Wellness Programs: Impact of the Vacated EEOC Wellness Incentive Maximum

 January 31 2019     Diane Cross

As mentioned in previous blog posts, most recently Wellness Program Incentives – Planning for 2019, the EEOC rule allowing a maximum wellness program penalty/incentive of 30% is vacated, effective since January 1, 2019. Since the rule has been vacated, we have received questions from employers curious if the other EEOC requirements still apply, as discussed below. 

It is important to first note the final rule (as a result of the AARP v. EEOC ruling) only impacts wellness programs subject to the EEOC’s wellness regulations.  For example, such programs include those that involve health information collection (“medical exams or inquiries”) such as with a biometric screening, health risk assessment, or annual physical that collects medical information.  In contrast, wellness programs that include a tobacco surcharge without testing for nicotine, or participatory programs such as providing gym use or educational lunch-n-learns, are not subject to EEOC’s wellness rules but rather, subject to HIPAA and ACA regulations and not impacted by the court’s decision. 

As we wait for further guidance from the EEOC, remember that only its 30% incentive limitation has been vacated.  This means employers are still obligated to comply with the remaining requirements under the EEOC rules related to wellness programs. For example, employers should provide a Notice to employees if they sponsor a wellness program that collects employee health information, and programs must be “voluntary” with a reasonable design to promote health or prevent disease. Our prior blog post EEOC Issues Final Rules on Wellness Program elaborates on the remaining requirements in order to be “voluntary”.   

While the EEOC’s wellness incentive maximum rule has been vacated, employers who sponsor wellness programs subject to the EEOC should continue to comply with all other requirements.  We will continue to monitor the status of EEOC guidance and communicate updates accordingly. Please contact your HORAN representative with questions.