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It seemed like it had taken the EEOC forever to issue regulations as to whether employers could provide employees an incentive to participate in a wellness program and still have the program be voluntary. The issue of “voluntary” is important because under the Americans with Disabilities Act (ADA) any wellness program that includes a disability-related inquiry and/or medical exam, participation must be voluntary. The same rule is applicable to any information that is protected under the Genetic Information Nondiscrimination Act (GINA).
In July 2016, the EEOC issued long awaited rules under the ADA and GINA relating to wellness plans. The rule provided that employers could implement penalties or incentives, limited to 30 percent of the cost of self-only coverage, to encourage employees to disclose ADA protected information and certain genetic information without causing the disclosure to be involuntary. These rules were applicable to plans beginning on or after Jan. 1, 2017.
Since then, the EEOC rules have been challenged by AARP. The AARP’s claim is that the 30 percent incentive or penalty still renders participation involuntary, since there could be some employees unable to pay the penalty and in effect forced to provide the protected information. The court agreed with AARP finding that the EEOC was arbitrary and did not provide enough evidence in its rulemaking to justify the 30 percent rule.
The court sent the rules back to the EEOC for further review and analysis. In the meantime, after the court’s decision was issued, AARP requested the court to reconsider its decision and vacate (render void) the EEOC’s regulations, to which the court agreed.
Vacating of the rules is not effective until Jan. 1, 2019. Therefore, the current rules permitting the 30 percent incentive/penalty remain in place during 2018. The EEOC has not indicated a time frame for the provision of new rules. Therefore employers will want to stay on top of this issue as to the future operations or offering of any wellness programs.
In conclusion, employers may stay the course for its wellness program in 2018. However, due to the vacating of the EEOC incentive rules, 2019 will bring new rules. As it relates to wellness programs, employers should remember that there are separate applicable rules under the Health Insurance Portability and Accountability Act (HIPAA). The HIPAA wellness rules are not affected by the vacating of the EEOC rules.