Tag Archives: gina

Dissecting Landmark Decision on Wellness

This is a follow-up to the announcement and “back story” of the Dec. 21 wellness decision in AARP vs. EEOC, a decision that could severely curtail incentives and penalties…and that could, to paraphrase the most memorable G-rated words ever spoken by Bill Clinton, end wellness as we know it.

That’s the bad news. The good news is that this decision may actually be a windfall for employers with wellness programs that use heavy incentives.

Q: What just happened?

AARP just won a very favorable district court ruling against the Equal Employment Opportunity Commission (EEOC), the agency charged with enforcing the Americans with Disabilities Act (ADA) and the Genetic Information Non-Discrimination Act (GINA). The full decision is here.

Q: How is this different from the previous ruling in AARP v. EEOC?

The original ruling, though in favor of AARP, gave EEOC more than three years to amend its rules to redefine “voluntary” to match the dictionary definition. The new ruling gives one year both for the EEOC to write the rules and for employers to implement the rules, and makes clear what is expected of them. Here  is the key to why this decision should stick:

The government can’t define “voluntary” to include fines of $2,000 or more for non-compliance if it also requires a “mandate” — the opposite of a voluntary option — that carries only a $695 penalty for non-compliance. A voluntary option can’t include remotely as high a penalty for non-compliance as a mandatory requirement, especially in the very same law.

See also: A Wellness Program Everyone Can Love  

Q: What will remain as of January 2019 that employers can require subject to forfeitures?

It is still OK to offer medical screenings and HRAs (collectively, “medical exams”) OR dangle incentives or fines (collectively “forfeitures”), just as it is today. The difference is that the programs involving required forfeitures can’t also require medical exams, which both the ADA and GINA say can only be “voluntary.” The court ruled that you can’t force employees to undergo “voluntary” exams by dangling or threatening to withhold large sums of money.

So you can still require employee forfeitures up to 30% (50% for smokers), and you can still offer medical exams. You just can’t combine the two. That’s because, in order for a wellness program to fall under ADA and GINA in the first place, medical exams must be involved. So, for example, requiring employees to either do screening or do Quizzify is still allowed.

Q: Does this cover screenings only, or are programs that combine annual physicals and forfeitures also affected?

A: If the results of the latter are not shared with the employer,  it appears that they may still be require-able. A better question is why an employer would want to require them. First, they lose money.  Second, they don’t appear to benefit employees, either. The New England Journal of Medicine, the Journal of the American Medical Association, Choosing Wisely and Consumer Reports (and also Slate) have all looked at the data and concluded that for most people annual physicals confer no net health benefit, meaning even if they were free they would be worthless. (People who have continuing health issues should, of course, see their doctor regularly. Those would not be considered checkups under this definition.)

Logically and intuitively, this conclusion would appear to be especially true when employees submit to those physicals under duress. Quizzify — and this question, like most Quizzify questions, carries the Harvard Medical School (HMS) shield — recommends two checkups in one’s twenties, three in one’s thirties, four in one’s forties, five in one’s fifties and for most people annually after that. However, this is also Quizzify’s most edited-out Q&A, as some employers nonetheless want even healthy employees to get physicals every year, and Quizzify respects that choice (though a customized question advocating it could not carry the HMS shield).

Q: These Q&As seem very Quizzify-centric.

A: That’s not a question, but I’ll answer it anyway. There are two reasons for that:

  1. We know of no other vendor that solves the problem and guarantees the solution, with EEOC indemnification. Quizzify was both conceived and designed in anticipation that this court decision would happen someday. (I just didn’t expect it to happen four days before Christmas, which meant a lot of my cousins got gift cards instead of ugly sweaters.) All my exposes on the wellness industry led me to conclude that conventional “wellness or else” (as Jon Robison calls it) could never survive a court challenge…and I designed a product specifically to allow employers to address that challenge immediately and completely.
  2. Those of you familiar with my work know I have only three talents in life: wellness outcomes measurement, employee health literacy/consumerism education and self-promotion.

Your vendor, Quizzify or not, should offer something like this right on their website. If they do, you’re safe:

Q: What other analyses should we be looking at?

The best is The Incidental Economist. AARP hasn’t released a formal statement, but its informal back story can be found at the bottom of this posting.

Q: So what should we do about it?

