Financial Incentives in Wellness Programs May Violate GINA

August 18, 2011  |  From HRCalifornia Extra

In June 2011, the Equal Employment Opportunity Commission (EEOC) issued an informal opinion letter on several issues related to workplace wellness programs. One issue the EEOC addressed was whether an employer-provided wellness program could offer financial incentives to employees to provide genetic information about themselves.

The EEOC’s opinion letter stated that employers may not specifically tie financial incentives to a requirement that employees provide genetic information to participate in the wellness program. According to the EEOC, offering this type of financial incentive violates federal GINA regulations.

The Genetic Information Nondiscrimination Act (GINA) prohibits the use of genetic information, which includes an employee’s family medical history, in making employment decisions and limits an employer’s ability to request, acquire or disclose genetic information. Title II of GINA applies to employers with 15 or more employees.

One exception allows employers to acquire genetic information about an employee or his or her family members when the employer offers a health or genetic service, including a wellness program, on a voluntary basis. The employee must give written consent that he/she is voluntarily participating in the wellness program. In addition, genetic information provided to the employer can only be in aggregate form.

Popular Benefit Program

Many employers make wellness programs available to employees as part of their company’s overall health care benefits package. The programs often target health issues such as smoking or obesity. Employers like the programs because healthier employees translate to lower health care costs for the company, and employees like the programs because they can save money on their health care premiums.

Employers have expressed on-going concern on GINA’s impact on employer-provided wellness programs.

Financial Inducements

In June, the EEOC’s Office of Legal Counsel provided an informal opinion letter to reiterate that “covered entities may not offer financial inducements for individuals to provide genetic information as part of a wellness program.” In other words, employers may not specifically tie financial incentives to a requirement that employee provide genetic information.

Health Risk Assessment and Wellness Programs

The final GINA implementation rule also provides that employers may offer a financial inducement for completing a health risk assessment that includes questions about genetic information, so long as the employer identifies the questions that are about genetic information and makes clear that the employee is not required to answer the questions about genetic information in order to receive the financial inducement.

The final GINA regulations offer an example of a health risk assessment that does not violate GINA and an assessment that does:

  • Example A: A covered entity offers $150 to employees who complete a health risk assessment with 100 questions, the last 20 of them concerning family medical history and other genetic information. The instructions for completing the health risk assessment make clear that the inducement will be provided to all employees who respond to the first 80 questions, whether or not the remaining 20 questions concerning family medical history and other genetic information are answered. This health risk assessment does not violate Title II of GINA.
  • Example B: Same facts as the previous example, except that the instructions do not indicate which questions request genetic information; nor does the assessment otherwise make clear which questions must be answered in order to obtain the inducement. This health risk assessment violates Title II of GINA.

Participation in a Targeted Disease Management Program

The EEOC letter reiterates that employers may offer financial incentives to encourage and guide employees who voluntarily provide genetic information (e.g. family medical history) to participate in an appropriate disease management program, only if the inducement is available to individuals whose health conditions and lifestyle risk factors make them suitable candidates, not just those who provide genetic information.

The final rule gives an example:

  • Employees who voluntarily disclose a family medical history of diabetes, heart disease, or high blood pressure on a health risk assessment that meets the requirements set forth above and employees who have a current diagnosis of one or more of these conditions are offered $150 to participate in a wellness program designed to encourage weight loss and a healthy lifestyle. This does not violate Title II of GINA. However, the opinion letter does not directly resolve whether there is a conflict between Title II of GINA, which applies to employers, and Title I of GINA, which applies to group health plans.

Best Practices

  • The EEOC letter provides some guidance to employers, but it does not have the force of law and is not typically given the same level of deference as a federal regulation. Moreover, despite the letter, there are still some seeming inconsistencies between various federal statutes and rules governing wellness programs.
  • There is also an unresolved question as to what extent the Americans with Disabilities Act permits an employer to offer financial incentives for employees to participate in wellness programs that include disability-related inquires (such as questions about current health status) or medical examinations (such as blood pressure and cholesterol screening).
  • Given the existing uncertainties, employers should consult counsel knowledgeable with all applicable legal requirements prior to implementing wellness plans.

For more information, see Medical Condition or Genetic Characteristics.​​​​​​​​​​​​​​