Fundamentals
The question of whether an employer can link health insurance premiums to wellness program participation touches upon a complex area of federal law. At its heart is the Genetic Information Nondiscrimination Act of 2008, known as GINA. This law establishes a foundational protection for individuals against discrimination based on their genetic information in both health insurance and employment contexts. Understanding this law is the first step in comprehending the boundaries set for employer wellness initiatives.
GINA’s primary function is to prevent health insurers and employers from using a person’s genetic data to make adverse decisions. This genetic data is defined quite broadly. It includes not just the results of genetic tests, but also the genetic tests of family members and any manifestation of a disease or disorder within a family, which is commonly known as family medical history. This wide definition means that even a simple questionnaire about your family’s health can fall under GINA’s protections.
A central tenet of GINA is that your genetic blueprint should not be used against you in the workplace or by your health plan.
What Makes a Wellness Program Voluntary
The law contains an important exception for voluntary wellness programs. An employer is permitted to request genetic information as part of a health or genetic service, including a wellness program, provided that participation is truly voluntary. The interpretation of “voluntary” has been a significant point of legal debate and regulatory changes. For participation to be considered voluntary, an employee must not be required to provide genetic information and must not be penalized for refusing to do so.
An employer can offer financial inducements for completing a health risk assessment that includes questions about family medical history. To remain compliant, the employer must make it clear that the incentive is available whether or not the participant answers the questions related to genetic information. This ensures that the employee’s choice is uncoerced and that the provision of sensitive genetic data is not a condition for receiving a reward.
The Role of the Equal Employment Opportunity Commission
The U.S. Equal Employment Opportunity Commission (EEOC) is the agency responsible for enforcing Title II of GINA, which pertains to employment. The EEOC has issued rules and guidance to clarify how GINA applies to employer-sponsored wellness programs. These regulations aim to balance the promotion of employee health with the protection of employees from discriminatory practices.
The agency has specified that any health or genetic services offered by an employer must be reasonably designed to promote health or prevent disease. This standard ensures that wellness programs are not a subterfuge for discrimination.
Intermediate
The legal framework governing wellness program incentives is shaped by the interplay of GINA and the Americans with Disabilities Act (ADA). While GINA focuses on genetic information, the ADA governs medical examinations and disability-related inquiries.
Many wellness programs incorporate elements that fall under both statutes, such as a health risk assessment that asks for family medical history (GINA) and also measures blood pressure and cholesterol (ADA). The EEOC has attempted to harmonize the requirements of these laws, but this has led to a shifting regulatory landscape.
How Have Incentive Limits Changed over Time?
In 2016, the EEOC issued final rules that permitted employers to offer incentives of up to 30 percent of the total cost of self-only health insurance coverage for participation in wellness programs. This 30 percent threshold was intended to align with the incentive limits allowed under the Health Insurance Portability and Accountability Act (HIPAA). The rules allowed this incentive level even for programs that asked for genetic information or included medical exams, provided they were part of a voluntary employee health program.
This position was challenged in court by the AARP, which argued that an incentive of that magnitude was coercive and rendered the program involuntary. The AARP contended that employees facing a penalty of several thousand dollars would feel compelled to disclose their private medical and genetic information, thus violating the spirit of GINA and the ADA. The court found this argument persuasive.
The legal definition of a “voluntary” wellness program has been contested, with courts scrutinizing the level of financial incentive offered.
The AARP V EEOC Decision and Its Aftermath
In August 2017, the U.S. District Court for the District of Columbia ruled in AARP v. EEOC that the EEOC had failed to provide a reasoned explanation for its 30 percent incentive limit. The court found the rule to be arbitrary and capricious because the EEOC did not adequately justify how such a high incentive maintained the voluntary nature of the program.
As a result, the court vacated the incentive limit portion of the EEOC’s wellness rules, with the order taking full effect on January 1, 2019.
This court decision removed the prior “safe harbor” that the 30 percent incentive provided and created significant uncertainty for employers. In response, the EEOC has since issued proposed rules that take a much more restrictive stance. These proposed regulations suggest that for any wellness program that requests genetic information (including family medical history), any financial incentive must be “de minimis.”
What Does De Minimis Mean in Practice?
The EEOC has indicated that a “de minimis” incentive is one of very small value. The proposed rules offer examples such as a water bottle or a gift card of modest value. This is a substantial departure from the previous 30 percent allowance.
The rationale is that a de minimis incentive is unlikely to coerce an employee into providing sensitive information they would otherwise prefer to keep private. This standard would apply to both participatory and health-contingent programs if they collect genetic information.
| Time Period | Incentive Rule Under GINA | Legal Status |
|---|---|---|
| Pre-2016 | General prohibition on incentives for genetic information. | Established Regulation |
| 2016 ∞ 2018 | Up to 30% of self-only coverage cost allowed. | Final Rule (Later Vacated) |
| Post-2019 | Uncertainty; proposed rules suggest a de minimis standard. | Vacated Rule / Proposed Rulemaking |
Academic
A sophisticated analysis of wellness program regulations requires an examination of the distinct statutory schemes and the tensions between them. GINA Title I applies to health plans and is regulated by the Departments of Labor, Health and Human Services, and the Treasury. GINA Title II applies to employers and is enforced by the EEOC.