Simply add the option of taking Quizzify quizzes to the option of HRAs/screenings. That one-step fix is guaranteed and indemnified to solve your legal issues. It will also save money both up front (a year of Quizzify costs much less than a single screening) and down the road, because wiser employees make healthier decisions…and healthier decisions save money. Employees also like playing trivia more than they like being browbeaten into promising to eat more broccoli.

If your vendor refuses to add Quizzify via a “single sign on” and you don’t want to add it separately, you can fire the vendor (we can help you do that — if the vendor shows a positive ROI it means their outcomes are fabricated, which we can easily demonstrate) and replace them with one that will, of which there are more to choose from every week.

Q: What happens next?

A: The EEOC needs to rewrite the rules to comply with this decision by making new rules — and needs to do it in 2018 so that they can be adopted and implemented by employers by January 2019. The definition of “voluntary” will be a line-drawing exercise. Likely, gift cards and small incentives will be considered “voluntary.” If your incentive falls within whatever cap they decide upon already, you’re fine, with or without Quizzify.

Q: Is this is last word?

A: No.  First, the final rules have yet to be written. The rules then have to be approved by the district court.

Along with that uncertainty are two others. The EEOC could appeal, because these days it tends to oppose employee rights, rather than support them. However, the DC Appellate Circuit, led by Merrick Garland, would likely not be favorably disposed toward arguments that require, for example, defining “involuntary” as “voluntary,”  especially when the court will know that even award-winning vendors harm employees, vendors flout guidelines and screen the stuffing out of employees and give incorrect advice, creating further harms, and that the industry itself is rife with corruption, starting at the top. (I published my last paper in a medical-legal journal rather than a clinical journal specifically in anticipation that it might be the basis for an amicus curiae brief specifically in a situation like this.)

See also: Should Wellness Carry a Warning Label?  

In an unregulated, employee emptor environment like this, voluntary fines collected by shareholders from employees wanting to protect themselves from the harms above should not exceed fines set as penalties for a mandate, and paid into a pool to create an insurance product. (That the mandate is going away is not relevant — it’s the fact the government has two words with opposite meanings that have inverse fines.)

Alternatively, an Act of Congress could gut GINA. The American Benefits Council could try to convince the legislators their colleagues contribute heavily to, like Virginia Foxx (R-NC5), to push HR1313, for example. HR1313 is arguably the worst bill of any type ever to clear a congressional committee, in that nobody benefits from it (other than DNA collection vendors, for whom it would be a windfall), but the ABC has already demonstrated its disregard for the best interest of its own members by browbeating Rep. Foxx into proposing that bill in the first place. The ABC is down, but not out…and, as this video shows, being down but not out can cloud one’s judgment.

However, because quite literally none of her constituents are helped by this bill and most of them in both parties detest it, Foxx may decide to disappoint her corporate overlords on this one, especially because it’s an election year.

Q: How is HR1313 (or a bill like it) that ABC might propose on behalf of its members (large employers) not in “the best interest of its own members”?

A: Many employers have finally figured out that even their own vendors know wellness loses money, and that incentives generally don’t change behavior because employees revert to their old behaviors once the incentive ends. (Incentives do work for Quizzify-type programs, because, as you’ll see for yourself if you take the quiz, once you pay an employee to know things, she can’t un-know them. Pay an employee to learn that CT scans are full of radiation once, and he will stop demanding unnecessary CT scans forever.)

However, employers are stuck with these huge incentives now, which some employees expect annually. This rewrite of the “voluntary” rules, likely capping incentives in the low three figures, will allow employers to spend much less on incentives…and blame the government. (Obviously, we hope they maintain the incentives and instead just offer the Quizzify alternative. This will also save money due to Quizzify’s low price and a much-reduced number of employees having to follow up on false positives.)

If ABC were to be successful in gutting GINA and allowing financially coercive wellness programs to continue unabated, employers would still have to fork over large incentives.

Navigating EEOC and Labor Department

Trends in 2013 suggest that the Equal Employment Opportunity Commission is stepping up litigation, potentially involving large dollars.

Recoveries by the EEOC were $39 million in 2013, slightly down from the $44 million recovered in 2012, but 2013 featured some high-profile cases. In 2014, the focus is likely to be on the Americans with Disabilities Act (ADA) and on the Genetic Information Nondiscrimination Act (GINA).

