EEOC Proposes New Rules on Wellness Programs

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OVERVIEW


On January 7, 2021, the Equal Employment Opportunity Commission (EEOC) issued proposed guidance regarding employer-sponsored wellness programs and the level of incentives employers may offer employees who participate in these programs in the form of two proposed rules. There is a 60-day comment period, which begins after the proposed rules are published in the Federal Register.

IN DEPTH


The proposed rules follow a series of court decisions regarding what level of incentives offered in wellness programs would violate the Genetic Information Nondiscrimination Act (GINA) and the Americans with Disabilities Act (ADA). The courts instructed the EEOC to propose criteria for wellness programs under the ADA. The EEOC framed these proposed rules within the context of the Department of Labor (DOL) wellness regulations, adopting the DOL’s “participatory” and “health-contingent” definitions and incentive limits. The proposed rules stipulate that employers may offer no more than a de minimis incentive to encourage participation in participatory wellness programs, but that for health-contingent wellness programs offered in connection with a group health plan, incentives may be offered as long as they are consistent with the current incentive limit rules allowed under the DOL wellness regulations. For example, a de minimis incentive for participatory wellness programs may be a water bottle or gift card of modest value, but paid annual gym memberships and free airline tickets likely do not qualify. This is a welcome alignment of the two sets of rules affecting employer-sponsored wellness programs and, if finalized, would simplify administration for plan sponsors.

Several federal laws govern wellness programs offered by employers. Group health plans offering wellness programs are subject to the Employee Retirement Income Security Act (ERISA)/DOL rules under the Health Insurance Portability and Accountability Act (HIPAA), which generally prohibits discrimination based on a health factor; however, the statute includes an exception for wellness programs. But wellness programs are also subject to Title I of the ADA and Title II of GINA, over which the EEOC has jurisdiction. Title I of the ADA restricts the medical information that employers may obtain from employees by generally prohibiting employers from making disability-related inquiries or requiring medical examinations. The ADA, however, provides an exception to this rule for “voluntary employee health programs,” which may include workplace wellness programs. Title II of GINA restricts employers and other covered entities from requesting, requiring or purchasing genetic information from employees unless an exception applies. One of the exceptions permits employers that offer health or genetic services, including as part of a voluntary wellness program, to request genetic information as part of these programs if certain requirements are met. The EEOC’s rules previously varied from the DOL’s rules, making wellness program compliance difficult for employers.

Plan sponsors are not entitled to rely on the proposed rules before the guidance is finalized. In the meantime, employers may wish to review their wellness programs for compliance with existing and proposed rules.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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