EEOC Proposes to Regulate Employer Wellness Plans Under GINA and ADA to Be More Consistent with HIPAA and ACA.

Last month, the EEOC proposed to amend its regulations under Title II the Genetic Information Non-discrimination Act (GINA) governing employer wellness programs that are part of group health plans (and are already subject to similar limitations under HIPAA and the ACA).  It also signaled that it might issue regulations governing the electronic security of employer records containing genetic information and wellness programs that seek the same information but are not part of a group health plan (which is already subject to HIPAA).   Unlike the current GINA regulation at 29 C.F.R. §1635.8(b)(2)(ii), the proposed regulations would permit an employer to provide financial and non-financial “inducements” (including penalties) in exchange for information gathered during a Health Risk Assessment (HRA) about the “current and past health status” of the employee’s spouse, if the spouse voluntarily consents, provides written authorization, and is covered by the health plan and if the program would have a reasonable likelihood of improving health or preventing disease.  This information would include, for instance, blood pressure, cholesterol, glucose levels, etc.  The proposed regulation does not similarly cover information about the employee’s children or the results of any genetic tests or other genetic information about the spouse. These regulations are similar to last April’s proposed regulations to govern employee wellness plans under the ADA, which also permit up financial incentives up to 30% of the cost of the health coverage.  In addition, the proposed regulations prohibit employers from conditioning the incentive on waiving the confidentiality of the genetic information (or agreeing to its sale).  

The EEOC’s current GINA regulations only permit an employer to seek genetic information (i.e., medical histories and information about an employee’s spouse, parents or children) in connection with a wellness program if, among other things, a financial incentive is not conditioned on the provision of the information.  The employer’s program may include a HRA or questionnaire seeking such information, but only if it is made clear that the financial incentive “will be made available whether or not the participant answers questions regarding genetic information.”  This existing regulation will still govern questions about the employee’s children, but a limited exemption is being created by the proposal to permit inducements for an employee’s spouse to participate in the wellness program and provide information about his or her current or past health status. 

As mentioned and like the proposed ADA regulations and existing HIPAA/ACA regulations, the program seeking this information must have a reasonable chance of improving health or preventing disease.  An employer can run afoul of this requirement when it seeks genetic information but then fails to provide follow-up information or advice, makes it overly burdensome (in time, intrusiveness or expense) for the participants to earn the reward (or avoid the penalty), or merely shifts costs from the employer to the employees based on their health. 

A HRA may include a questionnaire or medical examination, or both.  It must still comply with existing GINA regulations regarding consent, authorization, and confidentiality, etc.  

As mentioned, the financial incentive is limited to a similar 30% amount earlier discussed in the proposed ADA regulations (and apply under HIPAA and ACA for only health contingent programs).  However, while the ADA limitation was for employee-only health costs, the GINA provision can apply to the cost of family or employee +1 health plans, less the amount of incentive for the employee: 

The maximum amount of the inducement for an employee's spouse to provide information about current or past health status may not exceed 30 percent of the total cost of coverage for the plan in which the employee is enrolled less 30 percent of the total cost of self-only coverage.  For example, if an employer offers health insurance coverage at a total cost of $14,000 for employees and their dependents and $6,000 for self-only coverage, the maximum inducement the employer can offer for the employee and the employee's spouse to provide information about their current or past health status is 30 percent of $14,000, or $4,200. The maximum amount of the $4,200 inducement that could be offered for the employee's spouse to provide current or past health status information is $4,200 minus $1,800 (30 percent of the cost of self-only coverage), or $2,400.

 . . .The maximum amount of the inducement the employer may offer to the employee for participation is 30 percent of the cost of self-only coverage. For example, if an employer offers health insurance coverage at a total cost of $14,000 for employees and their dependents and $6,000 for self-only coverage, the maximum inducement that may be offered for the employee to respond to disability-related inquiries or take medical examinations is $1,800.

