While the litigation over wellness programs rages on, the EEOC is still marching forward with the implementation of its wellness rules that we wrote about previously. As most people in the wellness space are aware, the EEOC’s rules under ADA and GINA do not align completely with the HIPAA wellness rules, particularly on the issue of the amount of the incentive. The ADA and GINA rules apply to all wellness programs, whether participation-only or health contingent, and generally limit the incentive that is available to 30% of the cost of self-only coverage.
One open question under the ADA and GINA rules was how to calculate the incentive when an employer offers multiple tiers of coverage (e.g. Gold, Silver, Bronze) under a health plan. The ADA and GINA rules address the calculation of the incentive when there are multiple group health plans, but not multiple tiers. When an employer offers multiple group health plans, and an employee is eligible for a wellness program as long as he or she is enrolled in any one of them, then the maximum incentive is 30% of the lowest cost self-only option among the plans.
In a recently released informal discussion letter, the EEOC addressed how these rules apply to a single group health plan with multiple tiers where an employee enrolled in any tier can participate in the same wellness plan. Not surprisingly, the same rules used for multiple group health plans apply. In other words, the incentive is limited to 30% of the lowest cost self-only tier of coverage. (There are minor language differences between the ADA and GINA regulations in this regard, but the EEOC says they are “legally inconsequential.”). This means that if a company offers Gold, Silver, and Bronze tiers, for example, and employees enrolled in any tier get the same wellness plan, the reward is limited to 30% of the self-only Bronze premium.
While not a watershed piece of guidance, this clarification at least lets employers know what the rules of the road are. Because the letter is informal, it is not necessarily binding on the EEOC, but given the restrictive nature of the guidance, it seems unlikely the EEOC would take a different position in court or an investigation. If you have comments about this piece of EEOC guidance, or the wellness program rules in general, feel free to leave them in the comment section on this post.