, seems to endorse
an almost limitless application of the
safe harbor provision. The court thought
34 Seff v. Broward Cty., 778 F. Supp. 2d 1370 (S.D.
Fla. 2011), aff’d, 691 F.3d 1221 (11th Cir. 2012)
(involving an employer that charged employees
who did not complete a health risk assessment 20
dollars every two weeks)
35 EEOC v. Flambeau, Inc., No. 14–cv–638–bbc,
2015 WL 9593632 (W.D. Wis. Dec. 30, 2015)
(involving an employer that terminated insurance
coverage of employee who did not undergo
biometric screening).
36 As the Supreme Court explained in National
Cable and Telecommunications Ass’n v. Brand X
Internet Services, 545 U.S. 967, 972 (2005), a
judicial decision determining the meaning of a
statutory provision is controlling only if it ‘‘holds
that its construction follows from the unambiguous
terms of the statute and thus leaves no room for
agency discretion.’’ This follows from the deference
accorded agencies under Chevron U.S.A. Inc. v.
National Resources Defense Council, 467 U.S. 837,
XX (1984). See also id. at 985 (‘‘Before a judicial
construction of a statute, whether contained in a
precedent or not, may trump an agency’s, the court
must hold that the statute unambiguously requires
the court’s construction.’’)
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31131
the safe harbor applied because the
wellness program was ‘‘designed to
mitigate’’ risks and was ‘‘based on the
theory’’ that getting employees to be
involved in their own health care leads
to a healthier workforce.37 If this were
a sufficient justification for the safe
harbor, then any medical inquiry
directed at an employee as part of a
health plan is permissible if there is
some possibility—real or theoretical—
that the information might be used to
reduce risks. Thus, the requirement in
42 U.S.C. 12112(d)(4)(B) that disabilityrelated inquiries and medical
examinations conducted as part of a
health program must be voluntary
would be meaningless for anyone who
receives employer-provided health
insurance, because any inquiry or
medical examination could be defended
on the ground that it might result in
reduced health risks.
Comments Responding to Questions in
the NPRM
Certification in Lieu of Answering
Disability-Related Inquiries or
Undergoing Medical Examinations
Individuals, including individuals
with disabilities and their advocates,
commented that employees should be
allowed to provide a certification from
a medical professional that any medical
risks they have are under active
treatment instead of being required to
complete a HRA or undergo a medical
examination. By contrast, health
insurance issuers and employer groups
generally commented that allowing an
employee to submit such a certification
instead of completing a HRA would
circumvent the ability of a wellness
program to assess and mitigate health
risks.
The Commission has decided that
although some employees already may
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
wellness programs that the Affordable
Care Act clearly intends to promote. For
example, employers may use aggregate
information from HRAs to determine the
prevalence of certain conditions in their
workforce to design specific programs
aimed at improving the health of
employees with those conditions. The
Commission concludes that protections
in the final rule—such as the
requirement that wellness programs be
reasonably designed to promote health
or prevent disease, and confidentiality
requirements that have been further
strengthened over those in the proposed
37 Seff,
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rule—provide employees with
significant protections without adopting
a medical certification as an alternative
to completion of a HRA or biometric
screening.
Whether To Incorporate an
‘‘Affordability Standard’’ To Determine
Whether a Wellness Program Is
‘‘Voluntary’’
One individual commented that if the
EEOC feels constrained to adopt the rule
that the incentives provided in a
wellness program that asks employees
to respond to disability-related inquiries
and/or undergo medical examinations
may not be so large as to render health
insurance coverage unaffordable under
the Affordable Care Act, it should at
least do so based on the cost of the
family premium for individuals who
have family coverage.38 Several
disability advocacy groups commented
that if the Commission retains its
proposed ‘‘30 percent rule,’’ it should
include protection for low-income
employees and employees with
disabilities, such that the incentives
may not be so large as to render health
insurance coverage unaffordable using a
threshold far lower than the applicable
percentage used to determine whether
coverage is affordable under the
Affordable Care Act (9.5 percent as
adjusted). By contrast, a health
insurance issuer commented that it is
unclear how ‘‘low income’’ would be
defined, or how an employer would be
aware of an employee’s household
financial circumstances in order to
determine which employees would be
considered low income. Other industry
groups commented that current
Treasury regulations already provide
that the affordability of eligible
employer-sponsored coverage is
determined by assuming that each
employee fails to satisfy the
requirements of a wellness program
(except for the requirements of a
nondiscriminatory wellness program
related to tobacco use).39
The Commission has decided that by
extending the 30 percent limit set under
HIPAA and the Affordable Care Act to
include participatory wellness programs
that ask an employee to respond to a
disability-related inquiry or undergo a
medical examination, this rule promotes
the ADA’s interest in ensuring that
incentive limits are not so high as to
make participation in a wellness
program involuntary. We also agree that
the Treasury regulations that provide
that the affordability of eligible
38 See
26 U.S.C. 36B(c)(2)(C); 26 CFR 54.4980H–
5(e).
39 See
26 CFR 1.36B–2(c)(3)(v)(A)(4).
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employer-sponsored coverage is
determined by assuming that each
employee fails to satisfy the
requirements of a wellness program
(except for the requirements of a
nondiscriminatory wellness program
related to tobacco use) already serves as
a constraint on the level of incentives an
employer may offer, since affordability
generally is calculated based on the
employee’s cost of coverage relative to
his or her income without considering
the value of any wellness program
incentive. Accordingly, the Commission
declines to incorporate an affordability
standard into the final rule.
Wellness Programs Offered Outside of
Employer-Sponsored Group Health
Plans
Several comments were submitted in
response to the question in the NPRM
asking whether employers offer or are
likely to offer wellness programs not in
connection with a group health plan or
group health insurance coverage
(outside of a group health plan), and
whether the final rule should
specifically limit incentives provided as
part of such programs. One advocacy
group commented that more employers
are sending employees to Exchanges for
health care coverage but are offering
wellness programs in an effort to
improve employees’ health and increase
job productivity. Some commenters
stated that the final rule should apply
both to wellness programs that are part
of an employer-sponsored health plan as
well as to wellness programs offered
outside of 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.’’ One
group said that an example of a wellness
program offered outside of a group
health plan is one that is available to all
employees whether or not they
participate in an employer-sponsored
group health plan. Another group
suggested criteria for determining
whether a wellness program is part of or
outside of a group health plan, such as:
(1) Whether the program is offered by a
vendor that has contracted with the
group health plan or insurer; (2)
whether it only is offered to employees
enrolled in a group health plan; and (3)
whether the wellness program is
described as a covered benefit under the
terms of the group health plan.
Rather than listing factors for
determining whether a 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, including the
requirement to provide a notice and the
limitations on incentives, apply to all
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wellness programs that include
disability-related inquiries and/or
medical examinations. This means that
this rule applies to wellness programs
that are: offered only to employees
enrolled in an employer-sponsored
group health plan; offered to all
employees regardless of whether they
are enrolled in such a plan; or offered
as a benefit of employment by
employers that do not sponsor a group
health plan or group health insurance.
We considered taking the position
that wellness programs that are not
offered through a group health plan that
require employees to provide medical
information could not offer any
incentives. However, such an approach
would be inconsistent with our
conclusion, with respect to wellness
programs that are part of a group health
plan, that the offer of limited incentives
will not render the program involuntary.
Similarly, allowing unlimited incentives
where a wellness program is not offered
through a group health plan would be
inconsistent with our position that
limitations on incentives are necessary
to ensure voluntariness. Accordingly, as
noted below, this rule explains how to
calculate the permissible incentive level
for wellness programs regardless of
whether they are related or unrelated to
a group health plan.
Comments Regarding Specific
Provisions
Section 1630.14(d)(1): Explanation of
What Constitutes a ‘‘Health Program’’
Some commenters suggested that the
EEOC leave it to the tri-Departments to
determine what constitutes a health or
wellness program, while others
commented that wellness programs
should be required to be based on
clinical guidelines or national standards
or have a stronger connection between
the content of a HRA and the
development of specific disease
management programs.
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 NPRM’s requirement that an
employee health program, including any
disability-related inquiries and medical
examinations that are part of such a
program, must be ‘‘reasonably designed
to promote health or prevent disease.’’
This standard is similar to the standard
under the tri-Department regulations
applicable to health-contingent wellness
programs.40 In order to meet this
40 This rule applies the ‘‘reasonably designed’’
standard to both participatory and healthcontingent wellness programs, while the tri-
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standard, a program—including a
wellness program that is unrelated to a
group health plan—must have a
reasonable chance of improving the
health of, or preventing disease in,
participating employees and must not
be overly burdensome, a subterfuge for
violating the ADA or other laws
prohibiting employment discrimination,
or highly suspect in the method chosen
to promote health or prevent disease.
Programs consisting of a measurement,
test, screening, or collection of healthrelated information without providing
results, follow-up information, or advice
designed to improve the health of
participating employees 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. Further,
imposing a penalty solely on an
employee’s failure to achieve a
particular health outcome (such as
failing to attain a certain weight or
cholesterol level) would, in many
instances, discriminate against
individuals based on disability.41 The
interpretive guidance offers examples of
programs that would and would not
meet this standard.
Finally, because the ADA generally
restricts the medical information
employers may obtain from employees,
the Commission believes that requiring
wellness programs that include
disability-related inquiries and/or
medical examinations to be ‘‘reasonably
designed to promote health or prevent
disease’’ is necessary to give meaning to
Department regulations apply the standard only to
health-contingent wellness programs. The triDepartment regulations also state that, in order to
be reasonably designed, a health-contingent
outcome-based wellness program must provide a
reasonable alternative standard (or waiver) for an
individual to qualify for a reward if the individual
does not meet the initial standard based on a
measurement, test, or screening that is related to a
health factor. Under the ADA, a covered entity is
required to provide a reasonable accommodation (a
modification or adjustment) for a participatory
program even though HIPAA and the Affordable
Care Act do not require such programs to offer a
reasonable alternative standard (although, under the
HIPAA rules, a participatory program must be made
available to all similarly situated individuals,
regardless of health status). Finally, unlike the triDepartment regulations, the ‘‘reasonably designed’’
standard applies to all employee health programs
that include disability-related inquiries and/or
medical examinations, even if they are not related
to a group health plan. See 26 CFR 54.9802–
1(f)(3)(iii), (f)(4)(iii); 29 CFR 2590.702(f)(3)(iii),
(f)(4)(iii); 45 CFR 146.121(f)(3)(iii), (f)(4)(iii).
41 Changes made to the ADA by the ADA
Amendments Act of 2008 adopted a broad
definition of ‘‘disability’’ that makes it easier for an
individual to show that he or she has a disability,
a record of a disability, or that an employer took
some adverse action because it regarded him or her
as having a disability (such as imposed a penalty
for not meeting a particular health outcome).
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the exception for inquiries and
examinations that are part of voluntary
employee health programs. In addition,
this is a standard with which health
plans are now sufficiently familiar, and,
thus, it is reasonable to apply that
standard under the ADA to employers
that sponsor wellness programs.
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 medical
information.
Section 1630.14(d)(2)(i) Through (iv):
Definition of the Term ‘‘Voluntary’’
(i) Does Not Require Employees To
Participate
Individuals with disabilities and their
advocates commented that participation
in wellness programs is not voluntary
when an employee has no choice or
when financial penalties are the cost of
opting out. By contrast, health insurance
and employer groups commented that if
an employee has a choice whether to
participate, even if that choice may
result in a penalty, participation should
be considered voluntary.
To give meaning to the ADA’s
requirement that an employee’s
participation in a wellness program
must be voluntary, the incentives for
participation cannot be so substantial as
to be coercive. We, therefore, reject the
suggestion that merely offering
employees a choice whether or not to
participate renders participation
voluntary, regardless of the
consequences associated with that
choice. Nonetheless, although
substantial, the Commission concludes
that, given current insurance rates,
offering an incentive of up to 30 percent
of the total cost of self-only coverage
does not, without more, render a
wellness program coercive.
Accordingly, the final rule does not
make any changes to the requirement
that, in order for a wellness program to
be considered voluntary, an employer
may not require employees to
participate in the program.
(ii) Does Not Deny Coverage Under Any
Group Health Plan to Employees for
Non-Participation
Some employer and health care
groups commented that a number of
employers have begun experimenting
with tiered health plan benefit and costsharing structures (sometimes called
‘‘gateway plans’’) that base eligibility for
a particular health plan on completing
a HRA or undergoing biometric
screenings and asked the Commission to
allow for such plans. For example, a
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31133
health insurance issuer commented that
a current trend is to allow employees
who participate in a wellness program
to enroll in a comprehensive health
plan, while offering non-participants a
less comprehensive plan or one that
requires higher premiums or costsharing.
The Commission concludes that the
ADA does not prohibit an employer
from denying an incentive that is within
the limits set out in this final rule to an
employee who does not participate in a
wellness program that includes
disability-related inquiries or medical
examinations; nor does it prohibit
requiring an employee to pay more for
insurance that is more comprehensive.
The ADA, however, does prohibit the
outright denial of access to a benefit
available by virtue of employment.
When an employer denies access to a
health plan because the employee does
not answer disability-related inquiries
or undergo medical examinations, it
discriminates against the employee
within the meaning of 42 U.S.C.
12112(d)(4) by requiring the employee
to answer questions or undergo medical
examinations that are not job related
and consistent with business necessity
and cannot be considered voluntary.
Consequently, we decline to change this
provision in the final rule to allow for
the kind of tiered health plans described
by commenters. However, an employer
still may offer incentives up to 30
percent of the total cost of self-only
coverage based on participation in a
wellness program. Thus, an employee
who chooses a more comprehensive
health plan but declines to participate
in a wellness program could pay more
for the same comprehensive health plan
than an employee who participates in a
wellness program.
(iii) Does Not Take Any Adverse Action,
Retaliate Against, or Coerce Employees
Who Choose Not To Participate
Individuals, including individuals
with disabilities and their advocates,
and civil rights groups generally
commented that because financial
incentives can be significant enough to
become coercive for many employees,
the proposed rule did not offer enough
protection and was inconsistent with
the plain language of the ADA. Health
insurance and employer groups,
however, supported the provision.
No changes have been made to this
paragraph, which states that, in order to
be considered voluntary, an employer
may not retaliate against, interfere with,
coerce, intimidate, or threaten
employees in violation of Section 503 of
the ADA, codified at 42 U.S.C. 12203
(e.g., by coercing an employee to
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participate in an employee health
program or threatening to discipline an
employee who does not participate).
(iv) Notice
The Commission asked whether the
requirement that employees
participating in wellness programs that
ask disability-related questions and/or
require medical examinations be given a
notice concerning the information to be
collected, how it will be used, with
whom it will be shared, and how it will
be kept confidential should apply to all
wellness programs and not just to
wellness programs that are part of a
group health plan. We also asked
whether a notice should be required
where a covered entity offers only ‘‘de
minimis’’ incentives. (See the
discussion of de minimis incentives
under ‘‘Types of Incentives’’ below.)
Some disability advocacy groups
commented that rather than trying to
define what constitutes de minimis
rewards or penalties, the notice
requirements should apply to all
programs that include disability-related
inquiries or medical examinations,
regardless of whether they are part of a
group health plan or offer incentives.
However, an employer group
commented that any notice
requirements should be waived where
incentives are only de minimis.
Because the importance of the
information the notice communicates
does not depend on whether a wellness
program is part of a group health plan
or whether incentives are offered in
connection with the program, this
provision of the final rule clarifies that
the requirement to provide a notice
applies to all wellness programs that ask
employees to respond to disabilityrelated inquiries and/or undergo
medical examinations. For these
wellness programs to be deemed
voluntary, a covered entity must
provide a notice—in language
reasonably likely to be understood by
the employee from whom medical
information is being obtained—that
clearly explains what medical
information will be obtained, how the
medical information will be used, who
will receive the medical information,
the restrictions on its disclosure, and
the methods the covered entity uses to
prevent improper disclosure of medical
information.
Commenters representing employer
and health care groups said that the
notice requirement is duplicative of
existing law, while others asked the
Commission to provide model language
for a notice that would meet the
necessary requirements. Where an
employer’s current written notifications
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to employees regarding wellness
programs include the required
information, the employer can continue
to use those notifications for all of its
wellness programs that ask employees
to respond to disability-related inquiries
and/or undergo medical examinations.
However, where current notifications do
not include the detailed information
required by this provision, even if the
employer claims to meet requirements
under another law, it must revise
existing notifications or develop a new
notice to comply with this final rule.
Within 30 days of the final rule’s
publication, the Commission will
provide on its Web site an example of
a notice that complies with this rule.
The Commission also asked whether
the proposed notice provision should
include a requirement that employees
participating in wellness programs that
include disability-related inquiries and/
or medical examinations provide prior,
written, and knowing confirmation that
their participation is voluntary.
Disability groups expressed concerns
about employees who may unwittingly
‘‘waive’’ their privacy rights,
particularly when completing online
HRAs. For example, one group
commented that some HRA Web sites
include a provision, buried in an
obscure link, stating that using the
wellness program Web site constitutes a
waiver of the person’s privacy rights.
Other groups commented that
employees should have the option to
actively opt in to a privacy notification
agreement and that they should be fully
informed of everything that the vendor
or third party might do with personal
health data, including: Marketing
products and services to the employee;
disclosing personal information to third
party vendors that help provide services
on the vendor’s site; or authorizing the
third party vendor to collect the
employee’s health information directly
or indirectly from interaction with the
services and/or from the employee’s
health care provider or health insurer.
Health insurance issuers and
employer groups commented that
requiring employers to collect
signatures from non-participants would
create an administrative burden and
introduce additional costs and barriers
to employers’ willingness to offer
wellness programs and to employees’
participation. Another stakeholder said
that if the point of the proposed
regulation is to minimize confusion
between the ADA and Affordable Care
Act rules, requiring a written
authorization would undermine that
point and make the determination of a
‘‘voluntary’’ wellness program an
employee-by-employee process rather
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than a determination made at the
program level.
Although the Commission has
decided not to include a requirement
that employees must provide prior,
written, and knowing authorization, we
are concerned that the completion of a
HRA or disclosure of health information
in connection with a wellness program,
particularly when online resources are
used, would cause employees to waive
critical confidentiality protections of
their health information. We have
addressed this concern in the final
rule’s provisions on confidentiality of
medical information. (See the
discussion of § 1630.14(d)(4)(v) below.)
Section 1630.14(d)(3): ADA’s 30 Percent
Limit on Financial Incentives Generally
The Commission received numerous
comments on this provision of the
proposed rule. As stated in the general
comments section of this preamble,
disability advocacy groups and
individuals with disabilities said that
the proposed rule was based on the
erroneous assumption that the ADA
must be ‘‘conformed’’ to provisions of
the Affordable Care Act concerning
wellness programs. They also
commented that allowing wellness
programs to offer incentives of up to 30
percent of the total cost of self-only
coverage in exchange for employees
responding to disability-related
inquiries or undergoing medical
examinations would be coercive and
would substantially weaken the ADA’s
protections. While some individuals
with disabilities did not categorically
object to allowing employers to offer
incentives to employees who provide
health information, they stated that
employees should not have to answer
questions about their disabilities in
order to receive whatever reward is
offered. Employer and industry groups,
however, commented that the EEOC
should align the incentive limits for
wellness programs with the incentive
limits established in the tri-Department
regulations.
The final rule reaffirms that an
employer may offer incentives up to a
maximum of 30 percent of the total cost
of self-only coverage (including both the
employee’s and employer’s
contribution), whether in the form of a
reward or penalty, to promote an
employee’s participation in a wellness
program that includes disability-related
inquiries and/or or medical
examinations as long as participation is
voluntary. The 30 percent limit applies
to all workplace wellness programs
whether they are: Offered only to
employees enrolled in an employersponsored group health plan; offered to
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all employees whether or not they are
enrolled in such a plan; or offered as a
benefit of employment where an
employer does not sponsor a group
health plan or group health insurance
coverage.
Calculation of Incentive Limit Based on
Whether Employee Is Enrolled in a
Health Plan
The final rule explains how to
calculate the permissible incentive limit
in four situations. First, where
participation in a wellness program
depends on enrollment in a particular
group health plan, the employer may
offer an incentive up to 30 percent of
the total cost of self-only coverage
(including both employer and employee
contributions) under that plan. Second,
where an employer offers a single group
health plan, but participation in a
wellness program does not depend on
the employee’s enrollment in that plan,
an employer may offer an incentive of
up to 30 percent of the total cost of selfonly coverage under that plan. Third,
where an employer has more than one
group health plan, but participation in
a wellness program does not depend on
the employee’s enrollment in any plan,
the employer may offer an incentive up
to 30 percent of the total cost of the
lowest cost self-only coverage under a
major medical group health plan offered
by the employer. Finally, where an
employer does not offer a group health
plan or group health insurance
coverage, the rule uses the cost of the
second lowest cost Silver Plan 42
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 as a
benchmark for setting the incentive
limit. Thus, an employer may offer
incentives up to a maximum of 30
percent of the cost that would be
charged for self-only coverage under
such a plan if purchased by a 40-yearold non-smoker.
