Employment and Labor Insider - Legalese Is Not Spoken Here

Do you want a healthy workforce? Of course! But don't overdo it. A too-aggressive wellness program may make your company sick in the long run.

Employers and their insurance companies love wellness programs. They result in reduced premiums as well as (presumably) fewer big-money claims because they encourage employees to take better care of themselves.

Many employers offer "carrots" to employees to participate in wellness programs. There is no legal problem with "positive" incentives, as long as certain requirements are met.

But some employers wield a "stick," as well. They actually penalize employees who refuse to participate. The City of Chicago has recently announced a wellness program that will require employees to pay $50 a month to opt out. That's a lot of money for most people. Can penalties like this cause problems for employers? The issue isn't settled, but I have some concerns. 

1. The ADA. First, the Americans with Disabilities Act (even the "old" version) does not allow employers to ask for medical information from current employees unless the request is "job-related and consistent with business necessity." This usually means that there has to be a job-related problem that might be related to a medical condition, or perhaps a doctor's note saying that the employee cannot perform his or her duties because of a medical condition. The employer generally cannot ask for medical information without a reason. Even when there is a good reason to ask, the medical inquiry must be confined to the work-related issue.

(For example, if an employee in a heavy-lifting position claims a bad back, the employer cannot require him to get a complete physical.)

The ADA does have an exception for medical information collected pursuant to a voluntary wellness program. But if the employer is hitting individual employees for as much as $50 a month if they decline to participate, how "voluntary" is that program?

At least two courts have found that "negative reinforcement" such as Chicago's falls under a different exception in the ADA: the section that deals with "bona fide benefit plan[s] that are based on underwriting risks, classifying risks, or administering such risks that are based on or are not inconsistent with state law" and that are not a "subterfuge" to evade ADA compliance.

In one case, decided in 1998, the court upheld termination of an employee for insubordination who refused to provide medical information. In the other, decided this year, the court upheld a biweekly $20 deduction from pay for employees who chose not to participate in the wellness program. In other words, both of these courts found that the "voluntary wellness" exception wasn't even an issue because wellness programs connected with health insurance plans fell within a completely different exception to the ADA's prohibitions on medical inquiries.

With all due respect to these courts, I have a question: If every wellness program associated with a health insurance plan is automatically excluded from the ADA's general prohibition on medical inquiries, then why does the ADA even have the "voluntary wellness" provision? Aren't these courts effectively reading that provision right out of the ADA?

UPDATE: What do I know? On August 20, 2012, the U.S. Court of Appeals for the Eleventh Circuit affirmed the district court decision saying that the $20-per-paycheck deduction was lawful.

Another ADA concern I have is the fuzzy line (getting fuzzier every day) between lifestyle choices and actual or "regarded as" disabilities within the meaning of the ADA. If, say, someone who really likes food develops a weight problem, then she may become a "disabled" individual within the meaning of the ADA, and especially as amended by the ADA Amendments Act. It was reported this week that our friends at the U.S. Equal Employment Opportunity Commission filed suit against an employer for terminating a morbidly obese employee because of his obesity. The EEOC is contending that the employee's obesity is a "disability" within the meaning of the ADA Amendments Act, and that the company refused to consider reasonable accommodations, such as transfer to a job with lighter physical demands. (The company has thus far declined to comment, so all we have right now is the EEOC's side of the story.)

Even alcoholism is a "disability" entitled to an intermediate level of ADA protection.

So there are some reasons I worry about employers who are too "enthusiastic" about promoting wellness. In any event, the ADA isn't the only law that employers have to worry about.

2. "Lifestyle" or "lawful products" statutes. A number of states have so-called "lifestyle protection" or "lawful products" statutes, which essentially prohibit discrimination against applicants and employees based on lawful activities engaged in, or use of lawful products, during non-working hours. Even the narrower "lawful products" laws protect smokers as well as, presumably, drinkers, gourmands, skydivers (parachutes are "products," aren't they?), bungee-jumpers (bungee cords are "products," aren't they?), and other individuals who engage in risky but legal behavior. Yes, these laws usually contain exceptions, but employers need to be aware of their existence and make sure that what they're doing fits into one of the exceptions.

There has been a lot of publicity lately about certain employers who have refused to hire anyone who smokes. One should assume that these employers are in states that do not have "lawful products" statutes. Don't think that you can do it just because they did. If your friends all jumped in the lake, would you do it, too?

3. The GINA. Title II of the Genetic Information Nondiscrimination Act prohibits employers from "using, acquiring, requiring, or disclosing genetic information" with certain strictly defined exceptions. It also prohibits discrimination against individuals based on their genetic information. The statute defines "genetic information" so broadly that any family medical history information about the individual's first four degrees of kinship -- plus spouses and adopted children -- is included.

