Insights

EEOC Proposes Amendments to Wellness Program Regulations under the ADA and GINA


On January 7, 2021, the EEOC proposed amendments to the wellness program regulations under the ADA and the GINA. The proposed rules provide guidance for designers and administrators of those programs who wish to include incentives, among other matters.

As background, EEOC rules come into play for wellness programs that include disability-related inquiries (e.g., health risk assessment) or medical examinations (e.g., biometric screening). In 2016, the EEOC issued rules under the ADA and GINA that such programs had to be voluntary and could offer incentives to participate up to a 30% limit, among other requirements. However, this incentive limit was soon challenged in court. In AARP v. EEOC, the AARP challenged the 30% limit as involuntary and the court found that the EEOC failed to justify the basis for the limit. This eventually resulted in the removal of the rules related to incentives (effective since January 1, 2019).

As a result, there was no current EEOC guidance related to the incentive limitation, and the proposed amendments provide anticipated replacement guidance. The highlights of the proposed rules include:

  • Most wellness programs that include disability-related inquiries and/or medical examinations may offer no more than de minimis incentives to encourage employee participation. Examples of de minimis incentives include water bottles or gift cards of “modest value.”
  • There is an exception for certain health-contingent wellness programs. The proposed rules provide a safe harbor for health-contingent wellness programs that are part of or qualify as a group health plan and meet HIPAA’s nondiscrimination requirements. Such programs can offer up to the maximum incentive permitted under HIPAA, which is 30% of the total cost of coverage (and 50% for tobacco cessation programs). Nondiscrimination rules under HIPAA require the following criteria:
    • The program must give individuals an opportunity to qualify for the reward at least once a year.
    • The reward amount cannot exceed 30% (or 50% for tobacco cessation), based on total cost of single coverage, unless spouse can also participate (then it is based on cost of coverage in which enrolled).
    • The reward must be available to all similarly situated individuals.
    • The program must be reasonably designed to promote health or prevent disease.
    • The program must disclose that reasonable alternative standards are available.
  • Four factors provided to help determine if the wellness program is part of a group health plan include:
    • The program is only offered to employees who are enrolled in an employer group health plan.
    • Any incentive offered is tied to cost sharing or premium reductions (or increases) under the group health plan.
    • The program is offered by a vendor that has contracted with the group health plan.
    • The program is a term of coverage under a group health plan.
  • Since the EEOC is proposing a de minimis incentive standard (for wellness programs that do not meet the safe harbor), it no longer believes that a prior notice describing the type of medical information that will be collected and how it will be used (among other things) is necessary.
  • Only a de minimis incentive can be provided for all family members, not just spouses, in exchange for family members providing information about their manifestation of diseases or disorders.

Employers should be aware that these are proposed rules and are not final. The EEOC is soliciting comments for 60 days following the date the rules are published in the Federal Register. The EEOC will review any comments received during that time before issuing a final rule. The final rules could vary from the proposed rules. We are monitoring this process and will provide updates in future editions of Compliance Corner, including when the final rule is available.

Press Release »
Proposed Rules for Wellness Program Rules under ADA »
Proposed Rules for Wellness Program Rules under GINA »