Proposes new rule

EEOC Proposes New Rule On Workplace Wellness Programs

For the past two decades, the Equal Employment Opportunity Commission (“EEOC”) has taken the position that employers may offer and maintain wellness programs in the workplace, provided that the program neither requires participation nor penalizes employees who do not participate. Over the years, some have expressed concern that these wellness programs could and would run afoul of federal laws, like the Americans with Disabilities Act (“ADA”), by creating incentives that would effectively require employees to participate (and share protected medical information) to be treated equally with other workers.

In 2016, in response to such concerns, the EEOC issue a final rule to clarify employer obligations and the types of incentives that were considered permissible. Soon thereafter, the American Association of Retired Persons (“AARP”) filed suit, alleging the EEOC rule on permissible incentives did not give “employees a meaningful choice whether or not to participate in wellness programs that require the disclosure of ADA-protected information” to receive an award or avoid penalty. See AARP v. EEOC, 267 F. Supp. 3d 14, 28-29 (D.D.C. 2017). The Court agreed and the EEOC thereafter removed the 2016 rule amendment from ADA regulations.

Nonetheless, considering the AARP v. EEOC decision and the lessons learned therefrom, the EEOC has taken another shot at a rule on wellness programs. The EEOC recently issued two Notices of Proposed Rulemaking (“NPRM”): one that addresses rules and issues for wellness programs under the ADA, and one that addresses rules and issues for wellness programs under the Genetic Information Nondiscrimination Act (“GINA”).

The proposed ADA rule states: “a wellness program is a program of health promotion or disease prevention that includes disability-related inquiries or medical examinations. Wellness programs that do not include disability-related inquiries or medical examinations, such as those that provide general health and educational information or reward employees for attending a smoking cessation or nutrition class, are not subject to [these] rules…” It then distinguishes between participatory and health-contingent wellness programs.

Whether participatory or health-contingent, the new rule requires the wellness program to be voluntary. And the proposed new rule sets forth four (4) conditions that a wellness program must satisfy to be considered “voluntary” under the regulation.

Of these conditions, the biggest change of the new proposed rule relates to the condition applicable to offering incentives: generally, a wellness program is voluntary so long as it “does not offer more than a de minimis incentive (such as a water bottle or gift card of modest value) in exchange for an employee participating in the wellness program…”

The EEOC has given an example to clarify the language of this new proposed rule on incentives: “charging an employee $50 per month more for health insurance (or a total of $600 per year) for not completing a health risk assessment as part of a participatory wellness program would not be a de minimis incentive and, therefore, would violate the ADA because the employee would be treated less favorably with respect to the cost of health insurance than employees who chose to provide their health information.”

The principle of “de minimis” incentives is also adopted and incorporated into the NPRM under GINA. While GINA and the ADA both set forth protections for medical information of employees, they are distinct laws with distinct purposes and contain different protections. With that said, the rules for wellness programs under these laws do differ in several ways and both employers and employees should be mindful of those differences in rolling out any wellness programs.

It is important to finally note that the proposed new rules do not change or affect many of the big-picture rules that were previously articulated in the 2016 rule, such as:

  • An employer may not require employees to participate in wellness programs;
  • An employer may not deny coverage under any of its group health plans or particular benefits packages within a group health plan;
  • An employer generally may not limit the extent of such coverage based on participation in a wellness program or lack thereof; and
  • An employer may not take any adverse action against employees who decline to participate in an employee health program or fail to achieve certain health outcomes.

Stay tuned for further updates as the NPRM’s move forward in the rulemaking process. Various stakeholders will likely continue to provide input, criticism, and other feedback, which will likely ultimately shape or inform whatever final rule may result.