The EEOC explains that “the term “inducements” includes both financial and in-kind inducements, such as time-off awards, prizes, or other items of value, in the form of either rewards or penalties.”  Employers remain free to structure their incentives in a variety of ways, only some of which are subject to GINA:

However, an employer would be free to offer all or part of the $2,400 inducement in other ways as well, such as for the employee, the spouse, and/or another of the employee's dependents to undertake activities that would qualify as participatory or health-contingent programs but do not include requests for genetic information, disability-related inquiries, or medical examinations. Thus, in the example above, an employer could offer $1,800 for the employee to answer disability-related questions and/or to take medical examinations as part of a health risk assessment, could offer the same amount for the employee's spouse to answer the same questions and to take the same medical examinations, and could offer the remaining $600 for the employee, the spouse, or both to undertake an activity-based health-contingent program, such as a program that requires participants to walk a certain amount each week. Additionally, a wellness program may offer inducements in accordance with HIPAA and the Affordable Care Act without regard to the limits on apportionment set forth in this proposed rule if neither the employee nor the employee's spouse are required to provide current or past health status information, so long as the wellness program otherwise complies with the requirements of the ADA and GINA.

Title I of the ADA prohibits medical examinations and inquiries except in certain limited circumstances, such as “voluntary medical examinations, including voluntary medical histories, which are part of an employee health program available to employees at that worksite.”   42 U.S.C. § 12112(e)(4)(B).  Moreover, this information must remain subject to the same confidentiality obligations that cover other disability-related inquiries and examinations, although the EEOC proposes to extend the protections for wellness program information.   Under the EEOC’s recently proposed ADA regulations, “an employer may offer limited incentives up to a maximum of 30 percent of the total cost of employee-only coverage, whether in the form of a reward or penalty, to promote an employee’s participation in a  wellness program that includes disability-related inquiries or medical examinations as long as participation is voluntary.”  Wellness programs which do not involve medical inquiries or testing would not be subject to the proposed ADA limitations on financial incentives.  The EEOC also indicated that employees with disabilities should receive reasonable accommodations in order to receive the financial incentives or avoid the penalties. Employers may not take adverse action against employees who refuse to participate or fail to achieve certain health outcomes.   Finally, the EEOC invited comments on, among other things, whether it should raise the incentive percentage to 50% (as permitted by HIPAA) for tobacco cessation programs which include nicotine testing and other biometric measures.   

The proposed GINA regulations incorporate some of these issues:

(vii) Nothing contained in paragraphs (b)(2)(ii) through (vi) of this section limits the rights or protections of an individual under the Americans with Disabilities Act (ADA), as amended, or other applicable civil rights laws, or under the Health Insurance Portability and Accountability Act (HIPAA), as amended by GINA. For example, if an employer offers an inducement for participation in disease management programs or other programs that promote healthy lifestyles and/or require individuals to meet particular health goals, the employer must make reasonable accommodations to the extent required by the ADA; that is, the employer must make “modifications or adjustments that enable a covered entity's employee with a disability to enjoy equal benefits and privileges of employment as are enjoyed by its other similarly situated employees without disabilities” unless “such covered entity can demonstrate that the accommodation would impose an undue hardship on the operation of its business.”  . . . In addition, if the employer's wellness program provides (directly, through reimbursement, or otherwise) medical care (including genetic counseling), the program may constitute a group health plan and must comply with the special requirements for wellness programs that condition rewards on an individual satisfying a standard related to a health factor, including the requirement to provide an individual with a “reasonable alternative (or waiver of the otherwise applicable standard)” under HIPAA, when “it is unreasonably difficult due to a medical condition to satisfy” or “medically inadvisable to attempt to satisfy” the otherwise applicable standard.

The EEOC is considering even more modifications of the GINA regulations and seeks comments on the following issues: 

·        Whether employees should still receive inducements if the spouse refuses to disclose the requested information, but provides medical certification that the employee is under active medical treatment;

·        Whether the authorization requirement be limited only to wellness programs that offer more than de minimis rewards or penalties and how that would be defined;

·        Whether employers should be required to implement more specific electronic protections of medical and genetic information that is stored electronically to avoid hackers breaching the confidentiality of those records;

·        Whether employers offer (or are likely to offer in the future) wellness programs outside of a group health plan or group health insurance coverage that use inducements to encourage employees' spouses to provide information about current or past health status as part of a HRA, and the extent to which the GINA regulations should allow inducements provided as part of such programs. 

