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Court Rejects EEOC Wellness Rules for 2019

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On December 20, 2017, the Equal Employment Opportunity Commission’s (EEOC) final rules for employer-sponsored wellness plan incentives was rejected by the U.S. District Court for the District of Columbia.

There are a number of laws that affect the implementation and administration of wellness programs. Under the Americans with Disabilities Act (ADA), disability-related questions and medical examinations are permitted if they are part of a voluntary wellness program. The Genetic Information Nondiscrimination Act (GINA) allows employers to collect certain genetic information as part of a wellness program so long as the information is given voluntarily.

However, neither law defines “voluntary” in terms of wellness plans. On January 1, 2017, the EEOC attempted to shed light on the applicability of the ADA and GINA to wellness programs by clarifying that incentives offered to an employee (to answer disability-related questions, undergo medical examinations, or provide information about current or past health issues) may not exceed 30 percent of the total cost for self-only health plan coverage to be considered voluntary under the ADA and GINA.

In August 2017, the court required the EEOC to reconsider its 30 percent rule as it pertains to wellness programs and the voluntariness of these incentives. The EEOC then indicated that it would establish new final rules for wellness programs in October 2019 to take effect in 2021. Unhappy with the EEOC’s lengthy timeline for establishing better certainty for employers who sponsor wellness programs, the court rejected the EEOC’s 30 percent rule for wellness incentives but its ruling would not take effect until January 1, 2019.

What Employers Need to Know

For 2018, employers may continue to follow the EEOC’s current, final rules for wellness program incentives. However, for 2019 and beyond, employers should closely monitor developments and make sure that their programs comply with any new regulations released by the EEOC in the future.

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