The Commission has concluded that
the employer’s lowest cost self-only
coverage under a major medical group
health plan is an appropriate benchmark
for establishing the incentive limit
where an employer has more than one
group health plan and participation in
a 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
incentives for answering disabilityrelated questions or undergoing medical
examinations do not become so high as
to render the employee’s participation
involuntary.
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 Exchanges.43
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.44 Additionally, because the
Silver Plan typically is neither the least
nor most expensive plan available on
the Exchanges, incentive limits that are
tied to its cost may promote
participation in wellness programs
while not being so high as to be
coercive.
Types of Incentives
Some groups also commented that
non-financial incentives should not be
counted toward the cap. According to
these commenters, determining the
value of in-kind incentives, such as
employee recognition, use of a parking
spot, or easing of a dress code for a
wellness participant are difficult, if not
impossible, to determine and that
including such non-financial incentives
will add an additional administrative
burden and possibly discourage the use
of these kinds of incentives. Others
commented that if the provision is
adopted, the EEOC should avoid
requiring plans to calculate the value of
de minimis rewards when
demonstrating compliance with
applicable limits.
The final rule reaffirms that the offer
of limited incentives (whether financial
or in-kind) to encourage employees to
participate in wellness programs that
include disability-related inquiries and/
or medical examinations will not render
the program involuntary. However, the
total allowable incentive available
under all programs (both participatory
and health-contingent programs),
43 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
(indicating that, based on marketplace enrollment
from November 15, 2014 through February 15,
2015, 67 percent of people who selected a
marketplace plan, selected Silver).
44 See,
42 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/planscategories/ (last visited March 29, 2016).
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31135
whether part of, or outside of, a group
health plan, may not exceed 30 percent
of the total cost of self-only coverage,
which generally is the maximum
allowable incentive available under
HIPAA and the Affordable Care Act for
health-contingent wellness programs.45
The Commission sees no reason to
exclude in-kind incentives based on the
difficulty of valuing them when the triDepartment regulations clearly state that
the term ‘‘incentives’’ means ‘‘any
financial or other incentive.’’ 46
Employers have flexibility to determine
the value of in-kind incentives as long
as the method is reasonable.
We also decline to exclude de
minimis incentives. Although
commenters gave examples of some
incentives that might be considered de
minimis, no commenters offered a
workable principle or a dollar amount
that could be used as the basis for
defining which incentives 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 de minimis
value threshold. Moreover, the triDepartment regulations do not
distinguish between de minimis
incentives and others for purposes of
determining whether a plan has
complied with the 30 percent incentive
limit applicable to most healthcontingent wellness programs, even
though it is quite possible that healthcontingent wellness programs utilize
both de minimis and more substantial
incentives. Consequently, we have not
exempted the value of de minimis
incentives from the 30 percent limit on
incentives for wellness programs that
include disability-related questions and/
or medical examinations.
Calculation of Incentive Limit Based on
Self-Only Coverage
Numerous commenters said that
calculating the 30 percent limit on the
total cost of self-only coverage does not
align with the tri-Department
regulations implementing HIPAA’s
45 See Incentives for Nondiscriminatory Wellness
Programs in Group Health Plans, 78 FR 33158,
33,167 (June 3, 2013).
46 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
FAQs About Affordable Care Act Implementation
(Part XXIX) and Mental Health Parity
Implementation, Q. 11, https://www.dol.gov/ebsa/
pdf/faq-aca29.pdf (explaining that ‘‘a reward may
be financial or non-financial (or in-kind). . . . [A]n
individual obtaining a reward includes both
‘obtaining a reward (such as a discount or rebate of
a premium or contribution, a waiver of all or part
of a cost-sharing mechanism (such as a deductible,
copayment, or coinsurance), an additional benefit,
or any financial or other incentive) and avoiding a
penalty (such as the absence of a surcharge or other
financial or nonfinancial disincentives).’’
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wellness program provisions, which
provide that the incentive limit applies
to the total cost of coverage in which the
employee and any dependents are
enrolled, when wellness programs are
available to an employee’s dependents
or spouse. Because the ADA’s
prohibitions on discrimination—
including its restrictions on disabilityrelated inquiries and medical
examinations—apply only to applicants
and employees, not their spouses and
other dependents, this rule does not
address the incentives wellness
programs may offer in connection with
dependent or spousal participation.47
However, because medical history about
an employee’s family members,
including an employee’s dependents
and spouse, is considered genetic
information about the employee,
incentives offered in exchange for an
employee’s family member to provide
such information implicates Title II of
GINA.48 The EEOC also publishes today
a final rule under GINA concerning the
extent to which employers may offer
incentives for spouses and other family
members to provide health-related
information as part of a wellness
program.49
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Incentives Related to Smoking Cessation
Programs
The interpretive guidance
accompanying the proposed rule
explained the application of this
provision to smoking cessation
programs. Specifically, the interpretive
guidance stated that because a smoking
cessation program that merely asks
employees whether or not they use
tobacco (or whether or not they ceased
using tobacco upon completion of the
program) is not an employee health
program that includes disability-related
inquiries or medical examinations, the
30 percent incentive limit does not
apply. Therefore, a covered entity may
offer incentives as high as 50 percent of
the cost of self-only coverage, pursuant
to the regulations implementing section
2705(j) of the PHS Act, for such a
47 The ADA’s ‘‘association’’ provision that
protects applicants and employees from
discrimination based on their relationship or
association with an individual with a disability also
is not applicable here as it applies to only
relationships to persons with a disability. See 42
U.S.C. 12112(b)(4).
48 See 29 CFR 1635.3(c) (stating that genetic
information includes information about ‘‘[t]he
manifestation of disease or disorder in family
members of [an] individual’’); 29 CFR 1635.3(a)(1)
(stating that a family member of an individual
includes ‘‘a person who is a dependent of that
individual as the result of marriage, birth, adoption,
or placement for adoption’’).
49 The final rule implementing Title II of GINA is
published elsewhere in this issue of the Federal
Register.
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program. However, the interpretive
guidance explained that because any
biometric screening or other medical
procedure that tests for the presence of
nicotine or tobacco is a medical
examination under the ADA, the 30
percent incentive limit would apply to
such a screening or procedure.
Some commenters said that the
distinction the proposed rule made
between inquiries about tobacco use and
tests to determine such use was
confusing. Additionally, a national trade
association representing large employers
commented that the ADA’s prohibition
on medical examinations was intended
to prohibit employers from acquiring
and improperly using knowledge about
an employee’s or applicant’s disability
and was not intended to protect
employees from restrictions on tobacco
usage, which is not a disability. Other
employer groups commented that EEOC
should not reverse course on the efforts
being made by wellness programs to
discourage tobacco use, particularly
since employees are not required to quit
smoking/using tobacco but, rather,
simply asked to participate in cessation
programs.
The final rule retains the distinction
between smoking cessation programs
that require employees to be tested for
nicotine use and programs that merely
ask employees whether they smoke.
Although the fact that someone smokes
is not information about a disability, the
ADA’s provisions limiting disabilityrelated inquiries and medical
examinations apply to all applicants
and employees, whether or not they
have disabilities.50 Moreover, whatever
benefit smoking cessation programs that
are part of wellness programs may have,
the Commission can discern no reason
for treating medical examinations to
detect the use of nicotine differently
from any other medical examinations
when the ADA makes no such
distinction.
Section 1630.14(d)(4)(i) Through (iv)
(Previously 1630.14(d)(4) Through
(d)(6)): Explanation of the Requirements
Regarding Confidentiality of Medical
Information
The NPRM had three subsections
addressing the confidentiality of
medical information obtained through
voluntary health programs. Specifically,
the Commission redesignated paragraph
(d)(1) in § 1630.14, which states that
information regarding the medical
condition or history of any employee
shall be collected and maintained on
separate forms and in separate medical
files and be treated as a confidential
50 See
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medical record, as paragraph (d)(4) but
did not change any of the exceptions to
confidentiality set out in that section. It
also redesignated paragraph (d)(2),
which states that medical information
regarding the medical history of any
employee shall not be used for any
purpose inconsistent with § 1630.14(d),
as paragraph (d)(5). Finally, the
Commission proposed to add a new
paragraph (d)(6) to § 1630.14,
concerning the confidentiality and use
of medical information gathered in the
course of providing voluntary health
services to employees, including
information collected as part of an
employee’s participation in an
employee health program.
Paragraph (d)(6) in § 1630.14 stated
that medical information collected
through an employee health program
only may be provided to a covered
entity under the ADA in aggregate terms
that do not disclose, or are not
reasonably likely to disclose, the
identity of specific individuals, except
as needed to administer the health plan
and except as permitted under
§ 1630.14(d)(4). The interpretive
guidance explained that both employers
that sponsor wellness programs and
administrators of wellness programs
acting as agents of employers have
obligations to ensure compliance with
this provision.
Employer and health care groups
suggested that the confidentiality
provisions applicable to wellness
programs should be more closely
aligned with the HIPAA privacy and
security standards and the Affordable
Care Act. For example, an employer
group commented that the EEOC’s
guidance implies that compliance with
HIPAA’s privacy and security standards
may not always satisfy the ADA’s
requirement and that the final rule
should explicitly state that compliance
with the HIPAA privacy and security
standards would satisfy the
confidentiality requirement. By contrast,
one individual commented that the
Commission should strengthen
employment non-discrimination
protections beyond allowing disclosure
of only aggregate information to the
employer and recommended that
individuals have the right to request
that employers delete all their wellness
data if they stop participating in the
wellness program, or leave their
employer.
In response, the Commission retains
the requirements set forth in this
paragraph but includes additional
requirements to further protect
employees’ personal health information.
The final rule also places all of the
confidentiality requirements in a single
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paragraph: paragraph (d)(4) in
§ 1630.14.51
In response to comments that
participation in a wellness program,
particularly completion of an online
HRA, may result in employees waiving
critical confidentiality protections, the
final rule adds a new paragraph,
(d)(4)(iv), which is similar to a provision
in the final rule issued today under Title
II of GINA. Section 1630.14(d)(iv) states
that a covered entity may not require an
employee to agree to the sale, exchange,
sharing, transfer, or other disclosure of
medical information (except to the
extent permitted by this part to carry out
specific activities related to the wellness
program), or to waive confidentiality
protections available under the ADA as
a condition for participating in a
wellness program or receiving a
wellness program incentive.
The Commission declines to include
a requirement that employers or
wellness programs delete medical
information of employees who elect not
to continue participating in a wellness
program. The ADA only requires that
medical information of employees
participating in health programs be
maintained as a confidential medical
record, subject to limited exceptions for
its disclosure. We are mindful that other
laws may require the retention of such
information. Even the ADA’s
confidentiality provisions, codified at
42 U.S.C. 12112(d)(3)(B)(iii) and (4)(C),
contemplate that otherwise confidential
medical information may have to be
shared with government officials
investigating compliance with the ADA.
Section 1630.14(d)(5): Explanation of
the Rule’s Relationship to Other EEOC
Nondiscrimination Laws
This paragraph of the proposed rule
(previously § 1630.14(d)(7)) clarified
that compliance with paragraph (d) of
this section, including the limit on
incentives under the ADA, does not
relieve a covered entity of its obligation
to comply with other employment
nondiscrimination laws. Some
commenters suggested that the final rule
should give specific examples of
wellness programs that violate other
nondiscrimination laws, especially
those that may have a disparate impact
on a protected group.
The Commission has revised the
interpretive guidance accompanying the
proposed rule to further explain that
even if an employer’s wellness program
complies with the incentive limits set
forth in the ADA regulations, the
51 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 512(d).
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employer would violate Title VII or the
ADEA if that program discriminates on
the basis of race, sex (including
pregnancy, gender identity, transgender
status, and sexual orientation), national
origin, age, or any other grounds
prohibited by those statutes. The
interpretive guidance also explains that
if a wellness program requirement (such
as achieving 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.
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 amended 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.
Although a detailed cost-benefit
analysis of the final rule is not required,
the Commission recognizes that
providing some information on
potential costs and benefits of the rule
may be helpful in assisting members of
the public in better understanding the
rule’s potential impact. The
Commission notes that by providing
standards applicable to wellness
program incentives and clarity about
other ADA provisions (including the
insurance safe harbor provision), the
rule will significantly aid compliance
with the ADA and with HIPAA’s
nondiscrimination provisions, as
amended by the Affordable Care Act, by
employers and group health plans that
offer wellness programs. Currently,
employers that offer wellness programs
as part of group health plans face
uncertainty as to whether providing
incentives permitted by HIPAA will
subject them to liability under the ADA.
Additionally, employers that do not
offer health plans and so are not subject
to the wellness program provisions of
HIPAA, as amended by the Affordable
Care Act, have no way to determine
what, if any, incentives they may want
to offer are permissible under the ADA.
This rule clarifies that the ADA does
permit employers to offer incentives to
promote participation in wellness
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31137
programs that include disability-related
inquiries and/or medical examinations
and sets out the limits on such
incentives. The rule also removes
uncertainty about whether practices that
have been the subject of litigation, such
as conditioning enrollment in an
employer’s health plan on participation
in a wellness program that asks
disability-related questions or requires
medical examinations, are prohibited.
The Commission does not believe the
costs associated with the rule are
significant. Employers covered by the
ADA that offer wellness programs as
part of their group health plans are
already required to comply with
wellness program incentive limits for
health-contingent wellness programs.
EEOC’s final rule differs from HIPAA’s
wellness program incentives in that it
extends the 30 percent limit on
incentives under health-contingent
wellness programs to participatory
wellness programs. HIPAA, as amended
by the Affordable Care Act, places no
limits on incentives for participatory
wellness programs. As the incentives
offered by the vast majority of
employers currently fall below the limit
of 30 percent of the cost of self-only
coverage, the Commission does not
believe the rule will negatively affect
the ability of employers to offer
incentives sufficient to promote
meaningful participation in wellness
programs that are part of group health
plans. Employers that offer wellness
programs that do not require employees
to participate in a particular group
health plan can determine incentive
limits by reference to readily available
information about the cost of their own
group health plan or, in the case of
employers that do not offer group health
insurance, the cost of the second lowest
Silver Plan available under the state or
federal Exchanges under the Affordable
Care Act.
The only other potential cost is
associated with the requirement that
employers provide a notice to
employees informing them what
medical information will be obtained,
how it will be used, who will receive it,
and the restrictions on disclosure. For
the reasons set forth in the Paperwork
Reduction Act analysis that follows, the
Commission concludes that
approximately 265,880 employers will
need to develop such a notice. The
Commission estimates the time required
to develop the notice to be four hours,
for a total of 1,063,520 hours. According
to data from the Bureau of Labor
Statistics, the average hourly
compensation for employees in
‘‘management, professional, and
related’’ occupations was $55.56 as of
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December 2014, and the average hourly
compensation for employees working in
‘‘office and administrative support’’ was
$23.98.52 Assuming that 50 percent of
the time required to develop an
appropriate notice is attributable to
employees working in management,
professional, and related occupations
and that 50 percent of the time is
attributable to employees working in
office and administrative support, the
Commission estimates that the total cost
of developing a notice that complies
with the requirements of the proposed
rule would be $42,296,190. We note that
some employers and group health plans
may already have notices that comply
with these requirements, and that those
that do not will incur only a one-time
cost to develop an appropriate notice.
The Commission sought but did not
receive comments on these cost
estimates.
Other requirements in the rule will
result in no costs since they simply
restate basic principles of
nondiscrimination under the ADA. Even
in the absence of this rule, employers
are prohibited from requiring employees
to participate in employee health
programs that include disability-related
inquiries and/or medical examinations;
denying employees health insurance (or
any other benefit of employment) if they
do not participate in wellness programs;
retaliating against employees who file
charges claiming that a wellness
program violates the ADA; and
attempting to induce participation in
employee health programs through
interference with their ADA rights or by
coercion, intimidation, and threats.
Employers are also required to provide
reasonable accommodations to enable
employees to enjoy the equal benefits
and privileges of employment,
including participation in employee
health programs. To the extent
confidentiality of medical information
acquired in the course of providing an
employee health program is required,
the final rule will result in no additional
costs as the ADA already requires
employers to keep medical information
about applicants and employees
confidential.
To the extent this rule can be read to
impose additional confidentiality
obligations, the interpretive guidance to
the rule makes clear that a wellness
program that is part of a group health
plan may satisfy its obligation to comply
with § 1630.14(d)(4)(iii) by adhering to
52 See Bureau of Labor Statistics, Employer Costs
for Employee Compensation—December 2014
(2015), www.bls.gov/news.release/pdf/ecec.pdf.
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the HIPAA Privacy Rule.53 An employer
that is a health plan sponsor and
receives individually identifiable health
information from or on behalf of the
group health plan, as permitted by
HIPAA when the plan sponsor is
administering aspects of the plan, may
generally comply with this rule by
certifying to the group health plan, also
pursuant to the HIPAA Privacy Rule,
that it will not use or disclose the
information for purposes not permitted
by its plan documents and the Privacy
Rule, such as for employment purposes,
and abiding by that certification.
Further, if an employer is not
performing plan administration
functions on behalf of the group health
plan, then the employer may receive
aggregate information from the wellness
program under § 1630.14(d)(4)(iii) only
so long as it is de-identified in
accordance with the HIPAA Privacy
Rule.
Paperwork Reduction Act
The final rule contains an information
collection requirement subject to review
and approval by the Office of
Management and Budget (OMB) under
the Paperwork Reduction Act. As
required by the Paperwork Reduction
Act, the EEOC is submitting to OMB a
request for approval of the information
collection requirement under section
3507(d) of the Act.
Overview of This Information
Collection
Collection Title: Notice requirement
under Title I of the ADA, 29 CFR
1630.14(d)(2)(iv).
OMB number: 3046–0047.
Description of affected public:
Employers with 15 or more employees
that are subject to Title I of the ADA and
offer wellness programs as part of, or
outside of, group health plans.
Number of respondents: 265,880.
Initial one-time hour burden:
1,063,520.
Annual hour burden: None.
Number of forms: None.
Federal cost: None.
Abstract: The final rule says that a
wellness program that includes
disability-related inquiries or medical
examinations—whether it is part of, or
outside of, a group health plan—must
meet several requirements to be deemed
voluntary, including providing a notice
to employees informing them what
medical information will be obtained,
how it will be used, who will receive it,
and the restrictions on disclosure.
The NPRM asked for comments on
whether the proposed notice
53 See 45 CFR parts 160 and 164, subparts A and
E, respectively.
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requirement was necessary and on the
accuracy of its burden estimate.
Although none of the comments
specifically addressed the burden
estimate, some commenters said that the
notice requirement was duplicative of
existing law, while others asked the
Commission to provide model language
for a notice that would meet necessary
requirements. Burden Statement: We
estimate that there are approximately
782,000 employers with 15 or more
employees subject to the ADA 54 and, of
that number, one half to two thirds
(391,000 to 521,333) offer some type of
wellness program as part of, or outside
of, a group health plan.55 Of those
employers, 32 percent to 51 percent
require employees to complete a HRA
that likely contains disability-related
questions.56 Using the highest estimates,
we assume that 265,880 employers (51
percent of 521,333 employers) will be
covered by this requirement.
The final rule states that, to the extent
that employers already use forms that
provide the requisite information in an
applicable document that complies with
disclosures required under ERISA and
HIPAA, they do not have to create a new
notice to satisfy the requirements of this
provision and can use the same notice
for all of its wellness programs that ask
employees to respond to disabilityrelated inquiries and/or undergo
medical examinations. Therefore, the
burden only will be on employers that
will incur a one-time burden to develop
an appropriate notice to ensure that
employees who provide medical
information pursuant to a wellness
program do so voluntarily. This notice
may be included on or attached to any
HRA employees are asked to complete
and should explain what medical
information will be obtained, how it
will be used, who will receive it, and
the restrictions on disclosure.
Within 30 days of the final rule’s
publication, the Commission will
provide on its Web site an example of
a notice that complies with the rule.
Thus, the Commission anticipates that
the sample notice will reduce an
employer’s burden by making it easier
to satisfy this requirement. Because we
54 See Firm Size Data, Small Business
Administration, https://www.sba.gov/advocacy/849/
12162 (last visited March 28, 2016).
55 According a RAND report, ‘‘approximately half
of U.S. employers offer wellness promotion
initiatives.’’ RAND Final Report, supra note X, at
xiv. By contrast, a survey by the Kaiser Family
Foundation found that ‘‘[s]eventy-four percent of
employers offering health benefits’’ offer at least
one wellness program. See Kaiser Survey, supra
note 6, at 6.
56 The Kaiser Survey reports that 51 percent of
large employers versus 32 percent of small
employers ask employees to complete a HRA.
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do not have data on which to base an
estimate of time saved, we likely
overstate the burden by assuming that
creation of such a document will take
four hours, and assuming that 265,880
employers will be covered by rule, this
one-time burden would be 1,063,520
hours. Because employers do not have
to develop a new form unless they
collect medical information for a
different purpose, they will be able to
annually redistribute the same notice to
all relevant employees.
