Why a Common Health Plan Feature Now Puts You at Great Risk
Posted: April 25, 2018
A recent case puts employers in a very tricky spot regarding the Americans with Disabilities Act (ADA) and the Genetic Information Nondiscrimination Act (GINA).
A federal judge recently ruled in AARP v. Equal Employment Opportunity Commission (EEOC). The lawsuit claims the government's health plan incentive rules violate the ADA and GINA.
Illegal wellness incentives?
The above case hinged around the notion of a "voluntary" wellness program. Under the EEOC regulations, employers can offer incentives of up to 30% of the total cost of coverage for self-only coverage for participation in company-sponsored wellness programs that include components like health risk assessments (HRAs) and biometric screenings.
The AARP argued that such an incentive ran counter to the "voluntary" requirements of the ADA and GINA because employees who cannot afford to pay 30% more in premiums would essentially be forced to give up protected information they would not have disclosed otherwise.
Essentially, a judge "vacated" the EEOC's current incentive rules beginning Jan. 1, 2019, and the EEOC has the option of reworking those regulations in the interim.
The problem for employers?
First, assuming the EEOC does draft new regulations on wellness incentives with a lower incentive threshold, adjusting to the new regulations is going to be an administrative hassle that involves reworking plan designs and documents for employers.
But the interim period — the time between now and Jan. 1, 2019 — poses the most issues.
Reason: Even though companies may be able to follow the current EEOC wellness regulations during this period, that move is far from a safe legal bet for employers.
Lawsuits like AARP v. EEOC essentially open the door for employees and their attorneys to use to attack incentive-based wellness programs.
Four alternatives to risky incentives
If you are not comfortable taking the risks associated with incentive-based medical exams and HRAs, there are other options.
Bruce Gillis, Businessolver's strategy practice leader of health, welfare and compliance, offers the following options for concerned employers:
Give workers more choices. One surefire way to make wellness program participation truly voluntary is by giving workers the option of earning the same incentive in a manner that does not involve biometric screenings or HRAs.
Example: an incentive based on completing an education requirement.
Reduce the incentive. The judge in the AARP case essentially said the current 30% incentive maximum was too high.
Decreasing the amount of your incentives for biometric screenings and/or HRAs not only reduces your risk of being accused of not having a voluntary program, it also sets you up for the future. That is because the EEOC is likely to reduce the maximum incentive under the new regulations.
Put incentives on hold. While employers wait for further EEOC guidance, the safest move is to fully eliminate wellness incentives.
If you do go this route, you may want to direct the incentive budget toward other benefits employees want — financial wellness, more flexible work arrangements, PTO, etc.
Switch the incentive structure. Finally, employers can restructure their incentives so that no rewards are specifically tied to biometric screenings or HRAs. Gillis uses the example of blood screenings that test for nicotine. Or, instead of using the exam, simply ask employees if they use tobacco and adjust premiums accordingly.
Posted In: Genetic Information Nondiscrimination Act (GINA); Americans with Disabilities Act (ADA); Equal Employment Opportunity Commission (EEOC)
Want to know more? Read the full article by Jared Bilski at HR Morning