Employer wellness programs are the latest subject of EEOC regulatory efforts. Last week, the Equal Employment Opportunity Commission (“EEOC”) issued final rules explaining how wellness programs must comply with the Americans with Disabilities Act (“ADA”) and the Genetic Information Nondiscrimination Act (“GINA”). The new rules: (1) address the extent to which an employers may pay incentives or provide rewards to encourage participation in a wellness program that involves disability-related inquiries; and (2) clarify when a wellness program is “voluntary.”

Key provisions are as follows:

  • Scope. The rules apply to wellness programs (whether or not they are part of an employer health plan) that condition eligibility on providing certain information—such as responding to disability-related inquiries, completing health risk assessments, or submitting to a medical examination or biometric screening—and provide an incentive for participation or a penalty for not providing such information. Wellness programs without an incentive/penalty gateway requirement are not affected by the new rules.
  • Effect on Existing Rules. Existing regulations regarding HIPPA and ACA compliance are supplemented by the new rules. However, differences under the ACA rules remain, which creates challenges for employers to design compliant wellness programs.
  • Use of Information. Under the new rules, if a wellness program collects health information about employees and/or spouses, the information must be used (or reasonably designed to be used) for health promotion or disease-prevention, and feedback is provided to the employee. There is no other permissible reason for collecting such information from employees or spouses, and any information provided to the employer must be general and cannot reveal the identity of the employees or spouses.
  • Rewards/Penalties. Participation in a wellness program cannot be a requirement for participation in the employer’s health benefits plan, but rewards/penalties for participation are permitted within specified limits. Generally, rewards/penalties are limited to 30% of the total cost of single coverage. The 30% cap applies if the employee is tested for tobacco use, but not if tobacco use only is self-reported.

The rules pertaining to rewards and penalties, as well as required notices regarding employer information-gathering, go into effect as of the first plan year beginning on or after January 1, 2017. The remainder of the rules are considered clarifications of current regulations, and are immediately applicable. Employers should promptly assess the impact of the rules on their wellness program and make any design changes necessary to achieve compliance.