The GINA has some exceptions for genetic information disclosed in connection with voluntary wellness programs, but the GINA provisions focus on the right of the employee to decline to answer questions that seek "genetic information." (In other words, the GINA regs say it is all right for a wellness program to request "genetic information" as long as individuals aren't excluded from the program if they decline to answer questions asking for "genetic information," the "genetic information" requests are segregated from other requests, clear disclaimers are provided, and other requirements are met.) If the wellness program is not truly "voluntary," then arguably the GINA's permissive provisions would not apply.

The moral of the story: don't be overzealous with your wellness! Reasonable minds differ on this subject, but in light of the ADA(AA), state laws, and the GINA, I recommend that employers keep the focus "positive" and avoid punishing those who continue to burn the candle at both ends.  

Is it legal to bribe your employees to be healthy? Wouldn't that violate the Americans with Disabilities Act, or the Genetic Information Nondiscrimination Act, or something? 

In other words, is it legal any more for an employer to offer incentives  -- like, money? -- to employees to participate in "voluntary" wellness programs?

The Bureau of National Affairs has obtained and released an opinion letter from Peggy Mastroianni, legal counsel for the Equal Employment Opportunity Commission, addressing these questions.

Voluntary Wellness Programs and the ADA

As most of our readers know, the Americans with Disabilities Act generally prohibits employers from asking for medical information from current employees. One exception to the rule is when the inquiry is "job-related and consistent with business necessity," which is not the subject of today's post.

Another exception applies to inquiries that are part of a "voluntary wellness program," provided that the information obtained is kept confidential and not used in a manner that violates the ADA.

What many readers may not know is this: The EEOC has never taken a formal position on whether incentives to participate in a wellness program mean that the program is no longer "voluntary." If the wellness program is not voluntary, then any medical inquiries without "cause" would violate the ADA.

Many, many, many wellness programs today offer cash or other incentives to employees who participate. Although the EEOC has not taken a position, it has indicated its approval of incentives (with some provisos) in its regulations interpreting the Genetic Information Nondiscrimination Act. Based on this, employers are probably safe in continuing to offer wellness incentives, and we can hope that if the EEOC decides to take a contrary position on the ADA implications, the agency will enforce it prospectively and not retroactively.

What the GINA Regulations Say About Voluntary Wellness Programs

The EEOC's regulations on the employment-related part of the GINA (aka "Title II") deal extensively with wellness programs. Mastroianni's opinion letter is essentially consistent with the GINA regs. It is ok to ask for "genetic information" in connection with an "incentive" voluntary wellness program IF

*The employee first provides a knowing and voluntary written authorization allowing the wellness provider to request this information.

*The paperwork that the employee has to fill out clearly designates questions that may elicit "genetic information" and clearly indicates that the employee does not have to answer those questions and will not forfeit any part of the incentive by refusing to answer.

*If the employee chooses to answer and provides "bad" information (for example, a family history in which every male has died of a heart attack before the age of 50, and the employee is a 49-year-old male), the employer cannot use that information as the basis for any adverse action against the employee. (In fact, the employer should never receive this information at all, as discussed below.) On the other hand, the wellness provider may use the information to recommend a disease management program for the employee. For example, it would be fine for the wellness program to recommend that the employee consult with a cardiologist, take steps to lower his "bad" cholesterol, and be assessed for bypass surgery, angioplasty, or catheterization.

*Even the disease management program itself can offer incentives to participants without violating the GINA. In other words, the program can offer an "incentive within an incentive." But the incentive must be equally available to those who are at risk "through no fault of their own" (for example, because of bad family history), and to those who are at risk because of unhealthy lifestyles (for example, because they live on a diet of french fries smothered with gravy and nacho cheese, and smoke four packs a day).

*The wellness provider may not disclose any individually identifiable health information to the employer, although it may disclose aggregated information.

*****Keep in mind that the GINA definition of "genetic information" includes family history information.*****

As the EEOC would say, We hope this has been helpful to you.

A few weeks ago, I posted my thoughts about how the expanded definition of "disability" under the Americans with Disabilities Act Amendments Act will affect administration of the Family and Medical Leave Act. I promised to follow up with a post about the impact of the ADAAA on the Genetic Information Non-Discrimination Act "unless more pressing news intervene[d]."

As expected, I got distracted by Friday the 13th, and "common misconceptions." So, I'm a little behind schedule. 

As with my ADAAA/FMLA post, this is a work in progress, and I'd love to get feedback as to whether my ideas are right on target, so-so, or completely misguided.

The GINA, to grossly oversimplify, prohibits the disclosure, use, acquisition or attempted acquisition of "genetic information" as defined in the law, as well as discrimination because of "genetic information" or retaliation, etc.

The regulatory definition of “genetic information” includes not only the individual’s genetic testing information but also that of his or her family members as well as the “manifestation of a disease” in family members (e.g., “Has anyone in your family ever had cancer?”).

