Source: http://www.elinfonet.com/fedarticles/12/84
Timestamp: 2019-04-22 11:55:53+00:00

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The rules for employer-sponsored wellness programs continue to be a moving target; most recently, regulations issued by the Equal Employment Opportunity Commission (“EEOC”) intending to address issues under the Americans with Disabilities Act (“ADA”) and the Genetic Information Non-Discrimination Act (“GINA”).
Employers are about to enter into limbo when it comes to maintaining wellness programs, and you will soon need to make a decision about how you will implement any such programs at your workplace. As of January 1, 2019, the federal rules that had been put into place to govern wellness program incentives will be officially invalid, meaning that you will be somewhat in the wilderness when it comes to creating and enforcing a voluntary wellness program. Here’s a quick summary of how we got to this point, and three options for you to consider in light of the impending absence of rules.
In October 2016, AARP sued the Equal Employment Opportunity Commission (“EEOC”) under the Administrative Procedures Act (“APA”) arguing that there was no explanation for the shift in the EEOC’s position relating to what makes participation in a wellness program “voluntary”. Originally, the EEOC argued that in order for a wellness program to be “voluntary,” employers could not condition the receipt of incentives on the employee’s disclosure of American with Disabilities Act (“ADA”) or Genetic Information Nondiscrimination Act (“GINA”) protected information.
A federal court has vacated portions of rules issued by the Equal Employment Opportunity Commission (EEOC) that would have allowed employers to increase healthcare insurance premiums of employees who do not participate in wellness programs. However, the order will not take effect until January 1, 2019, to avoid business disruptions.
On September 21, 2017, the U.S. Equal Employment Opportunity Commission (EEOC) filed a status report with the U.S. District Court for the District of Columbia in response to that court’s August 22, 2017, ruling against the EEOC’s 2016 wellness program regulations. As a reminder, the EEOC regulations sought to clarify whether participation in a wellness program was “voluntary” under the Americans with Disabilities Act and the Genetic Information Nondiscrimination Act of 2008.
Wellness programs have been on a pendulum over the past decade, swinging back and forth from “yes you can” to “no you can’t.” However, since the Patient Protection and Affordable Care Act guidance specifically authorizing, enhancing and promoting these programs – which soon was followed by the long-awaited Equal Employment Opportunity Commission regulations permitting wellness programs under the American’s with Disabilities Act (ADA) and the Genetic Information Nondiscrimination Act (GINA) -- employers thought they finally were on firm ground.
On August 22, 2017, the U.S. District Court for the District of Columbia issued its decision in the American Association of Retired Persons, Inc.’s (AARP) challenge to the wellness program regulations issued by the U.S. Equal Employment Opportunity Commission (EEOC) in 2016 relating to the incentives allowable for participation in an employee health program under the Americans with Disabilities Act (ADA) and the Genetic Information Nondiscrimination Act of 2008 (GINA). The court held that the EEOC did not provide a reasonable explanation as to why the incentive limit of 30 percent of the cost of coverage rendered an employee health program voluntary rather than involuntary, but left the regulations in place for the time being.
A federal court has found Equal Employment Opportunity Commission (EEOC) rules allowing employers to increase healthcare insurance premiums of employees who do not participate in wellness programs to be arbitrary, and says they must be reconsidered.
The U.S. District Court for the District of Columbia invalidated the EEOC’s final regulations on the operation of voluntary wellness programs under the Americans with Disabilities Act (ADA) and the Genetic Information Nondiscrimination Act (GINA). The court ordered the EEOC to further consider its rules as required by the Federal Administrative Procedures Act (APA), but it did not vacate the regulations.
Wellness programs have gained popularity with employers interested in improving the health of their employees in order to reduce the number of sick days and overall health care costs. Wellness programs often include activities such as tobacco-cessation programs, health screenings, exercise groups and nutritional courses designed to motivate employees to adopt and maintain healthful behaviors. Anytime an employer contemplates offering a new type of benefit, however, it must be mindful of the fact that it may result in taxable income to the employees who receive it.
On April 5, 2017 the Equal Employment Opportunity Commission (EEOC) announced that it had reached a settlement with Orion Energy Systems, Inc. (Orion) relating to the EEOC’s claims that Orion’s wellness program violated the American with Disabilities Act (ADA) because participation was involuntary, and that Orion retaliated against an employee who objected to the program. See https://www.eeoc.gov/eeoc/newsroom/release/4-5-17a.cfm.
On March 2, 2017, in an attempt to clear the murky waters surrounding wellness programs, Rep. Virginia Foxx, chairwoman of the House Committee on Education and the Workforce, introduced the Preserving Employee Wellness Programs Act (the “Act’) (H.R. 1313). In an effort to protect wellness plans, the Act reaffirms existing law which permits employee wellness programs to be linked to financial incentives.
