EEOC clarifies rules for wellness programs

ADA-LogoWellness programs in the workplace

Increasingly, employers are putting in place wellness programs aimed at promoting healthier lifestyles and preventing disease among the workforce. Often they are offered in conjunction with company-sponsored health insurance plans. According to the benefits consulting firm Towers Watson, more than one-third of all employers charge a penalty to employees who do not participate in a wellness program.

Such programs take a variety of forms, but health risk assessments, biometric screenings, weight loss, cholesterol monitoring, and tobacco cessation are common components. It’s a win/win situation: the employer reduces its health care costs, and employees adopt a healthier lifestyle. The Affordable Care Act (ACA) permits employers to increase financial incentives to encourage employee participation.

Despite the obvious positives, employers considering a wellness program have been receiving mixed and confusing messages from the Equal Employment Opportunity Commission (EEOC). On April 16, 2015, the EEOC issued its proposed rules for employee wellness incentives that go a long way towards clearing up the confusion.

Controversy and confusion

As a starting point, consider the historical controversies employer-sponsored wellness programs have faced. Under the Americans with Disabilities Act (ADA), an employer may request medical examinations, information and history so long as the employee’s participation is voluntary. Some time ago, the EEOC advised employers that wellness programs that penalized employees who chose not to participate could be unlawful. In a 2011 informal opinion letter, the EEOC took the position that employers offering financial incentives to those who took part in a wellness program could be violating the Genetic Information Nondiscrimination Act (GINA). What followed were a number of lawsuits filed by the EEOC challenging employer wellness programs around the country.

Proposed rules bring clarity

Under the EEOC’s proposed rules, employees must be provided with a notice describing the types of health information gathered in the wellness program. The notice should inform employees how the information is used and who has access to that information. The employer may not obtain wellness information about specific employees. They are limited to knowing the aggregated data for their entire workforce.

Next steps for employers

The EEOC’s proposed rules are not yet final, but they provide employers with valuable guidance on how to offer incentives for employee participation in wellness programs without running afoul of the ADA. Don’t forget that any wellness plan must still satisfy the requirements of HIPAA and the Affordable Care Act. But improving the health of your workforce and reducing health care costs means putting a wellness plan in place should be on many employers’ 2015 to-do list.