EEOC Issues Proposed Rule on Workplace Wellness Programs

Eric Paltell
Eric Paltell

On April 16, 2015, the EEOC issued a Notice of Proposed Rulemaking (“NPRM”) on how the ADA applies to employer wellness programs that are part of a group health plan.  The NPRM will be published in the Federal Register on April 20, 2015, and the public will have a 60 day period within which to file comments.  The EEOC may then revise the rule based on the comments before taking final action to implement it.

Under Title I of the ADA, employers are prohibited from obtaining medical information from employees, except as part of certain medical examinations and as part of a “voluntary” employee health program.  It has been unclear as to whether the EEOC would allow employers to offer incentives to encourage employees to partake in such programs, as incentives might make participation appear to be something other than voluntary. However, both HIPAA and the Affordable Care Act permit wellness programs to offer incentives in the form of rewards for participating employees and penalties for those who fail to achieve certain outcomes.

The NPRM defines a wellness program as one “reasonably designed to promote health or prevent disease.”  It goes on to clarify that employers may offer incentives of up to 30% of the total cost of employee-only coverage to employees who partake in a wellness program and/or achieve certain outcomes. For example, if the total annual premium for employee-only coverage is $5,000 (including both the employer and employee share), the maximum allowable incentive is $1,500.  The 30% figure is consistent with  the limit HIPAA applies to wellness programs.

The NPRM adds a new subsection to the ADA’s confidentiality regulations.  The new subsection states the an employer may only receive information collected by the wellness program in aggregate form that does not disclose, and is not reasonably likely to discloses, the identity of individual employees.

The NPRM canbe found here, and the EEOC has also issued a “Fact Sheet for Small Business” and a Question and Answer document.

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