On January 25, 2017, in Equal Employment Opportunity Commission v. Flambeau, Inc., the Seventh Circuit rejected an EEOC challenge to an employer wellness program. The circuit court had the opportunity to address whether an employer’s wellness program was an involuntary medical examination pursuant to the ADA, 42 U.S.C. 12112(d)(4), but instead found the issues of statutory interpretation to be moot. As a result, employers are without what would have been welcome guidance on the ADA’s boundaries with respect to wellness programs.
As previously discussed, AARP has filed suit against the EEOC and challenged the agency’s wellness regulations. See http://www.disabilityleavelaw.com/2016/10/articles/ada/the-eeocs-2016-wellness-program-regulations-the-saga-continues/ On December 29, 2016, this challenge suffered a setback. In the December 29, 2016 Memorandum Opinion, U.S. District Judge John D. Bates denied AARP’s request for preliminary injunction and held that the regulations would take effect on January 1, 2017.
The EEOC’s 2016 wellness program regulations are once again under fire. On October 24, 2016, AARP filed a complaint against the EEOC in D.C. federal court challenging the EEOC’s rules relating to wellness programs. See AARP v. EEOC Specifically, AARP seeks a ruling that the 2016 Regulations relating to the Equal Employment Provisions of the Americans with Disabilities Act (the “2016 ADA Rule”) (29 C.F.R. §§ 1630.14(d)(3)) and Title II of the Genetic Information Nondiscrimination Act (the “GINA Rule”) (29 C.F.R. § 1635.8(b)(2)(iii)) are unlawful and request a preliminary injunction that would prevent the rules from taking effect on Jan. 1, 2017.
In a much anticipated decision, a Wisconsin federal district court has granted Orion Energy Systems, Inc.’s summary judgment on the EEOC’s challenge to its wellness program design. See Sept 19, 2016 Decision and Order. While largely good news for Orion, the ruling creates even more confusion for employers seeking clarity on wellness program design principles. In short, the Court: 1) rejected the EEOC’s claim that the wellness program violated the ADA because it was “involuntary;” 2) upheld the EEOC’s position that the ADA’s “safe harbor” for insurance could not be used to defend the wellness program design; and 3) held there was a triable issue on whether the employer’s termination of an employee who refused to participate in the wellness program was unlawful retaliation under the ADA. The case lives on due to the retaliation claim but many employers are scratching their heads on what the ADA requires for wellness programs going forward.
Wellness Programs’ Notice Form Provided by the EEOC.
New rules were published by the Equal Employment Opportunity Commission (EEOC) on May 17, 2016, under the Americans with Disabilities Act (ADA) for employers that have instituted “wellness programs.” Under the rules, employers must make sure participation in those programs is voluntary, and that the programs are reasonably designed to promote employee health.
As discussed in a prior alert, the Equal Employment Opportunity Commission (EEOC) recently issued final rules providing guidance on the application of the Americans with Disabilities Act (ADA) and the Genetic Information Nondiscrimination Act of 2008 (GINA) to employer-sponsored wellness programs.
The IRS has released a Chief Counsel Advice Memorandum discussing the tax treatment of wellness program benefits and employer reimbursement of premiums provided on a pretax basis under a § 125 cafeteria plan (under the Internal Revenue Code - IRC). Chief Counsel Advice Memorandums represent the IRS's response to a particular taxpayer's request for the IRS's assistance and may not be relied on as precedent. However, for an employer interested in offering similar benefits, they provide a good indication of the IRS's position.
Employee wellness programs are all the rage.
Employers implementing wellness programs have a number of laws to navigate: the Health Insurance Portability and Accountability Act of 1996, as amended (HIPAA); the Americans with Disabilities Act (ADA); and the Genetic Information Nondiscrimination Act (GINA), among others. Most companies are familiar with the requirements of HIPAA, which historically has been regarded as establishing the confines for employer-sponsored wellness programs.
The Equal Employment Opportunity Commission (EEOC) issued final rules on employer wellness programs. The final rules address employee protections under the Americans With Disabilities Act (ADA) and the Genetic Information Nondiscrimination Act (GINA). The EEOC worked closely with the Departments of Labor, Treasury and Health and Human Services to ensure consistency with existing privacy protections under the Health Insurance Portability and Accountability Act (HIPAA), as amended by the Affordable Care Act (ACA).