Even though GINA has been in effect since 2009, it wasn’t until 2013 that the EEOC filed its first lawsuit alleging genetic discrimination. The suit, against Tulsa-based Fabricut (Civil Case No: 13-CV-248-CVE-PJC), alleged the company violated the ADA by refusing to hire a woman because it regarded her as having carpal tunnel syndrome and violated GINA when it asked for her family medical history in a post-offer medical examination. Employers need to be very aware that GINA prohibits requesting family medical history, even with a contract medical provider during a post-offer examination. In May 2013, Fabricut agreed to settle the suit for $50,000 and to take specific actions to prevent future discrimination.

Just nine days into 2014, the EEOC settled its first systemic lawsuit alleging GINA violations, for $370,000. According to the complaint (EEOC v Founders Pavilion Inc. No 13- CV-06250), Founders Pavilion conducted post-offer, pre-employment medical exams and asked applicants to provide information about their family medical history. The suit also alleged that Founders Pavilion: fired an employee after refusing to provide her with an accommodation, a violation of the ADA; refused to hire two women because of a perceived disability; and either refused to hire or fired three women because they were pregnant.

It appears that there will be a major focus in 2014 on ADA and GINA violations –- which go hand in hand. Note that the trend in EEOC litigation regarding ADA claims has shifted from disability to a focus on an employer’s obligation to provide reasonable accommodations.

For federal contractors, the key question in 2014 is: “Are you disabled?” The Labor Department issued new rules that will require federal contractors with 50 or more employees or with more than $50,000 in government work to pose that question to workers, in an effort to reduce the ever-increasing jobless rate of people with disabilities. Employees aren’t required to answer the question, but federal contractors will have to show that at least 7% of their workforce has disabilities or will face fines and potential loss of contracts.

Although the ADA does not allow employers to inquire about disability, the EEOC has made an exception so employers can comply with the Labor mandate. But lots of issues will arise. Do employees want their bosses to perceive them as disabled? Will more employees qualify as disabled with the broader definition of disability enacted with the 2008 amendment to the ADA? What will happen to reasonable accommodations, given that the exception that allows employers to ask about disabilities doesn’t appear to then allow a disabled individual to ask for a reasonable accommodation? 2014 will certainly be interesting!

While we wait to see what shakes out, there are some practices and employer can follow.

Relative to GINA, it is important for employers to know that the new regulations provide a quasi-safe harbor to employers who have inadvertently received genetic information when that information was not sought. The EEOC suggests that the employer use the following language on any requests for medical information:

“The Genetic Information Nondiscrimination Act of 2008 (GINA) prohibits employers and other entities covered by GINA Title II from requesting or requiring genetic information of an individual or family member of the individual, except as specifically allowed by this law. To comply with this law, we are asking that you not provide any genetic information when responding to this request for medical information. ‘Genetic information’ as defined by GINA includes an individual’s family medical history, the results of an individual’s or family member’s genetic tests, the fact that an individual or an individual’s family member sought or received genetic services, and genetic information of a fetus carried by an individual or an individual’s family member or an embryo lawfully held by an individual or family member receiving assistive reproductive services.”

Relative to reasonable accommodations, employers are being urged by the EEOC to accept a doctor’s work release even if it has restrictions. Employers are also being urged to document entering into the interactive process if the reasonable accommodation is not straightforward or if the employer cannot meet the physician’s restrictions.

Although an employer may not ask disability-related questions or conduct a medical exam of an applicant until after making a conditional offer of employment, an employer may condition employment on the results of a medical examination or inquiries so long as all employees in a classification are subject to the same testing and or inquires and so long as the testing does not infringe on GINA. In addition, post-offer examinations may not be used to discriminate against individuals with disabilities. The testing must also be job-related and consistent with business necessity and evaluate some of the essential functions of the job. Furthermore, these tests cannot discriminate against a certain class. For example, they cannot be unduly difficult for a woman.

According to the ADA, the term “discriminate” includes an employer’s failure to make reasonable accommodations. The applicant should be provided the criteria for passing the test, based on the job description. It is very important for the employer to enter into the interactive process if performance of the essential job functions cannot be met.

Baseline testing — a tool that can assist employers in managing employees’ injuries by establishing if the injury arose out of the course and scope of employment — must follow the same guidelines as a post-offer test. Baseline testing must be conducted for all individuals in a classification, must be consistent with business necessity, cannot discriminate against a certain class and must evaluate some of the essential functions of the job. Baseline testing differs from post-offer testing in that it is usually not read until a work-related incident occurs.

2014 might be a trying time for employers, but the best defense for an employer is to be prepared.