Regulatory Flexibility Act
Title I of the ADA applies to
approximately 782,000 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 proposed 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. The
final rule clarifies that, in most respects,
employers that offer wellness programs
that are part of, or outside of, their
health plans may offer incentives to
employees consistent with HIPAA and
the Affordable Care Act without
violating the ADA. The rule also
clarifies that employers that offer
wellness programs to all employees,
regardless of whether they are enrolled
in a group health plan, and employers
that offer wellness programs but do not
provide group health insurance, also
may provide incentives for participation
in such programs consistent with the
limits set forth in this rule.
To the extent that employers will
expend resources to train human
resources staff and others on the revised
rule, we note 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 EEOrelated 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. Now that this rule
is final, we will include information
about the revisions to the regulations in
our general outreach programs and
continue to offer ADA-specific outreach
programs that will include this
information. On the date this rule is
published, we also will post technical
assistance documents on our Web site
57 See
Firm Size Data, supra note 54.
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explaining the revisions to these
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, 90 minutes to gain a
satisfactory understanding of the revised
regulations. We further estimate that the
median hourly pay rate of a human
resources professional is approximately
$49.41.58 Assuming that small entities
have between one and five human
resources professionals/managers, we
estimate that the cost per entity of
providing appropriate training will be
between approximately $74.12 and
$370.60.
The EEOC does not believe that this
cost will be significant for the impacted
small entities.
Unfunded Mandates Reform Act of 1995
This 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 1630
Equal employment opportunity,
Individuals with disabilities.
For the reasons set forth in the
preamble, the EEOC amends 29 CFR
part 1630 as follows:
PART 1630—[AMENDED]
1. The authority citation for part 1630
continues to read as follows:
■
Authority: 42 U.S.C. 12116 and 12205a of
the American with Disabilities Act, as
amended.
2. In § 1630.14:
a. Redesignate paragraph (d)(1)
introductory text as paragraph (d)(4)(i)
with the subject heading
Confidentiality;
■ b. Add new paragraph (d)(1)
introductory text;
■ c. Redesignate paragraphs (d)(1)(i),
(ii), and (iii) as (d)(4)(i)(A), (B), and (C);
■ d. Redesignate paragraph (d)(2) as
paragraph (d)(4)(ii);
■ e. Add new paragraph (d)(2) and
paragraph (d)(3);
■ f. Add paragraphs (d)(4)(iii) and
(d)(4)(iv); and
■ g. Add paragraphs (d)(5) and (6);
The revisions and additions read as
follows:
■
■
58 See Occupational Employment and Wages,
Bureau of Labor Statistics, https://www.bls.gov/oes/
current/oes113121.htm (last visited March 28,
2016).
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31139
§ 1630.14 Medical examinations and
inquiries specifically permitted.
*
*
*
*
*
(d) * * *
(1) Employee health program. An
employee health program, including any
disability-related inquiries or medical
examinations that are part of such
program, must be 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 employees, and it is not
overly burdensome, is not a subterfuge
for violating the ADA or other laws
prohibiting employment discrimination,
and is not highly suspect in the method
chosen to promote health or prevent
disease. A program consisting of a
measurement, test, screening, or
collection of health-related information
without providing results, follow-up
information, or advice designed to
improve the health of participating
employees 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 the
conditions identified. A program also is
not reasonably designed if it exists
mainly to shift costs from the covered
entity to targeted employees based on
their health or simply to give an
employer information to estimate future
health care costs. Whether an employee
health program is reasonably designed
to promote health or prevent disease is
evaluated in light of all the relevant
facts and circumstances.
(2) Voluntary. An employee health
program that includes disability-related
inquiries or medical examinations
(including disability-related inquiries or
medical examinations that are part of a
health risk assessment) is voluntary as
long as a covered entity:
(i) Does not require employees to
participate;
(ii) Does not deny coverage under any
of its group health plans or particular
benefits packages within a group health
plan for non-participation, or limit the
extent of benefits (except as allowed
under paragraph (d)(3) of this section)
for employees who do not participate;
(iii) Does not take any adverse
employment action or retaliate against,
interfere with, coerce, intimidate, or
threaten employees within the meaning
of Section 503 of the ADA, codified at
42 U.S.C. 12203; and
(iv) Provides employees with a notice
that:
(A) Is written so that the employee
from whom medical information is
being obtained is reasonably likely to
understand it;
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(B) Describes the type of medical
information that will be obtained and
the specific purposes for which the
medical information will be used; and
(C) Describes the restrictions on the
disclosure of the employee’s medical
information, the employer
representatives or other parties with
whom the information will be shared,
and the methods that the covered entity
will use to ensure that medical
information is not improperly disclosed
(including whether it complies with the
measures set forth in the HIPAA
regulations codified at 45 CFR parts 160
and 164).
(3) Incentives offered for employee
wellness programs. The use of
incentives (financial or in-kind) in an
employee wellness program, whether in
the form of a reward or penalty, will not
render the program involuntary if the
maximum allowable incentive available
under the program (whether the
program is a participatory program or a
health-contingent program, or some
combination of the two, as those terms
are defined in regulations at 26 CFR
54.9802–1(f)(1)(ii) and (iii), 29 CFR
2590.702(f)(1)(ii) and (iii), and 45 CFR
146.121(f)(1)(ii) and (iii), respectively)
does not exceed:
(i) Thirty percent of the total cost of
self-only coverage (including both the
employee’s and employer’s
contribution) of the group health plan in
which the employee is enrolled when
participation in the wellness program is
limited to employees enrolled in the
plan;
(ii) Thirty percent of the total cost of
self-only coverage under the covered
entity’s group health plan, where the
covered entity offers only one group
health plan and participation in a
wellness program is offered to all
employees regardless of whether they
are enrolled in the plan;
(iii) Thirty percent of the total cost of
the lowest cost self-only coverage under
a major medical group health plan
where the covered entity offers more
than one group health plan but
participation in the wellness program is
offered to employees whether or not
they are enrolled in a particular plan;
and
(iv) Thirty percent of the cost of selfonly coverage under the second lowest
cost Silver Plan for a 40-year-old nonsmoker on the state or federal health
care Exchange in the location that the
covered entity identifies as its principal
place of business if the covered entity
does not offer a group health plan or
group health insurance coverage.
(4) * * *
(iii) Except as permitted under
paragraph (d)(4)(i) of this section and as
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is necessary to administer the health
plan, information obtained under this
paragraph (d) regarding the medical
information or history of any individual
may only be provided to an ADA
covered entity in aggregate terms that do
not disclose, or are not reasonably likely
to disclose, the identity of any
employee.
(iv) A covered entity shall not require
an employee to agree to the sale,
exchange, sharing, transfer, or other
disclosure of medical information
(except to the extent permitted by this
part to carry out specific activities
related to the wellness program), or to
waive any confidentiality protections in
this part as a condition for participating
in a wellness program or for earning any
incentive the covered entity offers in
connection with such a program.
(5) Compliance with the requirements
of this paragraph (d), including the limit
on incentives under the ADA, does not
relieve a covered entity from the
obligation to comply in all respects with
the nondiscrimination provisions of
Title VII of the Civil Rights Act of 1964,
42 U.S.C. 2000e et seq., the Equal Pay
Act of 1963, 29 U.S.C. 206(d), the Age
Discrimination in Employment Act of
1967, 29 U.S.C. 621 et seq., Title II of
the Genetic Information
Nondiscrimination Act of 2008, 42
U.S.C. 2000ff, et seq., or other sections
of Title I of the ADA.
(6) The ‘‘safe harbor’’ provisions in
§ 1630.16(f) of this part applicable to
health insurance, life insurance, and
other benefit plans do not apply to
wellness programs, even if such plans
are part of a covered entity’s health
plan.
■ 3. In the Appendix to Part 1630 revise
Section 1630.14(d), to read as follows:
Appendix to Part 1630—Interpretive
Guidance on Title I of the Americans
With Disabilities Act
*
*
*
*
*
Section 1630.14 Medical Examinations and
Inquiries Specifically Permitted
Section 1630.14(d)(1): Health Program
Part 1630 permits voluntary medical
examinations and inquiries, including
voluntary medical histories, as part of
employee health programs. These health
programs include many wellness programs,
which often incorporate, for example: A
health risk assessment (HRA) consisting of a
medical questionnaire, with or without
medical examinations, to determine risk
factors; medical screening for high blood
pressure, cholesterol, or glucose; classes to
help employees stop smoking or lose weight;
physical activities in which employees can
engage (such as walking or exercising daily);
coaching to help employees meet health
goals; and/or the administration of flu shots.
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Many employers offer wellness programs as
part of a group health plan as a means of
improving overall employee health with the
goal of realizing lower health care costs.
Other employers offer wellness programs that
are available to all employees, regardless of
whether they are in enrolled in a group
health plan, while some employers offer
wellness programs but do not sponsor a
group health plan or group health insurance.
It is not sufficient for a covered entity
merely to claim that its collection of medical
information is part of a wellness program; the
program, including any disability-related
inquiries and medical examinations that are
part of such program, must be reasonably
designed to promote health or prevent
disease. In order to meet this standard, the
program must have a reasonable chance of
improving the health of, or preventing
disease in, participating employees, and must
not be overly burdensome, a subterfuge for
violating the ADA or other laws prohibiting
employment discrimination, or highly
suspect in the method chosen to promote
health or prevent disease. Asking employees
to complete a HRA and/or undergo a
biometric screening for the purpose of
alerting them to health risks of which they
may have been unaware would meet this
standard, as would the use of aggregate
information from HRAs by an employer to
design and offer health programs aimed at
specific conditions identified by the
information collected. An employer might
conclude from aggregate information, for
example, that a significant number of its
employees have diabetes or high blood
pressure and might design specific programs
that would enable employees to treat or
manage these conditions. On the other hand,
collecting medical information on a health
questionnaire without providing employees
meaningful follow-up information or advice,
such as providing feedback about specific
risk factors or using aggregate information to
design programs or treat any specific
conditions, would not be reasonably
designed to promote health or prevent
disease. Additionally, a program is not
reasonably designed to promote health or
prevent disease if it imposes, as a condition
to 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. A program also
is not reasonably designed if it exists mainly
to shift costs from the covered entity to
targeted employees based on their health or
simply to give an employer information to
estimate future health care costs.
Section 1630.14(d)(2): Definition of
‘‘Voluntary’’
Section 1630.14(d)(2)(i) through (iii) of this
part says that participation in employee
health programs that include disabilityrelated inquiries or medical examinations
(such as disability-related inquiries or
medical examinations that are part of a HRA)
must be voluntary in order to comply with
the ADA. This means that covered entities
may not require employees to participate in
such programs, may not deny employees
access to health coverage under any of their
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group health plans or particular benefits
packages within a group health plan for nonparticipation, may not limit coverage under
their health plans for such employees, except
to the extent the limitation (e.g., having to
pay a higher deductible) may be the result of
forgoing a financial incentive permissible
under § 1630.14(d)(3), and may not take any
other adverse action against employees who
choose not to answer disability-related
inquiries or undergo medical examinations.
Additionally, covered entities may not
retaliate against, interfere with, coerce,
intimidate, or threaten employees within the
meaning of Section 503 of the ADA, codified
at 42 U.S.C. 12203. For example, an employer
may not retaliate against an employee who
declines to participate in a health program or
files a charge with the EEOC concerning the
program, may not coerce an employee into
participating in a health program or into
giving the employer access to medical
information collected as part of the program,
and may not threaten an employee with
discipline if the employee does not
participate in a health program. See 42 U.S.C.
12203(a),(b); 29 CFR 1630.12.
Section 1630.14(d)(2)(iv) of this part also
states that for a wellness program that
includes disability-related inquiries or
medical examinations to be voluntary, an
employer must provide employees with a
notice clearly explaining what medical
information will be obtained, how the
medical information will be used, who will
receive the medical information, the
restrictions on its disclosure, and the
methods the covered entity uses to prevent
improper disclosure of medical information.
Section 1630.14(d)(3): Limitations on
Incentives
The ADA, interpreted in light of the Health
Insurance Portability and Accountability Act
(HIPAA), as amended by the Affordable Care
Act, does not prohibit the use of incentives
to encourage participation in employee
health programs, but it does place limits on
them. In general, the use of limited
incentives (which include both financial and
in-kind incentives, such as time-off awards,
prizes, or other items of value) in a wellness
program will not render a wellness program
involuntary. However, the maximum
allowable incentive for a participatory
program that involves asking disabilityrelated questions or conducting medical
examinations (such as having employees
complete a HRA) or for a health-contingent
program that requires participants to satisfy
a standard related to a health factor may not
exceed: (i) 30 Percent of the total cost of selfonly coverage (including both the employee’s
and employer’s contribution) where
participation in a wellness program depends
on enrollment in a particular health plan; (ii)
30 percent of the total cost of self-only
coverage when the covered entity offers only
one group health plan and participation in a
wellness program is offered to all employees
regardless of whether they are enrolled in the
plan; (iii) 30 percent of the total cost of the
lowest cost self-only coverage under a major
medical group health plan where the covered
entity offers more than one group health plan
but participation in the wellness program is
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18:56 May 16, 2016
Jkt 238001
offered to employees whether or not they are
enrolled in a particular plan; or (iv) 30
percent of the cost to a 40-year-old nonsmoker of the second lowest cost Silver Plan
(available under the Affordable Care Act) in
the location that the employer identifies as
its principal place of business, where the
covered entity does not offer a group health
plan or group health insurance coverage. The
following examples illustrate how to
calculate the permissible incentive limits in
each of these situations.
Where an employee participates in a
wellness program that is only offered to
employees enrolled in a group health plan
and the total cost of self-only coverage under
that plan is $6,000 annually, the maximum
allowable incentive is $1,800 (30 percent of
$6,000). The same incentive would be
available if this employer offers only one
group health plan and allowed employees to
participate in the wellness program
regardless of whether they are enrolled in the
health plan. Suppose, however, an employer
offers three different group health plans with
the total cost of self-only coverage under its
major medical group health plans ranging in
cost from $5,000 to $8,000 annually and
wants to offer employees incentives for
participating in a wellness program that
includes a HRA and medical examination
regardless of whether they are enrolled in a
particular health plan. In that case, the
maximum allowable incentive is $1,500 (30
percent of the total cost of the lowest cost
self-only coverage under a major medical
group health plan). Finally, if the employer
does not offer health insurance but wants to
offer an incentive for employees to
participate in a wellness program that
includes disability-related inquiries or
medical examinations, the maximum
allowable incentive is 30 percent of what it
would cost a 40-year-old non-smoker to
purchase the second lowest cost Silver Plan
on the federal or state health care Exchange
in the location that the employer identifies as
its principal place of business. Thus, if such
a plan would cost $4,000, the maximum
allowable incentive would be $1,200.
Not all wellness programs require
disability-related inquiries or medical
examinations in order to earn an incentive.
Examples may include attending nutrition,
weight loss, or smoking cessation classes.
These types of programs are not subject to the
ADA incentive rules discussed here,
although programs that qualify as healthcontingent programs (such as an activitybased program that requires employees to
exercise or walk) and that are part of a group
health plan are subject to HIPAA incentive
limits.
Under the ADA, regardless of whether a
wellness program includes disability-related
inquiries or medical examinations,
reasonable accommodations must be
provided, absent undue hardship, to enable
employees with disabilities to earn whatever
financial incentive an employer or other
covered entity offers. Providing a reasonable
alternative standard and notice to the
employee of the availability of a reasonable
alternative under HIPAA and the Affordable
Care Act as part of a health-contingent
program would generally fulfill a covered
PO 00000
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31141
entity’s obligation to provide a reasonable
accommodation under the ADA. However,
under the ADA, a covered entity would have
to provide a reasonable accommodation for a
participatory program even though HIPAA
and the Affordable Care Act do not require
such programs to offer a reasonable
alternative standard, and reasonable
alternative standards are not required at all
if the program is not part of a group health
plan.
For example, an employer that offers
employees a financial incentive to attend a
nutrition class, regardless of whether they
reach a healthy weight as a result, would
have to provide a sign language interpreter so
that an employee who is deaf and who needs
an interpreter to understand the information
communicated in the class could earn the
incentive, as long as providing the interpreter
would not result in undue hardship to the
employer. Similarly, an employer would,
absent undue hardship, have to provide
written materials that are part of a wellness
program in an alternate format, such as in
large print or on computer disk, for someone
with a vision impairment. An individual
with a disability also may need a reasonable
accommodation to participate in a wellness
program that includes disability-related
inquiries or medical examinations, including
a waiver of a generally applicable
requirement. For example, an employer that
offers a reward for completing a biometric
screening that includes a blood draw would
have to provide an alternative test (or
certification requirement) so that an
employee with a disability that makes
drawing blood dangerous can participate and
earn the incentive.
Application of Section 1630.14(d)(3) to
Smoking Cessation Programs
Regulations implementing the wellness
provisions in HIPAA, as amended by the
Affordable Care Act, permit covered entities
to offer incentives as high as 50 percent of
the total cost of self-only coverage for
tobacco-related wellness programs, such as
smoking cessation programs. As noted above,
the incentive rules in paragraph
1630.14(d)(3) apply only to employee health
programs that include disability-related
inquiries or medical examinations. A
smoking cessation program that merely asks
employees whether or not they use tobacco
(or whether or not they ceased using tobacco
upon completion of the program) is not an
employee health program that includes
disability-related inquiries or medical
examinations. The incentive rules in
§ 1630.14(d)(3) would not apply to incentives
a covered entity could offer in connection
with such a program. Therefore, a covered
entity would be permitted to offer incentives
as high as 50 percent of the cost of self-only
coverage for that smoking cessation program,
pursuant to the regulations implementing
HIPAA, as amended by the Affordable Care
Act, without implicating the disabilityrelated inquiries or medical examinations
provision of the ADA. The ADA
nondiscrimination requirements, such as the
need to provide reasonable accommodations
that provide employees with disabilities
equal access to benefits, would still apply.
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By contrast, a biometric screening or other
medical examination that tests for the
presence of nicotine or tobacco is a medical
examination. The ADA financial incentive
rules discussed supra would therefore apply
to a wellness program that included such a
screening.
Section 1630.14(d)(4)(i) Through (v):
Confidentiality
Paragraphs (d)(4)(i) and (ii) say that
medical records developed in the course of
providing voluntary health services to
employees, including wellness programs,
must be maintained in a confidential manner
and must not be used for any purpose in
violation of this part, such as limiting
insurance eligibility. See House Labor Report
at 75; House Judiciary Report at 43–44.
Further, although an exception to
confidentiality that tracks the language of the
ADA itself states that information gathered in
the course of providing employees with
voluntary health services may be disclosed to
managers and supervisors in connection with
necessary work restrictions or
accommodations, such an exception would
rarely, if ever, apply to medical information
collected as part of a wellness program, and
sharing such information could be
inconsistent with the definition of an
employee health program. In addition, as
described more fully below, certain
disclosures that are permitted for employee
health programs generally may not be
permissible under the HIPAA Privacy Rule
for wellness programs that are part of a group
health plan without the written authorization
of the individual.
Section 1630.14(d)(4)(iii) says that a
covered entity only may receive information
collected as part of an employee health
program in aggregate form that does not
disclose, and is not reasonably likely to
disclose, the identity of specific individuals
except as is necessary to administer the plan
or as permitted by § 1630.14(d)(4)(i). Notably,
both employers that sponsor employee health
programs and the employee health programs
themselves (if they are administered by the
employer or qualify as the employer’s agent)
are responsible for ensuring compliance with
this provision.
Where a wellness program is part of a
group health plan, the individually
identifiable health information collected
from or created about participants as part of
the wellness program is protected health
information (PHI) under the HIPAA Privacy,
Security, and Breach Notification Rules. (45
CFR parts 160 and 164.) The HIPAA Privacy,
Security, and Breach Notification Rules
apply to HIPAA covered entities, which
include group health plans, and generally
protect identifiable health information
maintained by or on behalf of such entities,
by among other provisions, setting limits and
conditions on the uses and disclosures that
may be made of such information.
PHI is information, including demographic
data that identifies the individual or for
which there is a reasonable basis to believe
it can be used to identify the individual
(including, for example, address, birth date,
or social security number), and that relates
to: An individual’s past, present, or future
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18:56 May 16, 2016
Jkt 238001
physical or mental health or condition; the
provision of health care to the individual; or
the past, present, or future payment for the
provision of health care to the individual.
HIPAA covered entities may not disclose PHI
to an individual’s employer except in limited
circumstances. For example, as discussed
more fully below, an employer that sponsors
a group health plan may receive PHI to
administer the plan (without authorization of
the individual), but only if the employer
certifies to the plan that it will safeguard the
information and not improperly use or share
the information. See Standards for Privacy of
Individually Identifiable Health Information
(‘‘Privacy Rule’’), Public Law 104–191; 45
CFR part 160 and Part 164, Subparts A and
E. However, there are no restrictions on the
use or disclosure of health information that
has been de-identified in accordance with the
HIPAA Privacy Rule. Individuals may file a
complaint with HHS if they believe a health
plan fails to comply with privacy
requirements and HHS may require
corrective action or impose civil money
penalties for noncompliance.
A wellness program that is part of a HIPAA
covered entity likely will be able to comply
with its obligation under § 1630.14(d)(4)(iii)
by complying with the HIPAA Privacy Rule.
