Mark Smith

Partner

mark@jmsmithlaw.com

The EEOC has been actively pursuing legal action against employers whose wellness programs are considered coercive under the ADA. Companies should be careful in any potential violations that could sink them in legal trouble. In fact, a recent proposed rule by the EEOC presents sound guidelines that, if followed, can help employers avoid violating the ADA and the consequences that follow suit.

The issue revolves around a provision within the ADA that allows employers to conduct medical examinations of employees only if they are job-related and consistent with business necessity or if the examinations are voluntary. The EEOC’s proposed rule aims at modifying the provision’s enforcement in particular areas of wellness programs, providing employers with a clearer picture as to what is acceptable and what isn’t.

Affected Areas of Change

Design: A wellness program must be reasonably designed in order to promote health or prevent disease, such as any disability-related inquiries or medical examinations. A program cannot be overly burdensome or a scheme for violating the ADA or other laws prohibiting employment discrimination. Examples of acceptable wellness programs include:

  1. Conducting a risk assessment in order to alert employees to any potential health risks that they may have been unaware of
  2. An employer’s use of collective information from employee risk assessments in order to design programs focused on specific conditions that are prevalent in the workplace.

Voluntariness: If the wellness program includes disability-related or medical examinations, it will be considered voluntary if:

  1. It does not require employees to participate
  2. Does not deny coverage under any group health plan or benefits package based on non-participation, or
  3. Limit benefits for employees who did not participate, and
  4. Does not take any adverse employment action or retaliate against, interfere with, coerce, intimidate, or threaten employees.

Notice: If the program is part of a group health plan, the employees must be provided with a notice written in an understandable manner. The notice must describe the types of medical information being obtained and the specific purposes for which it will be used as well as the restrictions on the release of the information, the parties with whom the information will be shared, and the methods that will be used to protect the information under HIPAA’s Privacy Standards.

Privacy: The medical information collected may not be shared with the employer except in aggregate form that is not likely to identify any specific employee, except as needed to administer the health plan. Group health plans subject to HIPAA will satisfy this obligation as long as they follow HIPAA regulations.

Limitation on Incentives: The maximum allowable incentive for participation in a wellness program or for achieving certain health outcomes is 30 percent of the total cost of employee-only coverage. The EEOC’s restrictions on incentives are generally limited to those that are involved with disability-related inquiries as part of a medical examination.

Nondiscrimination: Compliance with the proposed regulations does not eliminate an employer’s obligation to comply with state and federal law prohibiting unlawful discrimination against employees with disabilities. Absent undue hardship, an employer must provide a reasonable accommodation that enable employees with disabilities to participate in wellness programs and earn any reward, or avoid any penalty offered as part of those programs.

Following these guidelines, while not established law, can help build an effective defense against the EEOC in their hunt for ADA violations while enabling employees with disabilities to partake in the same opportunities as their fellow coworkers.