According to the EEOC’s Final Rule, employers may provide limited incentives to an employee who answers disability-related questions or takes medical examinations as part of a wellness program, whether or not the program is part of a health plan.
The Issue: Prior to the Final Rule, employers lacked clarity on how to properly structure “voluntary” participation incentives
The Final Rule indicates that to be “voluntary”, a program must not, for example, require participation, deny access to health insurance/benefits for non-participation, or retaliate against any employee who does not participate. Further, the employer must provide a notice that explains how the medical information it obtains will be used. Finally, employers must comply with incentive limits, which are generally 30% of the cost of employee-only coverage.
Some Consistency with HIPAA/ACA but Differences Remain
Like HIPAA and the ACA, the EEOC’s Final Rule makes clear that the term "incentives" includes both financial and in-kind incentives.
Unlike HIPAA and the ACA, the EEOC's Final Rule makes clear that the limit on incentives applies to any wellness program that requires employees to answer disability-related questions or undergo medical examinations, whether it is participatory or health contingent.
The employer wellness program must be “reasonably designed” to promote health or prevent disease, and not overly burdensome. Programs that ask employees to have a biometric screening to alert them to health status would meet this standard.
Other EEOC Guidance
On the same day that the ADA Final Rule was published, the EEOC issued a final rule amending the regulations implementing Title II of the Genetic Information Nondiscrimination Act to provide that employers may offer limited incentives for an employee's spouse to participate in a wellness program.
Bottom Line: Employers must continue to use caution with wellness programs.