It also includes information about the individual’s or family member’s request for genetic services, genetic information of a fetus carried by the individual or family member, and genetic information of an embryo “legally held by the individual or family member using an assisted reproductive technology” (e.g., in vitro fertilization).

Thankfully, the statute and regulation specifically exclude sex and age from the definition of “genetic information.” The regulation also excludes race and ethnic characteristics if that information is “not derived from a genetic test.”

For the most part, it has been believed that the ADA and the GINA do not overlap, which is the reason that we supposedly needed the GINA. The ADA was intended to apply to existing disabling medical conditions. (But not really, because the ADA also protects individuals with "histories" of disabilities and "perceived" disabilities. But anyway.) The GINA, on the other hand, has more of an emphasis on information about an individual's predisposition to certain medical conditions.

For example . . . sometimes a "preventive" mastectomy is recommended for women who have a significant history of breast cancer in their families. The woman undergoing this surgery probably does not have a "disability," even within the liberal meaning of the ADAAA, because she does not actually have breast cancer or a history of breast cancer, and may not be regarded as having an "impairment" that is not "transitory and minor." However, if her employer terminated her, she might very well have a GINA discrimination claim. The theory would be that the employer terminated her because of her family history of breast cancer, and because family history is "genetic information," the employer violated the GINA. 

(Caution: The standard for a finding of "regarded as" disabled under the ADAAA -- requiring that the employer only perceive an impairment that is not transitory and minor -- may mean that the mastectomy surgery itself could give rise to an ADAAA "regarded as" claim.)

The ADA also protects individuals who have "associations" with individuals with disabilities. I see the possibility for a lot of overlap between the ADA and the GINA on "association" claims.

For instance . . . Mary is pregnant with a child who has been prenatally diagnosed with Down Syndrome, a genetic condition. First, to avoid any liability for sex/pregnancy discrimination, the employer may not take any action against her based on whether she decides to go through with the pregnancy. But, let's say the employer strongly "encourages" Mary to have an abortion and fires her when she refuses. Clearly, Mary would have a valid pregnancy discrimination claim under Title VII. Would she have an ADA claim? She doesn't have a disability, but if I were a plaintiff's lawyer, I would include an ADA "association" claim. In other words, I'd allege that Mary's employment was terminated because of her association with an individual with a disability (i.e., her baby). Would she have a GINA claim, as well? I would say so -- this seems to be exactly the kind of situation that the GINA was enacted to address. The baby's condition would be "genetic information" about Mary.

And how about this classic ADA-association scenario? Joe's son has a congenital heart defect, and the company refuses to hire Joe because it is afraid that Joe's son will make the company's health insurance premiums skyrocket. Now, Joe would have an ADA "association" claim and a GINA discrimination claim, too.

On the other hand, if Joe's son is disabled in an automobile accident, and the company refuses to hire Joe because it's afraid Joe's son will make the company's health insurance premiums skyrocket, Joe would have an ADA "association" claim but (if I'm interpreting the GINA correctly) not a GINA claim. In this example, the son does not have a congenital health condition that could be considered "genetic."

So, these are the key areas where I see ADAAA/GINA overlap:

*Associational claims under the ADA and GINA discrimination based on family history.

*Discrimination claims based on an individual's "history" of a disability or actual disability where the condition is a congenital one.

*Discrimination claims based on an individual's being "regarded as" having a disability based on preventive surgery, genetic testing, association with a family member with a congenital disability.

Employment-related medical examinations, the ADA, and the GINA. The GINA will also overlap with some of the "old ADA" provisions, particularly concerning medical examinations. As most readers know, the ADA allows post-offer medical examinations if the examinations are required of all offerees in the job category. Employers are also allowed to send current employees for medical examinations as long as the examinations are "job-related and consistent with business necessity."

The ADAAA has not changed these rules. But the GINA has. Now, the employer must provide the GINA "safe harbor" language to the health care provider when sending an employee for any medical examination, even when the medical examination is legal. The "safe harbor" language is designed to prevent the health care provider from asking for family history. Even if the health care provider slips up and asks for it, the employer will be protected from liability if it provided the safe harbor language to the health care provider.

Voluntary wellness programs. The ADA also allows employers to get medical information from employees as part of a voluntary wellness program. The GINA allows questions related to the genetic background of employees in connection with voluntary wellness programs if the employer first gets a written authorization from the employee that includes certain specific content.

Confidentiality of medical information. Finally, the ADA is responsible for the well-known rule that requires employers to keep employee medical information confidential and separate from personnel files. Some of this medical information may also be covered by the GINA and, one would think, has already been purged from personnel files. But if it hasn't, the EEOC has said that it is not necessary for the employer to go back through old personnel files and remove GINA-protected information . . . as long as the information was put in the files before the effective date of the law (November 21, 2009). Of course, even the old genetic information cannot be used or disclosed, and genetic information cannot be put in a personnel file after November 21, 2009.

Next up: the interaction of the ADAAA with the HIPAA privacy rule. Does the fun ever start?