This exception allows employers to offer premium discounts or rebates, or modify otherwise applicable cost sharing (such as copayments, deductibles or coinsurance) in return for employees' adherence to certain programs of health promotion and disease prevention, subject to certain maximum incentive (or penalty) limits. These programs are more commonly known as wellness programs.

In June 2013, the U.S. Departments of Labor, Health and Human Services, and Treasury (DOL, HHS and Treasury, respectively) issued final regulations on incentives for nondiscriminatory wellness programs in group health plans under the ACA and HIPAA, giving employers what seemed like a good roadmap for designing and operating wellness programs.

However, these regulations did not address the impact of the Americans with Disabilities Act, as amended by the ADA Amendments Act of 2008 (ADA), or the Genetic Information Nondiscrimination Act (GINA) on employer wellness programs. Both the ADA and GINA generally prohibit employers from obtaining and using information about employees' health conditions or about the health conditions of their family members, including spouses.

Both laws, however, do allow employers to ask health-related questions and conduct medical examinations if the employer is providing health or genetic services as part of a voluntary wellness program.

Therefore, employers wanted to know: What does “voluntary” mean?

Can employers offer the maximum incentive/penalty limits described in the HIPAA regulations, as amended by the ACA, in exchange for health-related information or participation in medical examinations as a part of a wellness program and still comply with the ADA and GINA?

In May of 2016, the Equal Employment Opportunity Commission (EEOC) answered those questions by releasing final rules describing how the ADA and GINA apply to employer-sponsored wellness programs that request health information from employees and their spouses. The final ADA rule provided that wellness programs that are part of a group health plan and that ask questions about employees' health or include medical examinations may offer incentives of up to 30 percent of the total cost of self-only coverage and still be considered “voluntary,” in compliance with the ADA requirements.

Similarly, the final GINA regulations provide that an employer may offer a spouse up to 30 percent of the total cost of self-only coverage in exchange for his or her participation in the wellness program.

No incentives are allowed in exchange for the current or past health status information of employees' children or in exchange for specified genetic information (such as family medical history or the results of genetic tests) of an employee, an employee's spouse and an employee's children.

While the EEOC's final regulations did not coordinate perfectly with HIPAA/ACA regulations, these sets of regulations, working in conjunction with each other, appeared to be the final word on how wellness programs could be structured, including whether incentives could be offered, and in exchange for what information.

Since these final regulations were issued, however, it appears neither employers nor employees are entirely comfortable with the EEOC's interpretation of “voluntary.”

Generally, employers prefer the more expansive approach of the HIPAA/ACA rules, and groups that represent employees have argued that employers should not be able to offer any meaningful incentive in exchange for medical or genetic information, because an employee's forgoing of an incentive would amount to a penalty and therefore effectively make participation involuntary.

Potential roadmap

It was into this environment that H.R. 1313 was introduced, with the stated intent to “clarify rules relating to nondiscriminatory workplace wellness programs.”

More telling with respect to the intent behind the law is the fact sheet that Representative Virginia Foxx released in connection with H.R. 1313, which states that one particular aim of the bill is to “reassert congressional intent” to encourage the development of employee wellness programs, and that the “EEOC's actions have had the opposite effect, contrary to congressional intent.”

To that end, H.R. 1313 addresses three types of wellness programs:

• Wellness programs that offer more favorable treatment for individuals with adverse health factors.

• Wellness programs that are not offered in conjunction with an employer-sponsored health plan but provide rewards of no more than 30 percent of the total cost of coverage in which the employee and any dependents are enrolled (or no more than 50 percent, if permitted by the DOL HHS, and Treasury).

• Wellness programs that are offered in conjunction with an employer-sponsored health plan that:

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  • – Meet the definitions and conditions governing wellness, disease prevention and health promotion programs outlined in Section 2705(j) of the Public Health Service Act (PHSA);

  • – Provide rewards of no more than 30 percent of the total cost of coverage in which the employee and any dependents are enrolled (or no more than 50 percent, if permitted by the DOL, HHS and Treasury); and

  • – Comply with any regulations promulgated with respect to Section 2705(j) of the PHSA by the DOL, HHS and Treasury.

Under H.R. 1313, these three types of wellness programs will be automatically considered in compliance with the “acceptable examinations and inquiries” rules set forth in the ADA.

This means that employers could ask for medical histories and health appraisals, even in relation to disabilities, and not run afoul of the ADA restrictions. In addition, these wellness programs would be considered compliant under GINA.

H.R. 1313 specifically allows these types of wellness programs to collect information about the manifested disease or disorder of a family member without being considered to have made an unlawful acquisition of genetic information with respect to another family member, and without being in violation of Title I or II of GINA.

In other words, should H.R. 1313 become signed into law, employers would be able to charge employees who decline to provide genetic information up to 30 percent (and possibly up to 50 percent) more for health coverage.

While H.R. 1313 has yet to be approved by the either Senate or the House, there is some speculation that this legislation may be included in future health care reform bills proposed by the Republican-led effort to “repeal and replace” the ACA.

Should this bill become law, it would have a huge impact on the design and implementation of wellness programs going forward.