The proposed ADA regulations would require changes in gathering, using and maintaining information gathered under a wellness plan.  It would require the employer to notify employees “what medical information will be obtained, how the medical information will be used, who will receive the medical information, the restrictions on its disclosure, and the methods the covered entity uses to prevent improper disclosure of medical information.” It also would mandate that “medical information collected through an employee health program only may be  provided to a covered entity under the ADA in aggregate terms that do not disclose, or are not reasonably likely to disclose, the identity of specific individuals, except as needed to administer the health plan and except as permitted under 1630.14(d)(4).”  While HIPAA would govern when the employer is the plan administrator, the EEOC proposes its own requirements to essentially extend HIPAA’s Privacy Rule to employer non-administrators receiving information from a wellness program: “the aggregate information that the employer may receive from the wellness program under section 1630.14(d)(6) must be deidentified in accordance with the HIPAA Privacy Rule. Further, other disclosures of protected health information from the wellness program may only be made in accordance with the Privacy Rule.”

 

NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can be changed or amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.

Ohio Appeals Court Rejects Invasion of Privacy, Retaliation and Age Discrimination Claims

Yesterday, the Franklin County Court of Appeals affirmed the dismissal on summary judgment of an age discrimination claim involving the denial of a promotion, and retaliation and a claim for invasion of privacy for not maintaining the confidentiality of a performance plan document. Dautartas v. Abbott Laboratories, 2012-Ohio-1709. First, the Court had no difficulty rejecting the denial of promotion claim in that the person selected was only two years younger than the plaintiff and the plaintiff testified that one of the decisionmakers stated afterwards that she did not even know the plaintiff's age. Consideration of the plaintiff's age for purposes of succession planning (i.e., determining who might need to be replaced) was by itself insufficient to constitute evidence of direct discrimination. The passage of two months between the plaintiff's complaint of discrimination and the alleged retaliatory action was too remote by itself to create the inference of retaliation, particularly when the plaintiff had requested the Human Resources Manager to not conduct an investigation. Finally, the Court rejected the invasion of privacy claim because the attachment of a performance plan to a calendar entry accessible by plaintiff's peers was shown to be false, was not an intentional action and did not concern purely private matters because the statements concerned her professional and business life.

NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can change or be amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.

Franklin County Court of Appeals Affirms Dismissal of ADA Claim Brought by Former Drug Addict Who was Fired After Volunteering for Strip Search After Theft Accusation.

Last week, the Franklin County Court of Appeals upheld a summary judgment in favor of a fast food employer concerning a claim for disability discrimination brought by a former employee who had been fired for theft. Turner v. Shahed Enterprises., 2011-Ohio-4654.
The plaintiff was a recovered drug addict and convicted drug offender who was hired by the restaurant after she successfully passed a pre-employment drug screen (which was apparently not administered to any applicants who had not identified prior drug convictions). After an employee identified the plaintiff as being seen placing $50 in her pocket shortly after money went missing from the manager's desk, the plaintiff was confronted with the accusation. She volunteered to undress to disprove the accusation and the assistant manager permitted her to do so in the restroom. The money was later found near the plaintiff's work station in an area where all of the other employees also had access. The plaintiff was interviewed and release by police officers, but was still fired the next day. The plaintiff claimed that she was discriminated against on account of her former addiction when she was required to submit to a drug test when other employees were not, when she was required to undress to disprove the theft accusation, and when she was fired for attempted theft.

First, the Court found that requiring the plaintiff to submit to a pre-employment drug test was not a material adverse job action that could support a claim for discrimination. Further, the Court found it permissible for employers to adopt reasonable drug testing procedures to ensure that recovered addicts did not (or had not) relapsed. The ADA specifically provides that it shall not be a violation of the ADA for an employer to adopt or administer reasonable policies or procedures, including but not limited to drug testing, designed to ensure that recovered or recovering individuals are no longer engaging in the illegal use of drugs. 42 U.S.C. §12114(b).