On May 16, 2016, the Equal Employment Opportunity Commission (EEOC) issued final regulations governing the treatment of wellness programs under the Americans with Disabilities Act (ADA) and the Genetic Information Nondiscrimination Act (GINA). The final regulations provide direction to employers regarding workplace wellness programs that comply with the ADA and GINA. Also, according the Commission’s press release, the guidance will help employers operate such programs consistent with applicable provisions of the Health Insurance Portability and Accountability Act (HIPAA), as amended by the Affordable Care Act (ACA).
This week the Equal Employment Opportunity Commission (EEOC) issued final rules providing guidance on the application of the Americans with Disabilities Act (ADA) and the Genetic Information Nondiscrimination Act of 2008 (GINA) to employer-sponsored wellness programs. As we discussed in prior alerts, in 2015 the EEOC issued proposed rules for employer-sponsored wellness programs under the ADA and GINA. The final rules are largely similar to the proposed rules, but do include some important modifications based on public comments the EEOC received. Below are the most significant requirements of the final rules.
Employee wellness plans are a hot item these days. Increasingly, wellness plans are seen as a benefit to both employees and employers alike. As many employers jump on the bandwagon of this growing health trend, they should be aware of the other legal implications of creating and implementing these programs within their company. For example, a popular topic ever since the EEOC issued its proposed regulations last year has been how employee wellness programs can comply with existing regulations such as the ADA and Title II of the Genetic Information Nondiscrimination Act (GINA). Well now it’s time for employers to take note because the EEOC has just finalized its rules in this regard.
Wharton's David Asch discusses his research on health incentives.
On May 16, 2016, the U.S. Equal Employment Opportunity Commission (EEOC) issued final rules on employer-sponsored wellness programs. The final rules clarify the EEOC’s position on wellness plan compliance with the Americans with Disabilities Act (ADA) and Title II of the Genetic Information Nondiscrimination Act of 2008 (GINA). The final rules also attempt to reconcile differences between the Health Insurance Portability and Accountability Act of 1996 (HIPAA), as amended by the Affordable Care Act, and the EEOC’s proposed rules relating to wellness programs, which were released last year. Employers now have a clearer roadmap to follow when designing voluntary workplace wellness programs.
Nexsen Pruet tax and employee benefits attorney Sue Odom has produced a new video looking at the latest legal developments involving wellness programs.
Employers in the public and private sectors often provide wellness programs to their employees, especially those who work in safety sensitive jobs. But can an employer require employees to submit to testing under mandatory wellness programs as a job requirement? In Ortiz v. City of San Antonio Fire Dept., the Fifth Circuit ruled that evaluating an employee’s fitness for duty through a mandatory wellness program does not violate Title VII or GINA.
Consider the following wellness program scenario: A company implements a program that incentivizes employees to take a health risk assessment and undergo biometric screening. The assessment asks questions about the individual’s medical history, diet, mental and social health, and job satisfaction. The screening measures the individual’s height, weight, and blood pressure, and involves a blood test. To encourage employees to participate in the program, the company offers employees a $600 credit toward their premiums. Does this sound familiar?
With final ADA and GINA wellness program regulations expected this year from the Equal Employment Opportunity Commission (EEOC), 2016 looks to be an important year for regulation of these programs. However, program features like health risk assessments (HRAs) and biometric screenings have already become popular components of employer-sponsored health plans. In many cases, employers incentivize employees to participate through premium discounts, reductions in cost sharing or other inducements. In a recent case, an employer went a little further, designing its self-funded plan to be available only to those employees who participated in an HRA and biometric screenings (regardless of the results). Challenged by the EEOC, this employer prevailed under the Americans With Disabilities Act’s “safe harbor” exception. EEOC v. Flambeau, Inc., W.D. Wis., No. 3:14-cv-00638 (12/31/15).
The US District Court for the Western District of Wisconsin has ruled that wellness programs that are part of an insurance benefit plan may fall under the "safe harbor" exception to the Americans with Disabilities Act's (ADA) general prohibition that a covered employer require a medical examination, unless the examination is job-related and consistent with business necessity. In EEOC v. Flambeau, Inc., the Equal Employment Opportunity Commission (EEOC) had claimed that an employer's wellness program violated the ADA by requiring employees to submit to medical examinations because participation in the health insurance plan was conditioned on an employee completing a health risk assessment (HRA) and a biometric screening test.
Wait a minute. You mean to tell me that, even if I follow the guidance issued under the Health Insurance Portability and Accountability Act of 1996, as amended (HIPAA), in implementing a “legally-compliant” wellness program, I might still violate the Americans with Disabilities Act (ADA)?
On April 20, 2015, the U.S. Equal Employment Opportunity Commission (EEOC) published a much-anticipated proposed rule that seeks to amend the EEOC’s prior regulations with respect to employer “wellness programs” and address the implications of such programs under the Americans with Disabilities Act (ADA). While the primary focus of the proposed rule concerns the extent to which employers may use incentive-based programs to encourage employees to participate in wellness programs, the rule also addresses best practices and requirements with respect to maintaining the confidentiality of employee medical information.