An employer that is a health plan sponsor
and receives individually identifiable health
information from or on behalf of the group
health plan, as permitted by HIPAA when the
plan sponsor is administering aspects of the
plan, may generally satisfy its requirement to
comply with § 1630.14(d)(4)(iii) by certifying
to the group health plan, as provided by 45
CFR 164.504(f)(2)(ii), that it will not use or
disclose the information for purposes not
permitted by its plan documents and the
Privacy Rule, such as for employment
purposes, and abiding by that certification.
Further, if an employer is not performing
plan administration functions on behalf of
the group health plan, it may receive
aggregate information from the wellness
program under § 1630.14(d)(4)(iii) only so
long as the information is de-identified in
accordance with the HIPAA Privacy Rule. In
addition, disclosures of protected health
information from the wellness program may
only be made in accordance with the Privacy
Rule. Thus, certain disclosures that are
otherwise permitted under § 1630.14(d)(4)(i)
and (ii) for employee health programs
generally may not be permissible under the
Privacy Rule for wellness programs that are
part of a group health plan without the
written authorization of the individual. For
example, the ADA allows disclosures of
medical information when an employee
needs a reasonable accommodation or
requires emergency treatment at work.
Section 1630.14(d)(4)(iv) says that a
covered entity may not require an employee
to agree to the sale, exchange, sharing,
transfer, or other disclosure of medical
information (except to the extent permitted
by this part to carry out specific activities
related to the wellness program), or waive
confidentiality protections available under
the ADA as a condition for participating in
a wellness program or receiving a wellness
program incentive.
Employers and wellness program providers
must take steps to protect the confidentiality
PO 00000
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Fmt 4701
Sfmt 4700
of employee medical information provided as
part of an employee health program. Some of
the following steps may be required by law;
others may be best practices. It is critical to
properly train all individuals who handle
medical information about the requirements
of the ADA and, as applicable, HIPAA’s
privacy, security, and breach requirements
and any other privacy laws. Employers and
program providers should have clear privacy
policies and procedures related to the
collection, storage, and disclosure of medical
information. On-line systems and other
technology should guard against
unauthorized access, such as through use of
encryption for medical information stored
electronically. Breaches of confidentiality
should be reported to affected employees
immediately and should be thoroughly
investigated. Employers should make clear
that individuals responsible for disclosures
of confidential medical information will be
disciplined and should consider
discontinuing relationships with vendors
responsible for breaches of confidentiality.
Individuals who handle medical
information that is part of an employee
health program should not be responsible for
making decisions related to employment,
such as hiring, termination, or discipline.
Use of a third-party vendor that maintains
strict confidentiality and data security
procedures may reduce the risk that medical
information will be disclosed to individuals
who make employment decisions,
particularly for employers whose
organizational structure makes it difficult to
provide adequate safeguards. If an employer
uses a third-party vendor, it should be
familiar with the vendor’s privacy policies
for ensuring the confidentiality of medical
information. Employers that administer their
own wellness programs need adequate
firewalls in place to prevent unintended
disclosure. If individuals who handle
medical information obtained through a
wellness program do act as decision-makers
(which may be the case for a small employer
that administers its own wellness program),
they may not use the information to
discriminate on the basis of disability in
violation of the ADA.
Section 1630.14(d)(5): Compliance With
Other Employment Nondiscrimination Laws
Section 1630.14(d)(5) clarifies that
compliance with the requirements of
paragraph (d) of this section, including the
limits on incentives applicable under the
ADA, does not mean that a covered entity
complies with other federal employment
nondiscrimination laws, such as Title VII of
the Civil Rights Act of 1964, 42 U.S.C. 2000e
et seq., the Equal Pay Act of 1963, 29 U.S.C.
206(d), the Age Discrimination in
Employment Act of 1967, 29 U.S.C. 621 et
seq., Title II of the Genetic Information
Nondiscrimination Act of 2008, 42 U.S.C.
2000ff et seq., and other sections of Title I of
the ADA. Thus, even though an employer’s
wellness program might comply with the
incentive limits set out in paragraph (d)(3),
the employer would violate federal
nondiscrimination statutes if that program
discriminates on the basis of race, sex
(including pregnancy, gender identity,
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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
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Fmt 4701
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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
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]]>Agencies
[Federal Register Volume 81, Number 95 (Tuesday, May 17, 2016)]
[Rules and Regulations]
[Pages 31125-31143]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-11558]
[[Page 31125]]
Vol. 81
Tuesday,
No. 95
May 17, 2016
Part III
Equal Employment Opportunity Commission
-----------------------------------------------------------------------
29 CFR Parts 1630 and 1635
Regulations Under the Americans With Disabilities Act; Genetic
Information Nondiscrimination Act
Federal Register / Vol. 81 , No. 95 / Tuesday, May 17, 2016 / Rules
and Regulations
[[Page 31126]]
-----------------------------------------------------------------------
EQUAL EMPLOYMENT OPPORTUNITY COMMISSION
29 CFR Part 1630
RIN 3046-AB01
Regulations Under the Americans With Disabilities Act
AGENCY: Equal Employment Opportunity Commission.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: The Equal Employment Opportunity Commission (EEOC or
Commission) is issuing its final rule to amend the regulations and
interpretive guidance implementing Title I of the Americans with
Disabilities Act (ADA) to provide guidance on 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. This rule applies to all
wellness programs that include disability-related inquiries and/or
medical examinations whether they are offered only to employees
enrolled in an employer-sponsored group health plan, offered to all
employees regardless of whether they are enrolled in such a plan, or
offered as a benefit of employment by employers that do not sponsor a
group health plan or group health insurance. Published elsewhere in
this issue of the Federal Register, the EEOC also issued a final rule
to amend the regulations implementing Title II of the Genetic
Information Nondiscrimination Act (GINA) that addresses the extent to
which employers may offer incentives for an employee's spouse to
participate in a wellness program.
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, (202) 663-4665, or Joyce Walker-Jones, Senior Attorney
Advisor, (202) 663-7031, or (202) 663-7026 (TTY), Office of Legal
Counsel, U.S. Equal Employment Opportunity Commission. (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,
(202) 663-4191 (voice) or (202) 663-4494 (TTY). (These are not toll
free numbers.)
SUPPLEMENTARY INFORMATION:
Introduction
This rule applies to wellness programs that are considered
``employee health programs'' under Title I of the ADA.\1\ It does not
apply to programs that may be provided by entities other than those
subject to Title I, such as social service agencies covered under Title
II of the ADA,\2\ or places of public accommodation subject to Title
III of the ADA,\3\ that may provide similar programs to individuals who
are considered volunteers.
---------------------------------------------------------------------------
\1\ 42 U.S.C. 12101-12117.
\2\ 42 U.S.C. 12131-12134.
\3\ 42 U.S.C. 12181-12189.
---------------------------------------------------------------------------
A wellness program that is an employee health program may be part
of a group health plan or may be offered outside of a group health plan
or group health insurance coverage.\4\ All of the provisions in this
rule, including the requirement to provide a notice and limitations on
incentives, apply to all employee health programs that ask employees to
respond to disability-related inquiries and/or undergo medical
examinations. Wellness programs that do not include disability-related
inquiries or medical examinations (such as those that provide general
health and educational information) are not subject to this final rule,
although such programs must be available to all employees and must
provide reasonable accommodations to employees with disabilities.
---------------------------------------------------------------------------
\4\ The term ``group health plan,'' which includes both insured
and self-insured group health plans, as defined in the Employee
Retirement Income Security Act (ERISA) section 733(a), is an
``employee welfare benefit plan'' to the extent that the plan
provides medical care to employees and their dependents directly or
through insurance, reimbursement, or otherwise. An employer may
establish or maintain more than one group health plan. ERISA section
3(1) defines an ``employee welfare benefit plan'' as ``any plan,
fund, or program . . . established or maintained by an employer or
by an employee organization, or by both, to the extent that such
plan, fund, or program was established or is maintained for the
purpose of providing for its participants or their beneficiaries . .
. medical, surgical, or hospital care or benefits, or benefits in
the event of sickness, accident, disability, death or unemployment .
. . .''
---------------------------------------------------------------------------
Discussion
Many employers that sponsor group health plans also offer health
promotion and disease prevention activities, known as wellness
programs, to employees enrolled in a health plan.\5\ Some employers,
however, offer wellness programs that are available to all employees
whether or not they are enrolled in an employer-sponsored health plan,
while other employers do not offer a group health plan or group health
insurance coverage but offer some type of workplace wellness program.
Many of these programs obtain medical information from employees by
asking them to complete a health risk assessment (HRA) and/or undergo
biometric screenings for risk factors (such as high blood pressure or
cholesterol). Other wellness programs provide educational health-
related information or programs that may include: nutrition classes,
weight loss and smoking cessation programs, onsite exercise facilities,
and/or coaching to help employees meet health goals.
---------------------------------------------------------------------------
\5\ An annual survey conducted by the Kaiser Family Foundation
Health Research and Educational Trust indicated that 55 percent of
large firms that offered wellness programs said that most of their
wellness benefits were provided by the group health plan. See Karen
Pollitz & Matthew Rae, Kaiser Family Foundation, Workplace Wellness
Programs Characteristics and Requirements 5 (2016), https://kaiserfamilyfoundation.files.wordpress.com/2016/01/8742-02-workplace-wellness-programs-characteristics-and-requirements.pdf.
---------------------------------------------------------------------------
Some employers offer incentives to encourage employees simply to
participate in a wellness program, while others offer incentives based
on whether employees achieve certain health outcomes.\6\ Incentives can
be framed as rewards or penalties and often take the form of prizes,
cash, or a reduction or increase in health care premiums or cost
sharing.
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\6\ See RAND Health, Workplace Programs Study: Final Report xx
(2013), https://www.rand.org/content/dam/rand/pubs/research_reports/RR200/RR254/RAND_RR254.pdf [hereinafter RAND Final Report]. The
study found that 69 percent of employers with at least 50 employees
offer financial incentives to encourage employee participation,
while 10 percent offer incentives tied to health outcomes. By
contrast, a survey conducted by the Kaiser Foundation found that 36
percent of large employers with 200 or more employees and 18 percent
of smaller employers offer financial incentives to participate in a
wellness program. See Employer Health Benefits Survey, Kaiser Family
Foundation (2014), https://kff.org/health-costs/report/2014-employer-health-benefits-survey/ [hereinafter Kaiser Survey].
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Applicable Federal Laws
Several federal laws govern wellness programs offered by employers.
Wellness programs must comply with Title I of the ADA, Title II of
GINA,\7\ and other employment discrimination laws enforced by the EEOC.
Wellness programs that are part of or provided by a group health plan
or by a health insurance issuer offering group health insurance in
connection with a group health plan also must comply with the
nondiscrimination provisions of the Health Insurance Portability and
Accountability Act of 1996 (HIPAA), 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.'' \8\ A
wellness program
[[Page 31127]]
that is part of a group health plan also must comply with HIPAA's
Privacy, Security, and Breach notification requirements discussed later
in this preamble.
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\7\ 42 U.S.C. 2000ff-2000ff-11.
\8\ The Patient Protection and Affordable Care Act, Pub. L. 111-
148, 124 Stat. 119 (2010) (codified as amended in scattered sections
of 25 U.S.C., 26 U.S.C., 29 U.S.C., and 42 U.S.C.), and the Health
Care and Education Reconciliation Act of 2010, Pub. L. 111-152, 124
Stat. 1029 (codified at 42 U.S.C. 18121, 18043; 26 U.S.C. 1411,
4191; 20 U.S.C. 1087i-2), 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 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, making them
applicable to group health plans and group health insurance issuers.
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Title I of the ADA and Other Laws Prohibiting Employment Discrimination
Title I of the ADA prohibits discrimination against individuals on
the basis of disability in regard to employment compensation and other
terms, conditions, and privileges of employment, including ``fringe
benefits available by virtue of employment, whether or not administered
by the covered entity.'' \9\ The ADA also restricts the medical
information employers may obtain from employees by generally
prohibiting them from making disability-related inquiries or requiring
medical examinations.\10\ The statute, however, provides an exception
to this rule for voluntary employee health programs, which include many
workplace wellness programs.\11\ Additionally, the ADA requires
employers to provide reasonable accommodations (modifications or
adjustments) to enable individuals with disabilities to have equal
access to fringe benefits, such as general health and educational
wellness programs, offered to individuals without disabilities.\12\
Employers also must comply with other laws the EEOC enforces that
prohibit discrimination based on race, color, national origin, sex
(including pregnancy, gender identity, transgender status, and sexual
orientation), religion, compensation, age, or genetic information.\13\
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\9\ 42 U.S.C. 12112(a); 29 CFR 1630.4(a)(1)(vi). Title I of the
ADA applies to, in addition to employers, covered entities including
employment agencies, labor organizations, and joint-labor management
committees. See 42 U.S.C. 12111(2), (4), (5), 12112(b) (describing
the prohibited practices of each of these entities); see also 29 CFR
1630.2(b) (giving the definition of covered entity), 1630.4(a)(1)
(describing prohibited practices). Although employers generally will
be the ADA covered entities that offer wellness programs, this
preamble, the final rule, and the interpretive guidance frequently
use the term ``covered entity,'' as that term appears throughout
EEOC's entire ADA regulation.
\10\ 42 U.S.C. 12112(d)(4)(A) (stating that a covered entity
``shall not require a medical examination and shall not make
inquiries of an employee as to whether such employee is an
individual with a disability or as to the nature or severity of the
disability, unless such examination or inquiry is shown to be job-
related and consistent with business necessity''). The EEOC refers
to the types of inquiries prohibited by the ADA as ``disability-
related inquiries'' and has issued guidance on what constitutes such
an inquiry. See EEOC Enforcement Guidance on Disability-Related
Inquiries and Medical Examinations of Employees Under the Americans
with Disabilities Act, Question 1 (2000), https://www.eeoc.gov/policy/docs/guidance-inquiries.html [hereafter Guidance].
\11\ 42 U.S.C. 12112(d)(4)(B). A covered entity may conduct
voluntary medical examinations, including voluntary medical
histories, that are part of an employee health program available to
employees at that work site.
\12\ 42 U.S.C. 12112(b)(5)(A); 29 CFR 1630.9 (prohibiting
covered entity from failing to provide reasonable accommodations
absent undue hardship); 29 CFR 1630.2(o)(1)(iii) (providing that
reasonable accommodation includes modifications and adjustments that
enable a covered entity's employees to enjoy ``equal benefits and
privileges of employment'').
\13\ See Title VII of the Civil Rights Act of 1964 (Title VII),
42 U.S.C. 2000e-2000e-17; the Equal Pay Act of 1963, 29 U.S.C.
206(d); the Age Discrimination in Employment Act of 1967 (ADEA), 29
U.S.C. 621-634; and Title II of GINA. However, this rule concerns
only the application of the ADA's rules limiting disability-related
inquiries and medical examinations of employees to employer-
sponsored wellness programs. Compliance with the limits on
incentives in this rule does not necessarily result in compliance
with other nondiscrimination laws or other parts of the ADA. For
example, as the interpretive guidance explains, even if an
employer's wellness program complies with the incentive limits set
forth in the ADA regulations, the employer violates Title VII or the
ADEA if that program discriminates on the basis of race, color,
national origin, sex (including pregnancy, gender identity,
transgender status, and sexual orientation), religion, or age.
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HIPAA's Nondiscrimination Provisions
HIPAA's nondiscrimination provisions, as amended by the Affordable
Care Act, generally prohibit group health plans and health insurance
issuers providing group health insurance in connection with a group
health plan from discriminating against participants and beneficiaries
in premiums, benefits, or eligibility based on a health factor.\14\ An
exception to the general rule allows premium discounts, or rebates or
modification to otherwise applicable cost sharing (including
copayments, deductibles, or coinsurance), in return for adherence to
certain programs of health promotion and disease prevention.\15\
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\14\ The nondiscrimination provisions originally enacted in
HIPAA set forth eight health status-related factors, which the
December 13, 2006, final regulations refer to as ``health factors.''
71 FR 75014 (Dec. 13, 2006). Under HIPAA and the 2006 regulations,
as well as under PHS Act section 2705 (as added by the Affordable
Care Act), the eight health factors are: health status, medical
condition (including both physical and mental illnesses), claims
experience, receipt of health care, medical history, genetic
information, evidence of insurability (including conditions arising
out of acts of domestic violence), and disability.
\15\ Prior to the enactment of the Affordable Care Act, HIPAA
added section 9802 of the Code, section 702 of ERISA, and section
2702 of the PHS Act. DOL, Treasury, and HHS issued joint final
regulations in 2006 regarding wellness programs in connection with a
group health plan or group health insurance coverage under which any
of the conditions for obtaining a reward are based on satisfying a
standard related to a health factor. See 26 CFR 54.9802-1(f); 29 CFR
2590.702(f); 45 CFR 146.121(f). Paragraph (f)(2) of the 2006
regulations limited the total reward for such wellness programs to
20 percent of the total cost of coverage under the plan. The
Affordable Care Act amended the PHS Act to raise the limitation on
incentives to 30 percent of the total cost of coverage under the
plan. See PHS Act section 2705(j)(3)(A). The tri-Departments issued
final regulations in June 2013 to implement PHS Act section 2705 and
amend the 2006 HIPAA regulations regarding nondiscriminatory
wellness programs in group health coverage. Incentives for
Nondiscriminatory Wellness Programs in Group Health Plans, 78 FR
33158 (June 3, 2013) (codified at 26 CFR 54.9802-1; 29 CFR 2590.702;
45 CFR 46.121). Under the 2013 final regulations on
nondiscriminatory wellness programs, references to ``a plan
providing a reward'' include both providing a reward (such 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) and imposing a penalty (such as a
surcharge or other financial or nonfinancial disincentive).''
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The 2013 final tri-Department regulations to implement HIPAA's
nondiscrimination provisions discuss two types of wellness programs:
``participatory'' and ``health contingent.'' \16\ Participatory
wellness programs either do not provide a reward or do not include any
condition for obtaining a reward that is based on an individual
satisfying a standard related to a health factor. Examples of
participatory wellness programs include programs that ask employees
only to complete a HRA or attend a smoking cessation program. The tri-
Department regulations do not impose any incentive limits on
``participatory'' wellness programs and state that they are permissible
as long as they are made available to all similarly situated
individuals.
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\16\ See 26 CFR 54.9802-1(f); 29 CFR 2590.702(f); 45 CFR
146.121(f).
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Health-contingent wellness programs, which may be either activity-
only or outcome-based, require individuals to satisfy a standard
related to a health factor to obtain a reward. Examples of health-
contingent wellness programs include a program that requires employees
to walk or do a certain amount of exercise weekly (an activity-based
program) or to reduce their blood pressure or cholesterol level (an
outcome-based program) in order to earn an incentive. Incentives
offered in connection with health-contingent wellness programs
generally must not
[[Page 31128]]
exceed 30 percent of the total cost of self-only health coverage where
only an employee, not the employee's dependents, is eligible for the
wellness program.\17\ There are five requirements for health-contingent
wellness programs under PHS Act section 2705 and the 2013 final
regulations. Generally, health-contingent wellness programs must be
available to all similarly situated individuals and must: (1) Give
eligible individuals an opportunity to qualify for a reward at least
once per year; (2) limit the size of the reward to no more than 30
percent of the total cost of coverage (or, 50 percent to the extent
that the wellness program is designed to prevent or reduce tobacco
use): (3) provide a reasonable alternative standard (or waiver) to
qualify for a reward; (4) be reasonably designed to promote health or
prevent disease and not be overly burdensome; and, (5) disclose the
availability of a reasonable alternative standard to qualify for the
reward in plan materials that provide details regarding the wellness
program.\18\
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\17\ Under the tri-Department wellness regulations implementing
section 2705 of the PHS Act (as amended by the Affordable Care Act),
the applicable percentage is increased to 50 percent to the extent
that the additional percentage is in connection with a program
designed to prevent or reduce tobacco use. See 26 CFR 54.9802-
1(f)(5); 29 CFR 2590.702(f)(5); 45 CFR 146.121(f)(3).
\18\ Although the five requirements for health-contingent
programs generally are the same for activity-only wellness programs
and outcome-based wellness programs under the tri-Department
regulations, there are some differences. For the requirements
applicable to activity-only programs, see 26 CFR 54.9802-1(f)(3), 29
CFR 2590.702(f)(3), and 45 CFR 146.121(f)(3). For requirements
applicable to outcome-based programs, see 26 CFR 54.9802-1(f)(4), 29
CFR 2590.702(f)(4), and 45 CFR 146.121(f)(4).
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Finally, the 2013 final regulations recognize that compliance with
HIPAA's nondiscrimination rules (as amended by the Affordable Care
Act), including the wellness program requirements, is not determinative
of compliance with any other provision of any other state or federal
law, including, but not limited to, the ADA, Title VII, and GINA.\19\
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\19\ See Incentives for Nondiscriminatory Wellness Programs in
Group Health Plans, 78 FR at 33168 (``The Departments recognize that
many other laws may regulate plans and issuers in their provision of
benefits to participants and beneficiaries. These laws include, but
are not limited to, the ADA, Title VII of the Civil Rights Act of
1964, Code section 105(h) and PHS Act section 2716 (prohibiting
discrimination in favor of highly compensated individuals), the
Genetic Information Nondiscrimination Act of 2008, the Family and
Medical Leave Act, ERISA's fiduciary provisions, and State law.'').
