EEOC Provides Guidance on Wellness Incentive Programs

On April 16th, the Equal Employment Opportunity Commission (EEOC) released their long awaited wellness incentive regulations in draft form. This is welcome news to employers given the EEOC’s recent string of lawsuits challenging the voluntary nature of wellness incentive programs.

Who is impacted?

• • Companies where Title 1 of ADA applies (15+ employees)

• • Wellness programs in a group health plan that provide incentives for “disability-related inquires or medical examinations

    – This includes all biometric outcomes-based incentives, cotinine tested tobacco status incentives, and all participatory incentives (biometric screening, HRA, disease management, health coaching, etc.) where a participant must disclose medical information.

• • Tobacco-free incentives provided based on cotinine testing results. The regulations, however, are not applicable for tobacco-free incentives provided based on affidavits.

What are the key proposed changes?

• • There is now a maximum incentive of 30% of the employee-only total premium for activities related to “disability-related inquires or medical examination.” This was previously uncapped or limited to ACA incentive limits, and could change with coverage tiers.

• • Limiting access to certain plan or portion of plans (plan-gating) will not be compliant.

• • Companies cannot “take adverse employment action or retaliate against, interfere with, coerce, intimidate, or threaten employees” with the incentive.

• • Companies (or vendors) will now need to provide a notice before participation that is understandable to the participant, medical information will be obtained, who will receive the medical information, how the medical information will be used, the restrictions of its use and disclosure, and how they will keep the data safe.

Additional Detail

• • These are draft regulations. They are subject to change as the EEOC receives feedback from the public. However, this is tangible guidance from the EEOC on incentive design and should be viewed as a guide.

• • There is no proposed date of implementation as of yet.

• • These regulations are in addition to the ACA wellness incentive regulations that must also be followed.

• • It does not address compliance with the Genetic Information Nondisclosure Act as that will be addressed at a later point by the EEOC.

Next Actions

• • Our compliance team will continue to consult with you to ensure your wellness incentive programs meet all regulations and laws including using tools such as our Wellness Compliance Assessment.

• • We will guide you in addressing the risk of wellness incentive programs given the impact of new draft regulations.

• • As updates occur, we will provide you with updated information and guidance. Please contact your Oswald representative with questions.

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