The U.S. Equal Employment Opportunity Commission (EEOC) recently issued proposed new rules clarifying its stance on the interplay between the Americans with Disabilities Act (ADA) and employer wellness programs. Officially called a “notice of proposed rulemaking” or NPRM, the new rules propose changes to the text of the EEOC’s ADA regulations and to the interpretive guidance explaining them.
The vast majority of large employers offer some sort of wellness program, according to a recent survey. We’ve posted about the risks and benefits of these programs in the past. Now, more than ever, employers with such programs should take note. The EEOC recently issued its highly anticipated proposed regulations amending how the ADA applies to these increasingly popular programs.
For some time, employers have faced uncertainty about the status of their wellness programs under the Americans with Disabilities Act (ADA). While the Health Insurance Portability and Accountability Act of 1996 (HIPAA) and the Affordable Care Act (ACA) have allowed employers to provide financial incentives for employee participation in wellness programs for several years, the U.S. Equal Employment Opportunity Commission (EEOC) increased employer anxieties over otherwise-compliant wellness programs in 2013 and 2014 by suing several large companies over alleged ADA-related defects in the design of their wellness programs.
The Equal Employment Opportunity Commission (EEOC) has released its long-awaited proposed rule providing guidance on the application of the Americans with Disabilities Act (ADA) to employer-sponsored wellness programs.
The Equal Employment Opportunity Commission (“EEOC”) has published a Notice of Proposed Rulemaking, which opens for comments on April 20, 2015. The proposed rule would make changes to 29 CFR section 1630.14, Medical Examinations And Inquiries Specifically Permitted. It attempts to reconcile incentives for voluntary wellness programs under 29 CFR section 1630.14(d) with Title I of the Americans with Disabilities Act (“ADA”).
On April 16, 2015, the Equal Employment Opportunity Commission (EEOC) issued its highly anticipated proposed regulations amending how Title I of the Americans with Disabilities Act (ADA) applies to the increasingly popular employer wellness programs. The proposed rule is designed to provide guidance on the extent to which the ADA permits employers to use incentives to encourage employees to participate in wellness programs. The proposed regulations identify employee health programs, define the nature of a voluntary program, clarify the permissible incentives an employer may offer, and explain the notice and confidentiality requirements. Eighty-eight percent of employers with 500 or more employees offer some sort of wellness program, according to a 2014 survey of employer-sponsored health plans by Mercer, the benefits consultant.
The Internal Revenue Service (IRS), the Department of Labor (DOL), and the Department of Health and Human Services (HHS), the three federal agencies with primary responsibility for implementing the Affordable Care Act (ACA), released final regulations on May 29, 2013 that expand the limits on rewards (and penalties) that certain workplace wellness programs may provide without running afoul of the nondiscrimination requirements under the Health Insurance Portability and Accountability Act (HIPAA). The new rules replace regulations from 2006 and make significant changes to the criteria that wellness plans must meet in order to reward health results without discriminating based upon a health factor. The final regulations are applicable for plan years beginning on or after January 1, 2014, and employers should review the new opportunities and requirements the final regulations provide as they consider changes to their plan designs for the upcoming open enrollment season.
More and more employers and insurance companies are providing incentives and rewards to employees and their covered dependents to encourage participation in wellness programs—programs designed to improve an individual’s overall health and well-being, and to avoid and even treat, chronic health conditions. While there are many laws governing wellness programs, this article focuses on the often-overlooked federal income tax implications to employers and employees. Note that other federal or state laws affecting wellness program and federal excise tax implications to employers, which should not be forgotten when designing and operating a wellness program, are beyond the scope of this article.
The Eleventh Circuit Court held, in Seff v. Broward County, Florida, an employee wellness program that rewarded certain employees for taking certain “healthy” steps did not violate the Americans with Disabilities Act (“ADA”), 42 U.S.C. § 12101, as it fell within the ADA’s safe harbor provision for insurance plans.
From Incentives to Penalties: How Far Should Employers Go to Reduce Workplace Obesity?
This month, more than half of Americans probably made health-related New Year's resolutions, judging from past data, but few are likely to stick to them. Employees at CFI Westgate Resorts, an Orlando, Fla.-based vacation properties company, might consider themselves lucky: They have an incentive to get healthy. If they join in the company-wide weight-loss contest this month and succeed in reaching their goals, they could win cash prizes or a luxury vacation.
Is Wellness on Your To-Do List?
Are you considering adding a wellness program this year, or expanding your wellness offerings for employees? Have you considered whether your program is designed to comply with federal law?

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