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Critics find lot to complain about on new EEOC wellness rule.

Summary: A barrage of criticism has followed the release of new wellness program incentive rules for employees from the Equal Employment Opportunity Commission (EEOC).

The skeptics on ...

A barrage of criticism has followed the release of new wellness program incentive rules for employees from the Equal Employment Opportunity Commission (EEOC).

The skeptics on the rules range from business groups, politicians to policy advocates. Among the critics is Jennifer Mathis, director of programs and deputy legal director at the Bazelon Center for Mental Health Law.

"We are extremely disappointed by the final rules," she told InsideCounsel. "It is highly troubling that the EEOC permits employers to impose steep financial penalties on employees who choose to exercise their rights under the Americans with Disabilities Act (ADA) and the Genetic Information Nondiscrimination Act (GINA) to keep their own and their spouses' health information private.... The agency has weakened critical workplace confidentiality rights that Congress provided to employees based on concerns about how health information unrelated to a person's ability to do his or her job might be used by employers."

Similarly, Sen. Lamar Alexander, (R-Tennessee), who is health and labor committee chairman, said the new rules on workplace wellness, "will make it harder for employees to choose healthy lifestyles and to save money."

"Wellness programs are the only part of Obamacare that everyone agreed on--everyone except the EEOC," he said in a statement. "Congress was clear in its support of workplace wellness programs in the health care law--just about the only provision in the law with bipartisan support--and the Departments of Health and Human Services, Labor, and Treasury were clear in their regulations implementing the law. It seems the EEOC is the only one missing the mark."

He explained that the Patient Protection and Affordable Care Act allowed employers to offer discounts on health insurance premiums by up to 50 percent if approved by the three federal agencies--and those agencies have used that authority in 2013 to approve a 50 percent discount for smoking cessation. The new EEOC rules say that any discount above 30 percent may be discriminatory.

"The EEOC is taking away authority that Congress gave the administration and overruling the actions of the Departments of Health and Human Services, Labor and Treasury," Alexander said. "Today's rules contradict the law and continue the confusion the agency has caused, so Congress will need to act to help employees seeking to improve their health, while bringing down their insurance costs."

"The rules ... create real cause for concern because they undermine essential protections against discrimination in employment and insurance -- and critical protections against invasions of medical privacy -- provided by the .... ADA and the ... GINA," added Judith Lichtman, senior advisor, National Partnership for Women & Families, in a statement.

"These new rules take the country in the wrong direction by allowing for coercive practices, so employees have to either share private medical information with employers or pay appreciably more for health insurance. The result could well be more people refusing testing and treatments they need for fear employers and insurers will use the information against them; more people facing discrimination on the job and in insurance pricing; and higher health insurance costs for the consumers who can least afford to pay," she said. "In the end, if employers can shift costs and withhold rewards from employees with health problems, then women, workers of color, older workers and those with disabilities--who are especially vulnerable to chronic illnesses and more likely to experience health disparities--will suffer."

Even the U.S. Chamber of Commerce weighed in with Senior Vice President of Labor, Immigration, and Employee Benefits Randy Johnson saying in a statement, "Simply put, EEOC--which has no health care expertise and extremely limited jurisdiction over wellness programs -- has created rules that layer complicated, confusing, and contradictory requirements over an area which is already heavily regulated.... EEOC's final rules will have a chilling effect on the development, implementation, and innovation of workplace wellness programs, which Congress intended to be used as tools to improve employees' health and lower health care costs.... Unfortunately, EEOC's final rules are anything but consistent with the existing laws and regulations governing workplace wellness programs and fail to promote these popular programs which enjoy bi-partisan support."

However, the EEOC defended the new rules and said they explain how Title I of the ADA and Title II of the GINA apply to wellness programs offered by employers that request health information from employees and their spouses.

The final rules go into effect in 2017, and apply to all workplace wellness programs, including those in which employees or their family members may participate without also enrolling in a particular health plan, according to the EEOC.

"The EEOC received comments on both rules from a broad array of stakeholders and considered them carefully in developing this final rule," EEOC chair Jenny Yang said in a statement. "The Commission worked to harmonize HIPAA's goal of allowing incentives to encourage participation in wellness programs with ADA and GINA provisions that require that participation in certain types of wellness programs is voluntary. These rules make clear that the ADA and GINA provide important safeguards to employees to protect against discrimination."

When looking at practical implications of the new rule, Matthew Parker of Fisher & Phillips, told InsideCounsel said the EEOC provided "much needed guidance" about wellness programs and the offering of incentives. "We finally have some clear guidance on that incentive that can be offered," he said.

Because the ceiling is 30 percent, companies impacted by the new rule need to make sure they are not offering any incentive above that amount, according to Parker.

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Publication:Inside Counsel
Date:May 18, 2016
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