Restated HIPAA Regulations Require Health Plans To Tighten Privacy Policies And Practices

Health plans, their insurers, employer and other sponsors, and business associates have work to do. Health care providers, health plans, health care clearinghouses and their business associates will need to review and update their policies and practices for handling and disclosing personally identifiable health care information (“PHI”) in response to the omnibus restatement of the Department of Health & Human Services (“HHS”) Office of Civil Rights (“OCR”) of its regulations (the ” 2013 Regulations”) implementing the Privacy and Security Rules under the Health Insurance Portability and Accountability Act of 1996 (HIPAA). The Rulemaking announced January 17, 2013 may be viewed here.

Since 2003, HIPAA generally has required that health care providers, health plans, health care clearinghouses and their business associates (“Covered Entities”) restrict and safeguard individually identifiable health care information (“PHI”) of individuals and afford other protections to individuals that are the subject of that information. The 2013 Regulations published today complete the implementation of changes to HIPAA that Congress enacted when it passed the Health Information Technology for Economic and Clinical Health (HITECH) Act in 2009 as well as make other changes to the prior regulations that the Office of Civil Rights found desirable based on its experience administering and enforcing the law over the past decade.

Since passage of the HITECH Act, Office of Civil Rights officials have warned Covered Entities to expect an omnibus restatement of its original regulations. While the Office of Civil Rights had issued certain regulations implementing some of the HITECH Act changes, it waited to publish certain regulations necessary to implement other HITECH Act changes until it could complete a more comprehensive restatement of its previously published HIPAA regulations to reflect both the HITECH Act amendments and other refinements to its HIPAA Rules. The 2013 Regulations published today fulfill that promise by restating the Office of Civil Rights' HIPAA Regulations to reflect the HITECH Act Amendments and other changes and clarifications to OCR's interpretation and enforcement of HIPAA.

Highlights Of Changes
Among other things, the 2013 Regulations:

  • revise the Office of Civil Rights' HIPAA regulations to reflect the HITECH Act's amendment of HIPAA to add the contractors and subcontractors of health plans, health care providers and health care clearinghouses that qualify as business associates to the parties directly responsible for complying with and subject to HIPAA's civil and criminal penalties for violating HIPAA's Privacy, Security, and Breach Notification rules;
  • update previous interim regulations implementing HITECH Act breach notification rules that require Covered Entities including business associates to give specific notifications to individuals whose personally identifiable health care information is breached, the Department of Health & Human Services and in some cases, the media when a breach of unsecured information happens;
  • update interim enforcement guidance the Office of Civil Rights previously published to implement increased penalties and other changes to HIPAA's civil and criminal sanctions enacted by the HITECH Act
  • implement HITECH Act amendments to HIPAA that tighten the conditions under which Covered Entities are allowed to use or disclose personally identifiable health care information for marketing and fundraising purposes and prohibit Covered Entities from selling an individual's health information without getting the individual's authorization in the manner required by the 2013 Regulations;
  • update the Office of Civil Rights' rules about the individual rights that HIPAA requires that Covered Entities afford to individuals who are the subject of personally identifiable health care information used or possessed by a Covered Entity to reflect tightened requirements enacted by the HITECH Act that allow individuals to order their health care provider not to share information about their treatment with health plans when the individual pays cash for the care and to clarify that individuals can require Covered Entities to provide electronic personally identifiable health care information in electronic form;
  • revise the regulations to reflect amendments to HIPAA made as part of the Genetic Information Nondiscrimination Act of 2008 (GINA) which added genetic information to the definition of personally identifiable health care information protected under the HIPAA Privacy Rule and prohibits health plans from using or disclosing genetic information for underwriting purposes; and
  • clarifies and revises other provisions to reflect other interpretations and information guidance that the Office of Civil Rights has issued since HIPAA was passed and to make certain other changes that the Office of Civil Rights found appropriate based on its experience administering and enforcing the rules.

Covered Entities And Business Associates Must Act To Review And Update Policies And Practices
The restated rules in the 2013 Regulations make it imperative that Covered Entities review the revised rules carefully and updated their policies, practices, business associate agreements, training and documentation to comply with the updated requirements and other enforcement and liability risks. The Office of Civil Rights, even prior to the regulations, has aggressively investigated and enforced the HIPAA requirements.

