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In order to control health care costs, employers continue to introduce various wellness programs, including health risk assessments (HRAs). For general information on wellness programs, review our presentation "Wellness: A World of Opportunities." Some employers have considered requiring employees to participate in HRAs in order to be eligible for employer-sponsored health insurance. In the past, it has been unclear whether such an eligibility requirement was permissible, particularly under the Americans with Disabilities Act (ADA). Recently, the Equal Employment Opportunity Commission (EEOC), the agency responsible for enforcing the employment provisions of the ADA and the Genetic Information Nondiscrimination Act (GINA), issued an informal opinion letter to an employer stating that requiring employees to participate in an HRA in order to be eligible for health insurance would violate the ADA.
Involuntary vs. Voluntary Information Disclosure
HRAs generally require employees to provide individual health information, typically eliciting disability-related information and genetic information by means of questions or medical examinations. Under the ADA, employers may make disability-related inquiries or require medical examinations of employees if the inquiries or examinations are job-related and consistent with business necessity. In addition, both the ADA and GINA allow employers to offer "voluntary" wellness programs, but prohibit employers from requiring involuntary disclosure of disability-related information and genetic information. A wellness program is voluntary if employees are neither required to participate nor penalized for nonparticipation.
Opinion Letter Addresses Lawfulness of Eligibility Requirements
In its opinion letter, the EEOC stated that the employer's HRA would violate the ADA because employees who refused to participate in the HRA would be denied a benefit of employment—health insurance coverage—that would be available to employees who participated in the HRA. The EEOC concluded that the employer's HRA was not a voluntary wellness program because employees were penalized for nonparticipation. Also, the employer did not offer any suggestion that the HRA was job-related and consistent with business necessity, which may allow for disability-related questions and medical examinations.
Notably, the EEOC letter was limited to the lawfulness of eligibility requirements based on HRA participation. In an opinion letter earlier this year, the EEOC had suggested that financial incentives of less than 20 percent of the cost of insurance were voluntary and compliant with the ADA—the same standard required for the Health Insurance Portability and Accountability Act (HIPAA) anti-discrimination provisions for wellness programs that offer financial incentives. The recent EEOC letter rescinded that suggestion, leaving open the issue of whether financial incentives for HRA participation are permissible under the ADA. EEOC opinion letters are informal, nonbinding guidance, and to date, the EEOC has not officially addressed the issue of whether offering financial incentives tied to HRA participation violate the ADA.
It is possible that formal EEOC guidance on a similar issue may come later this month in the form of final employment regulations under GINA which address the standard for voluntary wellness programs. Several public comments to the proposed regulations have suggested that the existing HIPAA standards for wellness programs be adopted as the standard for voluntary wellness programs under GINA. However, the EEOC has not given a clear indication that it would adopt the existing HIPAA standards for either GINA or the ADA.
Considerations for Employers
Until formal guidance is published, employers would be well advised not to limit eligibility for health insurance on participation in an HRA. Employers wishing to encourage participation in an HRA may consider financial incentives, such as premium discounts, but employers should keep in mind that the 20 percent premium discount standard has only been approved under HIPAA. Because it is still unclear whether financial incentives are voluntary wellness programs, we recommend that employers take a "wait and see" approach and watch for formal EEOC guidance.
