On January 7, the Equal Employment Opportunity Commission (EEOC) proposed new regulations that offer some major changes to what organizations are permitted to offer as incentives to encourage participation in wellness programs. The regulations provide guidelines to ensure that employer-sponsored wellness programs do not violate the Americans with Disabilities Act (ADA) and the Genetic Information Nondiscrimination Act (GINA).
The EEOC's proposed rules follow a ruling by the U.S. District Court for the District of Columbia that vacated the EEOC's existing rules as of Jan. 1, 2019. This left many incentive-based wellness programs in legal limbo.
What is included in the new regulations?
Employers can comply with ADA and GINA protections only if they offer no more than a minimal incentive to encourage participation in wellness programs outside of the group health plan, if those programs collect employee health data.
What would be considered a minimal incentive? An example would be a water bottle or gift card of modest value. The proposed legislation also says that only a de minimis incentive for the wellness program can be offered to:
- Spouses and dependents
- Employees NOT enrolled in the health plan
There is a “safe harbor” exception for employers who offer a wellness program that provides incentives based on a measurable health standard (i.e. a health-contingent wellness program). These programs must be a part of the employer’s group health plan to offer an incentive greater than the minimal value as described above. For these plans, allowed incentives include 30% of the total cost of coverage of the plan in which an employee is enrolled and 50% for individual-coverage costs for employees who participate in programs that prevent or reduce tobacco use.
Unofficial versions of the Notices of Proposed Rulemaking (NPRMs) are available here.
When will these new regulations go into effect?
The proposed regulations have not been published in the Federal Register. This means the regulations are essentially just a draft and still must be reviewed. On January 20, 2021, the Biden administration ordered agencies to immediately withdraw most unpublished rules, including the EEOC proposed rules. Agencies may not issue any new regulations until they can be reviewed and approved by agency or department heads appointed or designated by President Biden.
There is no definitive date of when the proposed regulations may be reviewed or if there will be any changes before they become law.
Our recommendations
CHC is encouraging organizations to stay informed about what changes could impact their program. Companies may want to consider implementing an activities-based wellness program. Our member portal makes this easy, providing members with personalized wellness journeys, more reward options, a habit builder tool and much more! Contact a CHC representative for more information.
