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EEOC Issues Final Rules on Wellness Programs

 June 1 2016     Shelly Hodges-Konys
Certain employer-sponsored wellness programs must comply with rules under the Health Insurance Portability and Accountability Act (HIPAA) and the Affordable Care Act (ACA). But if you will recall, based on recent complaints and court cases, employer wellness program design under HIPAA and the ACA and EEOC enforcement of ADA and GINA rules seemed to be at odds. New EEOC final rules on wellness programs issued in May attempt to help coordinate several federal laws and help clear confusion for employers so that they can design programs consistent with the requirements under both HIPAA and the ACA and the ADA and GINA. According to the EEOC, the new rules “seek to ensure that wellness programs actually promote good health and are not just used to collect or sell sensitive medical information about employees and family members or to impermissibly shift health insurance costs to them.”

The EEOC’s final rule requires wellness programs to be considered “voluntary”. In order for a program to be considered voluntary, it must meet certain requirements. Those requirements include:

• Having a reasonable design to promote health or prevent disease.

• Having a design that does not deny access to health coverage or deny access to certain health benefit options to employees who choose not to participate in the wellness program.

• Providing participants a notice clearly explaining the medical information that will be obtained, how it will be used, who will receive it, and the plan disclosure requirements.

• Providing incentives that are limited to no more than 30% of the cost of employee only coverage in the group health plan (including all incentives whether financial or in-kind).

Additionally, the new rules place requirements on confidentiality limiting the employer’s ability to receive individually identifiable wellness information.

The new rules take effect immediately, but certain provisions apply to plan years beginning on or after January 1, 2017. We know you will have questions as you look to develop strategy around your wellness program. Please look for our upcoming compliance update on the new rules including frequently asked questions.