Second, the Court found that the employer lawfully terminated the plaintiff because it believed that she had attempted to steal $50 based on the accusation of a co-worker and the fact the money was eventually found near her work area. While another employee could have placed the money there and it was not found on the plaintiff, that the employer may have been mistaken does not mean that it was not motivated by its belief that she was a thief. The plaintiff could identify no evidence that her status as a recovered addict was the actual reason that she was terminated in light of the theft investigation.

Finally, the Court dismissed her invasion of privacy claim because she had volunteered to undress in front of the assistant manager to prove her innocence even after she was told that it would not be necessary:

Based upon the undisputed evidence, appellant voluntarily undressed in front of an assistant manager, while in a private bathroom, in order to show that she did not have the missing money on her person. Nobody asked her to undress. Rather, appellant was instructed that she did not have to undress, and she insisted in an attempt to exonerate herself. The expectation of privacy appellant now seeks to protect was lost when she undressed on her own volition.

The outcome would probably have been different if she had been threatened with termination if she did not agree to a strip search.

NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can change or be amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.

Supreme Court: Employer’s Review of Employee’s Text Messages Was Reasonable and Did Not Violate Fourth Amendment

This morning, a fairly unanimous United States Supreme Court again reversed the Ninth Circuit Court of Appeals and ruled that a police department's review of the content of text messages sent and received by a police officer on his work pager was reasonable under the circumstances and did not violate the Fourth Amendment. City of Ontario v. Quon, No. 08-1332 (U.S. 6/17/10). The Court found it irrelevant and did not address whether the plaintiff had a reasonable expectation of privacy and did not address (or overrule) the Circuit Court's ruling against the telecommunications provider for giving the message transcripts to the employer under the Stored Communications Act. The employer had asked to review the content of the text messages sent by its employees because they were routinely being assessed extra fees for exceeding their text message ceiling and management wanted to know if the ceiling was reasonable in light of the number of work-related messages being sent/received. Upon reviewing the transcript of the messages, it discovered that few of the messages were work related and some of the messages were sexually explicit. Accordingly, the officer was disciplined and he filed suit alleging that the city's audit of his text messages had violated his right under the Fourth Amendment.

According to the Court's opinion, this decision involved "the assertion by a government employer of the right, in circumstances to be described, to read text messages sent and received on a pager the employer owned and issued to an employee." The city had a policy informing employees that it might monitor their emails and computer usage and disclaiming any right of privacy. The policy did not explicitly apply to pagers or text messages, but the city informed the employees by memorandum that it considered the pagers to be subject to the Policy even though emails were sent via the city's own computer network while the text messages and pagers were operated by a telecommunications company and the messages were stored on the company's servers instead of the city's servers. The City's purchased pagers through a wireless provider which charged the city extra whenever it exceeded its text limit ceiling. The plaintiff exceeded the ceiling every month after he was issued the pager, but when he was given the option of having his use of his pager audited or paying the overage fee, he always chose to pay the overage fee. Nonetheless, the city became tired of having to bill him every month for excessive pager use and decided to audit his use of the pager in order to determine whether it was fair to charge him for work-related message because the text limit ceiling was too low or whether it should renegotiate its contract with the wireless provider.

At the city's request, the provider provided transcripts of the plaintiff's text messages (because the city was the account subscriber, not the plaintiff). A review of the transcripts (which were audited by the union to delete messages sent during non-work time) revealed that many of the plaintiff's messages were not work related and some were sexually explicit. He was referred to Internal Affairs for disciplinary action for pursuing personal matters during work time. The Internal Affairs investigation revealed that the plaintiff

sent or received 456 messages during work hours in the month of August 2002, of which no more than 57 were work related; he sent as many as 80 messages during a single day at work; and on an average workday, [the plaintiff] sent or received 28 messages, of which only 3 were related to police business.

The plaintiff filed suit (along with other individuals who had exchanged text messages with him uncovered by the audit and IA investigation) under state and federal law against the city and the wireless provider. The lawsuit alleged that their fourth amendment rights had been violated by the audit and investigation and that the provider had violated the Stored Communications Act by providing transcripts of the text messages to the city. The trial court granted summary judgment to the provider. It also concluded that the plaintiffs had a reasonable expectation of privacy (in that he had been given the choice of an audit or paying the overage fee), but that it was a jury question whether the city's search was reasonable under the circumstances. The jury found in favor of the city. However, the Ninth Circuit reversed summary judgment in favor of the provider and the jury verdict.

