Employers with established wellness programs that collect health information and/or require a medical exam can no longer rely on the EEOC regulations to justify that incentives provided under their wellness programs are voluntary. On December 20, the EEOC published a final rule (83 Fed. Reg. 65296) vacating the rules that allowed employers to offer those financial incentives to workers who participated in those wellness programs.
The EEOC entered the wellness program regulation arena in 2016 with rules under the Americans with Disabilities Act (ADA) and the Genetic Information Nondiscrimination Act (GINA). The ADA and GINA Wellness Program Rules required employers sponsoring wellness programs that collect health information (such as through a health risk assessment) and/or require a medical exam (for example, a biometric screening) to satisfy certain requirements. One such requirement involved limiting incentives under the wellness program to 30% of the cost of health coverage so that the wellness program would qualify as a “voluntary” employee health program.
Although the ADA and GINA Wellness Program Rules faced a number of challenges, one challenge brought by the AARP alleged that the EEOC had failed to demonstrate how offering employees discounts of up to 30% of their health coverage (or imposing penalties of up to 30%) would still allow the wellness programs to truly be considered voluntary to employees.
In late 2017, the U.S. District Court for the District of Columbia agreed with the AARP and held that the Wellness Programs Rules regarding the 30% incentive would be vacated effective January 1, 2019. Although the EEOC indicated that it intended to issue new rules to replace the vacated during the Summer of 2018, no such guidance was issued. Therefore the EEOC last month moved to formally rescind the vacated incentive regulations.
Some employers may choose to eliminate these incentives to avoid employee challenges until further guidance is issued. Employers choosing to maintain the incentives pending further guidance should continue to keep watch for future developments from the EEOC. As a practical matter, despite the EEOC’s recently stated intentions to issue regulations by June 2019, such efforts may be delayed due to there being two vacant seats on the five-member Commission, a pending challenge to the re-nomination of a third commissioner and delays in the Senate confirmation process.
Employers should also keep in mind that despite the rescission of the EEOC’s incentive rules, there are a number of other ADA and GINA Wellness Program Rules that remain in effect which have been the subject of recent enforcement action. The ACA/HIPAA Wellness Program Rules, previously discussed in the blog post “Wellness Programs May Need a Check-Up Following Recent EEOC Guidance,” also remain in effect and contain their own rules regarding incentives.
If you need assistance navigating wellness programs, contact your Akerman attorney.