The commitment of the Office of Civil Rights to enforcement most recently was demonstrated by its recent settlement with Hospice of North Idaho (HONI). On January 2, 2013, the Office of Civil Rights announced that the Hospice of North Idaho will pay the Office of Civil Rights $50,000 to settle potential HIPAA violations that occurred in connection with the theft of an unencrypted laptop computer containing electronic personally identifiable health care information. The Hospice of North Idaho settlement is the first settlement involving a breach of electronic personally identifiable health care information affecting fewer than 500 individuals.

While the Hospice of North Idaho settlement marks the first settlement on a small breach, this is not the first time the Office of Civil Rights has sought sanctions against a covered entity for data breaches involving the loss or theft of unencrypted data on a laptop, storage device or other computer device. Rather, the Office of Civil Rights continues to roll out a growing list of enforcement actions demonstrating that the potential risks of HIPAA violations are significant and growing. See also:

Coupled with statements by the Office of Civil Rights about its intolerance, the Hospice of North Idaho and other settlements provide a strong warning to covered entities of the need to carefully and appropriately manage their HIPAA encryption and other Privacy and Security responsibilities. Covered entities are urged to heed these warning by strengthening their HIPAA compliance and adopting other suitable safeguards to minimize HIPAA exposures.

In response to the 2013 Regulations and these expanding exposures, all Covered Entities should review critically and carefully the adequacy of their current HIPAA Privacy and Security compliance policies, monitoring, training, breach notification and other practices taking into consideration the Office of Civil Rights' investigation and enforcement actions, emerging litigation and other enforcement data, their own and reports of other security and privacy breaches and near misses, and other developments to decide if additional steps are necessary or advisable.

Brace For New Disability Discrimination Claims

President Obama’s declaration on October 1, 2012 of October as National Disability Employment Awareness Month reminds business that U.S. businesses and their leaders need to tighten their disability discrimination risk management and compliance in light of the Obama Administration’s emphasis on aggressively interpreting and enforcing disability discrimination laws, rising private plaintiff lawsuits and other recent regulatory and judicial changes.

With the Administration expected to step up further its already substantial educational outreach to the disabled and their advocates, U.S. employers should brace for this month’s celebration to fuel even more disability discrimination claims and other activity by the disabled and their activists.

Since taking office, President Obama has made enforcing and expanding the rights of the disabled in employment and other areas a leading priority. In his proclamation, President Obama reaffirmed his often stated commitment to the aggressive enforcement of disability laws and other efforts to promote opportunities for disabled individuals, stating “[My Administration remains committed to helping our businesses, schools, and communities support our entire workforce. To meet this challenge,… we are striving to make it easier to get and keep those jobs by improving compliance with Section 508 of the Rehabilitation Act.”

As the administration marks the month, U.S. employers and other business leaders can expect the Obama Administration will be stepping up its already aggressive outreach to disabled Americans to promote awareness of their disability law rights and tools for asserting and enforcing these rights. See, e.g. October Is National Disability Employment Awareness Month (NDEAM).

Business Faces Growing Employment Disability Exposures
As part of his administration’s commitment, the Obama Administration has moved to aggressively enforce the disability and accommodations of the Americans With Disabilities Act (ADA), Section 508 of the Rehabilitation Act, and other federal disability discrimination laws. The reach and effectiveness of these efforts has been enhanced by statutory and regulatory changes that require employers to exercise greater efforts to meet their compliance obligations and manage their disability and other discrimination risks.

ADA Exposures Heightened
The ADA, for instance, generally prohibits disability discrimination and requires employers to make reasonable accommodations to employees’ and applicants’ disabilities as long as this does not pose an undue hardship. Violations of the ADA can expose businesses to substantial liability. Violations of the ADA may be prosecuted by the EEOC or by private lawsuits. Employees or applicants that can prove they experienced prohibited disability discrimination under the ADA generally can recover actual damages, attorneys’ fees, and up to $300,000 of exemplary damages (depending on the size of the employer).

In recent years, amendments to the original provisions of the ADA have made it easier for plaintiffs and the EEOC to prove disabled status of an individual. Businesses should exercise caution to carefully document legitimate business justification for their hiring, promotion and other employment related decisions about these and other individuals who might qualify as disabled.