A publication jointly issued by the tri-Departments also explains
that the fact that a wellness program complies with the tri-
Department wellness program regulations does not necessarily mean it
complies 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.
Similarly, the fact that a 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 Affordable Care Act Implementation (Part
XXV), https://www.dol.gov/ebsa/faqs/faq-aca25.html.
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Background on the Notice of Proposed Rulemaking on the ADA and 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 April 20, 2015, for a 60-
day public comment period.\21\
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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\ Amendments to Regulations Under the Americans With
Disabilities Act, 80 FR 21659 (proposed April 20, 2015)(to be
codified at 29 CFR part 1630).
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The NPRM re-asserted the Commission's position that, as required by
the ADA, employee health programs that include disability-related
inquiries or medical examinations (including inquiries or medical
examinations that are part of a HRA or medical history) must be
``voluntary,'' and defined what that term meant in light of the
amendments made to HIPAA by the Affordable Care Act. The NPRM sought
comment on wellness programs in general and on any of the proposed
revisions to the ADA regulations and interpretative guidance at Sec.
1630.14, which:
--Explained that an ``employee health program'' must be ``reasonably
designed to promote health or prevent disease'' and must not be
``overly burdensome, a subterfuge for violating the ADA or other laws
prohibiting employment discrimination, or highly suspect in the method
chosen to promote health or prevent disease'';
--Defined the term ``voluntary'' and explained that in order for
participation in an employee health program to be voluntary, a covered
entity may not require employees to participate, deny access to health
coverage for nonparticipation, generally limit coverage under its
health plans, take any other adverse action, or retaliate, interfere
with, coerce, intimidate, or threaten an employee who does not
participate or fails to achieve certain health outcomes, and must
provide a notice clearly explaining what medical information will be
obtained, how it will be used, who will receive it, and the
restrictions on disclosure;
--Clarified that an employer may offer incentives up to a maximum of 30
percent of the total cost of self-only coverage to promote an
employee's participation in a wellness program that includes
disability-related inquiries or medical examinations (including a blood
test to detect the presence of nicotine as part of a smoking cessation
program), and that this limit applies whether the program is
participatory only, health contingent, or a program that includes both
participatory and health-contingent components;
--Explained the requirements concerning the confidentiality of medical
information obtained as part of voluntary employee health programs and
added a new paragraph that provided that a covered entity only may
receive information collected by a wellness program in aggregate form
that does not disclose, and is not reasonably likely to disclose, the
identity of specific individuals except as necessary to administer the
plan; and
--Clarified that compliance with the rules governing voluntary employee
health programs, including the limits on financial incentives
applicable under the ADA, does not ensure compliance with all of the
antidiscrimination laws the EEOC enforces.
The NPRM also explained that the references to the requirement to
provide a notice and the limitations on incentives in the proposed
rule, and the changes to the corresponding section of the interpretive
guidance, apply only to wellness programs that are part of or provided
by a group health plan or by a health insurance issuer offering health
insurance in connection with a group health plan. The proposed rule
asked for comments on whether employers offer or are likely to offer
wellness programs outside of a group health plan or group health
insurance coverage and whether the Commission should issue regulations
specifically limiting incentives provided as part of such programs.
Additionally, the Commission specifically sought comments on
several other issues, including:
--Whether to be ``voluntary'' under the ADA, entities that offer
incentives to encourage employees to disclose medical information also
must offer
[[Page 31129]]
similar incentives to persons who choose not to disclose such
information but who, instead, provide certification from a medical
professional stating that the employee is under the care of a
physician;
--Whether to be considered ``voluntary'' under the ADA, the incentives
provided in a wellness program that asks employees to respond to
disability-related inquiries and/or undergo medical examinations may
not be so large as to render health insurance coverage unaffordable
under the Affordable Care Act \22\ and, therefore, in effect coercive
for an employee;
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\22\ Specifically, the Commission sought input on whether it
would be appropriate to provide that the incentives employers offer
to employees to promote participation in wellness programs must not
render the cost of health insurance unaffordable to employees within
the meaning of 26 U.S.C. 36B(c)(2)(C) as implemented by 26 CFR
54.4980H-5(e), under which an offer of health insurance coverage is
affordable if the employee's required contribution for self-only
coverage is no more than a specified percentage (9.5 percent as
adjusted) of household income (or based on one of three
affordability safe harbors set forth in 26 CFR 54.4980H-5(e)). For
purposes of sections 36B and 4980H of the Code, the affordability of
eligible employer-sponsored coverage is determined by assuming that
each employee fails to satisfy the requirements of a wellness
program, except for the requirements of a nondiscriminatory wellness
program related to tobacco use. See 26 CFR 1.36B-2(c)(3)(v)(A)(4).
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--Whether employees participating in wellness programs that include
disability-related inquiries and/or medical examinations, and that are
part of a group health plan, should be required to provide prior,
written, and knowing authorization that their participation is
voluntary and whether there are existing forms that could provide
adequate protection;
--Whether the proposed notice requirement should apply only to wellness
programs that offer more than de minimis rewards or penalties to
employees who participate (or decline to participate) in wellness
programs that ask them to respond to disability-related inquiries and/
or undergo medical examinations; and
--Whether the proposed rule's 30 percent limit on incentives offered
with respect to wellness programs that ask employees to respond to
disability-related inquiries and/or undergo medical examinations would
have any impact on programs intended to prevent or reduce tobacco use.
Summary of Revisions and Response to Comments
During the 60-day comment period, the Commission received nearly
2,750 public comments on the NPRM from a wide spectrum of stakeholders,
including, among others: Individuals, including individuals with
disabilities and those who are considered overweight or have eating
disorders; disability rights and other advocacy organizations and their
members; civil rights groups; federal and state government employees
and representatives, including a joint letter from members of Congress;
employer associations and industry groups and law firms on their
behalf; and health insurance issuers and associations representing
them, third party administrators, and wellness vendors (referred to as
``health care groups''). The comments from individuals included 2,410
similar, but not uniform, letters--almost all of which were submitted
by a national organization that supports women and families--urging the
Commission to address HRAs that ask women whether they are pregnant or
plan on becoming pregnant. Most of the comments (2,723) were submitted
through the United States Government's electronic docket system,
Regulations.gov. The remaining 25 comments (a few of which also were
submitted through Regulations.gov) were mailed or faxed to the
Executive Secretariat. Additionally, members of the Commission met or
had telephone conversations with several stakeholder groups, a number
of which also submitted written comments.
The Commission has reviewed and considered each of the comments in
preparing this final rule. The first section of this preamble addresses
general comments concerning the Commission's interpretation of the
interaction between the ADA and HIPAA's wellness program provisions,
the final rule's applicability date, and the ADA's ``safe harbor''
provision.
The second section discusses comments submitted in response to
questions the NPRM asked about several issues, as noted above.
Finally, because three of the questions asked in the NPRM directly
relate to the provisions regarding the notice requirement and the
limitations on incentives, the preamble addresses those comments in the
last section that discusses comments regarding specific provisions.
General Comments
Interaction Between the ADA and HIPAA's Wellness Program Provisions
The Commission received a number of comments expressing support
for, and concerns about, wellness programs. For example, while many
commenters stated that properly designed 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 to
discriminate in ways long prohibited by the civil rights laws by
allowing employers to coerce employees into providing medical
information. Disability rights and advocacy groups expressed concerns
that the EEOC was abandoning its prior position that a voluntary
wellness program that includes disability-related inquiries and/or
medical examinations cannot involve penalties, while employer and
industry groups commented that the proposed rule's limitation on
incentives is inconsistent with the tri-Department rules.
Although the Commission recognizes that compliance with the
standards in HIPAA, as amended by the Affordable Care Act, is not
determinative of compliance with the ADA, we believe that the final
rule interprets the ADA in a manner that reflects the ADA's goal of
limiting employer access to medical information and is consistent with
HIPAA's provisions promoting wellness programs. Accordingly, after
consideration of all of the comments, the Commission reaffirms its
conclusion that allowing certain incentives related to wellness
programs, while limiting them to prevent economic coercion that could
render provision of medical information involuntary, is the best way to
effectuate the purposes of the wellness program provisions of both
laws.
Applicability Date
Employer associations and industry groups also 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 GINA wellness rule, and
that it not be applied retroactively. The Commission agrees and
concludes that the provisions of this rule set forth at Sec.
1630.14(d)(2)(iv) (concerning notice) and Sec. 1630.14(d)(3)
(concerning incentives) will apply only prospectively to employer
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 incentive permitted under this regulation. So,
for example, if the plan year for the health plan used to calculate the
permissible incentive limit begins on January 1, 2017, that is the date
on which the provisions of this rule governing incentives apply to the
wellness program. If the plan year of the plan used to calculate the
level of incentives
[[Page 31130]]
begins on March 1, 2017, the provisions on incentives and notice
requirements will apply to the 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.\23\
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\23\ Prior EEOC interpretations, including those set forth in
the 1991 final rule implementing Title I of the ADA, Equal
Employment Opportunities for Individuals With Disabilities, 56 FR
35726 (July 26, 1991), and in Commission guidance, Guidance, supra
note 10, may be considered in determining whether wellness programs
that began prior to this rule's applicability date and that ask
employees disability-related questions or require them to undergo
medical examinations comply with the ADA.
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ADA's ``Safe Harbor'' Provision
A number of stakeholders commented on a footnote in the NPRM, which
noted that the ADA's safe harbor provision applicable to insurance \24\
does not apply to wellness programs that include disability-related
questions or medical examinations. The safe harbor provision states, in
pertinent part, that an insurer or any entity that administers benefit
plans is not prohibited from ``establishing, sponsoring, observing or
administering the terms of a bona fide benefit plan based on
underwriting risks, classifying risks, or administering such risks that
are based on or not inconsistent with state law.''
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\24\ 42 U.S.C. 12201(c).
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Employer associations and industry groups that commented on the
footnote thought that the safe harbor provision applies to wellness
programs that ask disability-related questions or require medical
examinations. Several members of Congress asserted that the EEOC was
inappropriately seeking to rewrite the statute and vacate court
decisions through regulation. A few commenters distinguished between
wellness programs that are part of a group health plan, to which the
commenters said the safe harbor should apply, and those that are not
part of a group health plan, to which it should not apply. Several
noted that information obtained through wellness programs could provide
employers with valuable insight that would help them develop and
administer present and future plans. Two comments expressed the view
that the EEOC has no authority to interpret the meaning of the safe
harbor provision because it is in Title V of the ADA, not Title I, and
these commenters urged deletion of the entire footnote.
The Commission has authority to interpret the safe harbor provision
because, by its express terms, this provision applies to Titles I
through IV of the ADA. Moreover, as stated in Sec. 1630.14(d)(6) of
this rule, we reaffirm our position that the safe harbor provision does
not apply to an employer's decision to offer rewards or impose
penalties in connection with wellness programs that include disability-
related inquiries or medical examinations.
First, as we observed in the preamble to our proposed rule, the
ADA, codified at 42 U.S.C. 12112(d)(4)(B), specifically provides an
exception that allows employers to make disability-related inquiries or
conduct medical examinations as part of an employee health program as
long as employee participation is voluntary. To read the insurance safe
harbor provision as applicable to wellness programs--and thus to permit
incentives in excess of what this rule allows and even to permit
practices such as requiring employees to participate in wellness
programs in order to maintain their health insurance--would render 42
U.S.C. 12112(d)(4)(B) superfluous.\25\
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\25\ See Amendments to Regulations Under the Americans With
Disabilities Act, 80 FR at 21662 n.24.
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One commenter disagreed, arguing that application of the insurance
safe harbor provision to wellness programs that are part of a group
health plan would not render 42 U.S.C. 12112(d)(4)(B) superfluous, as
that section could still apply to wellness programs that are not part
of a group health plan. We, however, discern no Congressional intent--
either in the plain language of 42 U.S.C. 12112(d)(4)(B) or in the
legislative history on that section of the ADA--to restrict the
section's reach only to health programs that are not part of a group
health plan.
Additionally, the plain language of the safe harbor provision, and
an abundance of legislative history explaining it, make its narrow
purpose clear. At the time the ADA was enacted, health plans were
allowed to engage in some practices that are no longer permitted today.
For example, before HIPAA made the practice illegal in 1996, group
health plans were allowed to charge individuals in the plan higher
rates based on increased risks associated with their medical
conditions.\26\ The ADA's safe harbor provision was intended to protect
this now unlawful practice, provided that such decisions to treat
people differently because of their medical conditions were based on
real risks and costs associated with those conditions.
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\26\ See 29 U.S.C. 1182(b).
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In commenting on the safe harbor provision, the report of the House
Committee on Education and Labor accompanying the ADA noted:
Under the ADA, a person with a disability cannot be denied
insurance or be subject to different terms or conditions of
insurance based on disability alone, if the disability does not
impose increased risks.
* * *
Moreover, while a plan which limits certain kinds of coverage
based on classification of risk would be allowed under this section
[codified at 42 U.S.C. 12201(c)], the plan may not refuse to insure,
or refuse to continue to insure, or limit the amount, extent, or
kind of coverage available to an individual, or charge a different
rate for the same coverage solely because of a physical or mental
impairment, except where the refusal, limitation, or rate
differential is based on sound actuarial principles or is related to
actual or reasonably anticipated experience.\27\
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\27\ See H.R. Rep. No. 101-485, pt. 2, at 136-37 (1990). The
report further states that the ``safe harbor'' provision ``ensures
that decisions concerning the insurance of persons with disabilities
which are not based on bona fide risk classification be made in
conformity with non-discrimination requirements'' and that benefit
plans ``need to be able to continue business practices in the way
they underwrite, classify, and administer risks, so long as they
carry out those functions in accordance with accepted principles of
insurance risk classification.'' Id.; see also H.R. Rep. No. 101-
485, pt. 3, at 71 (the ``ADA requires that underwriting and
classification of risks be based on sound actuarial principles or be
related to actual or reasonably anticipated experience''); S. Rep.
No. 101-116, at 84 (1989) (``The Committee does not intend that any
provisions of this legislation should affect the way the insurance
industry does business [under] State laws.'').
---------------------------------------------------------------------------
For example, a blind person may not be denied coverage based on
blindness independent o[f] actuarial risk classification.\28\
---------------------------------------------------------------------------
\28\ H.R. Rep. No. 101-485, pt. 2, at 137.
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The same report summarized the safe harbor's purpose as follows:
[S]ection 501 is intended to afford insurers and employers the
same opportunities they would enjoy in the absence of this
legislation to design and administer insurance products and benefit
plans in a manner that is consistent with basic insurance risk
classification. . . . Without such a clarification, the legislation
could arguably find violative of its provisions any action taken by
an insurer or employer which treats disabled persons differently
under an insurance or benefit plan because they represent an
increased hazard of illness or death.\29\
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\29\ Id. at 137-38; see also S. Rep. No. 101-116, at 85-86.
The safe harbor provision, then, allows the insurance industry and
sponsors of insurance plans, such as employers, to treat individuals
differently based on disability (normally a prohibited
[[Page 31131]]
practice under the ADA), but only if the differences can be justified
by increased risks and costs ``based on sound actuarial data and not on
speculation.'' \30\
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\30\ H.R. Rep. No. 101-485, pt. 3, at 70. The safe harbor
provision also permitted practices such as excluding or limiting
coverage for individuals with pre-existing conditions (now
prohibited as a result of the Affordable Care Act), even though they
adversely affect people with disabilities, as long as they were not
a subterfuge to evade the purposes of the ADA. See S. Rep. No. 101-
116, at 29; H.R. Rep. No. 101-485, pt. 2, at 59.
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Nowhere does the ADA's legislative history refer to wellness
programs in connection with the safe harbor provision. The evidence, in
fact, is to the contrary. The only reference to wellness programs is in
a committee report discussing the ADA provision governing voluntary
health programs.\31\
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\31\ See H.R. Rep. No. 101-485, pt. 2, at 75 (noting that ``[a]
growing number of employers . . . are offering voluntary wellness
programs'' and that ``[a]s long as the programs are voluntary and
the medical records are maintained in a confidential manner and not
used for the purpose of limiting health insurance eligibility or
preventing occupational advancement, these activities would fall
within the purview of accepted activities'').
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Consistent with this legislative history, EEOC's ADA regulations,
the interpretive guidance accompanying them, and interim enforcement
guidance that the Commission issued in 1993 and that is still in
effect, confirm that the safe harbor provision applies to the practices
of the insurance industry with respect to the use of sound actuarial
data to make determinations about insurability and the establishment of
rates. Section 1630.16(f) of the regulations incorporates the language
of section 501(c) of the ADA. The interpretive guidance provides that
the safe harbor provision ``is a limited exception that is only
applicable to those who establish, sponsor, observe, or administer
benefit plans, such as health and insurance plans. . . . The purpose of
this provision is to permit the development and administration of
benefit plans in accordance with accepted principles of risk
assessment.'' \32\ EEOC's interim guidance on insurance further states:
---------------------------------------------------------------------------
\32\ 29 CFR part 1630, app. 1630.16(f).
Risk classification refers to the identification of risk factors
and the grouping of those factors that pose similar risks. Risk
factors may include characterizations such as age, occupation,
personal habits (e.g., smoking), and medical history. Underwriting
refers to the application of the various risk factors or risk
classes to a particular individual or group (usually only if the
group is small) for the purpose of determining whether to provide
insurance.\33\
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\33\ EEOC, Interim Enforcement Guidance: Application of the ADA
to Health Insurance 13, n.15 (1993), https://eeoc.gov/policy/docs/guidance.pdf.
Although employers claim that they use wellness programs to make their
employees healthier and thus ultimately to reduce their health care
costs, such use of wellness programs does not constitute underwriting
or risk classification protected by the insurance safe harbor.
The Commission disagrees with the result in the two district court
decisions that have applied the safe harbor provision far more
expansively to support employers' imposition of penalties on employees
who do not answer disability-related questions or undergo medical
examinations in connection with wellness programs, Seff v. Broward
County \34\ and EEOC v. Flambeau, Inc.\35\ However, neither court ruled
that the language of the statute was unambiguous. Hence, the agency has
the authority and responsibility to provide its own considered analysis
of the statutory provision, which is provided above.\36\
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\34\ Seff v. Broward Cty., 778 F. Supp. 2d 1370 (S.D. Fla.
2011), aff'd, 691 F.3d 1221 (11th Cir. 2012) (involving an employer
that charged employees who did not complete a health risk assessment
20 dollars every two weeks)
\35\ EEOC v. Flambeau, Inc., No. 14-cv-638-bbc, 2015 WL 9593632
(W.D. Wis. Dec. 30, 2015) (involving an employer that terminated
insurance coverage of employee who did not undergo biometric
screening).
\36\ As the Supreme Court explained in National Cable and
Telecommunications Ass'n v. Brand X Internet Services, 545 U.S. 967,
972 (2005), a judicial decision determining the meaning of a
statutory provision is controlling only if it ``holds that its
construction follows from the unambiguous terms of the statute and
thus leaves no room for agency discretion.'' This follows from the
deference accorded agencies under Chevron U.S.A. Inc. v. National
Resources Defense Council, 467 U.S. 837, XX (1984). See also id. at
985 (``Before a judicial construction of a statute, whether
contained in a precedent or not, may trump an agency's, the court
must hold that the statute unambiguously requires the court's
construction.'')
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The Commission also believes both cases were wrongly decided. The
employers in Seff and Flambeau did not use wellness programs in a
manner consistent with the application of the safe harbor provision. In
neither Seff nor Flambeau did the employer or its health plan use
wellness program data to determine insurability or to calculate
insurance rates based on risks associated with certain conditions--the
practices the safe harbor provision was intended to permit. Moreover,
there is no evidence in either Seff or Flambeau that the decision to
impose a surcharge or to exclude an employee from coverage under a
health plan was based on actual risks that non-participating employees
posed.
Seff, in particular, seems to endorse an almost limitless
application of the safe harbor provision. The court thought the safe
harbor applied because the wellness program was ``designed to
mitigate'' risks and was ``based on the theory'' that getting employees
to be involved in their own health care leads to a healthier
workforce.\37\ If this were a sufficient justification for the safe
harbor, then any medical inquiry directed at an employee as part of a
health plan is permissible if there is some possibility--real or
theoretical--that the information might be used to reduce risks. Thus,
the requirement in 42 U.S.C. 12112(d)(4)(B) that disability-related
inquiries and medical examinations conducted as part of a health
program must be voluntary would be meaningless for anyone who receives
employer-provided health insurance, because any inquiry or medical
examination could be defended on the ground that it might result in
reduced health risks.
---------------------------------------------------------------------------
\37\ Seff, 778 F. Supp. 2d at 1374.
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Comments Responding to Questions in the NPRM
Certification in Lieu of Answering Disability-Related Inquiries or
Undergoing Medical Examinations
Individuals, including individuals with disabilities and their
advocates, commented that employees should be allowed to provide a
certification from a medical professional that any medical risks they
have are under active treatment instead of being required to complete a
HRA or undergo a medical examination. By contrast, health insurance
issuers and employer groups generally commented that allowing an
employee to submit such a certification instead of completing a HRA
would circumvent the ability of a wellness program to assess and
mitigate health risks.
