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3 minute read |

Do Your Employee Wellness Incentives Discriminate?


New EEOC rules go into effect in 2017. Incentive Limits Set at 30%*

The National Business Group on Health (NBGH) says the Equal Employment Opportunity Commission's (EEOC) final rules on corporate wellness programs provide the much-need clarification employers had asked for with respect to where the EEOC stands on wellness plan incentives' compliance with the Americans with Disabilities Act (ADA) and Genetic Information Nondiscrimination Act (GINA).

The two EEOC rules, announced today and which take effect in 2017, provide guidance to both employers and employees about how workplace wellness programs can comply with the ADA and GINA consistent with provisions governing wellness programs in the Health Insurance Portability and Accountability Act (HIPAA).

NBGH Assesses the Rulings

Brian Marcotte, President and CEO of the National Business Group on Health, a non-profit association of 425 large U.S. employers, provided the following comments in a press release:

"For most large employer wellness programs, it's business as usual. Though we are still reading the fine print, the rules appear to contain no big surprises. All in all, the rules are very much in line with what the EEOC proposed last year. While we may have hoped for some additional flexibility, the rules do what the EEOC was asked to do -- clarify for employers where their wellness plan incentives stand with respect to ADA and GINA compliance."

Marcotte also noted the following:

  • The rules clarify how employers determine the maximum incentives for spousal health assessments and biometric screenings. Spousal incentives are limited to 30% of the total cost of self-only coverage, as it is for employees with self-only coverage. The cost of family medical coverage does not factor into the incentive limit under the EEOC rules.
  • Incentives for spouses, while permissible for health assessments, biometric screenings, and questions about current health status, are not allowed if tied to questions about family history or genetic tests.
  • The EEOC also reiterated a ban on plan designs in which a more generous plan option is only available to those completing a health assessment or biometric screening. (Note: a discount up to 30% can still be offered on a plan as long as that same plan is available to both incentive participants and non-participants. This amount is 50% for tobacco prevention and reduction, provided that testing for nicotine use is not part of the program.)
  • The EEOC reiterated a broad prohibition on incentives for children, including adult children, tied to health assessments, biometric screenings, family history, or genetic tests.

Wellness programs with incentives are prevalent: According to a survey released last month by The National Business Group on Health and Fidelity Investments, 78% of employers offer biometric screenings while 76% offer a health risk assessment program in 2016. About three fourths of employers (72%) use incentives to engage employees in these programs.

Reminder: Healthstat never shares protected health information with any employer.

*Tobacco Cessation Programs

The rule permits incentives of up to 50 percent for smoking cessation programs. A question about tobacco use posed by a health plan is not subject to the EEOC rule since it is not a disability-related question. Incentives or penalties imposed by a penalty for failing to participate in a smoking cessation program are therefore not subject to the EEOC 30 percent rule. If a wellness program uses biometric screening or other medical tests to determine the presence of nicotine, however, the 30 percent limit would apply.

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