On April 20, 2015, the United States Equal Employment Opportunity Commission (“EEOC”) issued proposed guidance concerning employer wellness programs. The proposed rule would amend the EEOC’s regulations and interpretive guidance implementing Title I of the Americans with Disabilities Act (“ADA”). Prior to the proposed rule, the EEOC was silent as to whether employers may offer financial incentives to encourage employees to participate in wellness programs. The proposed rule clarifies that the ADA permits employers to offer incentives to employees who participate in wellness programs and/or for achieving health outcomes. Under the proposed rule, employers will be permitted to offer participating employees a maximum incentive of 30% of the total cost of the employee-only coverage.
The proposed rule applies only to employee health programs that include disability-related inquiries or medical examinations. These programs must be “voluntary” and must be reasonably designed to promote health or prevent disease. In order for an employee’s participation to be deemed “voluntary,” the employer may not require employees to participate, may not deny health coverage to those who do not participate, and may not take adverse action against employees who do not participate. In addition, the employer must clearly explain:
- What medical information will be obtained;
- Who will receive the medical information;
- The restrictions on disclosure; and
- The methods the covered entity uses to prevent improper disclosure of employee’s medical information.
The proposed rule provides that an employer’s act of providing incentives to employees to participate in wellness programs will not render the program “involuntary.”
Members of the public have 60 days, or until June 19, 2015, to comment on the proposed regulations. At the end of the comment period, the EEOC will evaluate the comments and make revisions, if necessary. Assuming the proposed rules are adopted, employers can now provide financial incentives to increase employee health through qualified wellness programs. Stay tuned to see whether these proposed rules are in fact adopted.
As the law continues to evolve on these matters, please note that this article is current as of date and time of publication and may not reflect subsequent developments. The content and interpretation of the issues addressed herein is subject to change. Cole Schotz P.C. disclaims any and all liability with respect to actions taken or not taken based on any or all of the contents of this publication to the fullest extent permitted by law. This is for general informational purposes and does not constitute legal advice or create an attorney-client relationship. Do not act or refrain from acting upon the information contained in this publication without obtaining legal, financial and tax advice. For further information, please do not hesitate to reach out to your firm contact or to any of the attorneys listed in this publication.