EEOC on Workplace Wellness Programs: Final Rules Announced

Thursday, May 26, 2016

Earlier this month, the Equal Employment Opportunity Commission issued its final rules on employer wellness programs.  The final rules, which go into effect in January 2017, provide guidance on how workplace wellness programs can comply with the Americans with Disabilities Act (ADA) and Genetic Information Nondiscrimination Act (GINA).

The final rules address a number of issues, including the amount of incentives that an employer may offer to employees for participating in a wellness program.  Prior to the final rules, for example, the ADA regulations provided that employers could ask health-related questions and conduct medical examinations as part of a “voluntary” wellness program.  The regulations did not, however, define the term “voluntary” or address whether the offer of an incentive made a program involuntary.

The final rules clarify that a wellness program that requires employees to answer disability-related questions or to undergo medical examinations may offer incentives of up to 30 percent of the total cost for self-only coverage.  The 30 percent incentive limit brings the regulations in line with HIPAA, which applies the same incentive limit to health-contingent programs that require employees to achieve certain outcomes.
The final rules also set out a number of other requirements that must be met for a wellness program to be considered voluntary.  For example, employers may not deny an employee access to health coverage if the employee chooses not to participate in a wellness program.  Employers must also provide a notice that clearly explains what medical information will be obtained from employees in the wellness program.  The final rules also require that wellness programs be “reasonably designed to promote health or prevent disease” – in other words, a wellness program must actually promote health and cannot include burdensome time requirements for participation, involve unreasonably intrusive procedures, or be used to shift insurance costs or to gain sensitive medical information that would otherwise be in violation of the law.  In addition, the final rules include two confidentiality provisions.  The first generally provides that information from wellness programs may be disclosed to employers only in an aggregate form that does not disclose specific individuals.  The second provision prohibits employers from requiring employees to agree to the sale of health information or the waiver of confidentiality as a condition for participating in a wellness program or receiving an incentive