'Gating' through wellness programs under proposed EEOC regulation.

• Author: Walters, Lowell J.

This article examines a recently proposed regulation that limits certain rewards provided through wellness programs. Equal Employment Opportunity Commission (EEOC) Proposed 29 C.F.R. 1630.14(d), issued under the Americans with Disabilities Act (ADA), has been described as effectively eliminating the general practice of creating "gated levels" of a health plan. In examining those claims, this article omits wellness program restrictions imposed by the Affordable Care Act, the Health Insurance Portability and Accountability Act (HIPAA), other portions of the ADA, or other laws governing or affecting wellness programs, in general, even though an understanding of these restrictions is vital to creating an effective, compliant wellness program.

Employment Law, Employee Benefits, and the ADA

"Employment law" and "employee benefits" are areas of practice that often inter-relate, especially in the area of health benefits. The Family Medical Leave Act is a perfect example of this, in that whether an employee is entitled to the benefits of that law is generally considered an employment law issue, while an employer's compliance necessitates refining its health plan documentation and procedures, which is generally considered an employee benefits issue. The ADA has largely focused on employment law concerns of discrimination in the workplace, but this regulation focuses on discrimination within an employer's group health plan. If the EEOC raises concerns under the ADA or an employee brings a claim on the basis that he or she was unfairly discriminated against, one would hope that an employer would immediately involve its employment law attorney, and in order for that employment law attorney to understand, properly advise, and defend a claim brought under this portion of the ADA, there needs to be a basic understanding of the employee benefit concepts at issue.

Terminology

Since this portion of the ADA relates to employee benefits, it involves some concepts with terminology that might not be familiar. Following is a brief explanation of several of these concepts.

* Gated Levels or Gating--This term describes the practice of using a single health plan that provides different levels of coverage, generally through different ratios of coinsurance and deductibles. While "tiers" often refer to who is covered (such as just the employee or the employee and his or her spouse), "gated levels" refers to the extent of coverage (such as whether a covered procedure is reimbursed by insurance at 100 percent or 80 percent of the cost, with the participant paying the remainder). When a wellness program is used to determine the available levels of coverage, this practice is "gating."

* Health Plan--This term describes an employer-sponsored employee benefit plan that provides healthcare. Common medical plans, dental plans, and vision plans are normally health plans. Dependent care assistance programs and policies that pay an insured a set amount upon an event (such as admission to a hospital or a cancer diagnosis) without regard to the medical procedures or costs incurred is generally not a medical plan.

* Health Risk Assessment--This term refers to the collection of data, often through questions concerning medical histories and the drawing of blood in order to assess and address potential medical risks.

* Participant--This term describes an employee who enrolls in a health plan or wellness program. In some employee benefit situations, this term includes individuals who are eligible, but choose not to participate in a program; however, that is not how this term is used here.

* Wellness Program--This term describes a program designed to encourage employees to make healthy lifestyle choices. In this article, the term is abbreviated as "program." A program can be a "health plan" by providing medical care, such as screenings and vaccinations, but does not need to be. For example, a wellness program that rewards employees for exercising is not a health plan, but is a wellness program.

Scope of Regulation

EEOC Prop. 29 C.F.R. 1630.14(d), titled "Other acceptable examinations and inquiries," states: "A covered entity may conduct voluntary medical examinations and activities, including voluntary medical histories, which are part of an employee health program available to employees at the work site." (1) The EEOC's goal with this regulation is to...