The EEOC's issuance on May 16, 2016, of final regulations under the Americans with Disabilities Act (ADA) on employee wellness programs represents the close of another chapter in the history of confusion regarding rules applicable to wellness programs. Prior to the EEOC's issuance of proposed regulations on the ADA's application to wellness programs less than a year ago, confusion resulted from the EEOC's position in lawsuits alleging that certain wellness plan practices violated the ADA, and the juxtaposition of the EEOC's positions in the litigation against the relatively clear guidance on wellness programs under the HIPAA regulations. While these final ADA regulations resolve some of the unanswered questions raised by the proposed ADA regulations, they do little to resolve the complexities wellness programs face in complying with multiple, only partially-coordinated, regulatory schemes.
The final ADA regulations generally follow the proposed regulations discussed in our May 2015 Employer Alert, avoiding the threat in the proposed regulations of more burdensome administrative requirements in the final rule. The final rule retains the following proposed regulation requirements, and provides some clarification on additional points, including:
The provisions of the regulations requiring a notice and establishing incentive limits apply prospectively to wellness programs on the first day of the first plan year beginning on or after January 1, 2017. The other provisions are regarded by the EEOC as clarifications of existing requirements that already apply to wellness programs. The final regulations breathe new life into cases challenging these regulations in several federal appeals courts, casting a shadow on the already difficult path to compliance. However, regulatory agencies generally are given broad deference in promulgating regulations, so employers are advised to comply with these rules for now.
In conjunction with these ADA regulations EEOC also issued final regulations for wellness programs under the Genetic Information Nondiscrimination Act (GINA). Under the GINA rule employers may provide rewards or penalties in exchange for an employee's spouse (but not children) providing information about the spouse's current or past health status as part of a wellness program, whether or not the program is part of a group health plan. Spousal incentives are subject to most of the restrictions applicable under the final ADA rule. In addition, wellness programs also must comply with other laws such as HIPAA, Title VII, the Equal Pay Act, and the Age Discrimination in Employment Act (ADEA). Therefore, employers should consult employee benefits counsel to assist with a review of current wellness programs or proposed program designs or changes.