The Commission has decided that although some employees already may
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 wellness programs that the Affordable Care
Act clearly intends to promote. For example, employers may use
aggregate information from HRAs to determine the prevalence of certain
conditions in their workforce to design specific programs aimed at
improving the health of employees with those conditions. The Commission
concludes that protections in the final rule--such as the requirement
that wellness programs be reasonably designed to promote health or
prevent disease, and confidentiality requirements that have been
further strengthened over those in the proposed
[[Page 31132]]
rule--provide employees with significant protections without adopting a
medical certification as an alternative to completion of a HRA or
biometric screening.
Whether To Incorporate an ``Affordability Standard'' To Determine
Whether a Wellness Program Is ``Voluntary''
One individual commented that if the EEOC feels constrained to
adopt the rule that the incentives provided in a wellness program that
asks employees to respond to disability-related inquiries and/or
undergo medical examinations may not be so large as to render health
insurance coverage unaffordable under the Affordable Care Act, it
should at least do so based on the cost of the family premium for
individuals who have family coverage.\38\ Several disability advocacy
groups commented that if the Commission retains its proposed ``30
percent rule,'' it should include protection for low-income employees
and employees with disabilities, such that the incentives may not be so
large as to render health insurance coverage unaffordable using a
threshold far lower than the applicable percentage used to determine
whether coverage is affordable under the Affordable Care Act (9.5
percent as adjusted). By contrast, a health insurance issuer commented
that it is unclear how ``low income'' would be defined, or how an
employer would be aware of an employee's household financial
circumstances in order to determine which employees would be considered
low income. Other industry groups commented that current Treasury
regulations already provide that the affordability of eligible
employer-sponsored coverage is determined by assuming that each
employee fails to satisfy the requirements of a wellness program
(except for the requirements of a nondiscriminatory wellness program
related to tobacco use).\39\
---------------------------------------------------------------------------
\38\ See 26 U.S.C. 36B(c)(2)(C); 26 CFR 54.4980H-5(e).
\39\ See 26 CFR 1.36B-2(c)(3)(v)(A)(4).
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The Commission has decided that by extending the 30 percent limit
set under HIPAA and the Affordable Care Act to include participatory
wellness programs that ask an employee to respond to a disability-
related inquiry or undergo a medical examination, this rule promotes
the ADA's interest in ensuring that incentive limits are not so high as
to make participation in a wellness program involuntary. We also agree
that the Treasury regulations that provide that the affordability of
eligible employer-sponsored coverage is determined by assuming that
each employee fails to satisfy the requirements of a wellness program
(except for the requirements of a nondiscriminatory wellness program
related to tobacco use) already serves as a constraint on the level of
incentives an employer may offer, since affordability generally is
calculated based on the employee's cost of coverage relative to his or
her income without considering the value of any wellness program
incentive. Accordingly, the Commission declines to incorporate an
affordability standard into the final rule.
Wellness Programs Offered Outside of Employer-Sponsored Group Health
Plans
Several comments were submitted in response to the question in the
NPRM asking whether employers offer or are likely to offer wellness
programs not in connection with a group health plan or group health
insurance coverage (outside of a group health plan), and whether the
final rule should specifically limit incentives provided as part of
such programs. One advocacy group commented that more employers are
sending employees to Exchanges for health care coverage but are
offering wellness programs in an effort to improve employees' health
and increase job productivity. Some commenters stated that the final
rule should apply both to wellness programs that are part of an
employer-sponsored health plan as well as to wellness programs offered
outside of 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.'' One group said that an example of a wellness program
offered outside of a group health plan is one that is available to all
employees whether or not they participate in an employer-sponsored
group health plan. Another group suggested criteria for determining
whether a wellness program is part of or outside of a group health
plan, such as: (1) Whether the program is offered by a vendor that has
contracted with the group health plan or insurer; (2) whether it only
is offered to employees enrolled in a group health plan; and (3)
whether the wellness program is described as a covered benefit under
the terms of the group health plan.
Rather than listing factors for determining whether a 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, including the requirement to provide a notice and the limitations
on incentives, apply to all wellness programs that include disability-
related inquiries and/or medical examinations. This means that this
rule applies to wellness programs that are: offered only to employees
enrolled in an employer-sponsored group health plan; offered to all
employees regardless of whether they are enrolled in such a plan; or
offered as a benefit of employment by employers that do not sponsor a
group health plan or group health insurance.
We considered taking the position that wellness programs that are
not offered through a group health plan that require employees to
provide medical information could not offer any incentives. However,
such an approach would be inconsistent with our conclusion, with
respect to wellness programs that are part of a group health plan, that
the offer of limited incentives will not render the program
involuntary. Similarly, allowing unlimited incentives where a wellness
program is not offered through a group health plan would be
inconsistent with our position that limitations on incentives are
necessary to ensure voluntariness. Accordingly, as noted below, this
rule explains how to calculate the permissible incentive level for
wellness programs regardless of whether they are related or unrelated
to a group health plan.
Comments Regarding Specific Provisions
Section 1630.14(d)(1): Explanation of What Constitutes a ``Health
Program''
Some commenters suggested that the EEOC leave it to the tri-
Departments to determine what constitutes a health or wellness program,
while others commented that wellness programs should be required to be
based on clinical guidelines or national standards or have a stronger
connection between the content of a HRA and the development of specific
disease management programs.
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 NPRM's requirement
that an employee health program, including any disability-related
inquiries and medical examinations that are part of such a program,
must be ``reasonably designed to promote health or prevent disease.''
This standard is similar to the standard under the tri-Department
regulations applicable to health-contingent wellness programs.\40\ In
order to meet this
[[Page 31133]]
standard, a program--including a wellness program that is unrelated to
a group health plan--must have a reasonable chance of improving the
health of, or preventing disease in, participating employees and must
not be overly burdensome, a subterfuge for violating the ADA or other
laws prohibiting employment discrimination, or highly suspect in the
method chosen to promote health or prevent disease. 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 health of participating employees 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. Further, imposing
a penalty solely on an employee's failure to achieve a particular
health outcome (such as failing to attain a certain weight or
cholesterol level) would, in many instances, discriminate against
individuals based on disability.\41\ The interpretive guidance offers
examples of programs that would and would not meet this standard.
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\40\ This rule applies the ``reasonably designed'' standard to
both participatory and health-contingent wellness programs, while
the tri-Department regulations apply the standard only to health-
contingent wellness programs. The tri-Department regulations also
state that, in order to be reasonably designed, a health-contingent
outcome-based wellness program must provide a reasonable alternative
standard (or waiver) for an individual to qualify for a reward if
the individual does not meet the initial standard based on a
measurement, test, or screening that is related to a health factor.
Under the ADA, a covered entity is required to provide a reasonable
accommodation (a modification or adjustment) for a participatory
program even though HIPAA and the Affordable Care Act do not require
such programs to offer a reasonable alternative standard (although,
under the HIPAA rules, a participatory program must be made
available to all similarly situated individuals, regardless of
health status). Finally, unlike the tri-Department regulations, the
``reasonably designed'' standard applies to all employee health
programs that include disability-related inquiries and/or medical
examinations, even if they are not related to a group health plan.
See 26 CFR 54.9802-1(f)(3)(iii), (f)(4)(iii); 29 CFR
2590.702(f)(3)(iii), (f)(4)(iii); 45 CFR 146.121(f)(3)(iii),
(f)(4)(iii).
\41\ Changes made to the ADA by the ADA Amendments Act of 2008
adopted a broad definition of ``disability'' that makes it easier
for an individual to show that he or she has a disability, a record
of a disability, or that an employer took some adverse action
because it regarded him or her as having a disability (such as
imposed a penalty for not meeting a particular health outcome).
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Finally, because the ADA generally restricts the medical
information employers may obtain from employees, the Commission
believes that requiring wellness programs that include disability-
related inquiries and/or medical examinations to be ``reasonably
designed to promote health or prevent disease'' is necessary to give
meaning to the exception for inquiries and examinations that are part
of voluntary employee health programs. In addition, this is a standard
with which health plans are now sufficiently familiar, and, thus, it is
reasonable to apply that standard under the ADA to employers that
sponsor wellness programs. 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 medical
information.
Section 1630.14(d)(2)(i) Through (iv): Definition of the Term
``Voluntary''
(i) Does Not Require Employees To Participate
Individuals with disabilities and their advocates commented that
participation in wellness programs is not voluntary when an employee
has no choice or when financial penalties are the cost of opting out.
By contrast, health insurance and employer groups commented that if an
employee has a choice whether to participate, even if that choice may
result in a penalty, participation should be considered voluntary.
To give meaning to the ADA's requirement that an employee's
participation in a wellness program must be voluntary, the incentives
for participation cannot be so substantial as to be coercive. We,
therefore, reject the suggestion that merely offering employees a
choice whether or not to participate renders participation voluntary,
regardless of the consequences associated with that choice.
Nonetheless, although substantial, the Commission concludes that, given
current insurance rates, offering an incentive of up to 30 percent of
the total cost of self-only coverage does not, without more, render a
wellness program coercive. Accordingly, the final rule does not make
any changes to the requirement that, in order for a wellness program to
be considered voluntary, an employer may not require employees to
participate in the program.
(ii) Does Not Deny Coverage Under Any Group Health Plan to Employees
for Non-Participation
Some employer and health care groups commented that a number of
employers have begun experimenting with tiered health plan benefit and
cost-sharing structures (sometimes called ``gateway plans'') that base
eligibility for a particular health plan on completing a HRA or
undergoing biometric screenings and asked the Commission to allow for
such plans. For example, a health insurance issuer commented that a
current trend is to allow employees who participate in a wellness
program to enroll in a comprehensive health plan, while offering non-
participants a less comprehensive plan or one that requires higher
premiums or cost-sharing.
The Commission concludes that the ADA does not prohibit an employer
from denying an incentive that is within the limits set out in this
final rule to an employee who does not participate in a wellness
program that includes disability-related inquiries or medical
examinations; nor does it prohibit requiring an employee to pay more
for insurance that is more comprehensive. The ADA, however, does
prohibit the outright denial of access to a benefit available by virtue
of employment. When an employer denies access to a health plan because
the employee does not answer disability-related inquiries or undergo
medical examinations, it discriminates against the employee within the
meaning of 42 U.S.C. 12112(d)(4) by requiring the employee to answer
questions or undergo medical examinations that are not job related and
consistent with business necessity and cannot be considered voluntary.
Consequently, we decline to change this provision in the final rule to
allow for the kind of tiered health plans described by commenters.
However, an employer still may offer incentives up to 30 percent of the
total cost of self-only coverage based on participation in a wellness
program. Thus, an employee who chooses a more comprehensive health plan
but declines to participate in a wellness program could pay more for
the same comprehensive health plan than an employee who participates in
a wellness program.
(iii) Does Not Take Any Adverse Action, Retaliate Against, or Coerce
Employees Who Choose Not To Participate
Individuals, including individuals with disabilities and their
advocates, and civil rights groups generally commented that because
financial incentives can be significant enough to become coercive for
many employees, the proposed rule did not offer enough protection and
was inconsistent with the plain language of the ADA. Health insurance
and employer groups, however, supported the provision.
No changes have been made to this paragraph, which states that, in
order to be considered voluntary, an employer may not retaliate
against, interfere with, coerce, intimidate, or threaten employees in
violation of Section 503 of the ADA, codified at 42 U.S.C. 12203 (e.g.,
by coercing an employee to
[[Page 31134]]
participate in an employee health program or threatening to discipline
an employee who does not participate).
(iv) Notice
The Commission asked whether the requirement that employees
participating in wellness programs that ask disability-related
questions and/or require medical examinations be given a notice
concerning the information to be collected, how it will be used, with
whom it will be shared, and how it will be kept confidential should
apply to all wellness programs and not just to wellness programs that
are part of a group health plan. We also asked whether a notice should
be required where a covered entity offers only ``de minimis''
incentives. (See the discussion of de minimis incentives under ``Types
of Incentives'' below.)
Some disability advocacy groups commented that rather than trying
to define what constitutes de minimis rewards or penalties, the notice
requirements should apply to all programs that include disability-
related inquiries or medical examinations, regardless of whether they
are part of a group health plan or offer incentives. However, an
employer group commented that any notice requirements should be waived
where incentives are only de minimis.
Because the importance of the information the notice communicates
does not depend on whether a wellness program is part of a group health
plan or whether incentives are offered in connection with the program,
this provision of the final rule clarifies that the requirement to
provide a notice applies to all wellness programs that ask employees to
respond to disability-related inquiries and/or undergo medical
examinations. For these wellness programs to be deemed voluntary, a
covered entity must provide a notice--in language reasonably likely to
be understood by the employee from whom medical information is being
obtained--that clearly explains what medical information will be
obtained, how the medical information will be used, who will receive
the medical information, the restrictions on its disclosure, and the
methods the covered entity uses to prevent improper disclosure of
medical information.
Commenters representing employer and health care groups said that
the notice requirement is duplicative of existing law, while others
asked the Commission to provide model language for a notice that would
meet the necessary requirements. Where an employer's current written
notifications to employees regarding wellness programs include the
required information, the employer can continue to use those
notifications for all of its wellness programs that ask employees to
respond to disability-related inquiries and/or undergo medical
examinations. However, where current notifications do not include the
detailed information required by this provision, even if the employer
claims to meet requirements under another law, it must revise existing
notifications or develop a new notice to comply with this final rule.
Within 30 days of the final rule's publication, the Commission will
provide on its Web site an example of a notice that complies with this
rule.
The Commission also asked whether the proposed notice provision
should include a requirement that employees participating in wellness
programs that include disability-related inquiries and/or medical
examinations provide prior, written, and knowing confirmation that
their participation is voluntary. Disability groups expressed concerns
about employees who may unwittingly ``waive'' their privacy rights,
particularly when completing online HRAs. For example, one group
commented that some HRA Web sites include a provision, buried in an
obscure link, stating that using the wellness program Web site
constitutes a waiver of the person's privacy rights. Other groups
commented that employees should have the option to actively opt in to a
privacy notification agreement and that they should be fully informed
of everything that the vendor or third party might do with personal
health data, including: Marketing products and services to the
employee; disclosing personal information to third party vendors that
help provide services on the vendor's site; or authorizing the third
party vendor to collect the employee's health information directly or
indirectly from interaction with the services and/or from the
employee's health care provider or health insurer.
Health insurance issuers and employer groups commented that
requiring employers to collect signatures from non-participants would
create an administrative burden and introduce additional costs and
barriers to employers' willingness to offer wellness programs and to
employees' participation. Another stakeholder said that if the point of
the proposed regulation is to minimize confusion between the ADA and
Affordable Care Act rules, requiring a written authorization would
undermine that point and make the determination of a ``voluntary''
wellness program an employee-by-employee process rather than a
determination made at the program level.
Although the Commission has decided not to include a requirement
that employees must provide prior, written, and knowing authorization,
we are concerned that the completion of a HRA or disclosure of health
information in connection with a wellness program, particularly when
online resources are used, would cause employees to waive critical
confidentiality protections of their health information. We have
addressed this concern in the final rule's provisions on
confidentiality of medical information. (See the discussion of Sec.
1630.14(d)(4)(v) below.)
Section 1630.14(d)(3): ADA's 30 Percent Limit on Financial Incentives
Generally
The Commission received numerous comments on this provision of the
proposed rule. As stated in the general comments section of this
preamble, disability advocacy groups and individuals with disabilities
said that the proposed rule was based on the erroneous assumption that
the ADA must be ``conformed'' to provisions of the Affordable Care Act
concerning wellness programs. They also commented that allowing
wellness programs to offer incentives of up to 30 percent of the total
cost of self-only coverage in exchange for employees responding to
disability-related inquiries or undergoing medical examinations would
be coercive and would substantially weaken the ADA's protections. While
some individuals with disabilities did not categorically object to
allowing employers to offer incentives to employees who provide health
information, they stated that employees should not have to answer
questions about their disabilities in order to receive whatever reward
is offered. Employer and industry groups, however, commented that the
EEOC should align the incentive limits for wellness programs with the
incentive limits established in the tri-Department regulations.
The final rule reaffirms that an employer may offer incentives up
to a maximum of 30 percent of the total cost of self-only coverage
(including both the employee's and employer's contribution), whether in
the form of a reward or penalty, to promote an employee's participation
in a wellness program that includes disability-related inquiries and/or
or medical examinations as long as participation is voluntary. The 30
percent limit applies to all workplace wellness programs whether they
are: Offered only to employees enrolled in an employer-sponsored group
health plan; offered to
[[Page 31135]]
all employees whether or not they are enrolled in such a plan; or
offered as a benefit of employment where an employer does not sponsor a
group health plan or group health insurance coverage.
Calculation of Incentive Limit Based on Whether Employee Is Enrolled in
a Health Plan
The final rule explains how to calculate the permissible incentive
limit in four situations. First, where participation in a wellness
program depends on enrollment in a particular group health plan, the
employer may offer an incentive up to 30 percent of the total cost of
self-only coverage (including both employer and employee contributions)
under that plan. Second, where an employer offers a single group health
plan, but participation in a wellness program does not depend on the
employee's enrollment in that plan, an employer may offer an incentive
of up to 30 percent of the total cost of self-only coverage under that
plan. Third, where an employer has more than one group health plan, but
participation in a wellness program does not depend on the employee's
enrollment in any plan, the employer may offer an incentive up to 30
percent of the total cost of the lowest cost self-only coverage under a
major medical group health plan offered by the employer. Finally, where
an employer does not offer a group health plan or group health
insurance coverage, the rule uses the cost of the second lowest cost
Silver Plan \42\ 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 as a
benchmark for setting the incentive limit. Thus, an employer may offer
incentives up to a maximum of 30 percent of the cost that would be
charged for self-only coverage under such a plan if purchased by a 40-
year-old non-smoker.
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\42\ 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).
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The Commission has concluded that the employer's lowest cost self-
only coverage under a major medical group health plan is an appropriate
benchmark for establishing the incentive limit where an employer has
more than one group health plan and participation in a 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 incentives for answering
disability-related questions or undergoing medical examinations do not
become so high as to render the employee's participation involuntary.
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 Exchanges.\43\ 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.\44\ Additionally,
because the Silver Plan typically is neither the least nor most
expensive plan available on the Exchanges, incentive limits that are
tied to its cost may promote participation in wellness programs while
not being so high as to be coercive.
---------------------------------------------------------------------------
\43\ See 26 U.S.C. 36B(b)(2).
\44\ 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
(indicating that, based on marketplace enrollment from November 15,
2014 through February 15, 2015, 67 percent of people who selected a
marketplace plan, selected Silver).
---------------------------------------------------------------------------
Types of Incentives
Some groups also commented that non-financial incentives should not
be counted toward the cap. According to these commenters, determining
the value of in-kind incentives, such as employee recognition, use of a
parking spot, or easing of a dress code for a wellness participant are
difficult, if not impossible, to determine and that including such non-
financial incentives will add an additional administrative burden and
possibly discourage the use of these kinds of incentives. Others
commented that if the provision is adopted, the EEOC should avoid
requiring plans to calculate the value of de minimis rewards when
demonstrating compliance with applicable limits.
The final rule reaffirms that the offer of limited incentives
(whether financial or in-kind) to encourage employees to participate in
wellness programs that include disability-related inquiries and/or
medical examinations will not render the program involuntary. However,
the total allowable incentive available under all programs (both
participatory and health-contingent programs), whether part of, or
outside of, a group health plan, may not exceed 30 percent of the total
cost of self-only coverage, which generally is the maximum allowable
incentive available under HIPAA and the Affordable Care Act for health-
contingent wellness programs.\45\ The Commission sees no reason to
exclude in-kind incentives based on the difficulty of valuing them when
the tri-Department regulations clearly state that the term
``incentives'' means ``any financial or other incentive.'' \46\
Employers have flexibility to determine the value of in-kind incentives
as long as the method is reasonable.
---------------------------------------------------------------------------
\45\ See Incentives for Nondiscriminatory Wellness Programs in
Group Health Plans, 78 FR 33158, 33,167 (June 3, 2013).
\46\ 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 FAQs About Affordable Care Act
Implementation (Part XXIX) and Mental Health Parity Implementation,
Q. 11, https://www.dol.gov/ebsa/pdf/faq-aca29.pdf (explaining that
``a reward may be financial or non-financial (or in-kind). . . .
[A]n individual obtaining a reward includes both `obtaining a reward
(such as a discount or rebate of a premium or contribution, a waiver
of all or part of a cost-sharing mechanism (such as a deductible,
copayment, or coinsurance), an additional benefit, or any financial
or other incentive) and avoiding a penalty (such as the absence of a
surcharge or other financial or nonfinancial disincentives).''