As signed into law on September 25, 2008, the ADAAA amended the definition of “disability” for purposes of the disability discrimination prohibitions of the ADA to make it easier for an individual seeking protection under the ADA to establish that they have a disability within the meaning of the ADA. The ADAAA retains the ADA’s basic definition of “disability” as an impairment that substantially limits one or more major life activities, a record of such an impairment, or being regarded as having such an impairment. However, provisions of the ADAAA that took effect January 1, 2009 change the way that these statutory terms should be interpreted in several ways. Most significantly, the Act:

  • Directs the EEOC to revise that part of its regulations defining the term “substantially limits;”
  • Expands the definition of “major life activities” by including two non-exhaustive lists: (1) The first list includes many activities that the EEOC has recognized (e.g., walking) as well as activities that EEOC has not specifically recognized (e.g., reading, bending, and communicating); and (2) The second list includes major bodily functions (e.g., “functions of the immune system, normal cell growth, digestive, bowel, bladder, neurological, brain, respiratory, circulatory, endocrine, and reproductive functions”);
  • States that mitigating measures other than “ordinary eyeglasses or contact lenses” shall not be considered in assessing whether an individual has a disability;
  • Clarifies that an impairment that is episodic or in remission is a disability if it would substantially limit a major life activity when active;
  • Changes the definition of “regarded as” so that it no longer requires a showing that the employer perceived the individual to be substantially limited in a major life activity, and instead says that an applicant or employee is “regarded as” disabled if he or she is subject to an action prohibited by the ADA (e.g., failure to hire or termination) based on an impairment that is not transitory and minor; and
  • Provides that individuals covered only under the “regarded as” prong are not entitled to reasonable accommodation.

The ADAAA also emphasizes that the definition of disability should be construed in favor of broad coverage of individuals to the maximum extent permitted by the terms of the ADA and generally shall not require extensive analysis. In adopting these changes, Congress expressly sought to overrule existing employer-friendly judicial precedent construing the current provisions of the ADA and to require the EEOC to update its existing guidance to confirm with the ADAAA Amendments. Under the leadership of the Obama Administration, the EEOC and other federal agencies have embraced this charge and have significantly stepped up enforcement of the ADA and other federal discrimination laws.

Recent enforcement, regulatory and other activities by the EEOC show that the EEOC is enthusiastically moving forward to exercise its regulatory and enforcement powers under these enhanced ADA provisions to tighten requirements for employers and to enforce its rules. See e.g.,

Rising Rehabilitation Act Risks For Government Contractors
Beyond the generally applicable risks to all employers of more than 15 employees under the ADA, federal and state government contractors face more responsibilities and risks.

Subject to limited exceptions, government contractors providing services or supplies on ARRA or other government-funded contracts or projects must comply both with generally applicable employment discrimination requirements and special statutory and contractual nondiscrimination, affirmative action, and recordkeeping requirements applicable to government contractors. For instance, federal law generally requires government contractors to comply with the special equal employment opportunity requirements of Executive Order 11246 (EO 11246), Section 503 of the Rehabilitation Act of 1973 (Section 503), and the Vietnam Veterans’ Readjustment Assistance Act of 1974 (VEVRAA).

Pursuant to these laws, business with the federal government, both contractors and subcontractors, generally must follow a number of statutory and contractual requirements to follow the fair and reasonable standard that they not discriminate in employment on the basis of sex, race, color, religion, national origin, disability or status as a protected veteran. OFCCP generally audits and enforces these requirements. See Memo to Funding Recipients: Compliance with Applicable Nondiscrimination and Equal Opportunity Statutes, Regulations, and Executive Orders.

OFCCP has made clear that it will conduct compliance evaluations and host compliance assistance events to ensure that federal contractors comply and are aware of their responsibilities under EO 11246, Section 503 and VEVRAA.

While many government contractors may be tempted to become complacent about OFCCP exposures based on reports of the OFCCP’s relatively low enforcement in the past, see Report Says OFCCP Enforcement Data Show Infrequent Veteran, Disability Bias Findings. Recent enforcement data documents that OFCCP is getting much more serious and aggressive about auditing and enforcing compliance with its affirmative action and other requirements against government contractors under the Obama Administration. See also OFCCP Enforcement Data is Available on a New DOL Website and Affirmative Action Update: OFCCP Enforcement Statistics Show Increase in Violations.

The readiness of OFCCP to enforce its rules is illustrated by the settlement of an OFCCP action filed against federal contractor Nash Finch Co. (Nash Finch) announced recently. Under the settlement, Nash Finch agreed to pay $188,500 in back wages and interest and offer jobs to certain women applicants who OFCCP charged Nash rejected for the entry-level position of order selector at the company’s distribution facility in Lumberton, Minnesota. See Settlement of OFCCP Employment Discrimination Charge Reminder To ARRA, Other Government Contractors Of Heightened Enforcement Risks.

