EEOC Abandons Wellness Incentive Regulations

January 31, 2019

Effective January 1, 2019, the Equal Employment Opportunity Commission (EEOC) rescinded its wellness incentive regulations promulgated under the Americans with Disabilities Act (ADA) and the Genetic Information Nondiscrimination Act (GINA). Although the further collection of employee health information for voluntary health plans under EEOC regulations is uncertain, the wellness program regulations finalized by the IRS, the Department of Labor, and the Department of Health and Human Services under the Patient Protection and Affordable Care Act in 2013 remain the baseline for the design and administration of wellness plans offered in conjunction with group health plans.

Originally issued in May 2016, the EEOC wellness incentive regulations allowed insurance plans and insurers to provide rewards for employee participation in voluntary wellness programs. The incentives were capped at 30% of the total cost of self-only insurance coverage. The EEOC’s rescission of its wellness incentive regulations resulted from a D.C. federal court vacating the incentive provisions in August 2017 for failing to explain how such high incentives make a plan “voluntary.” Vacating of the wellness provisions was delayed until January 2019 to give the EEOC time to rewrite the regulations and prevent disruption.

Under the ADA, wellness programs with medical examinations or disability-related questionnaires must be both “voluntary” and “have a reasonable chance of improving the health of, or preventing disease in, participating employees, and is not overly burdensome.” Although the EEOC regulations maintain that wellness plans are not protected under an ADA “safe harbor” provision, two federal courts disagreed, providing employers with a defense against challenges under the ADA for wellness programs that are part of a formalized benefit plan.

The EEOC GINA regulations are open to interpretation regarding wellness programs that request genetic information, as there is no “safe harbor” provision in the statute. Employees may still provide such information voluntarily, but employers no longer have express power to grant incentives.