EEOC Wellness Incentives Update: What You Need to Know for 2019
On Dec. 20, 2017, a United States district judge for the District of Columbia ordered that portions of the EEOC’s 2016 regulations under the Americans with Disabilities Act and the regulations under the Genetic Information Nondiscrimination Act be vacated effective Jan. 1, 2019.
The judge was dissatisfied with the EEOC’s definition of a voluntary wellness program when incentives are tied to participation. The issues debated are:
- At what point is an incentive too large for the program to no longer be voluntary?
- Should there be incentives tied to activities that ask about employees’ medical histories (health risk assessments) and medical exams (biometric screens)?
The EEOC had until the end of August 2018 to provide new regulations with additional justifications. However, the EEOC ultimately decided not to respond for the 2019 plan year, creating a gray area surrounding incentives maximums tied to completing medical exams and/or revealing confidential medical and family health information.
What does this mean for your wellness program in 2019?
We are recommending that clients keep wellness incentives to a maximum of 20 percent of the total premium amount for the lowest-cost employee-only coverage for health contingent wellness programs. Here are our recommendations based on risk tolerance:
- Zero Risk – Clients who wish to have no liability should remove all incentives or penalties tied to HRA and biometric screening exams.
- Moderate Risk – Clients who can tolerate moderate liability should keep incentives under 20 percent of the total premium amount for the lowest-cost employee-only coverage.
- Offering employees multiple avenues to achieve the wellness incentive, other than requiring employees to complete the health risk assessment and/or biometric screening, is a safe, compliant alternative that is in line with the spirit of a wellness program.
- For clients who have a wellness incentive structure tied only to a health risk assessment and/or biometric screening, we recommend adding a disclaimer stating that, if someone is uncomfortable completing the health risk assessment or participating in the biometric screen, they can contact human resources for a standard alternative. The standard alternative does not need to be established prior to the beginning of the plan year. If you need ideas or resources for standard alternatives, please contact Kelly Holt.
- High Risk – Clients who are comfortable assuming the most risk can maintain the current incentive amount of 30 percent. Please remember that this is not our recommendation, and clients should seek legal counsel to evaluate the compliance of the health plan.
As always, let us know if you have any questions.