Employer sponsored wellness plans are becoming increasingly popular among employers and employees. Given the rate at which health care costs keep rising, most employers look at these programs as a win/win situation Unfortunately, there is a downside to wellness programs—the myriad federal and state laws regulating them, directly or indirectly. These legal pitfalls were discussed in detail our May, 2007 client alert. Now, in addition to complying with the Health Insurance Portability and Accountability Act (“HIPAA”), the Americans with Disabilities Act, and state smokers’ rights laws, employers now need to make sure they comply with the federal Genetic Information Non-Discrimination Act (“GINA”).
GINA was enacted on May 21, 2008. It prohibits employers from discriminating against individuals based on genetic information and bars insurers from using genetic information for purposes of eligibility and underwriting. Genetic information is defined broadly to include not only information about a person’s genetic tests, but any manifestation of a disease or disorder in a family member of the person (up to and including fourth-degree relatives). Thus, information about an employee’s family medical history would constitute protected genetic information under GINA.
Interim Final regulations implementing GINA were issued jointly by the Department of Treasury, Department of Labor and Department of Health and Human Services on October 7, 2009. These regulations address the collection of genetic information in connection with a wellness questionnaire, such as part of a Health Risk Assessment (“HRA”). Under the regulations, a request for genetic information by an employer as part of a wellness program is prohibited if a reward is offered in exchange for the information. Thus, if an employer provides a premium reduction or other incentive for employees to participate in a HRA, and the HRA requests information about a family member’s medical history, the HRA would violate GINA.
The rules also provide, however, that a request for genetic information as part of a HRA would be consistent with GINA if there is no reward offered and the HRA provides clear instructions that completion of the HRA is wholly voluntary.
This is similar to the position taken by the EEOC, recently reaffirmed in an informal letter discussing the requirements of the Americans with Disabilities (“ADA”). In general, it is a violation of the ADA for employers to make disability-related inquiries (i.e. questions likely to elicit information about a disability) unless they are job related and consistent with business necessity. The EEOC issued guidance in 2005 stating that inquiries that are made as part of a voluntary wellness program would not violate the ADA. Under the guidance, a wellness program is deemed voluntary if employees are both not required to participate and are not penalized for non-participation. The EEOC acknowledges in its recent informal letter that the EEOC has not taken a formal position on this issue, but nonetheless opines that a health risk assessment that provides an incentive for employees to participate is not voluntary because it penalizes employees who choose not to participate. Thus, a wellness plan that solicits health information about an employee, and provides an incentive to participate, could still violate federal law even if compliant with GINA and HIPAA.
The bottom line for employers is to exercise caution in crafting wellness plans. Employers with the best of intentions could easily run afoul of federal and/or state law when implementing a wellness plan. If you do not have a wellness plan, please call us before taking the steps to start one. While there is an emerging body of evidence that wellness plans can contribute significantly to the reduction of healthcare costs for employers and employees, there is still no real harmonization of federal law in favor of promoting these plans. Employers face significant risks if they implement them without fully understanding the rules.
For further information, please contact Joanne Pearson.