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EPLI: EEOC Looks to Resolve ACA-ADA Issue with Wellness Programs


New EEOC Proposed Rule Aims to Clarify Potential Violations with Workplace Wellness ProgramsNew EEOC Proposed Rule Aims to Clarify Potential Violations with Workplace Wellness Programs

In October 2014 we highlighted the confusion over wellness programs in the wake of the Affordable Care Act (ACA), which encourages these plans, and the Equal Employment Opportunity Commission (EEOC), which alleged that some programs were discriminatory and violated the Americans with Disability Act (ADA). In fact, the EEOC has filed a few lawsuits against companies claiming that they cannot force employees to participate in medical tests and then penalize them for not doing so. This seems to contradict the ACA provision, which allows employer use of monetary rewards and penalties to motivate employees to complete wellness activities or achieve certain measurable health outcomes.

Now the EEOC has taken action to clarify how workplace wellness programs can adhere to the requirements of both ACA and the ADA with a new proposed rule. According to the federal agency, “This proposed rule, which was approved by a bipartisan vote, would amend the regulations implementing the equal employment provisions of the ADA to address the interaction between Title I of the ADA and financial incentives as part of wellness programs offered through group health plans.”

Why the move by the EEOC for clarification? The federal agency received a significant amount of criticism from many U.S. companies, health insurers and other organizations for challenging wellness programs, designed to be compliant with the rules established under the ACA, by claiming that these programs violate the ADA. These actions have left employers struggling with guidance that has been inconsistent and vague.

Case in point: Last October the EEOC requested an injunction against Honeywell International Inc. over their health screening policy, which requires medical testing for employees and spouses. The agency alleged that their wellness program violates discrimination laws because it imposes monetary fines of up to $4,000 on employees who fail to complete the testing. Honeywell’s wellness program screens workers for blood pressure, cholesterol, blood-sugar levels, waist circumference and nicotine. On the other hand, Honeywell maintains the policy promotes employee well-being and reduces healthcare premiums for healthy employees: “We don’t believe it’s fair to the employees who do work to lead healthier lifestyles to subsidize the healthcare premiums for those who do not.” The District Judge in the case, stated: “What is better public policy and who is likely to succeed are not measures this court is prepared to decide…There are a number of fascinating issues for debate at a later time.” The case has been closed.

We’ll have to wait until the Office of Management and Budget (OMB) approves the EEOC’s proposed rule for it to be published in the Federal Register for a 60-day public notice and comment period. Once the comment period ends, the agency reviews public comments received and may revise the rule. The agency then goes through its final internal review process. Once the final rule has been published, an agency usually must wait at least 30 days before implementing it.

We’ll keep you posted on this important issue as it affects how employers proceed with their wellness programs. Be sure to have your program reviewed by an attorney to avoid any potential pitfalls. Also, ensure that you have a solid Employment Practices Liability Insurance (EPLI) program in place to respond to allegations of discrimination. Axis Insurance Services provides EPLI to companies across many industry sectors and can review your insurance plan. Just give us a call at (877) 787-5258.

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Blogged on: April 15, 2015 by Mike Smith
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