Aug. 31, 2016

Federal Regulatory Update: Employer-sponsored Wellness Programs

The Equal Employment Opportunity Commission ("EEOC") released two rules related to employer-sponsored wellness programs, both fully and self-insured:
 

• The Americans with Disabilities Act ("ADA") provides guidance to employers who use incentives to encourage employees to participate in wellness programs that ask the employees to respond to disability-related inquiries or undergo medical examinations.
   
  • Wellness programs may include disability-related inquiries or medical examinations, provided that the program is reasonably designed to promote health or prevent disease. The EEOC will consider a program that includes disability-related inquiries or medical examinations as "voluntary" as required under the regulations, so long as certain criteria are met.
     
  • The maximum allowable incentive for a program that involves disability-related inquiries or medical examinations cannot exceed 30 percent of the total cost of self-only coverage under the plan. This incentive maximum applies for all wellness programs, whether the program is considered a "participatory" wellness program or a "health-contingent" wellness program.
     
• The EEOC also issued a separate final rule under the Genetic Information Nondiscrimination Act ("GINA") to address employers who offer incentives to their employees' spouses to participate in a wellness program.
   
  • The GINA Final Rule applies where a portion of the incentive offered within a wellness program is for an employee's spouse to answer questions about his or her current or past health status or to take a medical examination. Incentives under the GINA Final Rule are also limited to no more than 30 percent of the total cost of self-only coverage under the plan.

Both wellness final rules were effective on July 18, 2016. Wellness programs must comply with the rules' requirements beginning on the first day of the first plan year that begins on or after Jan. 1, 2017. We are currently reviewing these rules and will provide additional information as it becomes available.

This communication is intended for informational purposes only. It is not intended to provide, does not constitute, and cannot be relied upon as legal, tax or compliance advice. The information contained in this communication is subject to change based on future regulation and guidance.