EEOC Releases Final Rules on Employer Wellness Program Incentives

October 19th, 2016

The Equal Employment Opportunity Commission (EEOC) updated regulation governing the use of employee data in employer-sponsored wellness programs with the release of two final rules. The rules clarify how employer wellness program data collection can comply with the Americans with Disabilities Act (ADA) and the Genetic Information Nondiscrimination Act (GINA). The rules go into effect in January 2017.

In the first rule, the EEOC provides guidance on the extent to which employers may offer incentives to employees to participate in wellness programs that ask them to answer disability-related questions or undergo medical examinations. The incentives cannot be so high as to be coercive, thus creating the risk of the program being involuntary. Programs may include incentives to walk 10,000 steps a day or attend a smoking cessation class, and will be permitted as long as they are available to all individuals and incentives are made regardless of health status. The wellness program would need to provide an alternative or waiver if the person cannot participate or achieve program goals due to a disability. The rule clarifies that if an employee is required to be enrolled in a health plan in order to participate in the wellness program, the incentive to the employee cannot exceed 30% of the total cost for an employee.

The second rule addresses the use of incentives to employees for providing a spouse’s genetic information as part of the wellness program. An employer may offer a limited incentive in the form of a reward or penalty to an employee whose spouse receives health or genetic services offered by the employer. The service that collects genetic information must make sure it is reasonably designed to promote health or prevent disease. The maximum incentive for a spouse’s participation cannot exceed 30% of the total cost of self-only coverage, which is the same incentive allowed for the employee.

The employer can only collect information for a wellness program in aggregate form that does not disclose the identity of the individual except as necessary to administer the plan. The employer cannot require the employee to agree to the sale, exchange, or transfer of medical information or to waive confidentiality protections. The individual must be informed of what information will be collected as part of the wellness program.