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We also decline to exclude de minimis incentives. Although
commenters gave examples of some incentives that might be considered de
minimis, no commenters offered a workable principle or a dollar amount
that could be used as the basis for defining which incentives 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 de minimis value threshold. Moreover, the tri-Department regulations
do not distinguish between de minimis incentives and others for
purposes of determining whether a plan has complied with the 30 percent
incentive limit applicable to most health-contingent wellness programs,
even though it is quite possible that health-contingent wellness
programs utilize both de minimis and more substantial incentives.
Consequently, we have not exempted the value of de minimis incentives
from the 30 percent limit on incentives for wellness programs that
include disability-related questions and/or medical examinations.
Calculation of Incentive Limit Based on Self-Only Coverage
Numerous commenters said that calculating the 30 percent limit on
the total cost of self-only coverage does not align with the tri-
Department regulations implementing HIPAA's
[[Page 31136]]
wellness program provisions, which provide that the incentive limit
applies to the total cost of coverage in which the employee and any
dependents are enrolled, when wellness programs are available to an
employee's dependents or spouse. Because the ADA's prohibitions on
discrimination--including its restrictions on disability-related
inquiries and medical examinations--apply only to applicants and
employees, not their spouses and other dependents, this rule does not
address the incentives wellness programs may offer in connection with
dependent or spousal participation.\47\ However, because medical
history about an employee's family members, including an employee's
dependents and spouse, is considered genetic information about the
employee, incentives offered in exchange for an employee's family
member to provide such information implicates Title II of GINA.\48\ The
EEOC also publishes today a final rule under GINA concerning the extent
to which employers may offer incentives for spouses and other family
members to provide health-related information as part of a wellness
program.\49\
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\47\ The ADA's ``association'' provision that protects
applicants and employees from discrimination based on their
relationship or association with an individual with a disability
also is not applicable here as it applies to only relationships to
persons with a disability. See 42 U.S.C. 12112(b)(4).
\48\ See 29 CFR 1635.3(c) (stating that genetic information
includes information about ``[t]he manifestation of disease or
disorder in family members of [an] individual''); 29 CFR
1635.3(a)(1) (stating that a family member of an individual includes
``a person who is a dependent of that individual as the result of
marriage, birth, adoption, or placement for adoption'').
\49\ The final rule implementing Title II of GINA is published
elsewhere in this issue of the Federal Register.
---------------------------------------------------------------------------
Incentives Related to Smoking Cessation Programs
The interpretive guidance accompanying the proposed rule explained
the application of this provision to smoking cessation programs.
Specifically, the interpretive guidance stated that because a smoking
cessation program that merely asks employees whether or not they use
tobacco (or whether or not they ceased using tobacco upon completion of
the program) is not an employee health program that includes
disability-related inquiries or medical examinations, the 30 percent
incentive limit does not apply. Therefore, a covered entity may offer
incentives as high as 50 percent of the cost of self-only coverage,
pursuant to the regulations implementing section 2705(j) of the PHS
Act, for such a program. However, the interpretive guidance explained
that because any biometric screening or other medical procedure that
tests for the presence of nicotine or tobacco is a medical examination
under the ADA, the 30 percent incentive limit would apply to such a
screening or procedure.
Some commenters said that the distinction the proposed rule made
between inquiries about tobacco use and tests to determine such use was
confusing. Additionally, a national trade association representing
large employers commented that the ADA's prohibition on medical
examinations was intended to prohibit employers from acquiring and
improperly using knowledge about an employee's or applicant's
disability and was not intended to protect employees from restrictions
on tobacco usage, which is not a disability. Other employer groups
commented that EEOC should not reverse course on the efforts being made
by wellness programs to discourage tobacco use, particularly since
employees are not required to quit smoking/using tobacco but, rather,
simply asked to participate in cessation programs.
The final rule retains the distinction between smoking cessation
programs that require employees to be tested for nicotine use and
programs that merely ask employees whether they smoke. Although the
fact that someone smokes is not information about a disability, the
ADA's provisions limiting disability-related inquiries and medical
examinations apply to all applicants and employees, whether or not they
have disabilities.\50\ Moreover, whatever benefit smoking cessation
programs that are part of wellness programs may have, the Commission
can discern no reason for treating medical examinations to detect the
use of nicotine differently from any other medical examinations when
the ADA makes no such distinction.
---------------------------------------------------------------------------
\50\ See Guidance, supra note 10.
---------------------------------------------------------------------------
Section 1630.14(d)(4)(i) Through (iv) (Previously 1630.14(d)(4) Through
(d)(6)): Explanation of the Requirements Regarding Confidentiality of
Medical Information
The NPRM had three subsections addressing the confidentiality of
medical information obtained through voluntary health programs.
Specifically, the Commission redesignated paragraph (d)(1) in Sec.
1630.14, which states that information regarding the medical condition
or history of any employee shall be collected and maintained on
separate forms and in separate medical files and be treated as a
confidential medical record, as paragraph (d)(4) but did not change any
of the exceptions to confidentiality set out in that section. It also
redesignated paragraph (d)(2), which states that medical information
regarding the medical history of any employee shall not be used for any
purpose inconsistent with Sec. 1630.14(d), as paragraph (d)(5).
Finally, the Commission proposed to add a new paragraph (d)(6) to Sec.
1630.14, concerning the confidentiality and use of medical information
gathered in the course of providing voluntary health services to
employees, including information collected as part of an employee's
participation in an employee health program.
Paragraph (d)(6) in Sec. 1630.14 stated that medical information
collected through an employee health program only may be provided to a
covered entity under the ADA in aggregate terms that do not disclose,
or are not reasonably likely to disclose, the identity of specific
individuals, except as needed to administer the health plan and except
as permitted under Sec. 1630.14(d)(4). The interpretive guidance
explained that both employers that sponsor wellness programs and
administrators of wellness programs acting as agents of employers have
obligations to ensure compliance with this provision.
Employer and health care groups suggested that the confidentiality
provisions applicable to wellness programs should be more closely
aligned with the HIPAA privacy and security standards and the
Affordable Care Act. For example, an employer group commented that the
EEOC's guidance implies that compliance with HIPAA's privacy and
security standards may not always satisfy the ADA's requirement and
that the final rule should explicitly state that compliance with the
HIPAA privacy and security standards would satisfy the confidentiality
requirement. By contrast, one individual commented that the Commission
should strengthen employment non-discrimination protections beyond
allowing disclosure of only aggregate information to the employer and
recommended that individuals have the right to request that employers
delete all their wellness data if they stop participating in the
wellness program, or leave their employer.
In response, the Commission retains the requirements set forth in
this paragraph but includes additional requirements to further protect
employees' personal health information. The final rule also places all
of the confidentiality requirements in a single
[[Page 31137]]
paragraph: paragraph (d)(4) in Sec. 1630.14.\51\
---------------------------------------------------------------------------
\51\ 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 512(d).
---------------------------------------------------------------------------
In response to comments that participation in a wellness program,
particularly completion of an online HRA, may result in employees
waiving critical confidentiality protections, the final rule adds a new
paragraph, (d)(4)(iv), which is similar to a provision in the final
rule issued today under Title II of GINA. Section 1630.14(d)(iv) states
that a covered entity may not require an employee to agree to the sale,
exchange, sharing, transfer, or other disclosure of medical information
(except to the extent permitted by this part to carry out specific
activities related to the wellness program), or to waive
confidentiality protections available under the ADA as a condition for
participating in a wellness program or receiving a wellness program
incentive.
The Commission declines to include a requirement that employers or
wellness programs delete medical information of employees who elect not
to continue participating in a wellness program. The ADA only requires
that medical information of employees participating in health programs
be maintained as a confidential medical record, subject to limited
exceptions for its disclosure. We are mindful that other laws may
require the retention of such information. Even the ADA's
confidentiality provisions, codified at 42 U.S.C. 12112(d)(3)(B)(iii)
and (4)(C), contemplate that otherwise confidential medical information
may have to be shared with government officials investigating
compliance with the ADA.
Section 1630.14(d)(5): Explanation of the Rule's Relationship to Other
EEOC Nondiscrimination Laws
This paragraph of the proposed rule (previously Sec.
1630.14(d)(7)) clarified that compliance with paragraph (d) of this
section, including the limit on incentives under the ADA, does not
relieve a covered entity of its obligation to comply with other
employment nondiscrimination laws. Some commenters suggested that the
final rule should give specific examples of wellness programs that
violate other nondiscrimination laws, especially those that may have a
disparate impact on a protected group.
The Commission has revised the interpretive guidance accompanying
the proposed rule to further explain that even if an employer's
wellness program complies with the incentive limits set forth in the
ADA regulations, the employer would violate Title VII or the ADEA if
that program discriminates on the basis of race, sex (including
pregnancy, gender identity, transgender status, and sexual
orientation), national origin, age, or any other grounds prohibited by
those statutes. The interpretive guidance also explains that if a
wellness program requirement (such as achieving 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.
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
amended 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.
Although a detailed cost-benefit analysis of the final rule is not
required, the Commission recognizes that providing some information on
potential costs and benefits of the rule may be helpful in assisting
members of the public in better understanding the rule's potential
impact. The Commission notes that by providing standards applicable to
wellness program incentives and clarity about other ADA provisions
(including the insurance safe harbor provision), the rule will
significantly aid compliance with the ADA and with HIPAA's
nondiscrimination provisions, as amended by the Affordable Care Act, by
employers and group health plans that offer wellness programs.
Currently, employers that offer wellness programs as part of group
health plans face uncertainty as to whether providing incentives
permitted by HIPAA will subject them to liability under the ADA.
Additionally, employers that do not offer health plans and so are not
subject to the wellness program provisions of HIPAA, as amended by the
Affordable Care Act, have no way to determine what, if any, incentives
they may want to offer are permissible under the ADA. This rule
clarifies that the ADA does permit employers to offer incentives to
promote participation in wellness programs that include disability-
related inquiries and/or medical examinations and sets out the limits
on such incentives. The rule also removes uncertainty about whether
practices that have been the subject of litigation, such as
conditioning enrollment in an employer's health plan on participation
in a wellness program that asks disability-related questions or
requires medical examinations, are prohibited.
The Commission does not believe the costs associated with the rule
are significant. Employers covered by the ADA that offer wellness
programs as part of their group health plans are already required to
comply with wellness program incentive limits for health-contingent
wellness programs. EEOC's final rule differs from HIPAA's wellness
program incentives in that it extends the 30 percent limit on
incentives under health-contingent wellness programs to participatory
wellness programs. HIPAA, as amended by the Affordable Care Act, places
no limits on incentives for participatory wellness programs. As the
incentives offered by the vast majority of employers currently fall
below the limit of 30 percent of the cost of self-only coverage, the
Commission does not believe the rule will negatively affect the ability
of employers to offer incentives sufficient to promote meaningful
participation in wellness programs that are part of group health plans.
Employers that offer wellness programs that do not require employees to
participate in a particular group health plan can determine incentive
limits by reference to readily available information about the cost of
their own group health plan or, in the case of employers that do not
offer group health insurance, the cost of the second lowest Silver Plan
available under the state or federal Exchanges under the Affordable
Care Act.
The only other potential cost is associated with the requirement
that employers provide a notice to employees informing them what
medical information will be obtained, how it will be used, who will
receive it, and the restrictions on disclosure. For the reasons set
forth in the Paperwork Reduction Act analysis that follows, the
Commission concludes that approximately 265,880 employers will need to
develop such a notice. The Commission estimates the time required to
develop the notice to be four hours, for a total of 1,063,520 hours.
According to data from the Bureau of Labor Statistics, the average
hourly compensation for employees in ``management, professional, and
related'' occupations was $55.56 as of
[[Page 31138]]
December 2014, and the average hourly compensation for employees
working in ``office and administrative support'' was $23.98.\52\
Assuming that 50 percent of the time required to develop an appropriate
notice is attributable to employees working in management,
professional, and related occupations and that 50 percent of the time
is attributable to employees working in office and administrative
support, the Commission estimates that the total cost of developing a
notice that complies with the requirements of the proposed rule would
be $42,296,190. We note that some employers and group health plans may
already have notices that comply with these requirements, and that
those that do not will incur only a one-time cost to develop an
appropriate notice. The Commission sought but did not receive comments
on these cost estimates.
---------------------------------------------------------------------------
\52\ See Bureau of Labor Statistics, Employer Costs for Employee
Compensation--December 2014 (2015), www.bls.gov/news.release/pdf/ecec.pdf.
---------------------------------------------------------------------------
Other requirements in the rule will result in no costs since they
simply restate basic principles of nondiscrimination under the ADA.
Even in the absence of this rule, employers are prohibited from
requiring employees to participate in employee health programs that
include disability-related inquiries and/or medical examinations;
denying employees health insurance (or any other benefit of employment)
if they do not participate in wellness programs; retaliating against
employees who file charges claiming that a wellness program violates
the ADA; and attempting to induce participation in employee health
programs through interference with their ADA rights or by coercion,
intimidation, and threats. Employers are also required to provide
reasonable accommodations to enable employees to enjoy the equal
benefits and privileges of employment, including participation in
employee health programs. To the extent confidentiality of medical
information acquired in the course of providing an employee health
program is required, the final rule will result in no additional costs
as the ADA already requires employers to keep medical information about
applicants and employees confidential.
To the extent this rule can be read to impose additional
confidentiality obligations, the interpretive guidance to the rule
makes clear that a wellness program that is part of a group health plan
may satisfy its obligation to comply with Sec. 1630.14(d)(4)(iii) by
adhering to the HIPAA Privacy Rule.\53\ An employer that is a health
plan sponsor and receives individually identifiable health information
from or on behalf of the group health plan, as permitted by HIPAA when
the plan sponsor is administering aspects of the plan, may generally
comply with this rule by certifying to the group health plan, also
pursuant to the HIPAA Privacy Rule, that it will not use or disclose
the information for purposes not permitted by its plan documents and
the Privacy Rule, such as for employment purposes, and abiding by that
certification. Further, if an employer is not performing plan
administration functions on behalf of the group health plan, then the
employer may receive aggregate information from the wellness program
under Sec. 1630.14(d)(4)(iii) only so long as it is de-identified in
accordance with the HIPAA Privacy Rule.
---------------------------------------------------------------------------
\53\ See 45 CFR parts 160 and 164, subparts A and E,
respectively.
---------------------------------------------------------------------------
Paperwork Reduction Act
The final rule contains an information collection requirement
subject to review and approval by the Office of Management and Budget
(OMB) under the Paperwork Reduction Act. As required by the Paperwork
Reduction Act, the EEOC is submitting to OMB a request for approval of
the information collection requirement under section 3507(d) of the
Act.
Overview of This Information Collection
Collection Title: Notice requirement under Title I of the ADA, 29
CFR 1630.14(d)(2)(iv).
OMB number: 3046-0047.
Description of affected public: Employers with 15 or more employees
that are subject to Title I of the ADA and offer wellness programs as
part of, or outside of, group health plans.
Number of respondents: 265,880.
Initial one-time hour burden: 1,063,520.
Annual hour burden: None.
Number of forms: None.
Federal cost: None.
Abstract: The final rule says that a wellness program that includes
disability-related inquiries or medical examinations--whether it is
part of, or outside of, a group health plan--must meet several
requirements to be deemed voluntary, including providing a notice to
employees informing them what medical information will be obtained, how
it will be used, who will receive it, and the restrictions on
disclosure.
The NPRM asked for comments on whether the proposed notice
requirement was necessary and on the accuracy of its burden estimate.
Although none of the comments specifically addressed the burden
estimate, some commenters said that the notice requirement was
duplicative of existing law, while others asked the Commission to
provide model language for a notice that would meet necessary
requirements. Burden Statement: We estimate that there are
approximately 782,000 employers with 15 or more employees subject to
the ADA \54\ and, of that number, one half to two thirds (391,000 to
521,333) offer some type of wellness program as part of, or outside of,
a group health plan.\55\ Of those employers, 32 percent to 51 percent
require employees to complete a HRA that likely contains disability-
related questions.\56\ Using the highest estimates, we assume that
265,880 employers (51 percent of 521,333 employers) will be covered by
this requirement.
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\54\ See Firm Size Data, Small Business Administration, https://www.sba.gov/advocacy/849/12162 (last visited March 28, 2016).
\55\ According a RAND report, ``approximately half of U.S.
employers offer wellness promotion initiatives.'' RAND Final Report,
supra note X, at xiv. By contrast, a survey by the Kaiser Family
Foundation found that ``[s]eventy-four percent of employers offering
health benefits'' offer at least one wellness program. See Kaiser
Survey, supra note 6, at 6.
\56\ The Kaiser Survey reports that 51 percent of large
employers versus 32 percent of small employers ask employees to
complete a HRA.
---------------------------------------------------------------------------
The final rule states that, to the extent that employers already
use forms that provide the requisite information in an applicable
document that complies with disclosures required under ERISA and HIPAA,
they do not have to create a new notice to satisfy the requirements of
this provision and can use the same notice for all of its wellness
programs that ask employees to respond to disability-related inquiries
and/or undergo medical examinations. Therefore, the burden only will be
on employers that will incur a one-time burden to develop an
appropriate notice to ensure that employees who provide medical
information pursuant to a wellness program do so voluntarily. This
notice may be included on or attached to any HRA employees are asked to
complete and should explain what medical information will be obtained,
how it will be used, who will receive it, and the restrictions on
disclosure.
Within 30 days of the final rule's publication, the Commission will
provide on its Web site an example of a notice that complies with the
rule. Thus, the Commission anticipates that the sample notice will
reduce an employer's burden by making it easier to satisfy this
requirement. Because we
[[Page 31139]]
do not have data on which to base an estimate of time saved, we likely
overstate the burden by assuming that creation of such a document will
take four hours, and assuming that 265,880 employers will be covered by
rule, this one-time burden would be 1,063,520 hours. Because employers
do not have to develop a new form unless they collect medical
information for a different purpose, they will be able to annually
redistribute the same notice to all relevant employees.
Regulatory Flexibility Act
Title I of the ADA applies to approximately 782,000 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, supra note 54.
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The Commission certifies under 5 U.S.C. 605(b) that this proposed
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. The final rule clarifies that, in most respects,
employers that offer wellness programs that are part of, or outside of,
their health plans may offer incentives to employees consistent with
HIPAA and the Affordable Care Act without violating the ADA. The rule
also clarifies that employers that offer wellness programs to all
employees, regardless of whether they are enrolled in a group health
plan, and employers that offer wellness programs but do not provide
group health insurance, also may provide incentives for participation
in such programs consistent with the limits set forth in this rule.
To the extent that employers will expend resources to train human
resources staff and others on the revised rule, we note 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. Now that this rule is final, we will include
information about the revisions to the regulations in our general
outreach programs and continue to offer ADA-specific outreach programs
that will include this information. On the date this rule is published,
we also will post technical assistance documents on our Web site
explaining the revisions to these 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, 90 minutes to gain a satisfactory understanding
of the revised regulations. We further estimate that the median hourly
pay rate of a human resources professional is approximately $49.41.\58\
Assuming that small entities have between one and five human resources
professionals/managers, we estimate that the cost per entity of
providing appropriate training will be between approximately $74.12 and
$370.60.
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\58\ See Occupational Employment and Wages, Bureau of Labor
Statistics, https://www.bls.gov/oes/current/oes113121.htm (last
visited March 28, 2016).
---------------------------------------------------------------------------
The EEOC does not believe that this cost will be significant for
the impacted small entities.
Unfunded Mandates Reform Act of 1995
This 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 1630
Equal employment opportunity, Individuals with disabilities.
For the reasons set forth in the preamble, the EEOC amends 29 CFR
part 1630 as follows:
PART 1630--[AMENDED]
0
1. The authority citation for part 1630 continues to read as follows:
Authority: 42 U.S.C. 12116 and 12205a of the American with
Disabilities Act, as amended.
0
2. In Sec. 1630.14:
0
a. Redesignate paragraph (d)(1) introductory text as paragraph
(d)(4)(i) with the subject heading Confidentiality;
0
b. Add new paragraph (d)(1) introductory text;
0
c. Redesignate paragraphs (d)(1)(i), (ii), and (iii) as (d)(4)(i)(A),
(B), and (C);
0
d. Redesignate paragraph (d)(2) as paragraph (d)(4)(ii);
0
e. Add new paragraph (d)(2) and paragraph (d)(3);
0
f. Add paragraphs (d)(4)(iii) and (d)(4)(iv); and
0
g. Add paragraphs (d)(5) and (6);
The revisions and additions read as follows:
Sec. 1630.14 Medical examinations and inquiries specifically
permitted.
* * * * *
(d) * * *
(1) Employee health program. An employee health program, including
any disability-related inquiries or medical examinations that are part
of such program, must be 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 employees, and it is not overly burdensome, is not a
subterfuge for violating the ADA or other laws prohibiting employment
discrimination, and is not highly suspect in the method chosen to
promote health or prevent disease. A program consisting of a
measurement, test, screening, or collection of health-related
information without providing results, follow-up information, or advice
designed to improve the health of participating employees 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 the conditions identified. A program
also is not reasonably designed if it exists mainly to shift costs from
the covered entity to targeted employees based on their health or
simply to give an employer information to estimate future health care
costs. Whether an employee health program is reasonably designed to
promote health or prevent disease is evaluated in light of all the
relevant facts and circumstances.
