Privacy Concerns Prompt EEOC to Propose Rule on Wellness Programs

Long lacking regulation, employee wellness programs offered as part of an employer's group health insurance are the subject of a proposed federal rule designed to protect privacy and prevent abuses. Here's what HR leaders need to know about it.

Few HR topics have the potential to be as controversial as Employee Wellness Programs (EWPs).

EWPs are purported to help encourage workers to adopt healthier lifestyles, which may, in turn, encourage healthier, more productive employees while decreasing absenteeism and health care costs.

But the U.S. Equal Employment Opportunity Commission (EEOC) sees potential for discrimination against employees through poorly implemented EWPs, and questions are mounting about  data privacy and the fairness of shifting insurance costs to employees who refuse to participate or who fail to meet wellness goals.

A proposed EEOC rule could change things. It would provide new guidance to both employers and employees regarding how wellness programs offered as part of an employer's group health plan must comply with the Americans with Disabilities Act (ADA). The public comment period is open until June 19.

I spoke with Chris Kuczynski, acting associate legal counsel, and Peggy Mastroianni, legal counsel, both of EEOC, recently to learn how these proposed changes would impact EWPs. The transcript has been edited for brevity and clarity.

HLM: Can you describe the proposed rule?

Kuczynski: This is a proposed rule primarily about employee wellness programs that ask questions about employees' health or require medical examinations, including blood pressure screening, cholesterol screens, or blood glucose screens where you're drawing blood and trying to determine someone's health status.

Some of these programs just require people do something that doesn't involve asking health-related questions or medical exams—things like taking a nutrition class, a smoking cessation class, or a weight loss support program. Employers have obligations in respect to those kinds of programs to provide reasonable accommodations for employees with disabilities who participate in those programs, such as providing a sign language interpreter to hearing impaired employees who wish to attend these classes.

But, this rule is really about wellness programs that seek medical information about their employees. The ADA allows employers to get that health related information from employees as a part of workplace health programs, as long as answering the questions is voluntary on the part of the employees.

HLM: Under the proposed rule, what could an employer do with the results of an employee's screening?

Kuczynski: These programs can't impose or be overly burdensome to employees. They can't evade or violate EEO laws.

Here are two examples of things that are okay under the proposed rules. The first: An employer does a health risk assessment, then gives employees information about what their health risks are. Second, they can use the health risk assessment data to look at the aggregate information about the health status of their workforce, then use that information to design programs that will improve those conditions.

Now, what's not OK is not using that info at all. They must use that information.

It can't just sit there unused, with no benefit given to employees. Just sort of collecting information about employees is not acceptable.

HLM: I've heard some organizations require employees to participate in EWPs. Will that requirement still be allowed?

Kuczynski: What the second part of the new rule means is that health program participation, including answering personal questions or having medical exams, is required to be voluntary. A program is not voluntary if employees are required to participate in the program, or if they're denied health coverage if they decline to answer questions or participate. It's rather obvious under the ADA already.

You can't require people to participate, or require them to answer personal questions. You can't deny health coverage based on wellness program participation, or limit coverage in ways other than is permitted concerning incentives.

There is also a ban against retaliating against anyone not participating or achieving stated wellness goals, taking adverse action against employees, disciplining them, coercing them, interfering with their ADA rights, or threatening them with discipline.

HLM: What about employee privacy?

Kuczynski: If wellness programs are part of a group health plan, it must provide a notice to employees about several things: What information is going to be collected as part of the program, with whom it's going to be shared, how it's going to be used, and what measures are going to be in place to protect confidentiality.

Confidentiality is a very important part of this proposed rule, and measures to protect confidentiality are very important to encourage people's participation in these programs. People are less likely to participate if they don't believe that the information will be kept confidential.

Also, employers should only be getting employee information back from wellness programs in aggregate form that does not reveal the identity of employees. [Employers] might know they have a number of employees that have diabetes from participation in health risk assessments, for example, but they should not know who those people are.

HLM: What about financial incentives for participating in the wellness program or meeting health goals?

Kuczynski: Certain incentives, financial and otherwise, are permitted as part of a wellness program that is part of the group health plan. If the incentive is tied to health insurance costs and dependent on reaching certain health goals, the level of the incentive can, at maximum, come to 30% the cost of self-only coverage through the company's health plan. That's the total cost toward the premium, as paid by both employee and employer.

For example, if the company self-only plan cost $6,000 yearly, the maximum allowable incentive would be $1,800.

HLM: Is the EEOC aware of any abuses related to employee wellness programs?

Mastroianni: We have brought two lawsuits which are still pending. We don't know how they're going to turn out. The charges have been brought to the commission and investigated. We're currently in court on them. The cases involved actions like employees being terminated because they declined to do a health risk assessment or participate in a wellness program.

In both cases, the full cost of health insurance was transferred to the employee rather than the employer paying part of it. These are examples of things that can happen with EWPs. Currently, these cases are still just allegations, but we'll find out more as the cases progress. These are examples of things that can happen in some workplaces.

Kuczynski: Other types of abuses can occur, especially breaches of confidentiality. Confidentiality requirements apply to everybody, not just people with disabilities. You can't disclose anybody's medical condition, whether they're considered an individual with a disability or not.

But, for people with disabilities, those kinds of disclosures, particularly if they're stigmatizing types of disclosures—things people might not want people in the workplace to know about—privacy violations can be particularly problematic. People with disabilities tend to be much more worried about the impact such a disclosure might have on future employment prospects.

HLM: What advice do you have for HR leaders?

Kuczynski: My advice would be to go and look at resources our organization has provided on the proposal we're making. In addition to the rule itself, we have a brief Q & A document that can help healthcare leaders and EWP administrators understand the main components of the proposal.

We also have a fact sheet for small businesses, but businesses of any size are welcome to read it, and might find it helpful.