In Employee Wellness Programs, Rules Are Unclear
Many employers in the United States have come to believe that establishing employee wellness programs can lower health costs and increase productivity. But key components common to many programsespecially disability-related questions and medical examinationscontinue to prove problematic for employers. The Equal Employment Opportunity Commission is taking steps to clear up the confusion.
The Americans With Disabilities Act limits the circumstances under which an employer can make disability-related inquiries of employees or ask them to take medical exams. But both are permitted by the ADA as part of voluntary wellness programs. Employment lawyers say a lack of guidance from the EEOC as to what constitutes a voluntary program has left companies at risk of violating federal anti-discrimination laws.
The EEOC held a public meeting in Washington, D.C., on Wednesday, asking for input on the topic of the interplay between wellness programs and anti-discrimination statutes.
Among the stakeholders giving testimony were acting associate legal counsel of the EEOC, Christopher Kuczynski; law firm partners; and advocates for employer-sponsored benefits groups, women and families, and disabled individuals.
Proskauer Rose partner Leslie Silverman was an invited panelist. EEOC vice chair from 2002-2008, Silverman spoke in a personal capacity and not on behalf of her firm. She says that the issue of financial incentives for employees is particularly unclear.
In recent years, the EEOCs office of legal counsel has issued informal opinion letters as to what incentives are permissible, but no formal guidance has been released. In its most recent letter, the OLC said only that the EEOC has not taken a position on whether and to what extent a reward amounts to a requirement to participate or whether withholding of the reward from non-participants constitutes a penalty, thus rendering the program involuntary.
In January 2009, the OLC wrote in an opinion letter [PDF] that compliance with the Health Insurance Portability and Accountability Act (HIPAA) would be deemed as ADA compliance. HIPAA regulations issued in 2006 indicated that standards-based wellness programs could offer up to a 20 percent reduction to participants health insurance premiums. In March of 2009, however, that portion of the OLC opinion letter was rescinded.
Proposed regulations in the Affordable Care Act could establish even higher limits on financial incentives. Silverman says that the problem for employers has been a lack of clarity.
So how are they dealing with this EEOC uncertainty? Some are more risk-averse than others, Silverman told CorpCounsel.com. Some want to absolutely know what EEOC would think, and theres only so much you can say there. She also has seen employers opt to comply with HIPAA and worry about problems with the EEOC if and when they arise.
It may be months or even years, says Silverman, before employers can expect to see clarity on the issue. The commission will first have to reach a consensus, and that could prove difficult.
Corrie Conway, of counsel in the labor and employment practice of Morgan, Lewis & Bockius, told CorpCounsel.com, Given that there are a lot of competing views, as evidenced by those who testified, Im not sure how imminent the guidance will be.
Conway, who attended Wednesdays meeting, says the commission made clear that it was intended to be educational for them.
The employer representatives on the panel urged the EEOC to align with the other government agencies that have developed guidance as far as whats an acceptable incentive, she says. But there is a lot of disagreement on this and other issues related to wellness programs.
For now, Conway would advise employers to keep financial incentives as small as possible. The larger the incentive, the larger the potential risk that it would not meet the voluntary standard, she says.
The EEOC will be taking public comments on the issue over the next two weeks.