On Oct. 4, the Departments of Labor, Health and Human Services, and the Treasury (the tri-agencies) published guidance about incentives that employers may offer to encourage employees to receive Covid-19 vaccines. They generally explained that incentives may be lawful if they comply with tri-agencies’ wellness plan regulations.
The agencies cautioned, however, that compliance with their regulations is “not determinative of compliance with” the Americans with Disabilities Act (ADA) and the Genetic Information Nondiscrimination Act (GINA). The Equal Employment Opportunity Commission (EEOC) enforces those laws.
Yet, the EEOC has not explained how wellness plans can comply with the ADA and GINA and recently withdrew proposed wellness plan regulations.
The EEOC’s silence creates uncertainty, but the public may take some comfort in knowing that no court has ever determined that a wellness plan that complies with the tri-agencies’ regulations violates either the ADA or GINA.
Legal Framework for Wellness Plan Compliance
Wellness plans seek to educate employees about health-related issues and promote the maintenance of healthy lifestyles. Employers offer two primary types of wellness plans: participatory and health-contingent wellness plans.
Participatory wellness plans either provide no financial incentive for participation or provide an incentive that is unrelated to satisfying a health-related standard. Health-contingent plans require an employee to complete a health-related activity or to achieve a health-related outcome.
Wellness plans must comply with the ADA, GINA, and the tri-agencies’ regulations. Two ADA provisions regulate wellness plans. First, 42 U.S.C. § 12112(4)(B) authorizes employers to “conduct voluntary medical examinations, including voluntary medical histories, which are part of an employee health program available to employees at that work site.”
Second, the ADA does not “prohibit or restrict” an employer from “establishing, sponsoring, observing or administering the terms of a bona fide benefit plan that are based on underwriting risks, classifying risks, or administering such risks that are based on or not inconsistent with State law.” This latter provision is known as the ADA’s insurance “safe harbor.”
GINA authorizes employers to request health and genetic information from employees as part of a wellness plan if the plan is “voluntary.”
The tri-agencies’ regulations implement amendments to the Health Insurance Portability and Accountability Act (HIPAA) enacted by the Patient Protection and Affordable Care Act. The tri-agencies’ regulations limit participation incentives only for health-contingent plans that are offered in connection with a group health plan.
The EEOC has asserted that compliance with the tri-agencies’ regulations is not a defense to ADA and GINA claims.
EEOC’s Failure to Provide Regulatory Guidance
Congress assigned the EEOC responsibility to regulate and enforce the ADA and GINA, yet the agency has failed to issue any wellness plan regulations under these laws. In 2009, the EEOC initially endorsed the HIPAA standards, then promptly withdrew its endorsement, and announced that it would “examine” the issue.
In 2016, the EEOC issued wellness plan regulations under the ADA and GINA that purported to “harmonize” those laws with the tri-agencies’ regulations. The regulations, however, were inconsistent with the tri-agencies’ regulations in several ways.
For example, the EEOC’s regulations limited any incentive for wellness plan participation by employees to 30% of the cost of self-only coverage, and extended the 30% standard to both participatory and health-contingent plans. The tri-agencies’ regulations calculate the incentives differently and do not limit incentives for participatory wellness plans.
In June 2020, the EEOC’s commissioners voted to issue proposed wellness plan regulations, and sent the proposed rules for publication in January 2021. On Feb. 12, however, EEOC Chair Charlotte A. Burrows notified the other commissioners that the proposed rules were “formally withdrawn.”
On April 30, Commissioner Janet Dhillon responded to a letter from Sen. Richard Burr (R-N.C.) and explained that the “Commission did not vote” to rescind the proposed regulations. Dhillon’s letter also explained that the Covid-19 “pandemic’s impact on employees’ health makes these [wellness] programs even more important” and that the “EEOC needs to move forward with its rulemaking now so that employers can implement such wellness programs within a clear legal framework.”
The EEOC has remained silent about wellness plans since Dhillon’s letter.
Lingering Uncertainty for Employers Based Upon the EEOC’s Inaction
All of this leaves workers and their employers with uncertainty about wellness plans and, in particular, employer-related Covid-19 vaccine standards. The lack of any EEOC-endorsed standard raises serious questions about the EEOC’s ability to enforce these laws. After all, the EEOC cannot fairly prosecute employers for allegedly illegal wellness plan practices when it will not identify what practices are illegal.
Still, employers can rely on a few guideposts. To date, no court has determined that a wellness plan that complies with the tri-agencies’ regulations violates either the ADA or GINA.
In addition, the U.S. Court of Appeals for the Eleventh Circuit determined that the ADA’s insurance safe harbor exempts wellness plans from ADA liability when those plans are a term of the employer’s group health insurance plan.
Thus, unless and until the EEOC issues a legally-enforceable standard, employers should ensure their wellness plans comply fully with the tri-agencies’ regulations and try to take advantage of the ADA’s safe harbor.
This column does not necessarily reflect the opinion of The Bureau of National Affairs, Inc. or its owners.
Eric S. Dreiband is a partner in Jones Day’s Washington, D.C., office. He represents clients in investigations, litigation, and counseling in civil rights, employment discrimination, whistleblower, wage and hour, and other matters. He previously served as the general counsel of the EEOC and as assistant attorney general for the DOJ’s Civil Rights Division.