(2) Voluntary. An employee health program that includes disability-
related inquiries or medical examinations (including disability-related
inquiries or medical examinations that are part of a health risk
assessment) is voluntary as long as a covered entity:
(i) Does not require employees to participate;
(ii) Does not deny coverage under any of its group health plans or
particular benefits packages within a group health plan for non-
participation, or limit the extent of benefits (except as allowed under
paragraph (d)(3) of this section) for employees who do not participate;
(iii) Does not take any adverse employment action or retaliate
against, interfere with, coerce, intimidate, or threaten employees
within the meaning of Section 503 of the ADA, codified at 42 U.S.C.
12203; and
(iv) Provides employees with a notice that:
(A) Is written so that the employee from whom medical information
is being obtained is reasonably likely to understand it;
[[Page 31140]]
(B) Describes the type of medical information that will be obtained
and the specific purposes for which the medical information will be
used; and
(C) Describes the restrictions on the disclosure of the employee's
medical information, the employer representatives or other parties with
whom the information will be shared, and the methods that the covered
entity will use to ensure that medical information is not improperly
disclosed (including whether it complies with the measures set forth in
the HIPAA regulations codified at 45 CFR parts 160 and 164).
(3) Incentives offered for employee wellness programs. The use of
incentives (financial or in-kind) in an employee wellness program,
whether in the form of a reward or penalty, will not render the program
involuntary if the maximum allowable incentive available under the
program (whether the program is a participatory program or a health-
contingent program, or some combination of the two, as those terms are
defined in regulations at 26 CFR 54.9802-1(f)(1)(ii) and (iii), 29 CFR
2590.702(f)(1)(ii) and (iii), and 45 CFR 146.121(f)(1)(ii) and (iii),
respectively) does not exceed:
(i) Thirty percent of the total cost of self-only coverage
(including both the employee's and employer's contribution) of the
group health plan in which the employee is enrolled when participation
in the wellness program is limited to employees enrolled in the plan;
(ii) Thirty percent of the total cost of self-only coverage under
the covered entity's group health plan, where the covered entity offers
only one group health plan and participation in a wellness program is
offered to all employees regardless of whether they are enrolled in the
plan;
(iii) Thirty percent of the total cost of the lowest cost self-only
coverage under a major medical group health plan where the covered
entity offers more than one group health plan but participation in the
wellness program is offered to employees whether or not they are
enrolled in a particular plan; and
(iv) Thirty percent of the cost of self-only coverage under the
second lowest cost Silver Plan for a 40-year-old non-smoker on the
state or federal health care Exchange in the location that the covered
entity identifies as its principal place of business if the covered
entity does not offer a group health plan or group health insurance
coverage.
(4) * * *
(iii) Except as permitted under paragraph (d)(4)(i) of this section
and as is necessary to administer the health plan, information obtained
under this paragraph (d) regarding the medical information or history
of any individual may only be provided to an ADA covered entity in
aggregate terms that do not disclose, or are not reasonably likely to
disclose, the identity of any employee.
(iv) A covered entity shall not require an employee to agree to the
sale, exchange, sharing, transfer, or other disclosure of medical
information (except to the extent permitted by this part to carry out
specific activities related to the wellness program), or to waive any
confidentiality protections in this part as a condition for
participating in a wellness program or for earning any incentive the
covered entity offers in connection with such a program.
(5) Compliance with the requirements of this paragraph (d),
including the limit on incentives under the ADA, does not relieve a
covered entity from the obligation to comply in all respects with the
nondiscrimination provisions of Title VII of the Civil Rights Act of
1964, 42 U.S.C. 2000e et seq., the Equal Pay Act of 1963, 29 U.S.C.
206(d), the Age Discrimination in Employment Act of 1967, 29 U.S.C. 621
et seq., Title II of the Genetic Information Nondiscrimination Act of
2008, 42 U.S.C. 2000ff, et seq., or other sections of Title I of the
ADA.
(6) The ``safe harbor'' provisions in Sec. 1630.16(f) of this part
applicable to health insurance, life insurance, and other benefit plans
do not apply to wellness programs, even if such plans are part of a
covered entity's health plan.
0
3. In the Appendix to Part 1630 revise Section 1630.14(d), to read as
follows:
Appendix to Part 1630--Interpretive Guidance on Title I of the
Americans With Disabilities Act
* * * * *
Section 1630.14 Medical Examinations and Inquiries Specifically
Permitted
Section 1630.14(d)(1): Health Program
Part 1630 permits voluntary medical examinations and inquiries,
including voluntary medical histories, as part of employee health
programs. These health programs include many wellness programs,
which often incorporate, for example: A health risk assessment (HRA)
consisting of a medical questionnaire, with or without medical
examinations, to determine risk factors; medical screening for high
blood pressure, cholesterol, or glucose; classes to help employees
stop smoking or lose weight; physical activities in which employees
can engage (such as walking or exercising daily); coaching to help
employees meet health goals; and/or the administration of flu shots.
Many employers offer wellness programs as part of a group health
plan as a means of improving overall employee health with the goal
of realizing lower health care costs. Other employers offer wellness
programs that are available to all employees, regardless of whether
they are in enrolled in a group health plan, while some employers
offer wellness programs but do not sponsor a group health plan or
group health insurance.
It is not sufficient for a covered entity merely to claim that
its collection of medical information is part of a wellness program;
the program, including any disability-related inquiries and medical
examinations that are part of such program, must be reasonably
designed to promote health or prevent disease. In order to meet this
standard, the program must have a reasonable chance of improving the
health of, or preventing disease in, participating employees, and
must not be overly burdensome, a subterfuge for violating the ADA or
other laws prohibiting employment discrimination, or highly suspect
in the method chosen to promote health or prevent disease. Asking
employees to complete a HRA and/or undergo a biometric screening for
the purpose of alerting them to health risks of which they may have
been unaware would meet this standard, as would the use of aggregate
information from HRAs by an employer to design and offer health
programs aimed at specific conditions identified by the information
collected. An employer might conclude from aggregate information,
for example, that a significant number of its employees have
diabetes or high blood pressure and might design specific programs
that would enable employees to treat or manage these conditions. On
the other hand, collecting medical information on a health
questionnaire without providing employees meaningful follow-up
information or advice, such as providing feedback about specific
risk factors or using aggregate information to design programs or
treat any specific conditions, would not be reasonably designed to
promote health or prevent disease. Additionally, a program is not
reasonably designed to promote health or prevent disease if it
imposes, as a condition to 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. A program also is not reasonably designed
if it exists mainly to shift costs from the covered entity to
targeted employees based on their health or simply to give an
employer information to estimate future health care costs.
Section 1630.14(d)(2): Definition of ``Voluntary''
Section 1630.14(d)(2)(i) through (iii) of this part says that
participation in employee health programs that include disability-
related inquiries or medical examinations (such as disability-
related inquiries or medical examinations that are part of a HRA)
must be voluntary in order to comply with the ADA. This means that
covered entities may not require employees to participate in such
programs, may not deny employees access to health coverage under any
of their
[[Page 31141]]
group health plans or particular benefits packages within a group
health plan for non-participation, may not limit coverage under
their health plans for such employees, except to the extent the
limitation (e.g., having to pay a higher deductible) may be the
result of forgoing a financial incentive permissible under Sec.
1630.14(d)(3), and may not take any other adverse action against
employees who choose not to answer disability-related inquiries or
undergo medical examinations. Additionally, covered entities may not
retaliate against, interfere with, coerce, intimidate, or threaten
employees within the meaning of Section 503 of the ADA, codified at
42 U.S.C. 12203. For example, an employer may not retaliate against
an employee who declines to participate in a health program or files
a charge with the EEOC concerning the program, may not coerce an
employee into participating in a health program or into giving the
employer access to medical information collected as part of the
program, and may not threaten an employee with discipline if the
employee does not participate in a health program. See 42 U.S.C.
12203(a),(b); 29 CFR 1630.12.
Section 1630.14(d)(2)(iv) of this part also states that for a
wellness program that includes disability-related inquiries or
medical examinations to be voluntary, an employer must provide
employees with a notice clearly explaining what medical information
will be obtained, how the medical information will be used, who will
receive the medical information, the restrictions on its disclosure,
and the methods the covered entity uses to prevent improper
disclosure of medical information.
Section 1630.14(d)(3): Limitations on Incentives
The ADA, interpreted in light of the Health Insurance
Portability and Accountability Act (HIPAA), as amended by the
Affordable Care Act, does not prohibit the use of incentives to
encourage participation in employee health programs, but it does
place limits on them. In general, the use of limited incentives
(which include both financial and in-kind incentives, such as time-
off awards, prizes, or other items of value) in a wellness program
will not render a wellness program involuntary. However, the maximum
allowable incentive for a participatory program that involves asking
disability-related questions or conducting medical examinations
(such as having employees complete a HRA) or for a health-contingent
program that requires participants to satisfy a standard related to
a health factor may not exceed: (i) 30 Percent of the total cost of
self-only coverage (including both the employee's and employer's
contribution) where participation in a wellness program depends on
enrollment in a particular health plan; (ii) 30 percent of the total
cost of self-only coverage when the covered entity offers only one
group health plan and participation in a wellness program is offered
to all employees regardless of whether they are enrolled in the
plan; (iii) 30 percent of the total cost of the lowest cost self-
only coverage under a major medical group health plan where the
covered entity offers more than one group health plan but
participation in the wellness program is offered to employees
whether or not they are enrolled in a particular plan; or (iv) 30
percent of the cost to a 40-year-old non-smoker of the second lowest
cost Silver Plan (available under the Affordable Care Act) in the
location that the employer identifies as its principal place of
business, where the covered entity does not offer a group health
plan or group health insurance coverage. The following examples
illustrate how to calculate the permissible incentive limits in each
of these situations.
Where an employee participates in a wellness program that is
only offered to employees enrolled in a group health plan and the
total cost of self-only coverage under that plan is $6,000 annually,
the maximum allowable incentive is $1,800 (30 percent of $6,000).
The same incentive would be available if this employer offers only
one group health plan and allowed employees to participate in the
wellness program regardless of whether they are enrolled in the
health plan. Suppose, however, an employer offers three different
group health plans with the total cost of self-only coverage under
its major medical group health plans ranging in cost from $5,000 to
$8,000 annually and wants to offer employees incentives for
participating in a wellness program that includes a HRA and medical
examination regardless of whether they are enrolled in a particular
health plan. In that case, the maximum allowable incentive is $1,500
(30 percent of the total cost of the lowest cost self-only coverage
under a major medical group health plan). Finally, if the employer
does not offer health insurance but wants to offer an incentive for
employees to participate in a wellness program that includes
disability-related inquiries or medical examinations, the maximum
allowable incentive is 30 percent of what it would cost a 40-year-
old non-smoker to purchase the second lowest cost Silver Plan on the
federal or state health care Exchange in the location that the
employer identifies as its principal place of business. Thus, if
such a plan would cost $4,000, the maximum allowable incentive would
be $1,200.
Not all wellness programs require disability-related inquiries
or medical examinations in order to earn an incentive. Examples may
include attending nutrition, weight loss, or smoking cessation
classes. These types of programs are not subject to the ADA
incentive rules discussed here, although programs that qualify as
health-contingent programs (such as an activity-based program that
requires employees to exercise or walk) and that are part of a group
health plan are subject to HIPAA incentive limits.
Under the ADA, regardless of whether a wellness program includes
disability-related inquiries or medical examinations, reasonable
accommodations must be provided, absent undue hardship, to enable
employees with disabilities to earn whatever financial incentive an
employer or other covered entity offers. Providing a reasonable
alternative standard and notice to the employee of the availability
of a reasonable alternative under HIPAA and the Affordable Care Act
as part of a health-contingent program would generally fulfill a
covered entity's obligation to provide a reasonable accommodation
under the ADA. However, under the ADA, a covered entity would have
to provide a reasonable accommodation for a participatory program
even though HIPAA and the Affordable Care Act do not require such
programs to offer a reasonable alternative standard, and reasonable
alternative standards are not required at all if the program is not
part of a group health plan.
For example, an employer that offers employees a financial
incentive to attend a nutrition class, regardless of whether they
reach a healthy weight as a result, would have to provide a sign
language interpreter so that an employee who is deaf and who needs
an interpreter to understand the information communicated in the
class could earn the incentive, as long as providing the interpreter
would not result in undue hardship to the employer. Similarly, an
employer would, absent undue hardship, have to provide written
materials that are part of a wellness program in an alternate
format, such as in large print or on computer disk, for someone with
a vision impairment. An individual with a disability also may need a
reasonable accommodation to participate in a wellness program that
includes disability-related inquiries or medical examinations,
including a waiver of a generally applicable requirement. For
example, an employer that offers a reward for completing a biometric
screening that includes a blood draw would have to provide an
alternative test (or certification requirement) so that an employee
with a disability that makes drawing blood dangerous can participate
and earn the incentive.
Application of Section 1630.14(d)(3) to Smoking Cessation Programs
Regulations implementing the wellness provisions in HIPAA, as
amended by the Affordable Care Act, permit covered entities to offer
incentives as high as 50 percent of the total cost of self-only
coverage for tobacco-related wellness programs, such as smoking
cessation programs. As noted above, the incentive rules in paragraph
1630.14(d)(3) apply only to employee health programs that include
disability-related inquiries or medical examinations. A smoking
cessation program that merely asks employees whether or not they use
tobacco (or whether or not they ceased using tobacco upon completion
of the program) is not an employee health program that includes
disability-related inquiries or medical examinations. The incentive
rules in Sec. 1630.14(d)(3) would not apply to incentives a covered
entity could offer in connection with such a program. Therefore, a
covered entity would be permitted to offer incentives as high as 50
percent of the cost of self-only coverage for that smoking cessation
program, pursuant to the regulations implementing HIPAA, as amended
by the Affordable Care Act, without implicating the disability-
related inquiries or medical examinations provision of the ADA. The
ADA nondiscrimination requirements, such as the need to provide
reasonable accommodations that provide employees with disabilities
equal access to benefits, would still apply.
[[Page 31142]]
By contrast, a biometric screening or other medical examination
that tests for the presence of nicotine or tobacco is a medical
examination. The ADA financial incentive rules discussed supra would
therefore apply to a wellness program that included such a
screening.
Section 1630.14(d)(4)(i) Through (v): Confidentiality
Paragraphs (d)(4)(i) and (ii) say that medical records developed
in the course of providing voluntary health services to employees,
including wellness programs, must be maintained in a confidential
manner and must not be used for any purpose in violation of this
part, such as limiting insurance eligibility. See House Labor Report
at 75; House Judiciary Report at 43-44. Further, although an
exception to confidentiality that tracks the language of the ADA
itself states that information gathered in the course of providing
employees with voluntary health services may be disclosed to
managers and supervisors in connection with necessary work
restrictions or accommodations, such an exception would rarely, if
ever, apply to medical information collected as part of a wellness
program, and sharing such information could be inconsistent with the
definition of an employee health program. In addition, as described
more fully below, certain disclosures that are permitted for
employee health programs generally may not be permissible under the
HIPAA Privacy Rule for wellness programs that are part of a group
health plan without the written authorization of the individual.
Section 1630.14(d)(4)(iii) says that a covered entity only may
receive information collected as part of an employee health program
in aggregate form that does not disclose, and is not reasonably
likely to disclose, the identity of specific individuals except as
is necessary to administer the plan or as permitted by Sec.
1630.14(d)(4)(i). Notably, both employers that sponsor employee
health programs and the employee health programs themselves (if they
are administered by the employer or qualify as the employer's agent)
are responsible for ensuring compliance with this provision.
Where a wellness program is part of a group health plan, the
individually identifiable health information collected from or
created about participants as part of the wellness program is
protected health information (PHI) under the HIPAA Privacy,
Security, and Breach Notification Rules. (45 CFR parts 160 and 164.)
The HIPAA Privacy, Security, and Breach Notification Rules apply to
HIPAA covered entities, which include group health plans, and
generally protect identifiable health information maintained by or
on behalf of such entities, by among other provisions, setting
limits and conditions on the uses and disclosures that may be made
of such information.
PHI is information, including demographic data that identifies
the individual or for which there is a reasonable basis to believe
it can be used to identify the individual (including, for example,
address, birth date, or social security number), and that relates
to: An individual's past, present, or future physical or mental
health or condition; the provision of health care to the individual;
or the past, present, or future payment for the provision of health
care to the individual. HIPAA covered entities may not disclose PHI
to an individual's employer except in limited circumstances. For
example, as discussed more fully below, an employer that sponsors a
group health plan may receive PHI to administer the plan (without
authorization of the individual), but only if the employer certifies
to the plan that it will safeguard the information and not
improperly use or share the information. See Standards for Privacy
of Individually Identifiable Health Information (``Privacy Rule''),
Public Law 104-191; 45 CFR part 160 and Part 164, Subparts A and E.
However, there are no restrictions on the use or disclosure of
health information that has been de-identified in accordance with
the HIPAA Privacy Rule. Individuals may file a complaint with HHS if
they believe a health plan fails to comply with privacy requirements
and HHS may require corrective action or impose civil money
penalties for noncompliance.
A wellness program that is part of a HIPAA covered entity likely
will be able to comply with its obligation under Sec.
1630.14(d)(4)(iii) by complying with the HIPAA Privacy Rule. An
employer that is a health plan sponsor and receives individually
identifiable health information from or on behalf of the group
health plan, as permitted by HIPAA when the plan sponsor is
administering aspects of the plan, may generally satisfy its
requirement to comply with Sec. 1630.14(d)(4)(iii) by certifying to
the group health plan, as provided by 45 CFR 164.504(f)(2)(ii), that
it will not use or disclose the information for purposes not
permitted by its plan documents and the Privacy Rule, such as for
employment purposes, and abiding by that certification. Further, if
an employer is not performing plan administration functions on
behalf of the group health plan, it may receive aggregate
information from the wellness program under Sec. 1630.14(d)(4)(iii)
only so long as the information is de-identified in accordance with
the HIPAA Privacy Rule. In addition, disclosures of protected health
information from the wellness program may only be made in accordance
with the Privacy Rule. Thus, certain disclosures that are otherwise
permitted under Sec. 1630.14(d)(4)(i) and (ii) for employee health
programs generally may not be permissible under the Privacy Rule for
wellness programs that are part of a group health plan without the
written authorization of the individual. For example, the ADA allows
disclosures of medical information when an employee needs a
reasonable accommodation or requires emergency treatment at work.
Section 1630.14(d)(4)(iv) says that a covered entity may not
require an employee to agree to the sale, exchange, sharing,
transfer, or other disclosure of medical information (except to the
extent permitted by this part to carry out specific activities
related to the wellness program), or waive confidentiality
protections available under the ADA as a condition for participating
in a wellness program or receiving a wellness program incentive.
Employers and wellness program providers must take steps to
protect the confidentiality of employee medical information provided
as part of an employee health program. Some of the following steps
may be required by law; others may be best practices. It is critical
to properly train all individuals who handle medical information
about the requirements of the ADA and, as applicable, HIPAA's
privacy, security, and breach requirements and any other privacy
laws. Employers and program providers should have clear privacy
policies and procedures related to the collection, storage, and
disclosure of medical information. On-line systems and other
technology should guard against unauthorized access, such as through
use of encryption for medical information stored electronically.
Breaches of confidentiality should be reported to affected employees
immediately and should be thoroughly investigated. Employers should
make clear that individuals responsible for disclosures of
confidential medical information will be disciplined and should
consider discontinuing relationships with vendors responsible for
breaches of confidentiality.
Individuals who handle medical information that is part of an
employee health program should not be responsible for making
decisions related to employment, such as hiring, termination, or
discipline. Use of a third-party vendor that maintains strict
confidentiality and data security procedures may reduce the risk
that medical information will be disclosed to individuals who make
employment decisions, particularly for employers whose
organizational structure makes it difficult to provide adequate
safeguards. If an employer uses a third-party vendor, it should be
familiar with the vendor's privacy policies for ensuring the
confidentiality of medical information. Employers that administer
their own wellness programs need adequate firewalls in place to
prevent unintended disclosure. If individuals who handle medical
information obtained through a wellness program do act as decision-
makers (which may be the case for a small employer that administers
its own wellness program), they may not use the information to
discriminate on the basis of disability in violation of the ADA.
Section 1630.14(d)(5): Compliance With Other Employment
Nondiscrimination Laws
Section 1630.14(d)(5) clarifies that compliance with the
requirements of paragraph (d) of this section, including the limits
on incentives applicable under the ADA, does not mean that a covered
entity complies with other federal employment nondiscrimination
laws, such as Title VII of the Civil Rights Act of 1964, 42 U.S.C.
2000e et seq., the Equal Pay Act of 1963, 29 U.S.C. 206(d), the Age
Discrimination in Employment Act of 1967, 29 U.S.C. 621 et seq.,
Title II of the Genetic Information Nondiscrimination Act of 2008,
42 U.S.C. 2000ff et seq., and other sections of Title I of the ADA.
Thus, even though an employer's wellness program might comply with
the incentive limits set out in paragraph (d)(3), the employer would
violate federal nondiscrimination statutes if that program
discriminates on the basis of race, sex (including pregnancy, gender
identity,
[[Page 31143]]
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
