EEOC Harmonizing ADA Rules and PPACA Wellness Incentives

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* Fully Insured
* Self-Funded
* Large Group (Over 50 lives)
* Small Group (Under 50 lives)

 

EEOC Harmonizing ADA Rules and PPACA Wellness Incentives

Who

Any employer-based health plan that includes a wellness program and its participants.

When

On April 20, 2015 the Equal Employment Opportunity Commission (EEOC) issued a "Notice of Proposed Rule Making" (NPRM). Comments on the proposed rule must be submitted by June 19, 2015.

What

The EEOC is responsible for assuring employers comply with the American's with Disability Act (ADA) and do not discriminate against disabled employees. The proposed rule coordinates the EEOC concerns related to potential discrimination with employer requested health information and related wellness incentives allowed under PPACA and HIPAA.

Executive Summary

It is increasingly common for health plans to integrate information from Health Risk Appraisals and/or the use Bio-metric testing to qualify for wellness incentives. The problem is the ADA limits an employer's ability to ask questions about employees' health or requiring them to undergo medical exams. In 2014, the EEOC caused market uncertainty when it filed a lawsuit against Honeywell over its wellness program potentially violating the ADA. Even though allowed under PPACA, prior to the NPRM, the EEOC had not agreed that employers could offer incentives to encourage employees to participate in wellness programs without violating the ADA.

The EEOC proposed ruling would harmonize its position with Department of Health and HUman Services (HHS), The Department of Labor (DOL), and Treasury. The EEOC proposed ruling makes it clear that wellness programs with incentives are allowed under the ADA if they:

(1) Are not used to discriminate based on disability, 

(2) Are voluntary and do not subject employees to threats, intimidation, or coercion for refusing to participate,

(3) Do not deny access or limit health coverage for non-participation,

(4) Provide reasonable accommodations that allow employees with disabilities to participate in wellness programs and receive any incentives offered,

(5) Have wellness incentives (or penalties) of not more than 30 percent of employee-only coverage,

(6) Medical information provided to an employer must be aggregated so that it is not likely to disclose the identity of specific employees,

(7) Provide notice a notice that describes what medical information will be collected, with whom it will be shared, how it will be used, and how it will be kept confidential.

Actions

Affected employers and industry groups should review the proposed rule and submit any comments by June 19, 2015. Employers with existing wellness and incentive programs can follow the proposed rule until a final rule is issued.

For more information about this strategy and how IPS Advisors can benefit you visit us at www.ipsadvisors.com 

The information provided is for educational purposes only. This information is from sources we believe to be reliable, but we cannot guarantee or represent that it is accurate or complete. The opinions are those of the writer, and the opinions and information presented are subject to change without notice.

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