Wellness Plans: Look Both Ways Before Crossing the Road


Renee Kuhs, Compliance Attorney, Vizance, Inc.

Look both ways before crossing the road. Does this advice sound familiar? Is it something your mother said to you every time you left the house? Is it advice you have passed along to your children? These words of caution are well suited for employers that have or are seeking to implement a Wellness Plan.

The EEOC recently filed lawsuits against three employers alleging their Wellness Plans violate the Americans with Disabilities Act. Two of these employers are located in Wisconsin; one employer is in Minnesota.

Employers are often surprised to learn that the Wellness Plan they have had in place for years violates federal law. Over the last seven years, I’ve worked with numerous employers to correct compliance problems with their Wellness Plan. Employers often rely upon an insurance carrier, insurance broker, or wellness consultant to help them implement their Wellness Plan. While these parties all bring expertise to the process, one important component is consistently missing – compliance with laws governing the employer. The three lawsuits that have been brought by the EEOC were filed against the employer. Neither the insurance broker nor the wellness consultant has been made a party to the lawsuits.

How will looking both ways before an employer crosses the road avoid litigation? Wellness Plans have typically been developed by focusing solely on the rules contained within the Health Insurance Portability and Accountability Act (HIPAA). However, HIPAA regulations specifically state that compliance with HIPAA in no way guarantees compliance with the Americans with Disabilities Act. Originally the HIPAA Wellness Regulations provided that if an employer followed certain guidelines, they could offer employees a reward of up to 20% of the total cost of single premium for their participation in a Wellness Program. More recently, the Affordable Care Act modified HIPAA’s Wellness Rules to allow the reward to equal 30% of the total cost of the single premium and up to 50% where tobacco use was a factor.

Employers have looked left only to be surprised by what lies to the right. The Americans with Disabilities Act (ADA) and the Genetic Information Nondiscrimination Act of 2008 (GINA) are not new laws. The Office of Civil Rights governs HIPAA, while the ADA and GINA are governed by the EEOC. The ADA and GINA each serve a much different purpose than HIPAA. The Americans with Disabilities Act restricts an employer’s ability to require employees to answer questions that may result in disclosure of a disability or submit to medical exams that are not job-related or consistent with business necessity. GINA protects against disclosure of genetic information. While the ADA includes a provision allowing voluntary wellness plans, the EEOC’s litigation makes clear that compliance with HIPAA does not equal compliance with the ADA. 

Employers that offer a Wellness Plan or are considering implementing one in the near future should consult with an attorney to confirm that its program complies with the federal laws governing employers.