Client Bulletin #569

UPDATE (Dec. 7, 2015) – The EEOC has extended the comment period for this proposed rule. The deadline to submit comments is now January 28, 2016.

Recently, the Equal Employment Opportunity Commission issued a proposed rule on employer wellness programs and the Genetic Information Nondiscrimination Act. The GINA proposal accompanies a proposed rule on employer wellness programs and the Americans with Disabilities Act, which the EEOC issued last spring.

When viewed from an EEO standpoint, the proposed rule is pretty good news for employers. We were concerned that the GINA rule might entirely prohibit employers from offering "inducements," or incentives, to employees’ family members who provided genetic information in connection with wellness programs. The proposed rule does allow inducements for certain health information from employees' spouses (although not their children).

On the other hand, the news is not quite so wonderful from the standpoint of the Health Insurance Portability and Accountability Act or the Affordable Care Act. The proposed GINA rule is more complicated and restrictive than the HIPAA rule and ACA requirements, as we'll explain below.

The GINA proposal focuses primarily on health information gathered from spouses of employees who participate in an employer's group health plan. (The employees' own rights are primarily governed by the ADA.)

As we did with the ADA proposal, we'll summarize the GINA proposal in "FAQ" format.

Why didn't the EEOC just issue this latest proposal as part of the ADA proposal it issued in the spring?

The GINA is more restrictive than the ADA on the right of an employer to acquire certain medical information. (For more than you ever wanted to know about the GINA, please read our bulletin from November 2010.)

In addition to placing more stringent restrictions on employers, the GINA protects not only employees but also their spouses and other family members in connection with wellness programs, while the ADA generally applies to employees only.

The EEOC said that when it issued proposed GINA regulations (adopted in 2010), no one commented or asked about the impact on spouses participating in employer wellness programs, but it says it has "received numerous inquiries" since that time.

What does the GINA proposal say?

The proposal would amend the 2010 GINA regulations by making six additions:

1) It's ok for an employer to "request, require, or purchase genetic information" in connection with employer-provided health or genetic services only if the services "are reasonably designed to promote health or prevent disease." The proposal tells us what would not be considered "reasonably designed":

*It must not be overly burdensome for the employees or family members participating,

*It must not be a sneaky way of (also known as "subterfuge for") violating the GINA or other anti-discrimination laws,

*It must not be "highly suspect in the method chosen to promote health or prevent disease."

The EEOC provides a few examples:

*Collecting information but failing to provide any follow-up or feedback to the individual who provided the information.

*Requiring a burdensome amount of time from the individual, or being intrusive, or imposing excessive costs on the individual.

*Existing for the sole purpose of shifting costs from the covered entity to "targeted employees based on their health."

2) It's ok for an employer to provide "inducements" (either rewards or avoidance of penalties) to encourage an employee's spouse to provide information about his or her current or past health status, if

*The spouse is enrolled in the employer's group health insurance, and

*The information is provided as part of a health risk assessment associated with the group health insurance, and

*The spouse provides prior knowing, voluntary, and written authorization.

On the other hand, the employer cannot offer inducements to obtain the spouse's "genetic information," or any information about the employee’s children. (And "children" includes not only biological children, but also adopted and stepchildren.)

One point of clarification: The GINA statute and the 2010 regulations have a broad definition of "genetic information" that includes, not only "true" genetic information like genotypes and DNA tests, but also medical history or examinations of the employee's family members. For example, it is normally a violation of the GINA for an employer to ask an employee whether anyone in his family has ever had cancer. Under the GINA, this is a request for "genetic information."

It appears that the EEOC is now distinguishing "true" genetic information (for example, genotypes and DNA tests) from medical history and medical examinations. Very strict rules apply to the former, but the rules relating to the latter are not as strict.

For clarity, in this bulletin, we will call "true" genetic information exactly that, and will refer to medical history or examinations using the EEOC’s term "current or past health status."

The spouse must also provide prior knowing, voluntary, and written authorization before disclosing past or current medical status in connection with a wellness program, and the authorization form has to "describe the confidentiality protections and restrictions on the disclosure of ["true"] genetic information or disclosure of current or past health status [for which inducements are allowed]." The employer may use the same form for both types of information or examinations. But remember that if the employer or wellness provider is collecting "true" genetic information from a spouse, it must do so without providing any inducements to the employee or spouse.

