EEOC takes final step to rescind wellness program incentive
Effective January 1, 2019, the Equal Employment Opportunity Commission (EEOC) has rescinded parts of its wellness program rule regarding incentives that employers may offer their employees. In May 2016, the EEOC published rules providing guidance to employers describing the extent to which employers may use incentives to encourage employees to participate in wellness programs that ask them to respond to disability-related inquiries and/or undergo medical examinations without violating the Americans with Disabilities Act (ADA) or Genetic Information Nondiscrimination Act (GINA). One section of the rules allows employer-sponsored wellness plans to offer employees discounts of up to 30 percent of the cost of self-only health coverage for divulging certain private medical information or to impose penalties of up to 30 percent for not doing so. In response to the incentive rules, AARP filed a lawsuit, and the court concluded that the EEOC did not provide sufficient reasoning to justify the 30 percent mark.
As a result of the court’s decision, the EEOC rescinded the section regarding the 30 percent discount without replacing it with a new rule. That said, employers can still use incentives to encourage employees to participate in wellness programs. But the decision by the court and the EEOC’s steps thereafter leave employers in the dark about what’s an appropriate discount level. The most conservative approach would be to not offer incentives. However, employers looking to increase participation should contact counsel to discuss what incentives would be appropriate and do not violate the ADA and GINA. In the meantime, we will be watching the EEOC for any new guidance or rules regarding incentives.
This is for informational purposes only. It is not intended to be legal advice and does not create or imply an attorney-client relationship.
Download PDF