These government contractor disability discrimination risks are particularly acute where the government contractor works on or provides supplies on contacts or projects funded in whole or in part by monies provided under ARRA. When the contract or project in question receives any funding out of the $787 billion of stimulus funding provided by ARRA, special OFCCP rules applicable to ARRA funded projects necessitates that federal contractors exercise special care to understand and meet their responsibilities and manage associated exposures. See, e.g. Settlement of OFCCP Employment Discrimination Charge Reminder To ARRA, Other Government Contractors Of Heightened Enforcement Risks.

GINA & Other Medical Information Nondiscrimination & Privacy Risks
Employers also need to use care to ensure that their hiring and other employment practices, as well as their employee benefits, workers’ compensation and wellness practices are up to date and properly managed to mitigate exposures under laws like the Genetic Information and Nondiscrimination Act (GINA), the ADA’s medical information privacy requirements, as well as the privacy and nondiscrimination rules of the Health Insurance Portability & Accountability Act and other relevant federal and state laws.

Signed into law by President Bush on May 21, 2008 and in effect since November 21, 2009, for instance, Title VII of GINA amended the Civil Rights Act to prohibit employment discrimination based on genetic information and to restrict the ability of employers and their health plans to require, collect or retain certain genetic information. Under GINA, employers, employment agencies, labor organizations and joint labor-management committees face significant liability for violating the sweeping nondiscrimination and confidentiality requirements of GINA concerning their use, maintenance and disclosure of genetic information. Employees can sue for damages and other relief like now available under Title VII of the Civil Rights Act of 1964 and other nondiscrimination laws. For instance, GINA’s employment related provisions include rules that:

  • Prohibit employers and employment agencies from discriminating based on genetic information in hiring, termination or referral decisions or in other decisions regarding compensation, terms, conditions or privileges of employment;
  • Prohibit employers and employment agencies from limiting, segregating or classifying employees so as to deny employment opportunities to an employee based on genetic information;
  • Bar labor organizations from excluding, expelling or otherwise discriminating against individuals based on genetic information;
  • Prohibit employers, employment agencies and labor organizations from requesting, requiring or purchasing genetic information of an employee or an employee’s family member except as allowed by GINA to satisfy certification requirements of family and medical leave laws, to monitor the biological effects of toxic substances in the workplace or other conditions specifically allowed by GINA;
  • Prohibit employers, labor organizations and joint labor-management committees from discriminating in any decisions related to admission or employment in training or retraining programs, including apprenticeships based on genetic information;
  • Mandate that in the narrow situations where genetic information is obtained by a covered entity, it maintain the information on separate forms in separate medical files, treat the information as a confidential medical record, and not disclose the genetic information except in those situations specifically allowed by GINA;
  • Prohibit any person from retaliating against an individual for opposing an act or practice made unlawful by GINA; and
  • Regulate the collection, use, access and disclosure of genetic information by employer sponsored and certain other health plans.

These employment provisions of GINA are in addition to amendments to HIPAA, the Employee Retirement Income Security Act of 1974 (ERISA), the Public Health Service Act, the Internal Revenue Code of 1986, and Title XVIII (Medicare) of the Social Security Act that are effective for group health plan for plan years beginning after May 20, 2009.

Under these HIPAA and GINA rules, health plans generally may not make certain medical inquiries or discriminate against employees or their family members based on family or individual medical history or genetic information. In addition, health plans and others are required to safeguard personal medical information and may only share that information under very limited circumstances requiring specific documentation be in place and that the parties can prove that the access and use of that information is appropriately restricted. Violation of these and other rules can have significant civil and in some cases even criminal liabilities for companies, plans, plan fiduciaries and company officials that take part in violations of these rules.

Businesses Should Act To Manage Risks
The ADAAA amendments, the Rehabilitation Act’s expanded reach, and the Obama Administration’s emphasis on enforcement make it likely that businesses generally will face more disability claims from a broader range of employees and will have fewer legal shields to defend themselves against these claims. These changes will make it easier for certain employees to qualify and claim protection as disabled under the ADA, the Rehabilitation Act, and other disability discrimination laws.