As with inducements to the employee, there are limits on the amount of "inducement" that an employer can provide based on disclosure of past or current medical history of the spouse. The total inducement can’t exceed 30 percent of the cost of providing group health insurance coverage to the employee and spouse. Here's the EEOC’s example:

If the cost of providing group health coverage to employee and spouse (or family coverage) is $14,000, then the employer cannot offer an inducement in excess of $4,200 (30 percent of $14,000).

Using the same example as above, the cost of providing family coverage was $14,000, with a total "inducement allowance" of $4,200 to employee and spouse. The EEOC assumes (for purposes of the example) that the cost of individual coverage to the employer was $6,000. If so, the employee's inducement can't exceed 30 percent of $6,000, or $1,800. Then, the spouse's inducement would be a maximum of $2,400 ($4,200 minus $1,800).

The EEOC's proposed 30 percent limitation is generally consistent with regulations under Health Insurance Portability and Accountability Act issued in June 2013, which took effect in 2014.

But nothing is simple . .

Under the HIPAA regulations, there is a higher inducement cap for tobacco cessation programs (50 percent), the inducement may be increased if the wellness program includes dependents, and the cap applies only to inducements offered in the context of "health-contingent" programs. The EEOC has declined to incorporate these provisions in its ADA and GINA wellness regulations. In addition, the "30 percent" is a more complicated calculation under the proposed GINA rule than under the HIPAA regulations. (Read on.)

3) The "30-percent limit" described above must also be apportioned between the spouses, in cases where the inducement is designed to encourage the spouse to provide information (as opposed to the employee).

The employee's share of the inducement cannot exceed 30 percent of the employer's cost of providing individual coverage. And then the spouse’s share can’t exceed the difference between the employee's share of the inducement and the total allowable inducement for spousal/family coverage. Thankfully, the EEOC provides another example:

While the EEOC tried to close the loop regarding inducements for spouses, the inducement allowance continues to stray from that permitted under the HIPAA rule, which has no "allocation" requirement for spouses. In order to be comfortable with compliance, wellness programs will need to follow the strictest allowance, which now seems to be the proposed allowance under the GINA.

The last three changes are a little simpler than the first three:

4) An employer is not allowed to require an employee, spouse, or other covered dependent to sell genetic information as a condition of participating in the wellness program or receiving an inducement. The employer also can't ask the individual to waive his or her rights under the GINA.

5) That said, the employer may obtain information about a spouse's past or current health status if the spouse is (a) covered under the employer's group health plan and (b) completing a health risk assessment on a voluntary basis (in other words, as long as the authorization and inducement requirements/limits already described are complied with).

6) "Inducements" include not only cash payments, but also "in-kind" items, "such as time-off awards, prizes, or other items of value, in the form of either rewards or penalties."

The EEOC is accepting comments on the proposed rule until December 29, 2015. They can be submitted at the Federal eRulemaking Portal, or by fax or regular mail.

Are there any particular topics for which the EEOC would like comments?

All comments are welcome, but the EEOC has specifically asked for comments on the following seven topics (this is just a summary – please review this part of the preamble to the proposed rule for more details):

1) Whether inducements should have to be available to spouses who refuse to disclose "true" genetic information or past or current health status, but provide certification from a medical professional saying that the spouse is under the care of a physician and that medical risks are under treatment.

2) Whether authorizations should not be required if the program offers only "de minimis" inducements, and if so, how "de minimis" should be defined.

3) Best practices for ensuring that wellness programs "promote health and prevent disease" and aren’t mere cost-shifting measures.

4) Whether the regulations should include provisions on how employers should safeguard electronically stored records, and if so what those should be.

5) Best practices relating to the security of spouses' health information, whether electronic or otherwise.

6) Whether the wellness program should be restricted to collecting the bare minimum of information needed to "promote health and prevent disease." Relatedly, whether wellness programs should be prohibited from acquiring genetic information from sources other than directly from the employee or spouse.

7) Whether employers offer wellness programs that are not part of their group health insurance plans, and if so, whether and how these guidelines should apply to them.

Here is the EEOC’s brief “Q and A” on the GINA proposed rule.

Although the GINA proposal does not dovetail with the HIPAA/ACA requirements, it does appear that the EEOC is trying to harmonize its mission to protect employees’ privacy rights with respect to health-related information with the strong federal policy – especially now, in light of the ACA - favoring wellness programs.

Deborah Hembree practices in the area of employee benefits. Brian Magargle practices in the areas of employee benefits and litigation. Robin Shea practices in the area of litigation prevention and defense, and is also editor of Constangy's blog, Employment & Labor Insider.

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