Clearing the Confusion on Tying Rewards to Spousal Wellness Program Participation

Posted by Barbara J. Zabawa | Oct 24, 2016 | 0 Comments

Since the EEOC issued the final rule under the Genetic Information and Nondiscrimination Act (GINA), there have been a number of questions relating to what is permissible with respect to rewarding employees for spousal participation in wellness programs.  First, to recap, GINA prohibits employer wellness programs for imposing a penalty or disadvantage on an individual because a spouse's disease or disorder prevents or inhibits the spouse from participating in the wellness program or from achieving a certain health outcome.  29 CFR s. 1635.8(b)(2)(i)(A). 

Second, GINA prohibits employer wellness programs from retaliating against an employee because of a spouse's refusal to provide information about his or her manifestation of disease or disorder to the wellness program.  29 CFR s. 1635.8(b)(2)(v). 

So, with those rules in mind, how can an employer wellness program tie an employee's reward to his or her spouse's participation, if at all?  Let's look at a few examples:

  1. Employee can earn reward (the value of which is no more than 30% of the total cost of self-only coverage) if both the employee and spouse meet a certain cholesterol level. If either employee or spouse fails to meet the cholesterol target, the employee does not earn the reward.  Permissible?

Answer:  No, this is not permissible.  This program is tying the employee's reward to the spouse achieving a certain health outcome.  As noted above, GINA prohibits employer wellness programs from imposing a penalty or disadvantage on an employee because the employee's spouse has a disease or disorder that prevents him or her from achieving a certain health outcome. The spouse in this case may have high cholesterol, arguably a “disease or disorder” that prevents the spouse from meeting a certain health outcome.  Denying the employee the reward because of the spouse's disease or disorder is not permissible under GINA.

  1. Employee earns a reward equal to 15% of the total cost of employee-only coverage and another 15% of that cost if both the employee and spouse do the following:
  1. Complete an HRA
  2. Attend a biometric screen (results are irrelevant for purposes of reward)
  3. Attend four seminars
  4. Provide evidence of a physical exam by their primary care physician

If either the spouse or employee fail to complete all four activities (which all four are presumed to qualify as “participatory” programs under the HIPAA/ACA rules), the employee's reward is $0.  That is, both employee and spouse must complete all four activities to earn the full 30% reward.  Is this permissible?

Answer:  Yes, this is permissible as long as the employee does not feel like they are being retaliated against for a spouse's refusal to participate in the biometric screen, for example.  The activities listed above do not ask the spouse to achieve a certain health outcome.  Thus, the reward is not tied to the spouse achieving a certain health outcome.

  1. Same facts as #2, above, except the reward is equal to 30% for the employee's participation and 30% for the spouse's participation. Would this be permissible?

Answer:  No, this is not permissible because the reward equals 60% of the total cost of employee-only coverage, which exceeds the 30% maximum award available under GINA.  The employee only gets the reward if both the employee and spouse complete all four activities.  If either the spouse or employee fail to complete all four, the employee's reward is $0, which is the same as a 60% penalty if the spouse refused to provide their biometric information (which violates GINA) or a 60% penalty if the employee refused to provide their health information (which would violate the ADA final rule).

  1. Employee can earn a reward of up to 60% of the total cost of employee-only coverage if both the employee and spouse join a fitness club, attend at least three health education classes (from a list of over a dozen options), and volunteer in the community. Is this permissible?

Answer:  Yes, this is permissible because all of these activities are “participatory” under the HIPAA/ACA rules, which does not place a limit on the reward amount.  Also, none of the activities involve the provision of health information by the employee or the spouse, so neither the ADA nor GINA rules (and their 30% incentive limits) would apply.

Many of the responses above were confirmed by EEOC Attorney Chris Kuczynski at the HERO Form 2016.  The take away is that employer wellness programs should not tie an employee's reward to a spouse's health outcome.  Also, the program should be careful not to structure an employee's reward so that the employee feels retaliated against if his or her spouse refuses to provide his or her health information.  If your wellness program needs compliance assistance, please contact the Center for Health and Wellness Law, LLC

About the Author

Barbara J. Zabawa

Attorney Barbara J. Zabawa started the Center for Health & Wellness Law, LLC after she recognized a need for legal services that shared a mission with providers to improve patient outcomes and population health, encourage wellness, protect patient interests in choice of provider and treatment options, provide holistic care, and expand information access. Attorney Zabawa has 20+ years of experience in the health care field, first receiving her Master's in Public Health from the University of Michigan before attending law school at UW Madison, where she graduated with honors in 2001. From 2003-2005, Ms. Zabawa clerked for the Honorable Barbara B. Crabb in the United States District Court for the Western District of Wisconsin and worked on a variety of matters, including employment, patent infringement, civil rights, and contract matters. She also served as a Skadden Fellow representing health care consumers on both the national and local level by helping consumers navigate private insurance coverage issues and advocating for their interests as a Funded Consumer Advocate at the National Association of Insurance Commissioners (NAIC). Attorney Zabawa has worked for a large health insurance company providing advice on the Affordable Care Act as well as HIPAA Privacy and Security compliance. In addition, she was in private practice at a large regional law firm for seven years, where she was a shareholder, led her firm's health care team and served as its HIPAA Privacy Officer. While in private practice, she handled a variety of health law matters, such as compliance with fraud and abuse laws, professional scope of practice matters, state licensing issues, HIPAA privacy and security compliance, Medicare and Medicaid reimbursement and conditions of participation compliance, Accountable Care Organization and other joint venture agreements, employment agreements, as well as business litigation. Attorney Zabawa is the author of the forthcoming book "Rule the Rules of Workplace Wellness Programs." She is a frequent speaker and writer both nationally and regionally on workplace wellness program compliance, the Affordable Care Act, fraud and abuse issues and HIPAA compliance. She has published several law review articles in the practice of health law and has been interviewed by TV, radio and print media regarding wellness, health reform, and HIPAA. She is a Board Member for Rogers Memorial Hospital Foundation, Board President for the Wisconsin Alliance for Women's Health, Board Member for Health Promotion Advocates, and currently serves on the Oversight Advisory Council for the Wisconsin Partnership Program and the State Bar Health Law Section Board. Education JD - University of Wisconsin Law School, cum laudeMPH - University of Michigan School of Public HealthBA - Lawrence University Admitted to Practice: • New York• Wisconsin• Federal District Court of the Western District of Wisconsin• Federal District Court of the Eastern District of Wisconsin• Court of Appeals for the Seventh Circuit• United States Supreme Court


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