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Shape Up Your Wellness Plan in 2019....

When the new year comes around, many people begin to reassess their health goals for the coming year. For employers with wellness programs, recent publications from the EEOC must be considered in reviewing wellness programs for compliance. First, a little refresher is in order:

Employers with wellness programs will recall there has been some uncertainty over the past few years as to what level of incentive or penalty is too high for the wellness program to still be considered "voluntary." This threshold is an important point in the design of wellness programs because an employer's ability to make disability-related inquiries, require medical examinations (such as biometric screenings), or to collect information about an employee's family members/spouse is limited to wellness programs that are "voluntary" under the Americans with Disabilities Act (ADA) and the Genetic Information Nondiscrimination Act (GINA). The ADA and GINA require that the collection of health/genetic information must be part of a voluntary wellness program in order to be compliant; otherwise, if the wellness program is not voluntary, the program would be in violation of the ADA and GINA. 29 CFR §1630.8(d)(2)(ADA) and 81 Fed Reg. at 31144 (GINA).

In 2016, the EEOC issued Final Rules explaining that an incentive or penalty of up to 30% would be considered "voluntary" thus limiting incentives for participation or penalties imposed for failure to participate to 30% of the total cost for self only coverage of the health plan.

In 2017, the AARP challenged the EEOC Final Rules in the case of AARP v. EEOC, 390 F.Supp. 2d 437 (D.D.C.2017) and that Court held that the EEOC "failed to adequately explain its decision" with respect to the 30% incentive level. AARP argued 30% was a significant enough financial benefit/penalty such that it was not "voluntary." The D.C. Circuit Court remanded the Final Rule to the EEOC and eventually ordered that the incentive/penalty ceiling of 30% be vacated effective January 1, 2019.

On December 20, 2018, in anticipation of this impending January 1, 2019 deadline, the EEOC issued two Final Rules. Consistent with the DC circuit's decision, the Final Rule removes the incentive section of both the ADA regulation (29 CFR 1630.14(d)(3) and of the GINA regulation (29 CFR 1635.8(B)(2)(iii), which means employers are no longer able to rely on the EEOC's "30% rule" for purposes of wellness plan compliance. In essence, the Final Rule simply clarifies the uncertainty left as the result of the DC Circuit's decision but underscores the need for employers to contact legal counsel to discuss options for wellness plans in 2019 and for the foreseeable future.


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