Brooke Colaizzi of Sherman & Howard joins us to discuss new ADA and GINA wellness regulations.
Mike Jackson: "Hi everyone. Welcome to IAML's Alert on the new ADA and GINA wellness regulations. We are joined today by Brooke Colaizzi from Sherman & Howard. Since joining Sherman & Howard in 2003, she has litigated claims under Title VII, the ADA, the ADEA and the FMLA. Brooke is the perfect person to inform us on these new regulations as she counsels employers on all aspects of the employment relationship, including contracts, workplace policies, employee relations, wage and hour issues, leave laws, wellness programs, independent contractors and covenants not to compete.
"Thank you so much Brooke for joining us today. Please start when you're ready."
Brooke Colaizzi: "Thank you Mike and hello everyone. To say that healthcare costs are a hot topic these days is somewhat of an understatement. Employers have used wellness programs for many years as a way of trying to combat the high cost of healthcare for their employees and they also use them for other reasons, increase in productivity, increase in morale, sense of team building. Wellness programs just make a lot of practical sense for a lot of employers. The one thing that we have known for several years is that the Equal Employment Opportunity Commission, the federal agency that is responsible for enforcing the federal employment anti-discrimination laws, has not been a fan of wellness programs and in the last few years they have sued several employers about their wellness programs alleging that the programs violated either the American with Disabilities Act or the Genetic Information Non-Discrimination Act or GINA.
“While we’ve known that the EEOC isn’t a fan, we also have not had any guidance to understand exactly what the EEOC has found offensive about these programs until now. In April of 2015, the EEOC issued a notice of proposed rule-making addressing the interaction of wellness programs with the ADA and GINA and final regulations were published in the federal register this past Monday, May 16th.
“I would like to walk through the key points of those regulations with you. Before we do that, it would probably make sense to understand what the EEOC considers to be a wellness program. They define a wellness program as a program that is reasonably designed to promote health or to prevent disease. That’s a very broad definition. It can cover everything from educational programs to smoking cessation programs, weight loss challenges, all the way up to complicated and multi-tiered wellness programs involving health risk assessments and biometric screenings. But, the key point to remember is that the ADA and GINA requires that a wellness program actually have a health related purpose. Now, with respect to the ADA the wellness programs that implicate that statute are those that do one of two things; they either have a component to them that is a medical examination or they have a component that asks questions that are considered disability related inquiries. And that is because the ADA generally prohibits employers from doing those types of things and making those inquiries with respect to their employees. Wellness programs are an exception to that general prohibition so long as they are voluntary and a key part of the regulations is understanding for the first time what the EEOC considers to be voluntary.
“With respect to GINA, GINA implicates wellness programs that have a component related to genetic information. And I’ll go through here shortly a little bit more information about what that genetic information entails. Now with respect to the ADA, the regulations are fairly broad with respect to addressing very many facets of wellness programs. With respect to GINA, the GINA regulations address a very, very specific circumstance and that circumstance is one which an employee’s spouse is participating in a wellness program and as part of that wellness program they are asked to provide information about their health status. So, it’s important to keep in mind that when we’re talking about GINA, we’re talking about that very specific circumstance and I’ll describe that in a little more detail here in just a moment.
“With respect to the ADA, the key question or the point of most contention over the last few years with respect to this whole issue of being voluntary, is whether or not employers are permitted to use incentives or penalties to encourage employees to participate in wellness programs. As you can imagine, incentives and penalties are a pretty powerful tool to maximize participation and it’s also the part that the EEOC considered to be potentially coercive. So, this whole issue of penalties and incentives is really at the core of these regulations. And the EEOC has concluded with respect to the ADA limited incentives and penalties can be used by employers without violating this voluntary requirement of the statute.
“With respect to GINA, as I mentioned before, GINA generally prohibits employers from requesting the genetic information of their employees. GINA’s an anti-discrimination statute patterned after Title VII and like the ADA it has an exception to that general prohibition for wellness programs that are part of health or genetic services offered by the employer.
“We need to make sure we understand what genetic information is. Genetic information is defined as the genetic tests of the employee, the genetic tests of the employee’s family members or, and her comes the mouthful, the manifestation of a disease or disorder in a family member of the employee, which is a fancy way of saying family medical history. And, the GINA regulations focus on that very specific instance in which a spouse is asked questions about his or her current or past health status. A spouse is considered to be a family member under GINA, which seems a bit odd because obviously in the vast majority of cases there is absolutely no genetic connection whatsoever between an employee and his or her spouse. And that is why this particular issue came up. Can employers, in fact, give incentives when a spouse is the one providing the information on the theory that they are not going to discriminate on an employee when it’s not the employee’s genetic information that is being discussed?
“Like the ADA, the EEOC decided that with respect to GINA, limited incentives are permissible when the spouse is giving information related to current or past health status. It’s just that family medical history piece that is allowed with respect to incentives.
“Let’s dive into a little bit more of the detail with respect to these incentives. Both the ADA and the GINA regulations adopt this 30% threshold for incentives or penalties and what the regulations say is that no incentive or penalty can amount to more than 30% of the cost of employee-only coverage. Now it’s important to realize that a year ago when the proposed regulations were first issued, they, with respect to the incentives, addressed only wellness programs that were part of group health plans. That’s why we have this reference to employee-only coverage.
“In the final regulations, the EEOC changed course a bit and has now indicated that these incentive limitations apply to all programs regardless of whether they are part of a group health plan or independent. Now the 30% is calculated in a different way depending on what the health insurance situation is in your organization. If you don’t have any insurance at all, you calculate it a different way. If you have multiple health plans, you calculate it a certain way. If you have one health plan, you calculate it a different way. So, I’ll refer you to the regulations with respect to what your organization situation is so that you can make sure you have a good idea of what that 30% means for you. The 30% is roughly equivalent to what the Affordable Care Act allows with respect to incentives and is also very similar to the incentives that are permitted under HIPAA so the EEOC did make some attempt at uniformity in coming up with these requirements.
“A couple of other issues with respect to these incentives and I mentioned this a moment ago, under GINA again, these incentives are permitted in only that very specific circumstance related to a spouse. An employer can not offer incentives to the employee to provide information about his own genetic information nor can they ask a spouse about the spouse’s genetic test and nor can they ask for the genetic information related to an employee’s child, which makes sense in the sense that child is going to have a genetic connection to the employee, but also note that that prohibition also extends to adopted children even though there is no genetic connection with an adopted child. So, just keep in mind that it’s a very narrow circumstance under GINA in which you can offer these incentives.
“It’s also important to keep in mind that although the incentives have been the core of this voluntary issue for the last few years, there are other aspects to it that the EEOC insists upon for these wellness programs to pass muster. Employers can not condition access to health benefits or to certain packages of benefits either on just a patient in the wellness program or the provision of genetic information or in this case, the spouse providing the information.