EEOC Rules to Restrict Wellness Incentives Now in Comment Period

A new Equal Employee Opportunity Commission (EEOC) rule would ban anything but de minimis incentives for wellness programs that require disclosure of personal health information. 

 

The EEOC Commission proposes amendments to provisions in two sections of the American Disability Act (ADA) regulations that establish the extent to which employers may offer incentives for employees to participate in wellness programs that obtain medical information.

 

“This rule adopts the view that allowing too high of an incentive would make employees feel coerced to disclose protected medical information to receive a reward or avoid a penalty and, therefore, states that most wellness programs that include disability-related inquiries and/or medical examinations may offer no more than de minimis incentives to encourage employees to participate.” Under the new proposed rule, “health-contingent wellness programs that are part of, or qualify as, group health plans to which the tri-Department wellness regulations apply are an exception to the de minimis standard. Accordingly, this proposed rule permits “health-contingent wellness programs that are part of, or qualify as, group health plans to offer the maximum allowed incentive under the 2013 HIPAA regulations (currently 30% of the total cost of coverage or 50% to the extent the wellness program is designed to prevent or reduce tobacco use), as long as they comply with the five HIPAA requirements for such plans.”

 

According to the EEOC announcement, “We are proposing this change because we believe that the de minimis incentive standard will make it unlikely that an employee will choose to participate in a program that requires providing medical information unless the employee believes the program has some value in promoting health or preventing disease.  Additionally, health-contingent wellness programs that are part of, or that qualify as, group health plans will be permitted to offer limited incentives that are more than de minimis in exchange for an employee’s medical information only if they satisfy the requirements for health-contingent wellness programs, one of which is that programs “must be reasonably designed to promote health or prevent disease.”  Health-contingent programs that fail to satisfy any of the requirements will be able to offer only de minimis incentives.