While HIPAA, as amended by the Affordable Care Act (ACA), permits wellness programs to offer significant rewards for meeting health-contingent outcomes, GINA and the ADA impose separate non-discrimination requirements that act as a ceiling on those incentives when certain information is requested.
Participatory versus Health Contingent Programs
The type of wellness program is a critical determinant of the applicable legal constraints. The distinction between these program types is essential for a compliant design.
- Participatory Wellness Programs ∞ These programs either have no condition for participation or do not require an individual to meet a standard related to a health factor to obtain a reward. An example is a program that reimburses employees for the cost of a fitness center membership.
- Health-Contingent Wellness Programs ∞ These programs require individuals to satisfy a standard related to a health factor to obtain a reward. These are further divided into activity-only programs (e.g. walking a certain amount each day) and outcome-based programs (e.g. achieving a specific cholesterol level).
HIPAA regulations allow for incentives up to 30 percent of the cost of health coverage (or 50 percent for tobacco-related programs) for health-contingent wellness programs. The legal conflict arises because to verify outcomes, these programs often need to make medical inquiries or conduct exams, which implicates the ADA and GINA. The AARP v. EEOC decision underscored that compliance with HIPAA does not automatically ensure compliance with the EEOC-enforced statutes.
The Absence of a GINA Safe Harbor
A key legal distinction is the presence of a “safe harbor” provision within the ADA that is absent in GINA. The ADA contains a safe harbor that permits insurers and plan sponsors to use information about risks for underwriting and classifying risks associated with a bona fide benefit plan.
The EEOC’s 2021 proposed rules suggest that health-contingent wellness programs that are part of a bona fide benefit plan might be able to offer incentives up to the 30 percent HIPAA limit without violating the ADA, provided they fall within this safe harbor.
GINA, however, has no such safe harbor provision. This statutory omission means there is no exception that would permit a larger financial incentive in exchange for genetic information, even if the wellness program is part of a bona fide health plan.
Consequently, any request for an employee’s family medical history or other genetic information remains subject to the strictest interpretation of “voluntary,” which under the proposed EEOC framework, equates to a de minimis incentive. This creates a complex compliance challenge where the ADA and GINA components of a single wellness program could be subject to different incentive limits.
The statutory differences between the ADA’s safe harbor and GINA’s stricter prohibitions create a complex compliance environment for integrated wellness programs.
| Statute | Relevant Information Type | Incentive Limit (Current Proposed Framework) | Statutory Safe Harbor for Plans? |
|---|---|---|---|
| HIPAA/ACA | General Health Factors | Up to 30% (50% for tobacco) for health-contingent programs. | Not Applicable |
| ADA | Disability-Related Inquiries / Medical Exams | De minimis, unless the program qualifies for the bona fide benefit plan safe harbor. | Yes |
| GINA | Genetic Information (e.g. Family Medical History) | De minimis only. | No |
What Is the Current State of Enforcement and Employer Risk?
Following the vacatur of the 2016 rules, the legal landscape is in a state of flux. The EEOC has not finalized its 2021 proposed regulations, leaving employers without definitive guidance. This ambiguity creates a risk for employers who choose to offer more than a de minimis incentive for wellness programs that collect information protected by the ADA or GINA.
The most conservative approach for employers is to structure wellness programs to comply with the most restrictive standard. This means offering only de minimis incentives for any program that involves a medical examination or asks for any genetic information, including family medical history. Until final rules are issued and any subsequent legal challenges are resolved, this remains the lowest-risk path for employers navigating this intricate legal area.
References
- U.S. Equal Employment Opportunity Commission. (2016). Final Rule on Employer-Sponsored Wellness Programs and Title II of the Genetic Information Nondiscrimination Act. Federal Register, 81(103), 31143-31156.
- U.S. Equal Employment Opportunity Commission. (2021). Notice of Proposed Rulemaking on Wellness Programs Under the Americans with Disabilities Act and the Genetic Information Nondiscrimination Act.
- AARP v. U.S. Equal Employment Opportunity Commission, 267 F. Supp. 3d 14 (D.D.C. 2017).
- Matthews, Kristin R. (2018). THE GENETIC INFORMATION NONDISCRIMINATION ACT AT AGE 10 ∞ GINA’S CONTROVERSIAL ASSERTION THAT DATA TRANSPARENCY PROTECTS PRIVACY AND CIVIL RIGHTS. Journal of Law and the Biosciences, 5(3), 639 ∞ 647.
- Shabo, Shira. (2010). The Genetic Information Nondiscrimination Act ∞ A new law for a new age of medicine. The Virtual Mentor, 12(1), 51-56.
Reflection
A Framework for Personal and Organizational Health
The intricate legal standards governing wellness programs reveal a deeper consideration of personal autonomy and data privacy. As you consider your own health journey, these regulations prompt a reflection on the value of your personal health information.
The laws are designed to create a space where choices about health can be made freely, without financial pressure clouding the decision to share deeply personal data. For any organization, the goal is to build a culture of well-being that is founded on trust and respect for these boundaries.
The most effective wellness initiatives are those that genuinely support employee health because they are built on a platform of voluntary and enthusiastic participation, a principle that the law seeks to uphold.