The Court declined to decide whether the plaintiffs had a reasonable expectation of privacy (in that it would affect the decision of whether a city would be reasonable in reviewing the transcripts for other reasons like performance evaluations, litigation or open records laws) and decided to assume for purposes of the appeal that he had such an expectation, that the audit constituted a search and that an employee's privacy interests in electronic communications was as strong as his interest in privacy from physical searches of his person, office, work desk and work locker.

"Although as a general matter, warrantless searches "are per se unreasonable under the Fourth Amendment," there are "a few specifically established and well-delineated exceptions" to that general rule," including an exception for workplaces. Under the approach of the plurality in O'Connor v. Ortega, 480 U. S. 709 (1987), "when conducted for a 'noninvestigatory, work-related purpos[e]'or for the 'investigatio[n] of work-related misconduct,' a government employer's warrantless search is reasonable" if (1) " it is 'justified at its inception'" and (2) "if 'the measures adopted are reasonably related to the objectives of the search and not excessively intrusive in light of' the circumstances giving rise to the search.'" The Court found that the O'Connor test was met by the city employer in this case.

The search was justified at its inception because a jury found that there were "reasonable grounds for suspecting that the search [was] necessary for a noninvestigatory work-related purpose" in order to determine whether the character limit on the City's contract with its wireless provider was sufficient to meet the City's needs. "The City had a legitimate interest in ensuring that employees were not being forced to pay out of their own pockets for work-related expenses, or on the other hand that the City was not paying for extensive personal communications."

" As for the scope of the search, reviewing the transcripts was reasonable because it was an efficient and expedient way to determine whether [the plaintiff's] overages were the result of work-related messaging or personal use." The review was also not "'excessively intrusive'" in that the City had limited its review to two of the several months at issue (in order to have a sufficient sample size) and had excluded messages sent during non-working hours. Moreover, even if the plaintiff

"could assume some level of privacy would inhere in his messages, it would not have been reasonable for [him] to conclude that his messages were in all circumstances immune from scrutiny. [He] was told that his messages were subject to auditing. As a law enforcement officer, he would or should have known that his actions were likely to come under legal scrutiny, and that this might entail an analysis of his on-the-job communications. Under the circumstances, a reasonable employee would be aware that sound management principles might require the audit of messages to determine whether the pager was being appropriately used."

Further, from the perspective of the police department, plaintiff's limited expectation of privacy, "with boundaries that we need not here explore, lessened the risk that the review would intrude on highly private details of [his] life." Its review of messages on his

"employer-provided pager was not nearly as intrusive as a search of his personal e-mail account or pager, or a wiretap on his home phone line, would have been. That the search did reveal intimate details of [his] life does not make it unreasonable, for under the circumstances a reasonable employer would not expect that such a review would intrude on such matters. The search was permissible in its scope."

The Court specifically rejected the approach of the Ninth Circuit that the availability of less intrusive measures made the search unreasonable. The Ninth Circuit had suggested that (i) the plaintiff be told in advance that his usage would be audited going forward; (ii) that the plaintiff be asked to count the words himself and report back to his employer; (iii) that the plaintiff be asked to redact the transcript of personal messages himself before it was reviewed by the employer. "That rationale 'could raise insuperable barriers to the exercise of virtually all
search-and-seizure powers,' because 'judges engaged in post hoc evaluations of
government conduct can almost always imagine some alternative means by which
the objectives of the government might have been accomplished.'" Therefore,
even if the police department "could have performed the search that would
have been less intrusive, it does not follow that the search as conducted was unreasonable." Similarly, even if the wireless provider had violated the SCA by providing the transcript to the employer, it did not follow that the employer's review of the transcript constituted an unreasonable search. "The otherwise
reasonable search by [the police department] is not rendered unreasonable by the assumption that [the wireless provider] violated the SCA by turning over the transcripts."

The plaintiffs did not attempt to argue that the city's review of the text messages violated the senders' privacy rights even if it did not violate the recipient's privacy rights. Therefore, the Court found that they had no Fourth Amendment claim either.

NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can change or be amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.