All U.S. businesses should review and tighten the adequacy of their existing compliance and risk management practices to promote and document compliance. These efforts should focus on all relevant hiring, recruitment, promotion, compensation, recordkeeping and reporting policies and practices internally, as well as those of any recruiting agencies, subcontractors or other business partners whose actions might impact on compliance.

In light of these and other developments and risks, businesses generally should act cautiously when dealing with applicants or employees with actual, perceived, or claimed physical or mental impairments to minimize exposures under the ADA, the Rehabilitation Act and other laws. Management should exercise caution to carefully and appropriately assess and identify the potential legal significance of physical or mental impairments or conditions that might be less significant in severity or scope, correctable through the use of eyeglasses, hearing aids, daily medications or other adaptive devices, or that management might be tempted to assume fall outside the ADA’s scope.

Likewise, businesses should be ready for the EEOC, OFCCP and the courts to treat a broader range of disabilities, including those much more limited in severity and life activity restriction, to qualify as disabling for purposes of the Act. Businesses should assume that a greater number of employees with such conditions are likely to seek to use the ADA as a basis for challenging hiring, promotion and other employment decisions. For this reason, businesses generally should tighten job performance and other employment recordkeeping to enhance their ability to demonstrate nondiscriminatory business justifications for the employment decisions made by the businesses.

Businesses also should consider tightening their documentation regarding their procedures and processes governing the collection and handling records and communications that may contain information regarding an applicant’s physical or mental impairment, such as medical absences, worker’s compensation claims, emergency information, or other records containing health status or condition related information. The ADA generally requires that these records be maintained in separate confidential files and disclosed only to individuals with a need to know under circumstances allowed by the ADA.

As part of this process, businesses also should carefully review their employment records, group health plan, family leave, disability accommodation, and other existing policies and practices to comply with, and manage exposure under the genetic information nondiscrimination and privacy rules enacted as part of GINA, the health care privacy rules of the HIPAA, and the medical record privacy rules of the ADA. Particular care should be used when planning wellness, health risk assessment, work-related injury, family or other medical leave or related programs, all of which raise particular risks and concerns.

In the face of the rising emphasis of OFCCP, the EEOC and other federal and state agencies on these audit and enforcement activities, government contractors should exercise additional compliance and risk management efforts beyond these generally recommended steps. Among other things, these steps should include the following:

  • Government contractors and subcontractors should specifically review their existing or proposed contracts and involvements to identify projects or contracts which may involve federal or state contracts or funding that could trigger responsibility. In this respect, businesses should conduct well-documented inquiries when proposing and accepting contracts to ensure that potential obligations as a government contractor are not overlooked because of inadequate intake procedures. Businesses also should keep in mind that ARRA and other federal program funds often may be filtered through a complex maze of federal grants or program funding to states or other organizations, which may pass along government contractor status and liability when subcontracting for services as part of the implementation of broader programs. Since the existence of these obligations often is signaled by contractual representations in the contracts with these parties, careful review of contractual or bid specifications and commitments is essential. However, it also generally is advisable also to inquire about whether the requested products or services are provided pursuant to programs or contracts subject to these requirements early in the process.
  • In addition to working to identify contracts and arrangements that are covered by OFCCP or other requirements, government contractors and other businesses also should reconfirm and continuously monitor the specific reporting, affirmative action, and other requirements that apply to any programs that may be subject to OFCCP requirements to ensure that they fully understand and implement appropriate procedures to comply with these conditions as well as pass along the obligation to make similarly necessary arrangements to any subcontractors or suppliers that the government contractor involves as a subcontractor.
  • Throughout the course of the contract, the government contractor also should take steps to maintain and file all required reports and monitor and audit operational compliance with these and other requirements.
  • The organization should develop and administer appropriate procedures for monitoring and investigating potential compliance concerns and maintaining documentation of that activity. Any known potential deficiencies or complaints should be promptly investigated and redressed with the assistance of qualified counsel in a prompt manner to mitigate potential risks.
  • Documentation should be carefully retained and organized on a real time and continuous basis to faciliate efficiency and effectiveness in completing required reports, monitoring compliance indicators and responding to OFCCP, EEOC or private plaintiff charges as well as other compliance inquiries.
  • Any audit inquiries or charges should be promptly referred to qualified legal counsel for timely evaluation and response.
  • When available and affordable, management should consider securing appropriate employment practices liability coverage, indemnification from business partners and other liability protection and assurance to help mitigate investigagtion and defense costs.
  • Board members or other senior management should include periodic review of compliance in their agenda.