Proposed Wellness Plan Legislation Responds To Lawsuits Filed By EEOC

The United States House of Representatives' Education and the Workforce Committee will conduct a hearing on March 24, 2015 about the House version of a bill proposed to the Senate two weeks earlier—the "Preserving Employee Wellness Programs Act" (S. 620) (H.R. 1189) (the "Bill").1

The Bill was introduced to the Senate on March 2, 2015 by Sen. Lamar Alexander (R-Tenn.) and Rep. John Kline (R-Minn.) with Sens. Mike Enzi (R-Wyo.), Johnny Isakson (R-Ga.), Tim Scott (R-S.C.), Orrin Hatch (R-Utah), Pat Roberts (R-Kan.), and Rep. Tim Walberg (R-Mich.).2 The Bill seeks to clarify the law relating to "nondiscriminatory employer wellness programs" in the wake of several lawsuits filed by the Equal Employment Opportunity Commission ("EEOC") that have created uncertainty about the legality of these programs.

Background

The Americans with Disabilities Act of 1990 ("ADA") authorizes employers to conduct medical examinations and to obtain employee medical histories as part of wellness programs as long as participation by employees is voluntary.3 In addition, the ADA contains a "safe harbor" that exempts "bona fide" benefit plans from the ADA's general prohibitions when the terms of such plans "are based on underwriting risks, classifying risks, or administering such risks that are based on or not inconsistent with State law."4

Like the ADA, Title II of the Genetic Information Nondiscrimination Act of 2008 ("GINA") contains an exception that permits employers to request and acquire genetic information in connection with voluntary wellness programs.5 Congress directed the EEOC to enforce these protections. In July 2000, the EEOC stated that "a wellness program is 'voluntary'"—and therefore lawful—"as long as an employer neither requires participation nor penalizes employees who do not participate."6

In 2006, the U.S. Departments of the Treasury, Labor, and Health and Human Services issued regulations that exempted wellness programs from the nondiscrimination requirements of the Health Insurance Portability and Accountability Act ("HIPAA") if they met certain requirements.7 Those regulations authorized employers to offer financial inducements to participate in wellness plans of up to 20 percent of the cost of coverage.8 On January 6, 2009, the EEOC announced that it agreed with this 20 percent standard. The EEOC reasoned that "[b]orrowing from the HIPAA rule is appropriate because the ADA lacks specific standards on financial inducements, and because it will help increase consistency in the implementation of wellness programs."9 On March 6, 2009, however, the EEOC rescinded this statement and announced that it was "continuing to examine what level, if any, of financial inducement to participate in a wellness program would be permissible under the ADA."10

In 2010, Congress passed the...