Guest Article

(From the November 15, 2010 issue of Deloitte's Washington Bulletin, a periodic update of legal and regulatory developments relating to Employee Benefits.)

EEOC's New GINA Regulations Allow for Wellness Plans

Newly issued regulations by the Equal Employment Opportunity Commission (EEOC) under title II of the Genetic Information Nondiscrimination Act (GINA) are consistent - but require some reconciliation by employers who offer wellness plans - with regulations issued last year by the Departments of Labor, Treasury, and Health and Human Services under title I of GINA.

Background on Title I and Title II

Title II of GINA prohibits the use of genetic information in the employment context. Its purpose is to protect job applicants and current and former employees from being discriminated against based on their genetic information. It restricts employers and other covered entities from requesting, requiring or purchasing genetic information, and strictly limits their disclosure of genetic information. The EEOC is required under GINA to issue the regulations that implement title II.

Previously, on October 7, 2009, the Departments of Labor, Treasury, and Health and Human Services issued regulations under title I of GINA, which applies to group health plans and to issuers in the group and individual markets. In contrast to the EEOC-governed title II, title I prohibits discrimination in group health plan premiums based on genetic information, and also prohibits plans from collecting genetic information (including family medical history) prior to or in connection with enrollment, or for underwriting purposes. The 2009 regulations impose significant restrictions on wellness programs - in particular, on the ability to provide financial or program eligibility rewards for the completion of health risk assessments that include genetic information (e.g., family medical history). Moreover, it prohibits any request for genetic information prior to enrollment - even where no financial or program eligibility reward is given.

The newly issued EEOC regulations under title II are consistent, but not identical with, the title I regulations. An employer will need to confirm its compliance with both when it offers a wellness program.

Title II's General Prohibition against Acquiring Genetic Information

Title II prohibits an employer or other covered entity from requesting, requiring, or purchasing the genetic information of an individual (or a family member of the individual), except as specifically provided in the regulations. A "request" includes conducting an Internet search on an individual in a way that is likely to result in obtaining genetic information, actively listening to third-party conversations, or searching an individual's personal effects for the purpose of obtaining genetic information. It also includes making requests for information about an individual's current health status in a way that is likely to result in obtaining genetic information.

An exception applies where the acquisition of genetic information is inadvertent. However, where the employer makes a request for medical information (e.g., to support an individual's request for accommodation under federal or state law, or for leave under the Family and Medical Act), the acquisition of genetic information will generally not be considered inadvertent unless the employer specifically directs the individual not to provide genetic information. The following language is deemed to suffice:

The EEOC regulations say the notice is to be provided in writing, but can be provided verbally where the employer typically requests the medical information verbally.

Wellness Programs under Title II

The EEOC's title II regulations provide employers and other covered entities that offer health or genetic services - including services under a voluntary wellness program - with a specific exception. Under the exception, the general prohibition against requesting, requiring or purchasing genetic information does not apply if the following four requirements are met.

The wellness plan exception prohibits the employer from offering financial inducements for individuals to provide genetic information - but allows financial inducements for completion of health risk assessments that include questions about family medical history or other genetic information as long as the covered entity makes clear that the inducement will be made available whether or not the participant answers questions regarding genetic information (e.g., the reward is provided to all participants regardless of whether they answer the genetic information questions).

Title I would further require that the request for genetic information not be made prior to enrollment. A title I approved example utilizes a bifurcated health risk assessment in this case. The first assessment requests no genetic information and a financial incentive is provided to all who complete it. The second assessment requests genetic information and is given only after enrollment without any financial incentive for its completion. See § 54.9802-3T(a)(3), Example 5.

In terms of financial incentives to participate in disease management programs, the EEOC regulations again somewhat parallel those under title I. An employer or other covered entity may offer financial inducements to encourage individuals who voluntarily provided genetic information (e.g., family medical history) which indicates they are at increased risk of acquiring a health condition to participate in disease management programs. However, these programs must also be offered to other individuals who have current health conditions or whose lifestyle choices put them at increased risk of developing the condition.

In contrast, the title I regulations generally prohibit a plan from conditioning eligibility to participate in a disease management program on family medical history. However, they do allow the establishment of programs that are based on medical appropriateness - for example, a disease management program (e.g., for diabetes) for individuals who qualify (e.g., who have the disease or are at risk for the disease based on genetic information) and seek the benefits. Title I regulations require that the plan request only the minimum genetic information necessary to make a determination regarding whether the disease management program is medically appropriate for the individual. Under an approved scenario, the plan would send out a notice to all participants that describes the diabetes disease management program and explains the terms for eligibility. Individuals interested in enrolling in the program are advised to contact the plan to demonstrate that they have diabetes or that they are at risk for diabetes. For individuals who do not currently have diabetes, genetic information may be used to demonstrate that the individual is at risk. See § 54.9802-3T(e), Example 4.

Effective Date of New Regulations

The EEOC regulations under title II of GINA are generally consistent with the previously-issued regulations under title I of GINA, but they do present another layer of analysis for employers to consider in making sure their wellness plans comply. The new regulations are effective January 10, 2011.

The information in this Washington Bulletin is general in nature only and not intended to provide advice or guidance for specific situations. If you have any questions or need additional information about articles appearing in this or previous versions of Washington Bulletin, please contact: Robert Davis 202.879.3094, Elizabeth Drigotas 202.879.4985, Mary Jones 202.378.5067, Stephen LaGarde 202.879-5608, Bart Massey 202.220.2104, Tom Pevarnik 202.879.5314, Sandra Rolitsky 202.220.2025, Deborah Walker 202.879.4955. Copyright 2010, Deloitte.